...Issues 1- What was wrong with Mr. Wallingford’s original AR-42 proposal? Should the proposal have been accepted by the Hollandsworth and Axeon boards od firectors? What should Mr. van Leuven do now regarding Mr. Wallingfor’s AR-42 proposal? 2- What, if anything, should be done to prevent issues like this from occurring again? 3- Is construction of the new factory in the U.K. in the best interest of Axeon N.V.? 4- What transfer price would be appropriate supposing the plant were not built and AR-42 was shipped from the Netherlands to the U.K.? 5- What should Mr. van Leuven do? Facts Executive Summary This report presents a case involving problems at a chemical manufacturing firm, Axeon N.V. having grown into a multinational Company, problems have emerged; do to ineffective performance measurement systems and lack of strategic control. The following management report describes and analyses those problems and presents solutions and recommendations. With headquarters in the Netherlands, Axeon N.V. operates three subsidiaries; in the U.K. Scandinavia and Southern Europe. The subsidiaries have considerable autonomy to determine their product mix and the setup of new manufacturing facilities. Case analysis revealed serious defects in the Company's operation resulting from poorly designed performance measurement systems and inefficient strategic control. These defects have led the Company to reward subsidiary managers for focusing solely on their subsidiaries short-term revenue...
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...[Ange företagets namn] HT 2014 Case Study Axeon N.V. [Ange företagets namn] HT 2014 Case Study Axeon N.V. Innehållsförteckning 1. Introduktion 2 1.1 Bakgrund 2 1.2 Problemformulering 2 2. Teoretisk referensram 3 2.1 Selznick’s Model 3 2.2 Management Control 4 3. Analys 5 4. Rekommendation 6 Litteraturförteckning 7 1. Introduktion I detta avsnitt av rapporten kommer kort bakgrundsinformation och en problemformulering om caset Axeon presenteras. 1.1 Bakgrund Axeon N.V., då stationerat i Heerlen, Nederländerna, producerade ett utbrett sortiment utav kemikalier i 24 fabriker. Under tidigare år hade Axeon använt sig av en enkel och funktionell struktur. Under senare tid förvärvade de flera nya företag och blev en koncern. Dessa förvärv bestod av tre olika företag; ett i Italien, ett i England samt ett i Sverige. Varje dotterbolag fick befogenheten att ta sitt eget ansvar för försäljning av alla Axeons produkter inom sin geografiska belägenhet. Ledningen inom Axeon betonade decentralisering där dotterbolagen fick en stor grad av självständighet. Det understryktes även att dotterbolagen fick fortsätta producera produkter vilka de benämnde som relevanta. I tillägg till detta uppmuntrade även Axeons ledning att cheferna för dotterbolagen fick komma med nya produktförslag, samt att de fick tillstånd att bygga nya tillverkningsfabriker ifall de kunde rättfärdiga dessa investeringar. Under 1998 lade verkställande chef av Hollandsworth...
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...R | AXEON N.V. | | Case Analysis | R | AXEON N.V. | | Case Analysis | Table of Contents Axeon N.V Overview 2 SITUATION ANALYSIS 2 ENVIRONMENTAL ANALYSIS 3 EXTERNAL SIZE UP 3 INTERNAL SIZE UP 3 ISSUE DESCRIPTION 3 SWOT ANALYSIS FOR NEW FACTORY 5 FINANCIAL ANALYSIS 6 Manufacture product in UK 6 Manufacture product in Netherlands 7 ALTERNATIVE 1: 8 Build the manufacturing plant in U.K. 8 ALTERNATIVE 2: 9 Manufacture more product in Netherland and sale it to cost to Hollandsworth 9 RECOMMENDATION 10 QUESTIONS 11 QUESTION #1 11 QUESTION #1b 11 QUESTION #1c 11 QUESTION #2 12 EXHIBITS 13 AXEON N.V. Case Analysis Axeon N.V Overview Axeon N.V. is a producer of industrial chemicals with 24 manufactory sites around Europe, and headquarters in Heerlen, Netherlands. It has acquired several companies within Europe to facilitate regional market penetration. By 1996 total sales from each subsidiary is shown in the table below. Company Name | Location | Total Axeon’s sales (%) | Total revenues | Axeon | Netherlands | 72% | £823 MM | Saraceno | Italy | 8% | £91 MM | Hollandsworth | United Kingdom | 14% | £160 MM | KAG | Sweden | 6% | £69 MM | As determined through Axeon’s management philosophy, Axeon is a decentralized organization where the subsidiaries are empowered to make decisions on what to sell in their respective regions. SITUATION ANALYSIS Anton van Leuven, Managing Director of Axeon N.V., was faced with a difficult...
