Research Proposal on "BMW"

Quoted Instructions for "BMW" Assignment:

Assignment #2 *****“ BMW*****s Dream Factory & Culture (Integrating Cases in textbook).

· Students will prepare a 3 to 4 page analysis responding to the following questions:

Describe the culture at BMW?

Discuss the model of leadership illustrated at BMW and the related impact on the organizational culture.

Analyze why employees derive high job satisfaction at BMW, using the concepts illustrated in the job characteristics model (see chapter 5).

Discuss the attributes of organizational creativity that are fostered at BMW.

Discuss how the culture and work environment impact the performance results of BMW.

The report will be graded using the following rubric.

Grading Rubric for Assignment # 2 *****“ BMW

Criteria

(180 total points)

0

Unacceptable

1

Developing

2

Competent

3

Exemplary

1.Describe the culture at BMW.

No elements were discussed.

One element was discussed.

Two elements were discussed.

Three elements were discussed.

2. Discuss model of leadership used at BMW and its impact on organizational culture.

Does not attempt assignment, nor discusses the leadership model and its impact on organizational culture.

The leadership model and its impact on organization culture were discussed, but with less than 60 - 79% accuracy and some of the discussion points were inappropriate or were not identified.

The leadership model and its impact on organization culture were discussed, with 80 - 89% accuracy and appropriate information was discussed.

The leadership model and its impact on organization culture were discussed with 90 to 100% accuracy and all appropriate information was identified and discussed clearly.

3. Analyze why employees derive high job satisfaction by using the job characteristic model.

No characteristics were discussed.

One characteristic was discussed.

Two characteristics were discussed.

Three characteristics were discussed.

4. Discuss the attributes of organizational creativity fostered by BMW.

No attributes were discussed.

One attribute was discussed.

Two attributes were discussed.

Three attributes were discussed.

5. Discuss how the culture and work environment impact the performance results of the organization.

Does not attempt assignment, or discusses how the culture and work environment impact performance results.

The impact of culture and work environment on performance results were discussed, but with less than 60 - 79% accuracy and some of the discussion points were inappropriate or were not identified.

The impact of culture and work environment on performance results were discussed, with 80 - 89% accuracy and appropriate information was discussed.

The impact of culture and work environment on performance results were discussed with 90 to 100% accuracy and all appropriate information was identified and discussed clearly.

6 Writing *****“ Grammar, spelling, punctuation

(APA, if required)

Sentences / paragraph structure, spelling, and punctuation

APA usage

8+ errors

(Many issues)

Sentences / paragraph structure, spelling, and punctuation

APA usage

6 -7 errors

(Many issues)

Sentences / paragraph structure, spelling, and punctuation

APA usage

4 *****“ 5 different errors

(Minor issues)

Sentences / paragraph structure, spelling, and punctuation

APA usage

0 - 3 different errors

INTEGRATING CASES

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. Detroit*****s

rigid bureaucracies have been slow to respond to

competitive threats and market trends. In contrast,

BMW*****s management system is flat, flexible, entrepreneurial*****”

and fast.

Few companies have been as consistent as BMW at

producing an ever-changing product line, with near

flawless quality, that consumers like. BMW has redefined

luxury design with its 7 Series, created enthusiasm

for its Mini, and maintained some of the highest

profit margins in the auto industry. A sporty four-wheeldrive

coupe and a stylish minivan called the Luxury

Sport Cruiser rolled off the production line in 2008.

These models promise to continue BMW*****s run of cool

cars under its new chief executive, Norbert Reithofer.

(His predecessor, Helmut Panke, stepped down upon

reaching the mandatory retirement age of 60. Panke

once insisted that all six members of the management

board take an advanced driving course so they would

have a better feel for BMW cars.) Says Reithofer: *****We

push change through the organization to ensure its

strength. There are always better solutions.*****

Virtually everyone at BMW is expected to help find

those solutions. When demand for the 1 Series compact

soared, plant manager Peter Claussen volunteered to

temporarily use the brand new factory in Leipzig,

Germany*****”which had been designed for the 3 Series*****”

to produce 5,000 of the compacts. Claussen and his associates

quickly figured out how to do it while maintaining

high quality. Recently, 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 (a nickname for BMW

cars, unlike the *****beemer***** or *****beamer***** nicknames used

for BMWmotorcycles) and be a big seller among those

on a tighter budget. They were right.

