BMW: Leadership Case

Introduction

Leadership, whether in political or business context, is about influence, strategic planning, and organization. According to Avery, Bell, & Hilb (2004: Para 3) good leaders are not unaware of the existing conditions and circumstances, but that they act to produce good results in those prevailing circumstances. The qualities as well as the functions and roles of good leaders have been brought forward. This paper therefore is a comprehensive analysis of leadership in relation to BMW.

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The leadership theory

Definition of leadership

Irrespective of the fact that there is no definite description of leadership, definitions have over the years been developed to explain the concept of leadership. According to Avery, Bell, & Hilb (2004:para 11), leadership is described as a social process via which an individual uses his influence to garner loyalty and support of the followers or other people with an objective of wanting to attain the support of the latter to accomplish certain tasks and responsibility by inculcating an idea of mutual responsibility. The leaders objectives can either be personal or own interests or on behalf of the society or the organization.

Shane (2000: 6), in his definition of leadership referred to it as a model through which individuals (leaders) creates leeway via which the followers or rather people can contribute their efforts towards making something unusual to occur. In a definition to leadership that appears more inclined to relating leadership with management however Avery, Bell, & Hilb, (2004: Para 6) defined effective leadership as the ability on the part of the leader to successfully incorporate and optimally use the existing resources as presented both by the macro and micro environments to successfully achieve the goals and objectives of the organization or the society.

In his own fashion of definition, Dwight D. Eisenhower (Spillane 2004: 37) referred to leadership as basically the art via which an individual gathers other peoples efforts and commitment to perform activities and tasks that he or she wants without having to force them to do with an objective of wanting to achieve the objectives that the leader has him/ herself set.

As a result, leadership can take the varied forms which includes, political leadership, social leaderships, and organizational leadership which is an equivalent of the organizational management (Spillane, 2004: 37). In addition, the leadership styles may be described in relation to the leader’s behavior and the approach (leadership) that the leader adopts. Basing on the aforementioned approach to leadership classification, Kurt Lewin categorized leadership into four classes.

In relations to organizational management, people have over the years tended to refer to organizational management and leadership as one and the same thing.

Irrespective of the difference in the terms however the two are extremely closely related function-wise and that they have almost insignificant points of distinction. According to the case, while transformational leadership concentrated on fostering emphasis on procedures, group reward, and organization by exemption, transformational leadership are typically steered by personality, personal relations, and originality.

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However, all aspects in the definition of the two terms indicates that they are greatly integrated hence attempts to obtain a clear distinction between them may be futile. However, a notable distinction in the application of leadership in the context of the organization is in use of individual’s leadership styles and group leaderships; the latter of which are characterized by use of cross functional leadership teams to make organizational decision.

Whether leadership behavior can be learnt or not is explained through clear analysis of the leadership traits or characteristics. The question is closely associated with the question as to whether leaders are born or made. Leaders are partly made and partly born. However, some leaders can be exclusively born. Spillane asserts that such form a group of individuals with exceptional inborn leadership traits and are highly successful in leadership. In contrast however there are some aspects of leadership that are naturally embedded on individuals personality while others can be indicted in the individual through learning and interacting with the external factors.

Factors that shape leadership behavior are of two categories. There are the natural or rather the inborn characteristics that are psychologically controlled which are also referred to as the personality variables and the physiological variable that an individual can acquire through learning and continued interaction with certain environment (Shane, 2003).. Personality traits of an individual are key determinants of his or her behavior as they influence leadership behavior. Since there are some leadership traits that can be taught, leadership behavior can also be learnt. However, most of the traits that make leadership behavior are inborn.

Leadership in BMW

The unmatched success that BMW continues to experience to date can greatly be credited to the leadership excellence that is typical to the organization and which is greatly entranced as an integral part of the organizational culture. According to the case study, the automobile company which is a market leader in the automobile industry is, marked by eras of great success especially the period between 1999 and 2001. Despite the fact that the organization doesn’t explicitly display its vision, mission, and value all signs points out that leadership forms one of the management aspects that are highly valued at BMW.

As a matter of facts, exceptional leadership models and team based management styles have been utilized in the organization to promote performance the latter of which have enabled the organization promote existence of confidence, trust, and high degree of collaboration among parties that are integral to BMW. Furthermore, successful leadership has enabled the company build solid, successful, and mutually beneficial relationships with the stakeholders and partners to the organization.

BMW’s Associate and Leadership Model

As a matter of facts, leadership at BMW is greatly entrenched in the BMW’s Associate and Leadership Model, a leadership model that is championed by the incorporations chairman, Milberg. According to the case, the model forms the pedestal and the pillars upon which all the leadership processes at BMW are carried out. Consequently, the model has played a great role in setting out requirements and providing direction concerning all procedures in the company. According to the case, this model was designed with an initial aim of supporting team and process-oriented cooperation, as well as a long-term leadership approach of establishing a culture of ‘We at BMW’.

