Fundamentals of Leadership in BMW Group - Essay Example

FUNDAMENTALS OF LEADERSHIP: BMW GROUP Introduction Leadership is defined by Hannah, Walumbwa and Fry as a process and has nothing to do with traits found in a leader, but rather a form of transactional and interactive situation that is seen between leaders and followers. Leadership is also concerned with how a leader influences their followers. In addition, leadership must occur within a group. It involves making members of a group act towards achieving their common goals. Therefore, leadership requires that one person leads others in achieving a certain goal, a goal which must be common for all members. This paper presents a report on the leadership within the BMW Group in relation to various models and theories of leadership. BMW’s CEO, Joachim Milberg Joachim Milberg, BMW’ CEO is a pragmatic leader who has led the company to achieve the most successful period in its history. The Great Man theory of leadership is a characteristic quality of leaders whose qualities lead to a great positive transformation of a company or business organization. The description of the qualities of leadership by Northouse (2010), illustrates that it is through the good attributes of a leader that positive change is made possible. The changes which have been brought about by Milberg especially in car production and the significant increase in sales of the company’s brands apparently illustrates that he is a great leader. Milberg can also be described in relation to the trait theory of leadership because it is through his unique traits that have made him to be a successful leader in causing positive change within the company. Milberg’s leadership traits demonstrate that he is a sensible leader who is also level headed in making leadership decisions. It can be argued that the special traits of this leader are inherited because they are explicit and unique when compared with the previous CEO as demonstrated by his excellent performance as the CEO of BMW Group. As a result of his god leadership traits, Milberg is very respected by all members of the BMW Group. The participative theory of leadership is described by Northouse (2010) as the kind of leadership style which gives due consideration of the opinions and needs of those who are led in reaching decisions. Milberg’s leadership in the company encourages democratic or team leadership in which the management gives the employees a chance to give their views and ideas on various project issues before reaching the final decision. Therefore the company’s CEO engages the company in participative leadership. Seminars and workshops are held in the company where employees engage in interactive discussions with the company’s management and thus make decisions which are based in common consent. The leadership of the company’s CEO has thus made the company make more sales and profits because participative leadership makes the employees work had towards a common goal and objectives because they form part of the decision making process. Northouse (2010) describes the participative leadership theory as an ideal leadership style because it recognizes the input and ideas of the subordinates in decision making. These leaders facilitate the participation and input from all members of the group to enable them feel more relevant and committed to the decision-making process. In participative theories, however, the leader retains the right to allow the input of others. According to Burt (2000), the leadership of Joachim Milberg as BMW’s CEO has led to continued improvement in production of cars and the assembly of vehicles is now based on a daily basis as opposed to weekly production in the past. This can be attributed to the company’s leadership which includes the production team and the company’s engineers in participatory decision making processes. As a result, the members of the production team has been able to give innovative suggestions which have contributed to the increased speed in production and high quality products which characterize the company in the tenure of Milberg as the Group’s CEO. Skills Approach in BMW Leadership Style According to Northouse (2010), the skills approach in leadership is concerned with the abilities and knowledge that a leader has. BMW CEO Joachim Milberg is an engineer with a desirable academic background which demonstrates that he is knowledgeable in car production which makes him a suitable leader for the company. This is one of the factors which have contributed to the leader’s success in improving the production of the company and making it to efficiently meet its business goals of high annual profits. The company’s leader also has a vast experience in production which makes him skilled to lead the group into higher heights. Burt (2000) adds that the leadership of BMW and the managing team is very knowledgeable in matters of car engineering and as a result they are able to guide the company staff into increased production and sale of automobiles. The skills theory in leadership illustrates that it is possible to make a leader through leaning various skills which makes him or her to be a successful leader. The increased performance of BMW shows that the leaders of the company are continuously acquiring new skills which are making them more effective in promoting achievement of the desirable goals of the company. According to Northouse (2010), Robert Katz provided a skills approach in leadership which describes a three skill approach in leadership. In 1995, Katz proposed a model in which proposes that a leader should have human skills, technical skills and conceptual skills to enable him or her to successfully lead an organization