The BMW group
Established in 1916, Bayerische Motoren Werke’s hereafter called BMW with its headquarters in Munich, Germany, begun by producing aeroplane engines, shifted to auto-mobile production in the late 1920s. Since, BMW has been very successful. As a requirement for the partial fulfillment of the MSc. Management Course I will try to analyse BMW in relation to leadership, Motivation and team work with my personal conviction and experience as to people management practices.
At the dawn of the twentieth century, most organisations relied on large numbers of people working together in the same building. The young started at the bottom, and the most able would, with experience, become the leaders. It worked well in the context of stable technology. The bosses could predict future needs well enough to make quite detailed plans, including the duties of employees. These could be structured into career ladders, plus a pension, to reward good workers. “Good” meant co-operative. They didn’t want bright ideas from low down the ladder (Bagshaw and Bagshaw, 1999). At the dawn of the twenty-first century, all this has metamorphosed.
Constant innovation makes experience, not irrelevant, but in need of constant adjustment. The good workers are no longer the quiet, co-operative ones, but those who
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A more recent management philosophy is for teams to be self managing. Organisational structures of today’s businesses are becoming more flatter as compared to those of yesteryears. There is a new concept of the organisation itself being learning, evolving organism (Fullop and Linstead, 1999). Businesses are doing business faster than ever before, because of the advent of the internet which was not available to businesses about twenty to thirty years ago. All these point to the fact that organisations are evolving.
The environmental conditions that BMW exists in will be analysed in this section. Much cannot be said about the political environment that exists. However the fall of the Berlin wall meant a lot and influenced BMW greatly because it had the potential to attract from a wide range of qualified and high potential quality workforce.
The management and leadership of BMW face a lot of challenges from the economic environment. Worldwide oversupply of cars is their number one challenge. This is because the car industry has the potential of producing more cars than it is likely to sell. The economic environment makes it possible for hostile takeovers and consolidations. It is not surprising that several attempts has been made to takeover or consolidate BMW.
There is a potential in BMW that attracts other companies to make the attempt to takeover or consolidate. BMW also face stiff competition from Ford, Daimler-Chrysler and other major car manufacturing companies. The production of cars steadily increased between 1997 and 2001 and this reflected in the company’s profit margins in year 2000 and 2001. BMW’s takeover of British Rover caused it to make some heavy losses. It however came out strong making profit again after it had sold off British Rover.
The social environment of BMW is very critical. Social environment thus makes up the customer base of BMW. The customer is the focus of everything that was done at BMW. With the customers becoming more sophisticated in their demands much pressure is on BMW to do just what the customer demands. BMW is also seen to be creating flexible work schedules that permit employees of BMW to travel outside peak hours and hundreds of flexible working time models. BMW normally closes down in August to enable its employees to join in the harvest on their family farm. BMW tries to quickly meet customer needs and also enhance employees’ work and life balance. BMW is also seen to be providing jobs to the community and also opening its plant to visitors daily and actively sponsoring cultural and sporting events.
BMW respond to the technological environment through its philosophy, by creating a Research and Engineering Centre in Munich. BMW in Japan assesses design and technology advances in Asia whereas their technology office in California liaises with US electronic, telecommunication and new materials. As far as technology in the car industry is concern BMW is seen to be ahead. This is demonstrated by their innovations in the pipeline – headlights that know when the next bend is approaching, traffic jam warnings, steering that shortens stopping distances and engines able to breathe more freely.
Much is not seen about the legal environment. However with a multinational company like BMW, many legal issues will be on its head. This is because international laws are there for them to contend with, more especially laws regarding repatriation of profits, protecting brand and more importantly labour laws which are somewhat different in different countries. BMW is very much concern with sustaining the environment and trading fairly.
The appointment of an Environmental Commissioner in 1973 is a clear indication that BMW is committed to sustaining the environment they operate in. Through this commitment the company introduced a water-based paint onto the market and by 1997 paints were powder-based and solvent free. It also credited with creating flexible work schedules to permit its employees to travel outside peak hours so that they will not be caught in traffic jams to pollute the air with the smoke of their cars. BMW has a dismantling and recycling plant and now the 3 Series is almost completely recyclable, while the 5 Series is about 85% recyclable. BMW cars are designed to be fuel efficient in their consumption. Transporting of component parts and finished products is done by rail wherever possible.
There are many ways of looking at leadership and many interpretations of its meaning, it is therefore difficult to generalise about leadership (Mullins, 2002). However a definition from the 1990s said, “Leadership is an influence relationship between leaders and followers who intend real changes that reflect their mutual purposes” (Rost, 1991). Mullins also submitted that leadership is essentially a relationship through which one person influences the behaviour or actions of other people (2002). The style of leadership evident in BMW is the transformational leadership. Transformational leadership is a process of engendering higher levels of motivation and commitment among followers.
The emphasis is on generating a vision for the organisation and the leader’s ability to appeal to higher ideals and values of follower and creating a feeling of justice, loyalty and trust (Mullins, 2002). Transformational leadership is further described as typically focusing on leadership as essentially a matter of supporting, directing and coordinating work or effort towards a known goal or purpose (Fullop and Linstead, 1999).
Since employees at BMW are empowered to self organize, not to withdraw into passive roles, make decisions, solve problems and to think in business terms, it gives them a greater autonomy, and they tend to become much committed to the organisation. In the organisation sense, transformational leadership is about transforming the performance or fortunes of a business (Mullins, 2002). When asked his aims for the company, Milberg, the CEO of BMW said that the most important thing is that the CEO must be someone with vision and the ability to turn his vision into reality together with his team. This statement by the CEO makes the leadership style in BMW much louder. This is because according to Ciulla (1999) transformational leaders have very strong values, but they do not force them on others but develops followers so that they can lead themselves.