In addition, the unique and strategic leadership model has greatly succeeded in encouraging personal responsibility among all people in BMW, self-reliance as well the ability to handle change. Ideally, the leadership model constitutes two parts namely the associate model and the leadership model. According to the case, the associate model mainly sets individual goals and expectations throughout the workforce.

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The leadership constituent model on the other hand challenges management to view its actions and activities within a culture of proactive leadership and development. The model’s criterion for evaluating leadership efficiency at BMW includes the trends in achievement of business goals (both hard and soft goals), leadership efficiency as displayed in the overall corporate thinking and acting, exhibition of technical and professional competency in leaders and employees throughout the organization, the show of leadership and team behavior as well as holding of personal qualities.

Therefore, the model and the criterion provide a typically efficient approach via which both exceptional and high performing leaders as well as the ineffective; leaders can be identified at BMW. Furthermore, the organization uses the leadership model to generate a culture of trust, provide orientation; promote cooperation as well as to realize responsibility among the organizational corporate leaders mainly self-responsibility and self-organization.

According to the case study the model is established on the basis of ten principles including increasing risk-taking, leaders as organizational role model, going by the agreed objectives, promotion of fun, establishment of efficient teams, setting of realistic visions, achievement of business goals, efficient corporate communication at all organizational levels, building of confidence and trust among all people at BMW as well as ensuring diversity for absolute competitiveness and maintenance of favorable market position in the automobile industry.

The unique leadership culture at BMW

Ideally, management success at BMW is greatly rooted and attributed to the uniqueness that the world market leaders in luxurious automobile manufacturing and marketing continues to exhibit. In fact, much of the celebrated success at BMW is perhaps drawn from the purely leadership culture that is seldom among organizations in Germany (Hellriegel & John, 2009). Typically, according to the latter, German management style is characterized by approaches where the top managements are the utmost authority, making all decisions and passing them over to the line managers, supervisors and subordinates to follow without a question. Consequently, there is a big difference between the management and the associates or rather the employees.

Ideally, the leadership and management culture at BMW is an absolute contrast of the German business culture; perhaps the major reason for its celebrated success. First, BMW has maintained a rather flat structure, where the gap between the management and the employees has virtually been minimized. More so, the best working environment as well as very sound relations between employees and managers reigns in the organization.

In deed, individual from across the organizational structure work together as equals to make better cars or rather improve the quality of automobiles at BMW. According to Hellriegel & John (2009:523), all the 106, 000 employees at BMW exists as a unified network with minimum hierarchical barriers and bureaucratic institutions that have ensured the best’s environment for collaborative decision making, innovation, invention, and coordinated efforts towards improving quality of their products.

Impact of the Unique BMW’s leadership culture

The unique culture and excellent working environment at BMW has to a great extent impacted positively on the management outcome. In fact, the two managerial aspects are sources of strategic advantages for the company and have unarguably played a significant role in the success that BMW boasts of today. First, the flat structure that is greatly rooted in the organization culture has to greater extent fostered unmatched efficiency not only in organizational decision making but also in the overall policies implementation. In addition, the organizational culture encourages team work, collaboration between management and employees in performing the organizational task as well as unification of the organizational purpose; making all individual work with commitment towards the achievement of the organizational goals and mission.

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Furthermore, the culture and the best working environment have produced positive results in soliciting employees’ loyalty, satisfaction and commitments towards the achievement of the organizational goals.

As such, employees at BMW exhibit unmatched commitments towards the success of the company; a factor which is attributed to the good results realized at therein. The working environment favors innovation, creativity, collective thinking, and deliberation among all the employees at all levels of management all of which contribute to even better products and which have seen BMW maintain its favorable market position and significant market share in the global automobile industry (Burdock ,2000:para 7).

The culture at BMW has resulted in the creation of informal networks and quality circles which have provided BMW with a source of even the most heretical ideas for improving quality of their products and improving the company’s profitability (BMW group, 2009). From the time employees or rather associates enters the company, they get acquainted with the BMW culture that makes them part and parcel of the company experience, a sense of belongingness, history, and company mission. A unified purpose of top quality products, importance of every individual in the organization in the achievement of the company goals and mission, as well as innovativeness are also key aspects of the BMW unique culture (Hellriegel & John, 2009:522).

At BMW, every associate or rather employee is a leader (BMW group, 2009). The company has in fact maintained a flat organizational structure where both the managers and the employees work hand in hand to achieve common organizational goals i.e. making automobile models which autonomously rule the global automobile markets. Ideally, the autocratic leadership model at BMW has been designed to create a management environment that supports the highest level of collaborative decision making, absolute team work, and the highest level of cooperation between the employees and management.

In fact, the leadership model at BMW is championed by the need for the management to obtain the best approach for defining the organizational tasks roles and responsibilities, based on the agreed objectives between the managers and the employees so that the two groups ultimately unite to achieve the goals as a unit (Avery, Bell, & Hilb, 2004:3). Also, it forms the basis in which the current organizational culture at BMW is rooted. Hellriegel & John (2009:522) asserts that BMW culture has minimized the gap between the management and the associates or employees, fostered a culture of openness and trust as shaped by the great sense of confidence, responsibility, self organization and flexibility and a sense of importance and belongingness that makes every employee feel as part and parcel of BMW.

