Leadership: Assessing the leadership at BMW - Essay Example

? Leadership: Assessing the leadership at BMW Contents Introduction 2 Defining Leadership 2 Traits Theory 3 Structure of Paper 3 Case Study 4 JoachimMilberg 4 Milberg’s Traits 4 Situational Leadership 5 Technical Skill 6 Skills Approach to Leadership 6 Blake & Mouton’s (Managerial) Leadership Grid 7 Theory Y 8 The Grid 9 Figure 1 BMW on a Blake & Mouton’s (Managerial) Leadership Grid 9 Effective Teamwork 9 Complexity Leadership Theory 10 Conclusion 11 Bibliography 13 Leadership: Assessing the leadership at BMW Introduction Leadership is a term that is used frequently, but is rarely used with the full weight of what it means understood. Leadership is not about being in charge and barking orders. Most anyone can be placed at the head of a group and function at a basic level. True leadership comes from knowing the expectations of both the group and of the work from the group and being able to inspire, motivate, and manipulate the members to behave in such a way as to achieve at their highest possible level. Leadership is not about being in charge, it is about leading the group towards a goal or set of goals and knowing how to get the best possible result from those efforts. Leading is about knowing the needs of both the group and the intended beneficiary of the product from that group, and bringing those concepts together to create something. Defining Leadership Northouse (2010, p. 2) states that “there almost as many different definitions for leadership as there are people who have tried to define it”. Leadership can be seen from a power relationship perspective, as a transformational process, or from a skills perspective. No matter from what perspective the act of leadership is considered, the phenomenon will have components that will include leadership as a process, will involve influence, occurs in a group setting, and involves common goals (Hacker and Tammy 2004). When defined as a process, leadership is seen as a transaction between the leader and the group which creates change. When understood through the transformational concepts, it is clear that leadership is not assigned, but is available to whoever is able to create the best possible changes towards success. Traits Theory One of the first ways in which the research of leadership was approached was through the study of traits. The theories that initially developed through this research was called ‘great man’ research as the focus was on those who historically showed great leadership skills. By the mid 20th century trait approach was under scrutiny because there seemed to be no consistent set of traits with which to identify a leader. Leadership was reconsidered as a relationship between people rather than focused on the traits of the leader. What has emerged through trait theory, however, is that the process of leadership is more often defined by a series of personality traits that the leader lends to the relationship: alertness, intelligence, responsibility, initiative, insight, self-confidence, persistence, and sociability (Northouse 2010: Kliem 2004). Structure of Paper The following paper will examine the way in which BMW has utilized different forms of leadership theories in relationship with how they have conducted business. An examination of BMW CEO Joachim Milburg will reveal different aspects of his leadership style. Looking at a skills approach will help to define the way in which technology is effectively put into place. To further explore leadership in BMW, style leadership skills will be examined towards the accomplishment of goals. Finally, by examining key leadership models and approaches, the overall experience of leadership at BMW will be explored. Case Study Joachim Milberg Joachim Milberg was not on a fast track towards a high level position, but this professor of Engineering ended up running BMW as their CEO when he attained the position in his late 50s (Kiley 2004). In 1999 he was promoted to CEO most likely because of disagreements by the board on how to proceed forward. Wolfgang Reitzle was clear on his beliefs that the company needed to scale back, his first real action most likely to close down the Longbridge operation in favour of the West Midlands facility (BBC News 1999). The BBC News (1999) reported that the union saw him as a “safe pair of hands”. They also reported that Professor Milberg was respected with a pragmatic nature that could focus on goals without being extreme in his actions. Milberg’s Traits Kiley (2004) reported that Milberg was the type of man to do his work and get down to business without any fanfare or pageantry. The drama level was lowered significantly through the academic perspective of this leader, his beliefs being that the work was the goal without arguing or dramatic sweeping gestures. There is a time for those types of gestures, but at the time that Milberg took over his post, the company needed to be settled into a forward motion of achievement rather than bogged down by fighting and extreme measures. One of the best ways to understand Milberg is to understand the changes that he made when he took over is to look at the man who did not get the job either in 1993 or in 1999, even though he was considered the heir apparent to the 23 year veteran of the chair Eberhard von Kuenheim., Wolfgang Reitzle. Reitzle was a flamboyant man, his personal life just as easily found in the news as his business life, and his personality style leadership was ruthless. Because of all the unrest at the company, it is best to understand the three years that Milberg ran the company through situational leadership theory. Situational Leadership Situational leadership theory involves looking at the situation, the leaders involved, and the followers (Martin 2006). Milberg was brought in specifically because of the traits that he displayed as being conservative and fair handed, and although looking at his leadership