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Leadership Practices at BMW Linking Employee Goals to Organizational Goals


LeadershipPractices at BMW: Linking Employee Goals to Organizational Goals



BayerischeMotoren Werke AG (BMW) is a leading luxury automobile producer in theglobe. It manufactures motorbikes and cars in three quality brandsnamely MINI, BMW, and Rolls Royce. BMW has embraced consolidationwhich is usually the main characteristics of the automobile industryand this has made BMW to remain a sovereign and extremely profitablecompany.

Leadershipis a crucial thing in organization management and this aspect hasreally been incorporated in BMW which enabled it to come out of aglobal financial crisis (GFC) successfully, which hit the automobileindustry badly. In 2010, the company reported the most excellentoutcomes in its history as a result of good management leadershipwhich brings forth all stakeholders and employees to get tuned to itsvision.

Thispaper shows that the performance of an organization is augmented byethical leadership. Such aspects as dedication to quality, trust,customer satisfaction, financial performance, and staff commitmentare linked to ethical leadership. In addition, this paper hasdescribed various ways in which BMW uses to enhance its leadershipsand become one of the world’s leading automobile producers. Theseinclude the following.

Firstis linking employees’ goals to organizational goals. In this casesome of the goals of employees are not limited to career enhancement,promotions, and training. The company encompasses enhanced financialperformance, quality customer service, improved product quality, anddedication of the employees to their work. All these are combined andresults in high performance and these leads to the ultimate goal ofBMW.

Secondly,sustainable leadership practices are also practiced at BMW.Sustainable leadership principles are portrayed in the structure offour-tier pyramid as shown in this paper. Thirdly, another feature islong-term thinking as a leadership practice depicted in BMW. Onething that is pointed out in this is that BMW leaders retain itsemployee. In addition, BMW endeavor to develop their skills throughtraining.

Inaddition, BMW leaders also know how to value their employees forinstance employees were rewarded with the intention of recognizingtheir sacrificial efforts to motivate them to offer quality servicesas par the vision of the company. According to studies, employeemotivation is one of the major factors resulting in employeesatisfaction. Satisfied employees work towards achievingorganizational goals.

Otherleadership characteristics portrayed in this paper at MBW includes isthe identification and multiplication of talent, highperformance and a reward system support, support of appreciation andcooperation by leaders to employees, managing change in a methodicalmanner and valuing the experience, know-how and skills of agingstaffs.

Lastlythis paper concludes that leadership practices play a major part inthe success of an organization and generally the paper has focused onleadership practices at BMW as a case study.

LeadershipPractices at BMW: Linking Employee Goals to Organizational Goals

BayerischeMotoren Werke AG (BMW) was established in 1916 and its headquartersare situated in Munich, Germany (Gantriis&amp Wartenberg, 2008).Together with Mercedes-Benz and Audi, BMW is a component of the“German Big 3” lavishness automobile producers. The threecompanies are the top selling luxury automobile producers around theglobe. In the contemporary time, BMW has a customer base ofapproximately 96,000 people employed in twenty four productionfacilities. The facilities are present in 13 nations but the companyfunctions a worldwide sales network in over 140 nations. BMWmanufactures motorbikes and cars in three quality brands namely MINI,BMW, and Rolls Royce. The Motorbikes are manufactured under the brandBMW Motorrad. In addition, the company is in possession of andmanufactures Mini cars, and it is also the mother firm of Rolls-RoyceMotor Cars. In the year 2012, the BMW Group manufactured 117,109motorbikes and 1,845,186 cars across its entire brands (Gantriis&amp Wartenberg, 2008).In 2012, Forbes.com listed BMW as the main highly regarded firm inthe globe. The rankings were founded on various notions including thewillingness of individuals to purchase, work for, recommend thecompany to other people, as well as investing. The company perceptionformed 60 percent whilst the products perception formed the remaining40 percent.

Inspite of the fact that consolidation is one of the characteristics ofthe automobile industry, BMW has remained a sovereign and extremelyprofitable company. While it is evident that the global financialcrisis (GFC) hit the automobile industry badly, BMW was able to comeout successful from the crisis. This is demonstrated by the fact thatin 2010 the company reported the most excellent outcomes in itshistory (Avery&amp Bergsteiner,2011). This performance can be put into view by considering thatwhilst a number of auto firms, especially German manufacturers,performed greatly in 2010, key US rivals of BMW faced difficulties.These were Chrysler and General Motors (GM). The two companies werefacing financial problems and by entering Chapter 11 in the GFC, theyaimed at avoiding entire bankruptcy.

