Answer

Case Study Analysis: Lundbeck Korea

Question 1

            Based on the case study, the priority of the local managers includes expanding the operations of Lundbeck as a business and developing a healthy relationship between the organization and the local communities. Their backgrounds and position will help them address these concerns. For instance, Jin Ho Jun has 15 years experience in the Korean market and understands the importance of culture in business, thus he is more suitable to build a relationship with the local communities.

            Regional managers’ priorities include leading the local managers to successfully meet their objectives through support, direction, guidance, and control. They also perform particular operational tasks in the Asian region. Asif Rajar, who is the regional manager, has an MBA and his position presents him with the opportunity to address the priorities. His MBA background will enable him to support the local managers successfully.

            The headquarter managers’ priorities are to oversee the business expansion and ensure that the operations of the company are following the four principles; Speed; results; integration; and specialization. Michael Anderson has the Knowledge of Lundbeck’s goals and values, making it easier to ensure that the company operates under the four principles.

            Lundbeck Company has a mentality that a small size business with 70 percent of the shares owned privately is an advantage. This mentality developed because of the desire by the company’s management to become a global firm thus opening various subsidiaries in different countries.

Question 2

            The functional areas in Lundbeck’s value chain that require global integration include the brand image, market share, and growth. For Lundbeck to maintain the growth in Korea which has been valuable so far, it requires global integration to maintain the brand image and growth. The areas that require local responsiveness include corporate structure, the strength established with the local communities (demand) and the need for expansion.

            I do not believe that Lundbeck’s reporting structures balance these requirements because the launch of Lexapro caused a strategic conflict in the company ranks. If the company has a balance between integration and local responsiveness, there should be no miscommunications and disputes.

Question 3

            A regional office has a value in that it enables independent growth directed to every region, thus allowing the company to integrate the Asian market. Lundbeck Asia is a regional division comprising of ten different subsidiaries with the same brand image but different approaches of operation to ensure independent growth.

            Andersen should not separate Lundbeck Korea from Lundbeck Asia because lack of regional support may potentially make the subsidiary to lose its competitiveness in Korea. Again, if the subsidiary is separated from the parent division, it may have too much independence, thus staying away from the core goals of the Lundbeck. Separation of the two entities could intensify the conflict between the management thereby creating a rift between the parent company and the subsidiary.

Question 4

            I believe the only possible solution that meets Anderson’s need without sending away Rajar and Jun is by giving Jun more freedom but leaving Rajar to continue overseeing the operations as the regional manager.

Question 5

            The case does not raise ethical questions, but a disagreement in marketing strategy between the regional and local manager. The regional manager supports an introduction of a new product into the Korean market while the local manager proposes that the company continue selling the product already in the market until it is fully established.