Organizational Development: BMW's Strategies and Challenges

This report provides a comprehensive analysis of BMW's organizational development, exploring its characteristics, activities, goals, and the environmental influences impacting its performance. It examines BMW's mission, objectives, and strategies, including its marketing mix and premium pricing. The report delves into the challenges BMW faces, such as globalization and changing consumer needs, and evaluates various organizational structure designs, including hierarchical, decentralized, and team-based structures. It recommends a shift towards decentralized and team-based structures to address issues in communication, decision-making, and employee retention. Furthermore, the report discusses the impact of organizational culture on multinational operations and suggests strategies for sustainable organizational development, emphasizing the importance of environmental protection and resource efficiency. The study concludes by highlighting the benefits of an effective organizational system and culture in achieving goals, gaining competitive advantages, and solving problems within a diversified environment.

Organizational Development

Executive summary
This present study of organizational development shows all ways by which an
organization can develop and expand its business or organization in an effective manner. In
this regards it shows all activities which company performs, goals for which it performs. It
will also show challenges which its face like environmental issues, political and others and
with the help of characteristics and effectiveness how it can reduce or solve all problems.
Further this will show importance of having an effective organizational system or culture in
order to accomplish goals, taking competition advantages and solving problems by knowing
effective ways of performing activities. It also shows effectiveness of strategies and choosing
the best one in order to solve negative effects of all external and internal business
environmental factors to make an effective decision. Also it will also discuss impacts of
organizational culture and their performance which operates in diversified culture.

Contents
Executive summary....................................................................................................................2
INTRODUCTION......................................................................................................................4
MAIN BODY.............................................................................................................................4
Main characteristics, activities, goals and environmental influences on the organization....4
Evaluation and recommendations of organizational structure designs to BMW on the basis
of challenges faces by this company......................................................................................6
Strategies for sustainable organisational development..........................................................8
Influences of organisational culture on multinational organization operate in diverse
environment..........................................................................................................................11
CONCLUSION........................................................................................................................13
REFERENCES.........................................................................................................................14
Books and journals...................................................................................................................14

INTRODUCTION
Organizational development refers objective based methodology which is being used
by companies in order to initiate a change of systems by making use of an effective
communication (Lewis, Cantore and Passmore, 2016). This present study of organizational
development is based on BMW which is German multinational luxury vehicle manufacturing
company. It was founded by Camillo Castiglioni in the year of 1916. It operates or serves its
services and products worldwide. This study is going to show characteristics, objectives,
activities of this company along with some environmental influences which can affect its
performance. It will also show effective organizational structure for BMW in order to make it
able to solve all challenges which it is facing at global level. Further, it will discuss strategies
which can allow it to take advantages of competitive and making itself sustainable. Lastly, it
will evaluate effects of organizational culture on performance of the company and on
multinational organizations which operate in diverse environment.
MAIN BODY
Main characteristics, activities, goals and environmental influences on the organization
Before discussing about environmental impacts on the BMW, it is important to talk
about mission, aims, and objectives of this company. By analysing its characteristics, aims
and activities it will be better understood that how environmental influences this company
and to which extent it is affecting its performance (Bräsen and et.al., 2017). Also, it will also
help this company out in analysing all problems or environmental influences and reducing all
by making use of its characteristics and abilities. Some objectives and the main purpose of
this company for which it performs several activities include:
 To become the world’s leading provider of premium products and services for
individual mobility is the main purposes of this company.
 To become unique than others by promoting diversity at workplace, using effective
leadership and taking risks as opportunities is one of the main key strength and
objectives of BMW.