Culture Much of BMW*****s success stems from an entrepreneurial

culture that is rare in corporate Germany.

Management in Germany is usually top-down, and the

cultural gulf between workers and managers is significant.

BMW*****s 106,000 employees, however, have become

a network of committed associates with few hierarchical

barriers to hinder innovation. From the

moment they set foot inside the company, associates

experience a sense of place, history, and mission. Individuals

from all levels of BMW work side by side.

They create informal networks where even the most

unorthodox ideas for making better Bimmers or

boosting profits can be voiced. BMW buyers may not

know it, but when they slide behind the wheel, they are

driving a vehicle born of thousands of impromptu

brainstorming sessions. BMW, in fact, might just be the

chattiest auto company ever. Claussen comments: *****The

difference at BMW is that [managers] don*****t think we

have all the right answers. Our job is to ask the right

questions.*****

That*****s not to say this freewheeling idea factory

hasn*****t made its share of blunders over the years. In 2001,

BMW alienated customers with its iDrive control system.

The device was designed to help drivers quickly

move through hundreds of information and entertainment

functions with a single knob. It proved incomprehensible

to many buyers. Rival Audi is narrowing the

gap with BMW in Europe by producing a new generation

of stylish, high-performance cars that have topped

consumer polls. Toyota*****s Lexus also has BMW in its

sights as it makes a move to gain market share in Europe

with sportier, better handling cars. Reithofer comments:

*****We will be challenged*****”no question. We have to take

Lexus seriously.*****

InBMW*****s favor is an enduring sense that things can

go wrong. New hires quickly learn that theBMWworld

as they know it began in 1959. That*****s when the company

nearly went bankrupt and was just a step away from

being acquired by Mercedes. This long-ago trauma remains

the pivotal moment in BMW folklore. Reithofer

continues: *****We never forget 1959. It*****s in our genes, and

it drives our performance.*****BMWwouldn*****t exist today if

it weren*****t for a bailout by Germany*****s wealthy Quandt

family*****”still the controlling shareholder, with a 47

percent stake*****”and a pact with labor to keep the company

afloat. *****Near-death experiences are very healthy

for companies,***** says ***** Cole, a partner at the Center

for Automotive Research in Ann Arbor, Michigan.

*****BMW has been running scared for years.*****

The story of 1959 is told and retold at each orientation

of new plant associates. Works Council Chief

Manfred Schloch, a 26-year veteran, holds up old,

grainy black-and-white photos of two models from the

1950s. The big one was too pricey for a struggling

postwar Germany. The other, a tiny two-seater, looked

like a toy and was too small to be practical, even by the

standards of that era. The company badly misjudged the

market, he says. Schloch pulls out a yellowed, typewritten

1959 plan for turning the company around with

a new class of sporty sedans. Schloch then hands out

photos of Herbert Quandt and the labor leader of the

period, Kurt Golda. Schloch states: *****I explain how we

rebuilt the company with Quandt*****s money and the

power of the workforce. And I tell them that*****s the way it

works today, too.*****

Motivated Workers, Better Cars BMW derives much

of its strength from an almost unparalleled labor harmony

rooted in that long-ago pact. In 1972 and years

before the rest of European companies began to think

about pay for performance, the company included all

employees in profit sharing. It set up a plan that distributes

as much as one and a half months***** extra pay at

the end of the year, provided BMW meets financial

targets. In return, employees are flexible. When a plant

is introducing new technology or needs a volume boost,

it*****s not uncommon for associates from other BMW

factories to move into temporary housing far from home

for months and put in long hours on the line. Union

leaders have made it easy for BMW to quickly adjust

output to meet demand. Without paying overtime, the

company can increase the production schedule to as

much as 140 hours a week (20 hours per day, 7 days a

week) or scale it back to as little as 60 hours. The system

enablesBMWto provide a high level of job security, and

no one can remember any layoffs*****”ever. Since 2000,

BMW has hired 12,000 new associates even as General

Motors and Ford Motor have slashed tens of thousands

of jobs.

