BMWs Dream Factory and Culture - Case Study Example

Case Study: BMW’s Dream Factory and Culture Name Institution Professor Subject Date Introduction The initials BMW stands for Bavarian Motor Works in English language. It is a German automobile, motorcycle and engine manufacturing company founded in 1917 with its headquarters in Munich, Bavaria, Germany (Jones, 2012). In addition to that, it is also the mother company of Rolls-Royce Motor Car. BMW is currently one of the ten largest companies that manufacture cars in the world. It specializes in the BMW, MINI and Rolls-Royce brands, some of the strongest brands in the car industry. The Company has a motto that aims to ensure it impacts differently in a highly competitive market place by providing an inspirational driving experience. The focus of BMW Company is majorly in the engineering field. This drive has been successful in terms of profit expansion. The sales of BMW model increased by 8%, with MINI going up by 18% and Rolls-Royce improving by 26% in the year 2007 (Jones, 2012). BMW has certain features that have helped it to maintain its good reputation in the automobile industry. It has a lot that other companies can learn from in terms of culture and factory operations. The Company is known for its managerial system that is flat, flexible, fast and entrepreneurial (552). Its ability to refine the luxury design it produces, has helped it to maintain high profile profit margin in the automobiles industry. It is upon this wide history and introductory remarks, that this paper bases it aims to present a detailed case study on BMW's dream factory and Culture. The paper aims to answer questions related to BMW's culture, the model of leadership and its impacts, how employees derive high job satisfaction at BMW and the attributes of organizational creativity fostered at BMW. BMW's Dream Factory and Culture As stated before, BMW has employed an entrepreneurial culture in its operations, a culture that is not common for most industries especially in Germany (Stanley, 2011). They practice a vertical top-down management style that ensures a good working relationship between workers and managers. The company refers to the employees as associates to remove any barriers to innovation. The welcome given to these workers at most times makes them as part of the organisation and therefore fit well in the realization of the company's mission. The tradition for managers that makes BMW unique therefore is that managers should not always think that they are right (Stanley, 2011). Such a culture came as a result of the biggest challenge that BMW faced in the installation of iDrive system, which proved hell to most of their customers (Stanley, 2011). Competition from other companies like Audi and Toyota also led to this culture. The company's experience in 1959 also propels them to adopt such a culture. In 1959, the company almost went down but was saved by the rich Quandt family who owns 47% shares in the company (553). After this, BMW approached the entrepreneurial culture from three perspectives: Having motivated workers to produce better cars, a good working environment and lastly a flexible approach to innovation. A Dream for Motivated Workers, Better Cars BMW as a company has come to value its workers so much. Dating back to 1972, the company has always believed that success should be shared by all associates in the company. This to date makes the company to include the employees in profit sharing by giving them extra pay at the end of every financial year (Stanley, 2011). The employees in turn do find themselves very flexible to an extent that they do sacrifice their time and even leave their families to go and work on new models (553). Therefore, the payment of overtime to its workers enables the company to meet demand levels and as well acts as a high level of job security. As other companies retrench their workers every year, BMW retains theirs and even adds to the list of existing ones. The new employees are also ever taken round for tests to see whether they can survive the challenging tasks in the company. Apart from the ordinary workers being given overtime, managers are as well appreciated in their work. The one who emerge talented are always promoted to higher ranks (553). In addition to this, the company takes them for in-service training sessions and from there requires them to stay humble and work closely with their subordinates and peers (552). The company thus do dream of a working place without disagreements between workers. Therefore, if the managers have any innovative ideas, they have to form a good relationship with everyone for the idea to sell and be funded. The Dream for a Good Work Environment This culture was realised during the construction of a new factory at Leipzig. In its construction, the plant manager proposed for a competition in drawing the plan for the plant (554). The aim of the manager was to have a factory not just for production but one that would improve communication between line workers and the managers and hence create a good working environment that would help the company build cars better (554). This resulted into a 27 year old engineer Jan Kau, requesting to be allowed top produce a flexible plan for the factory (554). The engineer assembled the top engineers into a two-day workshop at Austrian Alps where they had sessions discussing every detail and produced a building with branches that would extend and add space for building new models instead of them for each production, an expensive and time consuming process(554). The opening of this plant in 2005 was a testimony enough that BMW values teamwork. The factory to date looks like a museum with open workspaces in two floors (554). The building is designed in such a way that if the pace of half-finished cars goes slow, engineers will automatically realise and can respond very fast. The weekly audits from the company are always distributed to workers for them to see the production (Stanley, 2011). This kind of togetherness and openness has helped create a good working environment between workers, engineers and quality experts. The Culture of Flexibility and Innovation BMW has created a complex but flexible culture that allows it to customize its products. The factory is built in such a way it is able to produce a range of basic models. The customers then do come to select what they want starting from engine type, colour of gearshift box to limitless number of interior trims (Businessweek.com). The customers are also allowed to change their minds as early as five days before production begins (Businessweek.com). Averagely, BMW receives close to 17000 proposals for changes in a month (554). The line workers may at times produce similar models only twice in a year. The level of flexibility may seem expensive but the company sticks to it as way of beating its competitors like Toyota. The difference between the two companies is that while Toyota specializes in simplifying automobiles, BMW excels in mastering complexity and redesigning cars to