Theperformance of BMW can be attributed to its ethical leadership.Research has been carried out to show that the performance of anorganization is augmented by ethical leadership. Such aspects asdedication to quality, trust, customer satisfaction, financialperformance, and staff commitment are linked to ethical leadership.With reference to this, managers are required to take a practicalapproach to integrating ethical issues into their companies strategicplanning. Furthermore, there is support from public policy forleaders to be accountable for organizational ethics. In the currenttime, academic investigators have helped in exploring the linkagebetween leadership practices and how they are associated staff andorganizational performance. The current paper investigates leadershippractices at BMW: linking employees’ goals to organizational goals.

BMWleadership practices

Leadershippractices at BMW can be said to link employees’ goals toorganizational goals. According to studies, employees are the mostimportant asset of an organization (Avery&amp Bergsteiner,2011). It is based on the fact that the performance of anyorganization is attributed to how well the staffs are satisfied. Oneof the major ways of satisfying employees is by ensuring that theirgoals are put into consideration. It has been shown that employeeshave their own goals when entering in a particular organization andlinking this to the organization goals results in high performance(Gantriis&amp Wartenberg, 2008). Someof the goals of employees include and are not limited to careerenhancement, promotions, and training. On the other hand, the goalsof the company encompass enhanced financial performance, qualitycustomer service, improved product quality, and dedication of theemployees to their work. All these combined results in highperformance and these leads to the ultimate goal of BMW becoming theleader in the auto industry. BMW has realized this and it has put inplace ethical and appropriate leadership practices which meet thesame objective.

BMWpractices ethical leadership. The company is guided by various normswhich ensure that leaders perform in an ethical manner. There isamplifying support showing that being ethical is good fororganization and that strong leadership results in ethical cultures.Leaders in BMW support ethical cultures and it has resulted invarious rewards including boosted efficacy in every day operations,staff dedication to their work, effectiveness in decision makingprocedures, improved product quality, enhanced financial performanceas well as customer loyalty. Research has provided a number ofapproaches that can be employed by firms to put into action ethicsinitiatives (Gantriis&amp Wartenberg, 2008).For instance, through acquiescence, companies can employ internalcontrols with the intention of gaining ethical conformity. Ethics canalso be employed in public relations to promote the reputation of thecompany. The last approach entails the employment of a value foundedphilosophy which integrates the aforementioned approaches and centersof establishing an ethical environment through dedicated leadership.By having ethical leaders, BMW is able to create shared values whichsway the ethical behaviors of employees. This as a result enhancesthe linkages with investors, suppliers, clients, as well as thesociety in general.

Sustainableleadership practices are also practiced at BMW. Sustainableleadership principles are portrayed in the structure of four-tierpyramid (Avery&amp Bergsteiner, 2011).Whilst the lower levels comprise of twenty three honeybee practices,the uppermost tiers signify the consequential organizationalperformance results. The bottom of the pyramid constitutes offourteen foundation practices. They are termed as this as the leaderscan engage on them at any time they choose to do so. Higher levelpractices are contained in the subsequent level. Their emergencerelies on a number of groupings of the bottom practices implemented.The third tier mirrors the anticipated experience of the customerswhich encompass staff engagement, systematic innovation, and serviceand product quality (Avery&amp Bergsteiner, 2011).Considering how dynamic the model is in addition to featuring theinfluence of diverse practices in various ways, it is consideredappropriate for companies. BMW offers an example of a company thatoperates on honeybee principles. This has been evident for a numberof decades, a factor that has helped the company emerge successfulsince its establishment. The application of the 23 honeybeeprinciples has been demonstrated on the operation of the company andhow the leaders link the goals of the employees to those of thecompany (Kantabutra&amp Avery, 2013).

Long-termthinking is another leadership practice depicted in BMW (Avery&amp Bergsteiner,2011). A lasting viewpoint supports numerous decisions made by BMWleaders in the daily operations of the business. Such decisionsinclude retaining more skilled employees. Skilled workers assist thecompany in attaining its desired goals as they offer their expertisein the functioning and operation of the business. One thing that ispointed out in this is that BMW leaders retain its employee. Inaddition, the endeavor in developing their skills through training, afactor that assists the company in achieving its goal of improvedperformance and becoming the premier in the auto industry. Thecompany’s leadership also encourages employees to work together andthis allows development of skills thus, bringing substantialexperience to the company.