into efficient achievement of objectives. The operations of BMW are based on the technical abilities or skills of both the management and the staff. The leaders of the company are equipped with technical skills in car engineering which makes them well suited to lead project team in executing projects within the automotive industry. The leaders of the company require technical skills so that they are able to understand the challenges and needs of the technical team in the manufacturing arm of the company. Edmondson, Palmeri, Grow and Tierney (2003, p. 57) say that as a result of the technical abilities of BMW’s leadership, they are able to solve the technical difficulties of the staff through workshops and demonstration on which challenges are discussed through this interactive forums with an aim of reaching the solution for the problem at hand. According to Burt (2000), the success of BMW and its competitiveness in the automobile industry is attributed to the vast technical knowledge, proficiency and competence of the management and the technical staff. The technical skills of the BMW management are high in the lower management because they are the experts who are directly involved in car production. Karlgaard (2009, p. 23) says that in 2000, Michael Mumford also explained leadership in terms of the skills model. Mumford’s approach describes leadership from a different perspective as compared to that of Katz but both points of view describe leadership in terms of skills of a leader as the determinant of competence. It can be argued that technical skills must be supplemented by both human and conceptual skills for managers to be able to successfully lead the technical team. Good relationship between the management and the technical team within BMW Company is essential and this is possible through the human skills of the leaders. Conceptual skills are also required for the company’s management so that the technical decisions they make are based on thorough understanding of the due technical process and the implications of the decision. BMW’s Leadership Style in Goal Accomplishment According to Avery and Bergsteiner (2011, p. 11), the BMW Company applies a democratic style in leadership. Through this style of leadership, the management of the company provides an open forum for dialogue between its leaders and the employees. The company has remained competitive in the automobile industry because of the high business accomplishment and achievement of goals which is attributed to its good leadership style. Hannah, Walumbwa and Fry (2011, p. 771) explains that when leaders involve their followers in the making of decisions the efficiency of goal achievement is greater than in non participatory management and leadership approaches. The leaders of various projects of the BMW Group and its functional sections consult with the company employees before making decisions. In accordance to Northouse (2010), consultative decision making is an appropriate leadership method because it prevents the risk of a single individual making business decision which would be misinformed and hence wrong. Therefore it can be argued that the BMW Group has achieved significant success over the years in the accomplishment of its goals due to the good leadership style. Karlgaard (2009, p. 23) points out that the democratic leadership style leads to the cooperation of employees in the execution of work activities which means that they work towards the achievement of a common goal. Therefore, through the democratic leadership style, BMW Group motivates its employees through leaders who consult with the group before reaching the final decision. The employees feel important through a consultative nature of leaders and thus they are encouraged to work with a goal of meeting the decisions which are reached through a group decision. According to Avery and Bergsteiner (2011, p. 12), the success of BMW in the achievement of its business goals is attributed to its human capital. This assertion shows that the good leadership of the company through its managing team has played the central role in the success of the company. The application of the democratic leadership style to promote goal achievement within the BMW Company is demonstrated by the fact that workshops are used to enhance interaction between the leaders and the employees so that changes and decisions are based on discussions and unanimous agreements. The Blake and Mouton’s model of leadership is based on the people and production as the behavioral dimensions in the leadership process as described by Northouse (2010). The model illustrates that leadership involves getting concerned by about the people and their productivity. In the analysis of the managers of BMW Group, the model can therefore be used to identify the style of leadership and its success in the accomplishment of the goals of the company. Avery and Bergsteiner (2011, p. 14), explains that the success of BMW Group in the achievement of goals is a product of the leader’s concern for the employees. This is illustrated by the fact that the members of a group or team are considered by the management in deciding on the best approach of accomplishing a specific task. The interests and needs of employees are put in consideration through discussions during workshops which the company uses to successfully execute its projects. Avery and Bergsteiner (2011, p. 13), points out that the achievement of goals within the BMW Group is made possible by leaders because they are concerned about the production which emanate from the input of resources into the company. The leaders of the company lay a lot of emphasis on the efficiency of the business activities in