customer's tastes (Businessweek.com). This style of customization thus creates an emotional appeal among the customers of BMW hence raising their sales. The movement of ideas from bottom to up in the organisation is another culture that helps keep models fresh every year. Young designers are always given an opportunity to compete and produce the best of their ideas. The engineers, associates, designers and market experts do work together on a single project in order to produce the best. A good example was in the redesigning of Rolls-Royce, where all were represented including those from California (554). The team produced a new Phantom, 19-foot vehicle that remains to Rolls’ DNA characterized by 21st century lines and high sophistication (Edmondson, 2006). This model has been the best-seller model for BMW Company. BMW therefore creates a good room for innovations and every person in the company has a chance to air their ideas concerning how the company can be improved. This approach has made the company to receive good productions for its customers. An example was in 2004 at Munich when cars were paraded for the board to examine their styling and proportions in day light; it is here that the Z4 model was discovered, hitting show rooms in 2007 (554). Answers to questions in the Sheet 1) How would you describe the culture at BMW? In summary, the culture at BMW is a corporate and an entrepreneurial culture where the going to work is a lifestyle instead of being a job (Stanley, 2011). Being referred to as associates, employees are regarded as team members and a family of BMW. In the description of BMW culture, the group believes in treating people with respect and trust because it facilitates a good base for a sustainable corporate culture (Stanley, 2011). Therefore, everyone's view is respected and the management is humanized in addition to getting overtime for his or her work. The corporate culture at BMW also opens doors for open communication to enable people to interact, support each other and appreciate each other's efforts and achievements (Stanley, 2011). The employees are rewarded for positive behaviour and achievements through incentive programs (Stanley, 2011). In addition, the company uses past mistakes to learn to be able to improve their products and services. In addition to that, it promotes talented managers and even organises in-service trainings for them. 2) What model of leadership is illustrated at BMW? How does this impact BMW’s culture? The kind of leadership offered is one that ensures that managers create a good working rapport with their subordinates. No manager knows everything and therefore, all employees should be treated with respect and their views given a democratic hearing. Servant leadership is as well portrayed as the managers are entitled to help the employees in the lower ranks grow and remain motivated. This kind of corporate culture has impacted positively on the BMW Company. The company for many years has had minimal misunderstanding between its workers and the executive staff. This has extended to a point where the junior staff has contributed positively to the growth of the company through innovative ideas. A good example is the plan that was used to build the company’s plant at Leipzig. Democratic space for innovative ideas has enabled the company to achieve a good working environment for all the workers and as well made it avoid past mistakes like the one witnessed in 1959. 3) Using the concept illustrated in the Job Characteristics Model, analyse why employees derive high job satisfaction at BMW? The employees are so satisfied at BMW, a phenomenon that is not common among other companies. The first is the kind of welcome they are given when they join the company. Secondly, every workers view is regarded as important regardless of the rank on the industry. The kind of team at BMW makes one feel like he is in a family. In addition, the workers are paid promptly and as well added an overtime for good work. Lastly, the company organises for in-service training and workshops for its employees and managers and this enhances capacity building. Every employee can add value to the company and therefore in terms of innovation, the company adopts a culture of flexibility and democratic innovation. Even the junior members at the company are always given a hearing and sometimes can be involved in major planning sessions in the company. The plant at Leipzig was planned by a junior engineer in the company. 4) What attributes of organizational creativity are fostered at BMW? In terms of organizational attributes, BMW believes that everyone in the company is resourceful and therefore when success is realised, it should be shared by all. Courtesy and respect is central to the organisational style of BMW. The corporate culture in the company can be attributed to the success of the company and therefore the company management have tried to retain and improve it for all those years of operations. The openness in communication among the top CEO and managers running down to line workers is another attribute that ensures efficient management of the company. The good models and flexibility accounts for the good organisational style the company possesses. Conclusion The BMW is one of the largest car producers in the world and therefore normally look for employees who have a team spirit and personal initiative together with uncompromising desire to explore for more knowledge (BMW Group, 2012). This kind of selection is normally meant to constantly maintain quality standards. BMW stands out because of their technical-know-how and because of the corporate culture which when pursued consistently leads to high-efficiency culture (BMW Group, 2012). There is always room for brainstorming to have an improve variety of goods to customers. The inclusion of all employees in decision-making process has made the employees to have a strong team spirit. This case study presents many benefits. One fact is that a company will grow to its greatest heights if integrates a corporate culture with an entrepreneurial culture. Some of the cultures that should be adopted by all companies should be: good motivation of workers through payment of overtime, creating a neutral ground of working in the company that ensures that even the managers listen to the person at lowest level. Most companies should adopt the beneficial culture of flexibility and innovation. This will help ensure that the process of customizing their products works out well and everyone can contribute. A major benefit of this case study is to learn that team work can take a company to its greatest dreamt heights. References 'BMW Dream Factory'. Bloomsberg Magazine. Businessweek.com. Web, October 15, 2012 Accessed on 13th December, 2012. BMW Group (2012). Corporate Culture. Web, 2012 Accessed on 13th December, 2012. Jones, Tim. (2012). Profile: BMW; Innovation Leaders.Web, 2012 Accessed on 29th November, 2012. Stanley, Henry.(2011). The Culture of BMW. Study Mode. Web, May, 2011 Accessed on 13th December, 2012. Read More