Oneof the major aspects of honeybee practice is formulating continuingdevelopment and training for all employees. It implies that suchpractice should not be restricted to some of the staffing members.BMW leadership has put this into consideration and this is evidencedby the fact that in 2010, the company invested 179 million Euros intraining its employees. The company offers formal training to itsemployees even during the difficult times. In 2010 for instance,training for every staff averaged approximately 2.4 days up from 1.6days in the previous years (Avery&amp Bergsteiner, 2011).In addition to this, BMW carried on with its graduate and traineedevelopment programs. The presence of a strong focus on thedevelopment and retaining employee in the entire firm sustains aprogression planning policy of promoting the staff internally. It hasbeen shown that BMW desires to develop and train its own leaders andmanagers, a move that safeguards the company’s exceptional culture.In addition to this, the leadership practice assist in meeting thegoals of its employees which includes training and skill enhancement.

BMWleaders also know how to value their employees. It is another basisof honeybee practice that is extensively employed by the company.Valuing employees is considered a key factor in any organization.When employees are valued, they feel appreciated and they worktowards attaining the goals and objectives set by the company. Someof the fundamental benefits provided by the company to its employeesencompass maternity leave, protective clothing, holiday bonuses,participation in employee share scheme, as well as yearly bonusesfounded on the firm’s success every year. The staffs usually takepart in BMW’s profit sharing plan. In 2010 for instance, employeeswere rewarded with the intention of recognizing them for thesacrifices they had made during the global financial crisis(Kantabutra&amp Avery, 2013).The total bonus received by employees in that year was up by one andhalf month’s salary. Most scholars put forth that the success andperformance of the majority of the well-liked firms originate fromthe leadership practices being practiced. According to John Kotter,leaders should practice a number of things. They include creating acommon vision or goal for the firm, obtaining support fromconsiderable partners, motivating and knowing how to employ theresources provided, and being committed and passionate with theirjobs (Kantabutra&amp Avery, 2013).By taking in these characteristics, leaders create a favorableatmosphere for the employees to work in. At BMW, leaders know how tomotivate their employees. According to studies, employee motivationis one of the major factors resulting in employee satisfaction.Satisfied employees work towards achieving organizational goals. AtBMW, employees are satisfied using various factors encompassing staffengagement, training, monetary and non-monetary rewards as well ascareer advancement.

Anotherleadership practice at MBW is the identification and multiplicationof talent (Avery&amp Bergsteiner, 2011).One of the major actions undertaken by the leaders is investing anunbalanced quantity of time in the recruitment and developmentprocess of its employees. Leaders at higher performing companies putforward that they have sufficient time for their employees’accomplishments (Shenhar,1998).It is based on the fact that knowledge-age corporations can onlyattain high performance when the top leaders direct the way toattain, evaluate, develop, as well as retain the talented employees.It implies that rather than pushing human resources harder, theyshould involve themselves in person in searching for talent anddeveloping people (Shenharet al, 2001).This can be achieved by developing into being compulsive talentexplorers. Leaders scan for the most excellent individuals within theorganization and visibly communicating both by deed and wordregarding their searching, developing as well as retainingorganizational talent. In addition to this, leaders ensure that theirsubordinates are comfortable and this is achieved by ensuring thatthey exhibit a fanatical knowledge about the talent of theiremployees besides searching for additional ways of multiplying itsvalue (Avery&amp Bergsteiner, 2011).Exploring for talent is especially significant for BMW consideringthat innovation is the lifeblood of the company. It has been shownthat the company regularly plans for non-existing professionals whoare projected to be important in future. As explicated by NorbertReithofer, the contemporary time requires companies to be aware ofthe essential skills to be utilized in future. Successfullydeveloping, manufacturing, and marketing a novel automobilenecessitates shaping and mastering innovation. The approach taken byBMW in recruiting and developing its employees is expressed inReithofer saying that the best people in an organization can only bemade by implementing the best principles. This maxim mirrors adominant talent multiplier approach.

