Running head: BMW'S DREAM FACTORY AND CULTURE

BMW's Dream Factory and Culture BUS/520

BMW's Dream Factory and Culture BMW, with more than $60 billion in sales, is much smaller than its American rivals. However, the U.S. auto giants could still learn some things from BMW (Reh, n.d., para.1). BMW’s culture could be considered one driven highly by teamwork. BMW’s 106,000 employees have become a network of committed associates with few hierarchical barriers to hinder innovations. Individuals from all levels of BMW work side by side. Which creates informal networks where even the most unorthodox ideas for making better Bimmers or boosting profits can be voiced? The difference at BMW is that managers don’t think they have all the right answers, their jobs are to ask the right questions (Reh, n.d., para. 2). Leadership is the process of developing ideas and a vision, living by values that support those ideas and that vision, influencing other to embrace them in their own behaviors, and making hard decisions about human and other resources. The model of leadership used at BMW would be one of delegate style where the leader permits the team to make the decisions within prescribed limits (Hellriegel, & Slocum, 2010). A good example of this model/style being used would be when the demand for the 1 Series compact soared, plant manager Peter Claussen volunteered to temporarily use the brand new factory in Leipzig, Germany which had be designed for the 3 Series. Clausesen and his associates quickly figured out how to do it while maintaining high quality (Reh, n.d., para.3) Another good example of the delegate style/leadership model would be when line workers in Munich, Germany, suggested adding a smaller diesel engine in the 5 Series. They contended that it would have enough power to handle like a Bimmer and be a big seller among those on a tighter budget. They were right (Reh, n.d., para 3). Considering that organizational culture reflects the shared and learned values, beliefs, and attitudes of its members, I would say that model greatly impacted their culture for the positive; BMW believes motivated workers make better cars. Take for instance how BMW relies on factory workers to find ways to cut costs and boost output in their plants. To motivate their employees and align their efforts with the needs of BMW, managers and union leaders designed a new pay system which offers all employees annual bonus of $400 for their ideas (Hellriegel, & Slocum, 2010). Another instance would be how in 1972 and years before the rest of European companies began to think about pay for performance, BMW included all employees in profit sharing. It set up a plan that distributes as much as one and half months’ extra pay at the end of the year provided BMW meets financial targets. In return, employees are more flexible (Reh. n.d., para. 9). BMW employees derive high job satisfaction due to individual differences which influences how employees respond to enriched jobs. They include knowledge and skills, strength of growth needs, and satisfaction with contextual factors. When it comes to knowledge and skills, applicants that make it to an interview undergo elaborate daylong drills in teams to that screen out big egos. For the lucky few who are hired, a Darwinian test of survival ensues (Reh. n.d. para. 10). Employees of BMW derive high job satisfaction from strength of growth needs in the sense without paying overtime, the company can increase the production schedule to as much as 140 hours a week or scale it back to as little as 60 hours. The system enables BMW to provide a high level of job security, and no one can ever remember any lay offs (Reh. n.d. para. 10). There are a few attributes of organizational creativity that are fostered at BMW. One attribute would have to be construction of the Leipzig factory that have pillars of sunlight streaming through soaring glass walls , open workspaces cascade over two floors, unfinished car bodies move along a track with enhanced lighting that runs above offices and an open cafeteria (Reh. n.d. para.12). The second attribute would have to be the process in which they promote. BMW promotes talented managers rapidly and provides little training along the way. It requires them to reach out to others to the ropes. With no one to formally coach them in a new job, managers need to stay humble ad work closely with subordinates and their peers (Reh. n.d. para. 10). The final attribute of organizational creativity that are fostered at BMW would have to be the way they allow customers to order and customize their vehicles right from the factor. BMW buyers can select everything from engine type to the color of the gear-shift box to a seemingly limitless number of interior trims-and then change their mind and order a completely different configuration as little as five days before production begins. The culture and work environment impact the performance results of the organization greatly. An instance of how the work environment impacts the performance results would be how BMW constructed the plant in Leipzig to allow engineers to see when the pace of the half finished cars slows so that they would be able to quickly investigate the problem (Reh. n.d. para.12). The construction of the plant also improved the communications between line workers and managers due to the open, airy spaces (Reh. n.d. para 11). The culture impacts the performance results in the sense that individuals from all levels of BMW work side by side. With individuals from all levels working side by side, it allows them to become a network of committed associates with few hierarchical barriers to hinder innovations. In doing this it gives the associate a sense of place, history, and mission. BMW’s culture also impacts performance results in the since that new hires quickly learn that the BMW world as they know it begun in 1959. That’s when the company newly went bankrupt and was just a step away from being acquired by Mercedes (Reh. n.d. para 7). With BMW teaching new hires this, it allows them to become more determined and helps drive BMW’s success.

Reference:
BMW’s Dream Factory and Culture. (n.d.) Retrieved October 24, 2009, from Strayer E Companion website. www.strayeronline.net.

Hellriegel, D, & Slocum, J. (2010). Leadership and organizational behavior. Cengage Learning.