 To manufacture environmental friendly cars in order to become sustainable and
cooperating in protecting people against environmental issues.
 To support society and all people by providing them qualitative services, products and
by being responsible.
 To increase sales all across the world.
Some characteristics of BMW which is a well-known multinational German company,
specializes in producing luxury vehicles and motorcycles, include:
 There are some tangible and intangible resources which this company have and make
effective use of it which helps it out in accomplishing its goals.
 One of the main characteristics for which it is mainly known is its design icons which
identify its models (Steinparzer and et.al., 2016).
 An ability to use technologies in an effective manner and focusing in research and
development is other main characteristics of this company. This ability makes it able
to produce qualitative, attractive designs of vehicles which attract customers towards
it for buying its vehicles.
 Custom colours of its vehicles used interior materials and personalized touches are
other main characteristics for which people buy its products. In addition, it is stated
that it has several colours like Moonstone Metallic, Ruby Black Metallic and others. It
also has varieties of premium leathers like warm up the cabin with fine grain wood
trim, full merino leather etc.
Activities and strategies:
In the context of global strategy it is analysed that marketing mix is one of the best
strategies of this company which helps it out in promoting its products and services. Also it
allows this company to attract customers by allowing them to compare all elements of
marketing mix like pricing strategy, products features, place and promotional activities with
other companies (Steenkamp, 2017). It allows customers to make the best buying decision.
In addition, it is also analysed that BMW concentrates on premium segment on a global scale
and consistently defines high-end brand identification renders success. It also uses premium
pricing strategy as it based on several factors. This pricing strategy allows customers to
demand as well as pay higher prices for perceived value.

In addition, it can be said that HR activities like recruitment and motivation to employees
allow it to retain skilled workforce in company for the long run. Financial activities and using
different tools also help it out in managing finance statement and presenting it to
stakeholders.
Environmental influences
In this context it is analysed that changing needs of customers and trends putting pressure on
this company to become sustainable and performing all activities by using natural resources
to some extent. Reducing wastes is one of the main aims as per the environmental
regulations. Consumers are becoming more aware about protecting environment and protect
people against CO2 emission as well as fuel usage by cars. For this purpose, BMW has dove
headfirst into the development as well as distribution of hybrid car models. As per the
changing needs of customers and awareness towards environmental protection, this company
decided to invest in environmental protection.
In addition, it is also analysed that BMW has invested for protecting environment and it is
helping it out in improving resource efficiency and generated cost saving around €167
million. It has also initiated for reducing carbon footprint in those areas where energy usage
is high. It is now known as counted in eco friendly because of low emission and also its
vehicles produce less environmental footprint.
Evaluation and recommendations of organizational structure designs to BMW on the basis of
challenges faces by this company
In the context of BMW it is stated that this group is operating in around 120 countries
with having 24 production facilities. It also has around 12 research and development plants in
12 countries. So, from this it can be said that maintaining operations in all countries is not an
easy task. It has to face several problems while operating business internationally o globally.
After deciding operating business in many countries it found requirement of making changes
in models and setting new standards. Along with it, it implemented organizational change.
It has set new standards for high performance luxury cars; Organizational change is
one of the main changes which it adapts due to several problems. Implementing
organizational changes is also one of the main tasks for this company. Managing

environmental and workplace safety was also one of the big deal but with the help of using
effective organizational structure designs it can solve all problems (Sovacool and et.al.,
2019).
Globalization diversifies market for vehicle manufacturers which can create problem like
decrease in revenue but by focusing on improving manufacturing capacity it can solve this
main problem which occur due to globalization.
Hierarchical structure: It is stated that BMW is making use of hierarchy organizational
structure having several management layers that can be sometimes more complex structure
(BMW Corporate Hierarchy, 2018) . In this type of structure the main responsibility and
roles played by its chairmen as they establish main aims, objectives, mission and strategies of
the company. Its top level of board of manager includes: vice president, development
production director, director of purchasing and supply network and others. All plays different
and effective roles. As like this it also has some members at it second, third and fourth level.
But there are some limitations of this structure which can create some problems in the future.
For example: it makes complication in interacting with each other’s due to workflow,
inconsistencies in management which can slow down decision making and communication
process as well.
So, it is important for this company to focus on organizational changes and changes in
structure design. It can be suggested to BMW that it should focus on decentralized
organizational structure for implementing effective organizational change and solving all
problems which it is facing in managing processes and people.
Decentralized organizational structure: As per this organizational structure, daily
operational as well as decision making responsibility is being taken by top management to
middle and lower manger. One of the main advantages of this structure is top manager can
make himself free up to focus more on decision making. By involving all level of manager, it
can improve the process of decision making (Carter, 2017). An effective decision making
process can help it out in taking competitive advantages and making a strong position in the
China as it is stated that there are several major competitors who are fighting over the market
share in China. There are several benefits of this organizational structure which this company
can take such as:

