Bernard Arnault's Leadership Style - Case Study Example

Bernard Arnault clearly understood the worldwide potential of his goods when no one else did and he also had the capacity to exploit any situation. His entrepreneurial background must have helped initially when he took over the textile conglomerate. Louis Vuitton was a family-run business in those days and in the mid-Eighties and he had to fight a bitter battle to gain control of this company. 

His appreciators say that he has an inborn vision of clever marketing, creative designs and knows how to keep tight control over his empire without a single slackening moment. He knows how to conduct global business with an uncanny ability and stopped further acquisitions when the time was unfavorable.

His leadership style is highly appreciated in the Corporate world. Entry into luxury marketing needs powerful backing and he received it from the French government which was looking for someone to take over the textile empire. It is said that the sale of his Mediterranean home made him exclaim that "When something has to be done, do it! In France, we are full of good ideas, but we rarely put them into practice" (Forbes, June 2, 1997).

His powerful friend Antoine Bernheim, MD of investment firm Lazard Freres arranged finance and his family arranged $15 million of their own money, and the total was used to buy Dior, which he said was the potential cornerstone of ‘luxury-goods supermarket’. Also, it is believed to be a brutal rise to power with opportunistic leadership strategies in which Henry Racamier, the former chairman of LVMH’s Louis Vuitton was eliminated along with all top executives. His decision-making is ruthless, almost vicious, and full of calculated risk-taking. He knew how to balance commerce and artistry by involving both sound management practices with creativity. He was careful to be choosy when it came to picking his managers.    

“He believed that to raise creative energy, a company must have managers with a certain love for and understanding of artists” and he hired John Galliano, who could create unusually melodramatic unconventional designs”.

The old business house changed its profile overnight to display the most brilliant artistry. A trained pianist, Arnault always maintained a creative eye and created a name for himself as the most unique CEO of the world. He insisted on financial discipline without curbing artistic innovation because he thought creativity counterbalances commerce. He could be an autocrat and showed it when he terminated services of Dior perfumes heads to replace them with new US executives who became unpopular while the company financially gained and this move resulted in some of the timeless most enduring ‘star brands’ which he explained:

"Our strategy is to have some stars—and there are not many stars in the luxury business. What is a star? It's a name that is the very best. It's a name that is very profitable. But the number of true stars is less than I can count on both of my hands" (New York Times, March 25, 2001).

He went on a bourgeoisie shopping spree and indulged himself while amassing a business empire par excellence that spread all over the western world.  He was advised against too large an expansion, but he believed in himself and came out a winner. He referred to the competitors in one of his interviews: "They saw it was working. And then they said, 'Okay, now we are going to do the same thing.' I think, really, they underestimate the difficulty. They underestimate the time required to make it successful. And my guess is that they will have a very tough time." (Washington Post, April 28, 2002).

Some of the acquisitions did fail to generate income but the failures were too small to bring his empire down. He had setbacks due to a decline in tourism in the year 2004. But a leader always knows how to pull through in good and bad situations and his ever-surfacing optimism stood by his stead.   He has human resource management ability, excellent taste, unflinching decision making, and calculated risk-taking. An autocratic leader, but capable of leaning on others when necessary, and has a great uncompromising vision that could energize others, and his entrepreneurial initiatives have helped management theory because he could take his followers to an emotionally spiritual level with his leadership. He is a focussed, centralized, decision-oriented, intrinsic leadership style of power, influence, and position, with motivation, psychological rapport, and he has taken personal leadership of management to a new height.