Axeon case study
Axeon N.V. Case Study
Company Strategy: Axeon acquired three foreign companies in Milan, London and Sweden to take advantage of geographical expertise in these subsidiaries. And the company emphasizes a high degree of decentralization from top-level management.
Issue 1: Organization structure – Is Axeon’s current organization structure decentralized?
Although decentralization is part of Axeon’s current strategy, however from the case facts show that Hollandsworth does not have the considerable autonomy to decide what to sell and what to produce. Though it is said that the subsidiaries are encouraged to propose the development of new products, but the fact was that the Axeon Netherlands would take over the idea of new product development if it made more returns. Furthermore, although Hollandsworth built their arguments and justify the investment in their markets, but they still cannot have their own manufacturing plants. All of these contradict with the company’s decentralization strategy.
Issue 2: Management behavior – Mr. Van’s behavior
When Mr. Van learned about the new project, he gave Ian a quite positive attitude and Ian was very enthusiastic and expected that Mr. van Leuven will accept the proposal. However the fact was that Mr. van Leuven did not really think carefully about this project in terms of risks, and he was highly dependent on his managers’ opinions. Eventually his managers convinced Mr. van Leuven that the overhead and variable costs are higher than projected, therefore he rejected the proposal. However his behavior creates conflicts between Netherland team and England team.
Issue 3: Risk of rejecting the proposal
The Netherlands management did not give enough acknowledgment to UK team, there would be a potential risk for Axeon, because the UK company may grow to become a competitor in the future. The headquarters of Axeon wants to keep the control on the subsidiaries and refuses to give autonomy to them. Establishing a new plan
Company Strategy: Axeon acquired three foreign companies in Milan, London and Sweden to take advantage of geographical expertise in these subsidiaries. And the company emphasizes a high degree of decentralization from top-level management.
Issue 1: Organization structure – Is Axeon’s current organization structure decentralized?
Although decentralization is part of Axeon’s current strategy, however from the case facts show that Hollandsworth does not have the considerable autonomy to decide what to sell and what to produce. Though it is said that the subsidiaries are encouraged to propose the development of new products, but the fact was that the Axeon Netherlands would take over the idea of new product development if it made more returns. Furthermore, although Hollandsworth built their arguments and justify the investment in their markets, but they still cannot have their own manufacturing plants. All of these contradict with the company’s decentralization strategy.
Issue 2: Management behavior – Mr. Van’s behavior
When Mr. Van learned about the new project, he gave Ian a quite positive attitude and Ian was very enthusiastic and expected that Mr. van Leuven will accept the proposal. However the fact was that Mr. van Leuven did not really think carefully about this project in terms of risks, and he was highly dependent on his managers’ opinions. Eventually his managers convinced Mr. van Leuven that the overhead and variable costs are higher than projected, therefore he rejected the proposal. However his behavior creates conflicts between Netherland team and England team.
Issue 3: Risk of rejecting the proposal
The Netherlands management did not give enough acknowledgment to UK team, there would be a potential risk for Axeon, because the UK company may grow to become a competitor in the future. The headquarters of Axeon wants to keep the control on the subsidiaries and refuses to give autonomy to them. Establishing a new plan