Leadership, Human Resource Policy and BMW success

One source of strength at BMW is that the company has to a greater extent succeeded in winning the employees loyalty via maintaining the unmatched employees’ satisfaction levels. Although the current employees satisfaction and loyalty at the company is historical i.e. date back to the 1959 company bail out – in which the company entered in to a strategic and long-term agreement with the employees (Hellriegel & John, 2009:522) – the human resources management at BMW is excellent and has managed to maintain one of the most satisfied and loyal workforce in the globe by any standards.

In the first instance, the company through its already established culture has learnt to instill a feeling of belongingness, recognition, importance and respects for the employees across its human resources. In addition, the employees are actively involved in decision making, their ideas are listened to and opinions highly valued by the managers. At the same time, openness and trust between the managers and employees has greatly fostered employees’ satisfaction at BMW (Hellriegel & John, 2009:522).

Secondly, the employees at BMW are well rewarded. According to Hellriegel & John (2009:522), BMW was among the first European company to commence rewarding employees performance and unmatched contribution towards organizational success. As such, the company incorporated employee in the company profit sharing plan in which the employees are paid up to one and a half month payment over and above the annual payment as long as the company meets its financial goals. In addition, BMW offers the highest level of job security to its employees as long as the employees are effective (Hellriegel & John, 2009:522).

The employees however find the ability to meet this precondition autonomous since the controls during the recruitment process and subsequent employees’ development ensures that the company hires the best and the most effective human resources. Burdock, Holy, McPherson, Vankadara, & Vigilante (2000:522), reports that the company has hired well over 10000 employees since 2002 and has not reported even a single lay off unlike other firms in the industry who have a tendency of slashing their workforce every other day.

Exceptional Leadership, Car Quality and Competitiveness

Leadership and management at BMW has all through realized that for them to stay competitive in the car manufacturing industry, it is imperative that they maintain a focus strategy aimed at developing and facilitating continuous creativity and innovation among the committed, loyal and satisfied workforce that the company has (Burdock et al, 2000). As such, the company has, through its unique and appropriate culture ensured the best environment via which creativity and innovativeness are enhanced thus leading to development of the best car models (Burdock et al, 2000:Para 9).

This has enabled BMW to maintain favorable position in the global car market. Among the major attributes of organizational creativity and innovations that have been enhanced at BMW includes, offering the factory workers and engineers autonomy to either creatively design standardized models that meets the company or creatively vary or customize the car models either to match reestablished market needs or to match a customer order specification.

The latter is so flexible that it can accommodate a customer order placed in less that a week before production. In addition, creativity at BMW has been fostered by the autocratic management and leadership style that allows for brainstorming sessions among the employees and encouraged creativity through personal innovativeness and individual idea to develop the best quality and customer satisfying automobiles. Hellriegel & John (2009:523) points out that trust, openness, and collaboration between all individuals at BMW to achieve common organizational objective to great extent favors creativity and innovativeness in the company in a way that out smarts its close rivals like Toyota.

Conclusion

Leadership is one of the most important yet complex aspects of organizational management. Although leadership and management have often been referred to as synonymous, the two are vividly different. However, they perform almost similar functions in the organizational set up. Success in organizational leadership is however greatly determined by the leaders both natural qualities and learnt aspects.

BMW is one of the leading companies in the global automobile industry that is greatly celebrated for the production of high performing and luxurious automobile products. This case therefore reveals that the role of management and organizational leadership in the success of BMW since it was incorporated in 1917 is unmatched. Furthermore, the unique leadership culture at BMW forms the pedestal of the organizational success. The autocratic leadership style, lack of vision, mission and values display coupled with the famous BMW’s Associate and Leadership Model have been the engine that has driven BMW success characterized by decades of continuous improvement, market leadership as well as unmatched profitability.

Reference List

Avery, G. Bell, A., & Hilb, M. 2004. Understanding Leadership: BMW Sheer Driving Pleasure, Paradigms and Cases, Sage Publication Ltd London Pp 1-12.

BMW group 2009. The Company Official Website. Web.

Burdock, R., Holy, R., M McPherson, R., Ng, J., Vankadara, M., & Vigilante, N. 2000. Briefing Report on BMW. Macquarie University (unpublished report).

Hellriegel, D., & John W. Slocum Jnr. 2009. Organizational Behavior 2/E BMW’S Dream Factory and Culture BMW, South West Cengage Learning Mason, OH 45040 USA 522-523.

Shane, S. 2003. A General Theory Of leadership: Individual – Opportunity in New Horizon of Leadership Success. Edward Elgar Publishing.

Spillane, J. P., 2004. Towards a theory of leadership practice. Journal of Curriculum Studies 36 (1): 33–38.

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