BMW*****s human resources department receives more

than 200,000 applications annually. Those who make it

to an interview undergo elaborate daylong drills in

teams that screen out big egos. For the lucky few who

are hired, a Darwinian test of survival ensues. BMW

promotes talented managers rapidly and provides little

training along the way. It requires them to reach out to

others to learn the ropes. With no one to formally coach

them in a new job, managers need to stay humble and

work closely with subordinates and their peers. This

minimizes traditional corporate turf battles. Anyone

who wants to push an innovative new idea learns the key

to success fast. *****You can go into fighting mode or you

can ask permission and get everyone to support you,*****

says Stefan Krause, BMW*****s 44-year-old chief financial

officer. *****If you do it without building ties, you will be

blocked.*****

Work Environment The construction of the Leipzig

factory is a testament to the power of such ties. When

plant manager Claussen first proposed a competition to

lure top architects, executives at headquarters were

taken back. Krause comments: *****People said to me,

*****˜What*****s wrong with these guys in Leipzig? We don*****t

need beautiful buildings, we need productive buildings.*****

***** Claussen convinced Krause and others that the

unconventional approach wouldn*****t just produce a pretty

factory but one whose open, airy spaces would improve

communications between line workers and managers

and create an environment that helps the company build

cars better.

Even before Claussen began pushing his architectural

vision, others were busy designing the inner

workings of the plant. Jan Knau, an engineer, was only

27 when he was asked to come up with a flexible assembly

line for the factory. Knau, then just a junior

associate, contacted BMW*****s top 15 assembly engineers.

He invited them to a two-day workshop at a

BMW retreat near the Austrian Alps. After a series of

marathon sessions that included discussions of every

facet of the ideal assembly line, Knau sketched a design

with four *****fingers,***** or branches, off the main spine.

The branches could extend to add equipment needed

to build new models. This made it possible to keep

giant robots along the main line in place rather than

moving them for each production change, an expensive

and time-consuming process.The Leipzig plant opened

in 2005. It represents Claussen*****s vision of teamwork

enhanced through design by Knau*****s creative engineering

concepts. With pillars of sunlight streaming

through soaring glass walls, architect Hadid*****s design

looks more like an art museum than a car factory.

Open workspaces cascade over two floors. Unfinished

car bodies move along a track with enhanced lighting

that runs above offices and an open cafeteria. If the

pace of the half-finished cars slows, engineers know it

immediately and can quickly investigate the problem.

The weekly quality audits*****”in a plaza workers pass on

their way to lunch*****”ensure that everyone is quickly

aware of any production snafus. The combination of

togetherness and openness sparks impromptu dialogue

among line workers, logistics engineers, and quality

experts. Knau states: *****They meet simply because their

paths cross naturally. And they say, *****˜Ah, glad I ran into

you, I have an idea.***** *****

Flexibility and Innovation The flexibility of BMW*****s

factories allows for a wide range of variations on basic

models. At Leipzig, for instance, parts ranging from

dashboards and seats to axles and front ends snake onto

overhead conveyer belts to be lowered into the assembly

line in precise sequence according to customers***** orders.

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. Customers request

some 170,000 changes a month in their orders, mostly

higher priced options such as a bigger engine or a more

luxurious interior. There are so many choices that line

workers assemble exactly the same car only about once

every nine months.

Integrating Cases 523

This kind of customization would swamp most automakers

with budget-busting complexity. But BMW

has emerged as a sort of anti-Toyota. Toyota excels in

simplifying automaking. BMW excels in mastering

complexity and tailoring cars to customers***** tastes.That*****s

what differentiatesBMWfrom Lexus and the rest of the

premium pack. *****BMW drivers never change to other

brands,***** says Yoichi Tomihara, president of Toyota

Deutschland. He concedes that Toyota lags behind

BMW in the sort of customization that creates emotional

appeal.