through trait theory is also valued, seeing his leadership as it was crafted from the situation of the time period is highly relevant. There are two aspects that must be considered in situational leadership theory: “any situation plays a large part in determining leadership qualities and the leader for that situation” and “the leadership qualities of an individual are themselves the product of a previous leadership situation that have moulded the individual” (Martin 2006, p. 46). When a leader comes into a situation that will need to uniquely influence the decisions that the leader will make, it is likely that situational leadership theory is framing the leadership experience. When Milberg took the reins in 1999, the board was in unrest which had the entire company feeling as if it was in jeopardy, some more than others of course. As Milberg took the reins he had to approach his leadership in relationship to the situation into which he was entering. The situational leadership avenue of his approach created some limitations in the way he could operate, all of his decisions having to stay within the conservatism that would quell the unrest. As opposed to expected leadership, the board chose someone with a style that fit the situation that had evolved in the company. Milberg wasn’t going to create publicity that was of the type that Reitzle was generating and he wasn’t going to engage in high risk or grand sweeping gestures that would create further turmoil. His leadership can also be assessed by trait theory as those traits that he carried were necessary to quell the situation that the company was experiencing. Technical Skill As Milberg worked through the situational leadership theory in order to create changes that could benefit the company, he helped to put into place the Associate and Leadership Model. In making this change, he was making a break from the past which was something that the situation required because of the antagonism that had built up between management and associates. This type of a leadership model is designed to have two parts: the first is the associate model which allows for individual goals and expectations to be set in the work force, and the leadership model which promotes a culture of leadership in which the management is actively engaged in development (Murray, Poole, and Jones 2006). The new model allowed for a development of his own personality as a form of leadership that could spread throughout the company. Skills Approach to Leadership The skills approach to leadership takes into consideration technical, human, and conceptual skills that are required in the process of business. According to Katz, leadership involved a set of skills that could be learned in order to create effective leadership (Ginsberg and Davies 2007). Mumford and those who researched with him developed the three skills approach which included the technical, human, or conceptual skills development models through which sufficient leadership is developed to fulfil the needs in of the specific group (Murray, Poole, and Jones 2006). Milberg, in creating the Associate and Leadership Model, expected that leadership would be attained through setting goals, both hard and soft; in order to engage each member of management to be proactive and attain the skills needed in order to lead in their respective departments. The brand concept is that the company has no explicit mission statement and stands for premium quality without needed to be explicit about it. The brand profile is synonymous with performance, shear driving pleasure, and the energy of a high performance vehicle (Murray, Poole, and Jones 2006). The professionalism with which the brand is associated creates a culture in which knowledge is the backbone to the leadership that is in place. Thus, using leadership that has evolved professionally and through gaining the knowledge necessary to carry forward their image is crucial to the continuation of the culture of BMW. Blake & Mouton’s (Managerial) Leadership Grid When examined through Theory X and Theory Y as postulated by McGregor defines motivations by actors in a group as definable along a continuum. At the end of Theory X is the idea that people are motivated by their needs and that leaders from this perspective believe that people will do as little work as possible, that they dislike work and that people will avoid responsibility and seek out micro-management in order to not be responsible for decisions. Theory Y leadership operates under the belief that people will act under their own direction if given incentive, people will naturally seek out responsibility, and that innovative decision making can occur throughout an group, just not stem from managerial loci (Shriberg and Shriberg 2011: Heldman 2011). Theory Y In order to more adequately assess BMW’s leadership style through goal accomplishment as it relates to a position on the Blake & Mouton Leadership Grid, there must be first an assumption that BMW views its workers through Theory Y belief systems. Proof of this is in the standards for the Associate and Leadership model that was put into place by Milberg. Milberg stated that “Its part of the leader­ship style to point out perspectives, define tasks, and then agree on objectives. That also includes reporting back if agreed targets are not met, which demands a certain amount of courage. Employees must not withdraw into passive roles” (BMW Case Study 2011/12). Expectations of associates and the various levels of management to take responsibility for goals and targets provides for a belief and expectation that workers have a drive to be integrally involved in the production of the product and all aspects that relate to the product. In order to place the leadership style into the Blake & Mouton Leadership Grid, understanding the Theory Y culture is crucial. The company should be nearer to the ‘produce or perish’ end of the grid. Because there is an expectation for