It can improve learning of people as it depends upon bottom up philosophy. Decision
making process is democratic in which all managers are given equal and fair chance to take
participation in the process of decision making and share their views. Input of every level can
be checked any time which can allow manager to identify whether all processes are going in
the right track or there is requirement of taking actions. It also increases flexibility among
employee and make them able to adapt changes in an effective manner. So, it can be said that
by using this design, BMW can implement organizational change at workplace in an effective
manner. It can increase employee retention rate because all employees are being treated with
respect and given greater levels of responsibility. Respected and valued people are more
likely to retain with the company and support them in accomplishing their goals.
Team based structure: In addition, it can also be suggested to BMW that it can also focus
on team based organizational structure. It is stated that this company operates in several
companies and due to different culture, values of people it face problems in managing them.
So, by making an effective use of this structure it can allow all team members to work on
specific projects with collaboration. It can improve their relation and can also make them able
to stay with the company. When people work in a team rather working individually then it
allows them to reduce errors in processes and functions which lead improved productivity.
Product development, customers services, process improvement are some areas which can be
improved with the help of this organizational structure (Nowell and Timmermans, 2018). It
also allows employees to increases their skills and learns new things like different ways of
performing activities, ways to deal with complex situations and clients as well.
So, from the above discussed and suggested organizational structure designs it can be said
that BMW can manage processes, people in an effective manner. Both these structure can
also allow it to increase opportunities and reducing threats. By employing an effective chief
financial officer it can manage and lead organization through particular changes. One of the
main reasons of suggesting employing CFO is he plays several roles like Accounting,
Controlling and HR department in order to make sure that developing people are at forefront
of everything which they do. It can be best done by having an Executive Sponsor responsible
for driving cultural change and innovation. By doing so it can recreate new culture with
having new local values of authenticity, inspiration and collaboration (Escrig and et.al.,
2019).

Strategies for sustainable organisational development
Sustainable development is one of the main and effective approaches of developing by
making an effective use of available resources in such a manner which can allow company to
renew or continue for others. Or it can be said that making an effective use of some resources
without hurting needs of the future generation as they can also make use of all those
resources and this manner of using is known as sustainable development (Aras and Crowther,
2016). There are several reasons of being sustainable or sustainable development for BMW
such as:
 It can allow company to reduce carbon emission which is one of the main key of the
success of company because people are becoming more aware and concern about
environmental protection.
 It can also help it out to balance economic, social and environmental needs and
providing prosperity for the future generation.
 When company focuses on becoming sustainable then it also focuses on making kits
processes innovative in order to make an effective use of resources. This innovation in
processes allows it to attract customers to the great extent as well as taking advantages
of competitive opportunity.
 It also allows company to make changes in 2 areas of management which leads
improvement of management system. For example: company can have greater
accountability to non traditional stakeholders and can make continuous improvements
in reporting practices (Saha, 2017).
In the context of BMW it can be said that it focuses on sustainability and its vision shows that
how concerned it is towards sustainable development. Vision of this company is to become
the most successful and sustainable premium provider of individual mobility. And for
accomplishing or achieving this vision, it has made efforts and set approximate strategic
sustainability goals. All established goals related to sustainability focuses on 3 main areas
such as: production process and value creation, quality of products and services and the most
important employees and society (Sustainable Production at BMW, 2017).
Action towards sustainable development: In addition it can be said that it is working so
hard to achieve its vision and for sustainable development. It utilizes variety of methods like
making an effective use of exclusive renewable energy in the production process of premium
vehicle around the world. It has implemented a biomass project which is located around 60

