BMW - buyers & Human resources - Essay Example

BMW – Buyers and Human Resources Introduction to BMW The Bayerische Motoren Werke, BMW Group has grown over years to be among the world leaders in manufacturing cars and motorcycles. With its headquarters in Munich, Germany, it currently has over 96,000 employees distributed across more than 100 countries globally (BMW Group 2011). Its brands include BMW, Rolls Royce and MINI. Organisational culture of BMW’s human resources In order to adapt to the constantly changing business environment, BMW has been more proactive, dealing with new concepts and exhibiting more sensitivity to customer service (BMW Group 2012.

Its organisational structure has been modified so that it deals with the new operational adaptations. According to Stokes and Lomax (2008), organisation structure defines critical relationships in a business entity aimed at achieving its objectives. As such, in BMW, the new structure defines the new business culture. This culture has been incorporated into the minds of the employees which contribute to the strategies of the firm. Hence, as argued by Pfeffer (2007), the policies of human resources at BMW would be critical in its conduct and performance.

The increased competition in the market has seen the European Union dominate specifically the motor industry. These new competitions have forced older companies to reform. Just like other organisations, BMW requires basic activities of human resources for survival. Such include recruitment, training and development, reward systems, appraisal, control and feedback (Patterson et al. 2010). The structures to be adopted by human resources would largely be influenced by the organisational culture; employees normally have strong emotional attachments to organisations that they work for.

Like the other German firms, BMW has adopted a flat, less rigid structure (BMW Group 2012). Supangco (2012) describes the McKinsey’s 7-S model which identifies the components of an organisation, three of which include staff, style and structure. BMW has adopted the equal opportunity culture with no sexual discrimination in the organisation. According to BMW Group (2012), the firm offers young female employees the technological insight in their careers. The company extensively trains its staffs with its BMW Group’s Trainee Promotion Programme, TPP giving a perfect platform for not only understanding but also practically applying theoretical studies.

The involved trainees would be rewarded with more rewards than just their pay including Christmas bonuses, health programme and subsidies on travelling and meals’ expenses. In 2000, the firm introduced what it referred to as “lifetime working hours account” aimed at benefitting workers who work more for the firm in their retirement, in addition to the pension benefits (BMW Group 2003). This is in line with the modern shift of compensation from the traditional one-dimensional standardised compensation packages as noted by Tiwari and Saxena (2012).

In the firm, staff would not be considered in terms of their cost but rather considered as performance factors. The firm refers to its employees as associates as opposed to referring to them as workers (BMW Group 2012). According to its human resources policy, any policy that does not articulate the interests of its associates would eventually result into a negative cost. However, the firm has failed to relate these policies to customer satisfaction limiting them to employee welfare alone. As such, the ultimate goal of a contended employee could be elusive from the customer’s perspective.

The firm therefore needs to incorporate customer satisfaction when developing its human resource culture. Buyers BMW has been largely considered as a manufacturer of luxury cars, both traditional and functional. Unlike its counterparts such as the US Cadillac which largely produces traditional luxury cars, BMW manufacturing focus has been on functional luxury cars aimed at attracting customers seeking soft and comfortable environment with a living room appearance (BMW Group 2011). These functional luxury cars guarantee performance in addition to style as opposed to the traditional luxury cars.

The BMW-manufactured cars provide precision suspension system and pinpoint steering that makes the driver aware of the surrounding environment. The buyers targeted by BMW encompass affluent men and women in their prime ages identified by BMW Group (2011) as those aged between 25 and 40. Being among the leading motor exporters, ethnicity would be less important in determining buyers, with the firm encouraging positive associations to promote their brands in foreign markets. Pride and Ferrell (2006) described the strategy adopted by BMW as mass customisation where products, prices and distribution would be tailored to meet the personal selection of customers in its premium brand market.

Examples of these tailor made products include the 3-series costing between $20,000 and $50,000 and includes sedans, convertibles and coupes. The 5-series was manufactured for the core luxury market selling between $40,000 and $50,000. The 6-series luxury coupe sells for between $60,000 and $70,000 and has a combination of luxury salon comfort and sports car. Having evaluated the buyers of BMW manufactures cars, it would be crucial to identify its competitors so as to determine effective approaches in maintaining these customers.

According to Buckley (2001), the rivals of BMW’s luxury cars encompass manufacturers of luxury cars from the US, Japan and other European Union nations. Examples of these firms include Cadillac, Ford, Chrysler, Buick and Lincoln from the US, Honda, Toyota and Lexus from Japan and locally competes with German Jaguar, Mercedes Benz and Audi. So as to ensure its survival amidst the intense competition, Stokes and Lomax (2008) observe the entry of BMW into the market for Minis targeting younger and fashion conscious-car owners.

Stokes and Lomax (2008) argue on the importance of manufacturers keeping an eye on its competitors so as to safeguard their markets. In order to secure its market segment against its competitors, BMW has adopted various mechanisms including advanced plans to manufacture 7-series which aims at providing ultimate luxury (Pride & Ferrell 2006). More so, it has purchased the Rolls-Royce brand with the aim of outdoing its rivals. Through its BMW Card which serves both as a loyalty reward and Visa credit card, the firm learns its customers and develops effective customer relationships (BMW Group 2011).

But the company suffers heavily from the perception that its cars are costly. With the increased competition, more manufacturers would seek to attain cost advantage, thus the need for BMW to devise ways to curb this perception, for example through advertisements as proposed by Patterson et al. (2010). In addition, the increased sensitivity to environmental issues among customers should cause the firm to focus its manufacturing efforts on fuel efficient motor vehicles. Finally, due to the increased cost of living, BMW should diversify to manufacturing less costly cars to serve its customers who would be adversely affected economically.

References BMW Group 2003, Value-oriented human resources policy: the 8 guidelines of personnel policy of the BMW Group, viewed 30 October 2012, BMW Group 2011, April 1, Who we are: corporate culture, viewed 30 October 2012, BMW Group 2012, Career opportunities at the BMW Group, Munich, viewed 30 October 2012, Buckley, M 2001, BMW cars, MBI Publishing Company, St. Paul, MN. Maguire, Marion 2004, BMW brand audit: Scientific study, GRIN Verlag, Germany. Patterson, M, Rick, J, Wood, S, Carroll, C, Balain, S & Booth, A 2010, ‘Systematic review of the links between human resource management practices and performance’, Health Technology Assessment, vol. 14, no. 51.

Pfeffer, J 2007, ‘Human resources from an organisational behaviour perspective: some paradoxes explained’, Journal of Economic Perspectives, vol. 21, no. 4, pp. 115 – 134. Pride, WM & Ferrell, OC 2006, Marketing: concepts and strategies, Houghton Mifflin Company, Boston, MA. Stokes, D & Lomax, W 2008, Marketing: a brief introduction, Thomson Learning, London, UK. Supangco, VT 2012, ‘Strategic HR practices in some organisations in the Philippines’, Philippine Magazine Review, vol. 19, pp.

35 – 48. Tiwari, P & Saxena, K 2012, ‘Human resource management practices: a comprehensive review’, Pakistan Business Review, pp. 669 – 705.