taking responsibility for not meeting targets, there is some likelihood that this end of the grid is not extended all the way to the end, however, only that the production of results be met at its greatest possible capacity, not that it creates an atmosphere of fear. Because the BMW culture exhibits aspects of cult belief systems, defined by a ‘BMW culture’ in which all workers are interested in the outcome, there is a reciprocal system of respect and concern for needs between the employees and the company, the care that is given is given back in engaged concern for the performance of tasks at a high level. The Grid The grid in Figure 1 is likely to best represent the general area that BMW occupies in relationship to how company culture has defined behaviours that relate to goal achievement and attitudes towards tasks in relationship to the behaviours and cultivations of management. Figure 1 BMW on a Blake & Mouton’s (Managerial) Leadership Grid Effective Teamwork Creating effective teamwork is best when it is an organic process when strengths and weaknesses come together naturally to create a culture in which innovative and creative solutions emerge from a rich and productive environment. In lieu of this dream circumstance, effective teams are created through emulation of models and theories with the goal of specific collaborative effects create a culture in which belief systems frame the nature of teamwork. Child and McGrath (Uhl-Bien, Marion, and McKelvey 2011) identified problems that concerned leadership in relationship with the emerging global relationship that most industries have developed in the macro-environment. The challenge is defined in creating something other than a bureaucratic structure in which to provide structure for the emergence of new needs in a global environment. Complexity Leadership Theory Uhl-Bien, Marion, and McKelvey (2011) propose that complexity leadership theory can provide for a global economy in which different influences have emerged that must be addressed. Complexity theory allows for different levels of leadership to rise to the challenges that are integrated with the problems that have arisen within globalisation. In this theory, leadership is a function performed within interaction. Relationships are vital to the way in which leadership is accomplished, which seems to be a great part of the way in which BMW has created their work culture. This type of leadership requires complex, adaptive systems (CAS) in which different factions or groups are interrelated through a common purpose or interconnected belief systems towards a goal. Leadership in a global perspective is essentially relationship based in order to support both the theories of sustainability that are essential for global participation and the connections that must be made in order to form collaborations. Through defining the needs of stakeholders and having a concern for those needs, leadership is established that promotes mutual interests and high levels of participations (Werhane and Painter-Morland 2011). McGrath explored the concept of complexity theory, discovering that “groups are inherently dynamically systems, operating via processes that unfold over time” (Fiske et al 2010). BMW utilizes this approach through devotion to those aspects of their own belief systems that create a collaborative nature to their leadership and associate relationships. Their culture of leadership is based on the following: The core philosophy behind the overall model is to: • generate a culture of trust; • provide orientation; • promote cooperation; and • realize responsibility (especially self-responsibility and self-organization) (BMW Case Study 2011/12) This provides the framework for a complex system in which to create a globally oriented organisation. Conclusion The central emerging theme from the exploration of the BMW leadership model is that relationships that are respected and expected to take responsibility for their product. From this perspective, the Associate and Leadership Model has developed as a system in which relationship leadership and complexity leadership theories are utilized in order to provide for the development of a globally enriched organisation. When Milberg took the reins at the BMW, he was shackled a bit through situational leadership frameworks as he was having to tailor his leadership skills towards the events that had led up to his being given the position over other candidates. He was selected because of his straightforward, conservative nature in which his decisions were based upon safe and protective measures that would preserve not only the company, but the status of the workers. The key factors that influence the type of leadership that is shown within the BMW structure is that it is based on the stakeholder models in which those who have concerns with the success of the company are treated with respect for those concerns. Through leadership that trusts and expects and earns trust, BMW has created a culture of success because all those who are involved will settle for nothing less. Bibliography BBC News. 5 February 1999. Business: The company file – Battle for BMW driving seat. BBC News. [Online]. Accessed 9 January 2011 from http://news.bbc.co.u k/2/hi/business/273538.stm BMW Case Study 2011/12 Fiske, Susan T., Daniel Todd Gilbert, Gardner Lindzey, and Arthur E. Jongsma. 2010. Handbook of social psychology. Hoboken, N.J.: Wiley. Ginsberg, Rick, and Timothy Gray Davies. 2007. The human side of leadership: navigating emotions at work. Westport, Conn: Praeger Publishers. Hacker, Stephen, and Roberts Tammy. 2004. Transformational leadership: creating organizations of meaning. Milwaukee, Wis: ASQ Quality Press. Heldman, Kim. 2011. PMP: project management professional exam : study guide. Indianapolis, Ind: Wiley. Kiley, David. 2004. Driven: inside BMW, the most admired car company in the world. 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