The case talks about Lundbeck, a leading central nervous system company that deals with pharmaceuticals. The vice president of the company was contemplating about whether to allow the company to operate independently in Korea or remain as subsidiary of the parent company. The pharmaceutical market in Korea had been confirmed to be on the rising spiral and that the subsidiary company in this region was performing superbly under their country manager. The subsidiary company had grown way beyond the level the it had been projected and was expanding rapidly to accommodate more staff.
The major dilemma that confronted the company’s vice president was whether the reporting structure that was previously used was still necessary considering the profitable operation of the subsidiary. The stand-off between the vice president and the country Director was due to the fact that the company had only been ob the profit scale for 3 years and it was not an enough justification to grant independence to Lundbeck Korea. In addition, Korea was only a small part of the Asian markets which included Japan and China. This meant that, allowing Lundbeck Korea to operate independently would have altered the regional the entire reporting structure of the company.
According to the market survey of the company, the leading markets for the product s was USA, Western Europe and Japan. These markets were stable and had good growth paths according to the projections of the company. The remaining market segments for the CNS was taken by the emerging economies . Despite its small market volume, the emerging economy countries posted a significant growth which was in excess the company had expected from these countries. The total market industry for CNS worldwide stood at $93 billion by the end of 2005 since the CNS disease had become an health-threat.