Km from the Rosslyn plant, North of South Africa. It is the place where BMW group
operates the first economically viable biogas power plant. Producers of biogas are roughly
25,000 cows from a neighbouring organic cattle farm which plays an important role in
creating raw materials which is required for the fermentation process of biogas. So, it can be
said that Plant Rosslyn is known as one of the effective and sustainable energy projects of
BMW around the world. As like its plant in Rosslyn, it’s others plant located in South
Carolina, USA also is sustainable and make uses of Methane gas to power part of production
process.
Sustainable strategies: As per the economic dimension, sustainable theories are being
divided into main 3 parts such as: efficiency, consistency and sufficiency. By making use of
all these three strategies of sustainability, BMW has made itself able to meet Europe’s CO2
requirements for 2020 and 2021. It is the reason that why BMW is considered the market
leader among 3 popular well-known brands: Audi, Mercedes and BMW. It has reported that
profits, sales, revenue and skilled workforce is higher at this company as compare to others.
One of the main reasons behind its success is its sustainability strategy which passed in the
year of 2009 and it was overarching strategy for all (Johnson, 2016).
For promoting lower emission, automotive industry is now transforming traditional
combustion engine concept into new concept. There are some challenges which this company
has to face is there are some people who still feel hesitated to buy E-cars due to high prices
and some limitations like availability of charging stations, range limitation etc. But with the
help of effective strategy and regulations of European Union on CO2 and NOx emission for
diesel engines for car industry is supporting this company to make significant changes and
continue sustainable development. These EU regulations allow this company to measure CO2
emission and accordingly it can adjust their products offerings and making changes in
strategies if it does not meet all requirements of this regulation. SO, it can be said that
following all rules and regulations of EU union is other kind if sustainable strategy which has
supported BMW in becoming the market leader.
Evolution and revolution: In addition, it can be said that to continue sustainability was the
big task for this company because it had to face several challenges and problems. One of the
main challenges was found that younger generation is losing their interest in automobile
products and especially of urban regions (Germany BMW’s Sustainability Strateg,. 2016).
These changes in interest of younger generation and other aspects of sustainability have

leaded this company to anticipate future mobility projects which include: BMWi360 degree
electric, car sharing platform DriveNow etc. With the help of parallel evolution and
revolution, this company is responding to all challenges in an effective manner and it is the
reason that it has become able to improve efficiency as well as emission of combustion
engines and introducing product line of E-cars.
In addition, it is also stated that BMW group promised and committed to new social contract
which was all about adopting sustainable development goals which formed the heart of the
2030 agenda of the shape economic growth in environmentally sound way. By making some
changes in processes and other areas like changes in car sharing services, Reach now and
others, BMW tried to accomplish all pre determined and set sustainable development goals. It
is also stated that BMW group tried to support paradigm shift from cities which were suitable
for cars to those cities which is suitable for people (BMW Group is Working to Achieve
Sustainable Development, 2018).
In the context of future strategy, it is stated that it will focus on sustainability and long term
success. Its future strategy will help it out to make profit and accomplishing all targets which
include a reduction in cost, capital expenditure and capital employed per vehicle in
development, production, sales and administration (BMW Group Sets a Course for the
Future, 2019).
So, it can be said that by focusing on main three areas it has made successful
implementation of strategy. In product and services it focuses on electro mobility, CO2
emission and mobility patterns and in value creation it emphasizes on renewable energy and
resource consumption and in the last main area corporate citizen and employees it
emphasizes on leadership and diversity.
Influences of organisational culture on multinational organization operate in diverse
environment
Corporate or organizational culture plays an important role as it refers to beliefs and
behaviours which determine ways of managing people and management by company and
handling all outside business transactions. Organizational culture affects performance of
companies especially on those who operates in multinational and diverse environment
because they face problems in managing different culture and beliefs of people. One of the
main reasons as why it affects performance of companies is different attitudes of employees
towards work (Leithy, 2017).