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...Caselösning Axeon N.V Nuvarande situation Under caset får vi följa koncernen Axeon N.V med huvudkontor i Heerlen, Nederländerna. Bolaget äger tre dotterbolag från olika delar av Europa, vilka är belägna i Sverige, Storbritannien och Italien. Sammanlagt innehar de 24 olika fabriker som producerar varor inom kemikalie-industrin. Varje region har eget säljansvar och ledningen i varje land kan även bestämma sin egen produktionsmix, bolagen måste alltså inte sälja Axeons produkter utan kan på egen hand producera liknande produkter och sälja dessa. Detta ger dem en hög grad av decentralisering. Koncernen motiverar sina regionchefer till högre försäljning genom sitt bonussystem som belönar divisionscheferna efter “Divisional revenue growth” och “Economic Profit”. Problematisering Under uppmaning från Axeon att dotterbolagen gärna får utveckla produkter och bygga anläggningar har den brittiska managing directorn Ian Wallingford efter grundläggande undersökningar lagt fram förslaget om att bygga en fabrik för produktion av produkten AR-42. För att stötta sitt förslag har Mr. Wallingford genomfört en marknadsundersökning under sex månader som visade att efterfrågan på AR-42 är 400 ton per år och att byggnationen av fabriken skulle ge en ROI på 20 %. Dessa fakta får dock motstånd av det Nederländska huvudbolaget då marknadsavdelningen anser att de brittiska beräkningarna av den efterfrågan är för stor och orealistisk. Dessutom visar det sig att den Nederländska fabriken inte utnyttjas...
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...28 were minor. Approach A brief summary chapter seems to help students consolidate their previous topic-by-topic learning, and they appreciate such a chapter for final exam study preparation. The summary of the many different adjectives placed before the word “cost” and the concepts behind these adjectives is useful. However, because there is no conceptually new material here, one need not spend much time on the text. Rather, instructors can jump right into a discussion of one of the chapter’s cases, which is intended to raise issues that cut across multiple chapters. Cases Puente Hills Toyota raises many financial responsibility center, performance measurement, and incentive systems issues in a car dealership setting. Axeon N.V. illustrates the real world application of many management accounting and control concepts, including incremental cost analysis, capital budgeting, sensitivity analysis, transfer pricing, organization design, and control system administration. Case 27-1: Puente Hills Toyota Note: This case is unchanged from the Twelfth Edition. Purpose of Case This case can be used to motivate discussions of a number of topics, including financial responsibility centers, performance measurement, transfer pricing, and incentives. The setting is an automobile dealership, a business about which all students have some interest and understanding. And the setting is real, so students can benefit from secondary learning about the industry...
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...II. ISSUE IDENTIFICATION (Specific) In order to meet the projected global demand for chemical AR-42, should Axeon N.V. pursue constructing the new manufacturing plant in the U.K. or should it manufacture the product in its existing Dutch plant? III. ANALYSIS FRAMEWORK 1. Qualitative Analysis The group started the analysis by evaluating the reasonableness of assumptions used by Wallingford in making his computations. Assumptions that the group believes may not be valid will then be modified to be more realistic. Furthermore, the internal repercussions (how it would impact relationships within the organization) of a particular decision will also be evaluated. Ultimately, the decision with the best NPV and the most manageable negative repercussions will be selected. 2. Quantitative Analysis Revised assumptions will be applied in calculating NPVs under various scenarios. A sensitivity analysis that relaxes these assumptions will also be made to augment the primary NPV analysis. IV. ANALYSIS A. Evaluation of Assumptions Several assumptions were relied on in projecting the effects of the proposal which may not be appropriate. Among these assumptions are the following: 1. The 8% discount rate used to compute for the net present value of the proposal is the rate at which they could borrow money in England to fund the project. Using the 8% discount rate overestimates the NPV of the proposal making it appear more profitable than it really is. The proposal should have used...
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...Charlotte Beers (Ogilvy & Mather) Case analysis At the point of planning to the launch of the business, the owner of the business is very passionate and usually experienced in the line-of-business; as David Ogilvy was at the age of 38 when he started his own advertising agency in 1948. Ogilvy & Mather, an advertising agency was started in New York and expanded worldwide. By 1991, O&M was ranked the largest marketing company in the world.[1] But there comes a time when a company must look to adapt a change. With competition growing, clients of O&M changed their demands. O&M was a high-cost agency that was failing in controlling their budget and lowering their cost; they failed to see the reason for a change. Due to that fact, O&M had lost few of their multi-million dollar accounts. Many companies may have either filed bankruptcy or have shutdown in the process of losing their clients but O&M was not the type of company that would give up that easily. In 1992, Charlotte Beers was appointed CEO of O&M and a massive change was underway. She was not the type of person who would dwell on the past, but instead look to better the future. Charlotte Beers clearly made an impression on the O&M employees as she had the ability to inspire. But more importantly, she came up with three strategies which turned the company around 360 degrees; Client Security, Better Work/More Often, and Financial Discipline. Yes these strategies were formed for an advertising agency...
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