Bottom-up ideas help keep BMW*****s new models

fresh and edgy year after year. Young designers in various

company studios from Munich headquarters to

DesignWorks in Los Angeles are constantly pitted

against one another in constructive competitions. Unlike

many car companies, where a design chief dictates a

car*****s outlines to the staff,BMWdesigners are given only

a rough goal. Otherwise, they are free to come up with

their best concepts.

To get the most out of its associates, BMW likes to

bring together designers, engineers, and marketing experts

to work intensively on a single project. The redesign

of the Rolls-Royce Phantom, for instance, was

dubbed *****The Bank.***** The 10 team members worked out

of an old bank building at London*****s Marble Arch, where

dozens of Rolls Royces roll by daily. *****We took designers

from California and Munich and put them in a new

environment***** to immerse them in the Rolls Royce

culture, says Ian Cameron, Rolls*****s chief designer. The

result was the new Phantom, a 19-foot vehicle that remains

true to Rolls*****s DNA, but with 21st-century lines

and BMW*****s technological sophistication under the

hood. With sales of the $350,000 car running at about

700 a year, the Phantom is the best seller in the superluxury

segment, outstripping both the Bentley Arnage

and the Mercedes Maybach.

Much ofBMW*****s innovation doesn*****t come via formal

programs such as The Bank, however. In 2001, management

decided to pull the plug on the disappointing

Z3 sports coupe. That didn*****t stop a 33-year-old designer

named Sebastian Trübsbach from doodling a sketch of

what a Z3 successor might look like. Ulrich Bruhnke,

head of BMW*****s high-performance division, loved it. In

Trübsbach*****s drawing, Bruhnke saw a car that could rival

Porsche*****s Cayman S in performance but at a lower price.

He persuaded a few designers and engineers to carve out

some time for the renegade project. Next, Bruhnke

gathered a team to map out the business case. The small

group worked for 10 months to build a prototype.

The moment of truth came in 2004 at a top-secret

test track near Munich. Cars were lined up so the Board

of Directors could examine their styling and proportions

in natural light. Only one was covered by a tarp. Panke

approached the mystery model. *****What is this interesting

silhouette?***** he asked Bruhnke, who invited his boss to

take a look. Panke yanked back the cloth, exposing a

glittering, bronze metallic prototype for what would

become the Z4 coupe. Bruhnke breathed a sigh of relief

when he saw Panke*****s eyes light up as they viewed the

car*****s design. Panke and the Board of Directors quickly

gave the go ahead. The Z4 coupe sped to production in

just 17 months, hitting showrooms in 2007.

To take a virtual tour of how each model of the Z4 is

manufactured, go to www.bmwusfactory.com. Click on

*****Virtual Tour.***** The virtual tour is at BMW*****s state-ofthe

art Spartanburg, South Carolina, manufacturing

plant. A moderator describes each step of the production

process.

For more information on the BMW Group, visit the

organization*****s home page at www.bmwgroup.com.

Questions

1. How would you describe the culture at BMW?

2. What model of leadership is illustrated at BMW?

How does this impact BMW*****s culture?

3. Using the concepts illustrated in the job characteristics

model (see Chapter 5), analyze why employees

derive high job satisfaction at BMW.

4. What attributes of organizational creativity are

fostered at BMW?

Source: Adapted from Edmondson, G.BMW*****s dream factory.

Business Week, October 16, 2006, 70*****“80; Kurylko, D. T. Job

swap works for BMW. Automotive News, July 9, 2007, 48;

Cokayne, R. BMW plan offers workers stable income. BusinessReport,

September 3, 2007; Pries, L. Emerging production

systems in the transnationalization of German carmakers:

Adaptation, application or innovation? New Technology: Work

and Employment, 2003, 18, 82*****“100; BMW Group. www.

bmwgroup.com (September 2007). *****