Lundbeck Korea: Managing an international growth engine - Essay Example

Lundbeck Korea: Managing an International Growth Engine Question In my view, Andersen should branch out Lundbeck Korea from Lundbeck Asia and haveLundbeck Korea directly report to him in Copenhagen. This is because Lundbeck Korea is going through an extremely stout augmentation and there is a possibility that remaining part of Lundbeck Asia is limiting its potential to grow even further. In addition, by splitting Lundbeck Korea from Lundbeck Asia and having Lundbeck Korea directly report to him in Copenhagen, Lundbeck Korea will experience tremendous benefits from being independent, consequently, Lundbeck Company will be the ultimate beneficiary. The financial impact of the parent organization cannot be overstated. Since Lundbeck Korea will be reporting directly to Andersen in Copenhagen, this means the parent company has the direct channel of providing technical expertise, buying power, employees, know-how and market money, development and research finances, and additional elements Lundbeck Korea cannot accomplish or afford while it is still part of Lundbeck Asia. In addition, Jin-Ho Jun possess the necessary qualities that the parent company in Copenhagen require to solidify Lundbeck Korea’s position in this unfamiliar territory. There is no need for Jin-Ho Jun to report to the leader of Lundbeck Asia, Asif Rajar because he has approximately 15 years of experience in the central nervous system market in Korea, which makes him an expert in the market and able to handle Lundbeck Korea’s operations without supervision from Asif Rajar. Also, the fact that Jin-Ho Jun has worked in a number of international pharmaceutical corporations makes him qualified to report directly to Andersen in Copenhagen (Roberts 7). I also think Andersen should split Lundbeck Korea from Lundbeck Asia and have Lundbeck Korea directly report to him in Copenhagen because Jin-Ho Jun possesses the international knowledge necessary to undertake the corporate policies and strategies of Lundbeck. In addition, Lundbeck Korea has a great chance of enhancing its performance when it is separated from Lundbeck Asia and its leader report directly to Andersen in Copenhagen. Jin-Ho Jun has an extremely decent network of relations with eminent psychiatrists in Korea. He has dedicated effort and time to make sure there is a high-quality relation with these significant opinion leaders who are essential in promoting Lundbeck’s products in the Korean market. This is not a painless or simple endeavor (Roberts 8). While reporting directly to Andersen in Copenhagen, Jin-Ho Jun can inform Andersen of the views of these significant opinion leaders, which will be significant during the formulation of the company policies and guidelines. Also, to develop the form of association that Jin-Ho Jun has achieved, an individual should be eager to sacrifice a tremendous amount of time which is not possible if Lundbeck Korea is still part of Lundbeck Asia and Jin-Ho Jun is still reporting to Asif Rajar. Also, Lundbeck Korea and Lundbeck Asia should be separated because both Jin-Ho Jun and Asif Rajar have different knowledge regarding the Korean market. Jin-Ho Jun is more aware that the Korean pharmaceutical sector is quite dissimilar from markets in other areas than Asif Rajar. It is evident from the numerous company meetings that the Korean managers highlight with tremendous frustrations to the headquarters and regional managers that the non-Korean managers do not have sufficient understanding of the distinctiveness of the Korean market (Roberts 8). Since Jin-Ho Jun has sufficient knowledge and experience regarding the Korean market, the parent company in Copenhagen can trust him to handle the operations of Lundbeck Korea independently and make him report directly to Andersen. Pros There are a number of advantages which may be derived from separating Lundbeck Korea from Lundbeck Asia and having Lundbeck Korea directly report to Andersen in Copenhagen. One, the parent company in Copenhagen will easily provide the financial capacity and means to jump start new products at Lundbeck Korea. Two, the marketing power of the parent company in Copenhagen, for example, the capability to develop new products or place the products in stores, may be an advantage to Lundbeck Korea when it intends to extend its operations. Three, it is simpler for Lundbeck Korea to form partnerships and joint ventures with other organizations when it is separated from Lundbeck Asia and it is able to report directly to Andersen in Copenhagen because it will not be held back by Lundbeck Asia which creates a large organizational bureaucracy. Four, Lundbeck Korea will now have the capacity to borrow finances from the parent company in Copenhagen and issue its own debt. Five, separating Lundbeck Korea from Lundbeck Asia will segregate dangers because they will be seen as independent legal units. Six, if Lundbeck Korea is separated from Lundbeck Asia. The losses at Lundbeck Korea will not automatically transfer to Lundbeck Asia. Finally, in the event Lundbeck Korea is separated from Lundbeck Asia and Lundbeck Korea reports directly to Andersen in Copenhagen, Lundbeck Korea will experience enhanced efficiencies and larger diversification, partly because Asif Rajar will not take part in the operational details of Lundbeck Korea (Roberts 1). Cons There are several disadvantages which may be drawn from separating Lundbeck Korea from Lundbeck Asia and having Lundbeck Korea directly report to Andersen in Copenhagen. First, to sustain its reputation and image, the parent company in Copenhagen may sometimes be compelled to pay for the debts of Lundbeck Korea. Second, the parent company in Copenhagen may be liable for Lundbeck Korea’s damages if it is subject to enforcement acts or if it violates the rules. Third, Lundbeck Korea’s management will have restricted liberty in making significant decisions, whether involving finance, products, or other significant topics. Subjects must frequently go through a number of chains of command in the parent company’s administration prior to any action being carried out (Roberts 14). Finally, Lundbeck Asia will not have absolute access to the cash flow of Lundbeck Korea. Question 2 Andersen holds a belief that the strengths and weaknesses of a person are components of the strategic decision making procedure. In addition, Andersen wonders if Lundbeck Korea has the capacity to flourish under less stringent management and similarly gain from a direct association with the headquarters activities in Copenhagen. Also, Andersen wants to discover a way to establish additional focus on the Korean market in headquarters. Jin-Ho Jun possess the necessary qualities that the parent company in Copenhagen require to solidify Lundbeck Korea’s position in this unfamiliar territory. On the other hand, Asif Rajar plays a significant part in developing Lundbeck Korea. He maintains firm control over the Asian activities (Roberts 8). The only solution that can meet Andersen’s needs and does not result in either Jin-Ho Jun or Asif Rajar exiting the company is establishing a comprehensive governance framework. This comprehensive governance framework will make Andersen, Jin-Ho Jun and Asif Rajar sufficiently aware of what is taking place in all areas of Lundbeck Company. Consequently, both Lundbeck Korea and Lundbeck Asia will engage in activities that will meet Andersen’s needs and make sure both Jin-Ho Jun and Asif Rajar do not exit the company. In addition, the comprehensive governance framework will highlight the relationship between Lundbeck Korea, Lundbeck Asia, and the parent company in Copenhagen, explaining the responsibilities and duties of all these units and developing a comprehensible line of reporting between Lundbeck Korea and Lundbeck Asia and the parent company in Copenhagen. Moreover, the comprehensive governance framework must permit Lundbeck Korea to function independently and in its best interests, without negatively affecting the interests of Lundbeck Asia and the parent company. This will guarantee that the needs of Andersen are met, and both Jin-Ho Jun and Asif Rajar do not leave Lundbeck company. Work Cited Roberts, M. Lundbeck Korea: Managing an International Growth Engine. Massachusetts: Ivey Publishing, 2010. Print. Read More