addition to the objectives of accomplishing specific goals. This makes it possible for the company to achieve success in the attempt of meeting the set goals. Using Blake and Mouton’s grid, it is evident that team leadership is the characteristic of the BMW Group. This is because there is high concern for the people as well as the production of the company. Through team leadership therefore BMW Group has been able to meet its goals through the use of the people in increasing the productivity of the company. The concern for the people is demonstrated by the incorporation of the ideas of the employees and their needs in the decision making process. Additionally, the team leadership within the company has proved successful because the leaders lay emphasis of the achievement of objectives and therefore the goals of the company. The implication of the team leadership which applies democratic and consultative principles in management of the BMW staff is effective and efficient achievement of goals. Effective Leadership in Team Success Karlgaard (2009, p. 23) says that according to Hill’s Team Leadership Model, an effective leader should be able to assess and determine the problems that the members of a team have. The diagnosis of the challenges and problems of the team by the leader helps him or her to take the most appropriate measures or actions with the aim of providing an accurate solution to the problems. The leaders of BMW Group participate in workshops and project teams through active interaction with the group members. Through this interaction, the leaders are able to identify the challenges faced by the team members such as problems in the development of innovative technologies. From this participation and discussion with the group members, the management is enabled to make decisions which would include allocation of sufficient funds for projects. The identification of team problems is facilitated by democratic or team leadership within the company which allows team members to express their opinions and thus mention their problems. According to Northouse (2010), it is through team leadership that the problems which project team faces can be identified which form a basis for provision of appropriate decisions. The solutions to the problems faced by BMW’s project teams are decided upon interactive discussion of the management with the team members as explained by Avery and Bergsteiner (2011, p. 11). Therefore through interactive leadership, suggestions of the team members on the solutions to problems are considered by leaders before reaching a decision. For example, team members may suggest the amount of money needed for successful accomplishment of a task so that the leaders use the suggestions as a guide in reaching the final decision. Karlgaard (2009, p. 23) points out that according to the McGrath’s theory of team leadership, leaders play two critical functions during the leadership process. These functions are the maintenance and task functions. The task functions in leadership means that a leader should facilitate a group’s strive in the accomplishment of a specific task. On the other hand, the maintenance function in team leadership means that a leader must ensure that the functioning of a team is maintained. The BMW Group leaders engage various teams in active discussions during workshops which are aimed at successfully executing a specific task. The car manufacturing tasks of the BMW Company involve various engineering tasks in which groups are created to create innovative car products. These groups achieve success in the accomplishment of the tasks before them through the company’s good team leadership. The success of a company depends on the ability of its management to maintain the functioning of group projects as demonstrated by Northouse (2010). The BMW maintains its project teams though adequate funding of the projects, motivation of the staff and provision of good working environment. The environment within the automobile manufacturing plants of the company is conducive for the company’s employees. Moreover, the company compensates its staff with admirable payment packages and hence maintains them through such approaches to motivation. More importantly, the company invests adequate funds on its project through proper decision of team leaders and as a result maintains the teams of various automobile projects. Conclusion BMW’s success is attributed to its effective leadership. BMW Group is doing very well in the market and has experienced an era that can be described as full of success especially due to the team leadership style of the company’s management and the company’s CEO, Joachim Milberg. The technical skills in the leadership of the company and participative or democratic management of teams is also the reason why the company has remained successful in achievement of its goals and being competitive in the automobile industry. References Avery, G.C. and Bergsteiner, H 2011, "How BMW successfully practices sustainable leadership principles", Strategy & Leadership, Vol. 39, no. 6, pp. 11-18. Burt, T 2000, Rover in the rear-view mirror: Interview Joachim Milberg: Tim Burt finds BMWs chairman considered, upbeat and focused on the future, United Kingdom, London (UK). Edmondson, G, Palmeri, C, Grow, B, & Tierney, C 2003, BMW, Businessweek, 3836, pp. 57-60. Hannah, S., Walumbwa, F. & Fry, L 2011, Leadership in Action Teams: Team Leader and Members Authenticity, Authenticity Strength, and Team Outcomes, Personnel Psychology, 64, 3, pp. 771-802 Karlgaard, R 2009, Four Styles of Leadership, Forbes, 184, 8, p. 23 Northouse, P. G 2010, “Leadership Theory and Practice”, 5th Ed., Sage Publications, Thousand Oaks Read More