In the context of BMW it can be said that culture of BMW is full of passion, team working,
personal development, passion, diversity and others. The main aims of organizational
structure of this company are to promote equality and diversity, focusing on team working by
which it can improve relation among employees (Unique BMW Group Culture, 2019). Some
elements of culture of multinational companies which affect performance of company
include: art, colour, and attitudes of employees, education, literacy, languages,
communication etc.
Some positive and negative effects of organizational culture of BMW which operates
globally include:
Language problems: Languages is one of the main problems for BMW because it operates
in many countries where it has different cultures of employees. Employees face problems in
communicating or interacting with each others. They feel unable to understand languages
which lead miscommunication and conflicts as well.
Increasing employees’ turnover: Different age group, ethnicity and culture of people have
different perspectives. This changes in perspective become reason of conflicts among
employees and at the time of decision making process when manager taken views of some
employees into consideration then other employees feel ignored. It de-motivated them and it
increase staff turnover (Wolf, 2020).
Treatment with employees: But with the help of an effective organizational change
management and using Hofstede organizational model, BMW is trying to solve all problems.
Hofstede culture model helps it out in cross cultural communication and also make its able to
understand effects of society’s culture on the values of all its employees. One of the main key
of its success and successful implementation of organizational change is its ability to provide
value to its employees by providing flexible working hours, assistance in child and social
security care. It helps them out in satisfying employees and encouraging them to adapt
changing situation in an effective manner. By making able to leader in playing effective roles
in change management, it makes its employees able to adapt changes and having positive
impacts of organizational culture such as:
 Leader in change management and organizational culture, make sure that all members
know that a change will happen and they will also have to use different ways to
perform activities.

 They also make sure that people understand things that will change anytime and what
will stay the same and how they have to react (Miao, Humphrey and Qian, 2018).
 It is one of the main key of the success of BMW of making its organizational structure
and implementation of organizational structure successful is encouraging people for
trying new things in a new way by providing effective and right environment and
guidance as well.
BMW group culture: It is stated that this group has their own stated company beliefs. Some
beliefs include:
Employees: It includes skilled workforces who make company and it is known as one of the
important and powerful success factor. Personnel decisions are among the most important
and they are being given equal opportunities in decision making and all others processes.
Dissent: Employees of this company are required to express their dissent in an open manner.
Effectiveness: It is stated that BMW focuses on getting effective outcomes which can have
long term impacts so, it focuses on performance of employees which helps it out in
accomplishing this goal.
First class performance: The vision of this company is to become sustainable the most
successful automobile service provider. For this, it makes its employees able to set their own
goals and have willingness to deliver the first class performance.
So, overall it can be said that after facing several problems due to organizational
culture and having different culture of employees at all its stores, it manages them in an
effective manner. It fosters as well as cultivates all discussed company beliefs because it
believes that they can make themselves sustainable only when they have strong cultural
foundational. It is also aware of its all social responsibilities in the field of culture and for that
it has engaged it in long term support of projects in all important areas. (Cultural Engagement
at BMW Group, 2018). It can also be said that it uses effective strategies and models o
sustainable and it is one of the main reasons of it of becoming market leader and taking
opportunities of competitive advantages.
CONCLUSION

From the above study it has been summarised that sustainability played a vital role for
not only societies but also for companies as it allows them to support people by
environmental protection and attracting customers for buying their sustainable products. This
study has shown effective sustainable strategies which helped out to automobile companies in
reducing CO2 emission and making people believe that its all processes are managed in an
effective manner and it is focusing on sustainable development. Further, it has also shown
effectiveness of organizational structure design in order to make employees able to perform
their function in an effective manner, reducing errors in the production process and feel
motivated. An effective organizational structure design also make companies able to improve
their decision making process and solving all problems created by ineffective communication
as well as increasing staff retention rate of the company. Lastly, this report has discussed
influences of organizational culture on those companies who operate at large scale and
globally as they face problems in managing people and processes.

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styles: Contrasting the electric vehicle manufacturing strategies for the BMW i3 and
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Carter, D.P., 2017. Role perceptions and attitudes toward discretion at a decentralized
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