Highperformance and a reward system are also supported in BMW. Thecompany leaders recognize that the only way they can emergesuccessful is by ensuring that their staffs employ their entireproductivity, skills, as well as knowledge in ensuring that corporatesuccess takes place. Consecutively, the performance of the employeesis rewarded by just, competitive, transparent, as well as goodremuneration. The remuneration system is designed in a manner that isfounded on justly rewarding the performance of the individual membersas well as that of the whole group. Although rewarding employees bypay is not considered a major motivation factor, it is alsoconsiderable significant (Shenhar,1998).Certainly, employees aim at getting good remuneration for theaccomplished job. This implies that it is one of their goals whichthey aim at achieving after entering a company. In turn, employeesoffer their knowledge and expertise for the attainment oforganizational goals. By putting this into consideration, BMW hasbeen able to reward its employees appropriately in order to meettheir goals.

Thecompany leaders also support appreciation and cooperation (Avery&amp Bergsteiner,2011).Whilst the BMW group anticipates its employees to demonstrate fulldedication to the creation of value, they are also shown hugeappreciation by the firm. The company understands that appreciatingits employees is one of the major ways of emerging successful in theauto industry (Shenhar et al, 2001). Employee appreciation isconsiderably noticeable in a wide array of possibilities foremployees to develop into being actively engaged in shaping the firm.It is achieved through enhanced management system as well asco-determination. Employee appreciation at BMW is evident in variousforms including being involved in decision making, yearly bonuses,and holiday bonuses (Avery&amp Bergsteiner,2011).By doing so, employees feel part and parcel of the company andperform the job as theirs. This means that they do their level bestto ensure enhanced performance of the company. It is evidenced on howthey execute their duties without the need for continuous monitoringand supervision.

Managingchange in a methodical manner is another leadership practice evidentat BMW (Avery &amp Bergsteiner, 2011). During the global financialcrisis for instance, the company collaborated with the unions inorder to lessen the number of employees. The reason was to deal withthe difficulties faced during the crisis. In addition to this, thecompany puts into consideration aging of its workforce (Shenhar,1998).As evidenced in most companies, aged employees retire age of 50 yearsand over. After doing so, the skills, knowledge and expertise gainedby such employees during their active years goes to the drain.Nevertheless, this is not the case for BMW. The implication of amodifying workforce is recognized by the company. As put forward bythe Chair of the Supervisory Board, Joachim Milberg, it is vital forBMW to carry on building up and maintaining know-how in addition toacknowledging the significance of more training. Such concernsrepresent a key challenge for most companies in future due to thesocietal demographic aging. It is anticipated that by the year 2020,BMW will have 45 percent of its employees being 50 years of age andover.

Unlikemost firms, BMW values the experience, know-how and skills of itsaging staffs. The company retains such employees and keeps themproductive as well as healthy. For instance, in 2007, an experimentalmanufacturing line was constructed in Dingolfing, one of thecompany’s biggest plants (Avery &amp Bergsteiner, 2011). Theintention was to staff the line with the aged employees whoseresponsibility was to maximize their own place of work. Themanufacturing line was constructed in a manner that favored each andevery employee, a factor that helped them continue with their roles.For example provision of extraordinary shoes which were designed forthe purpose of relieving aching feet. Employees with aging eyes werealso catered for by increasing font size and angling themanufacturing lines monitors in an appropriate manner. As noted byShenhar et al (2001), magnifying glasses are also offered whereby thestaff is incapable of reading engraved numbers. The majority of thesesuggestions initiated from employees as the plan was intended tobenefit the whole workforce. It was estimated that approximately 70percent of the suggestions initiated from the employees and they wereaimed at planning their working environment during their older age.The implementation of these ideas proved to the staff members thatthey are valued by the company. This move not only amplifies thecompany performance but also its employees’ level of satisfaction.It was evidenced that productivity amongst the older employees wentup seven percent.


Inconclusion, it is evident that leadership practices play a major partin the success of an organization. The current paper has focused onleadership practices at BMW: linking employees’ goals withorganizational goals. As discussed in the paper, there are variousleadership practices evident in the company that has helped itachieve its goals and objectives. BMW practices ethical leadershipvalues its employees, provides training and skill development for itsemployees, identification and multiplication of talent, as well assustainable leadership practices. It has been shown that, thesefactors results in high employee satisfaction, and in turn enhancesthe performance of the organization.


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