chapter  10
16 Pages

The business-unit concept at AKZO and the interpreting role of the CEO

In 1985 a Dutch book ‘The style of the leader’ (Dijk et al. 1985) was pub-

lished. It contained 26 interviews with leading Dutch businessmen and top managers. The contributions were inspired by the ideas of Peters and

Waterman work In Search of Excellence (1982) which had popularized the

view that company cultures, close linkages with customers and new leader-

ship had a significant impact on effectiveness. Amongst the ‘tableau de

troupe’ was a depiction of Esquire A. A. Loudon, who had become chair-

man of the board of the Dutch chemical multinational AKZO. He reduced

the board membership from ten to four members to improve decisiveness,

build team spirit and take joint decisions. The corporation, however, was still a strongly decentralized federation of powerful divisions and autono-

mously operating divisional presidents. For the company he wished to

become the conductor of a newly structured orchestra as he retorted to the

interviewers (Dijk et al. 1985: 95). To that end he was guiding a transition

towards business units and initiated strategic control, a hybrid style, which

involves both the promotion of overall corporate interests and business unit

autonomy. The end result was the disappearance of the divisions.