BMW Organizational Culture, Leadership, and Job Satisfaction

BMW's Organizational Culture

The culture of BMW AG combines both transformational and transactional leadership styles in an attempt to create an optimal balance of vision and discipline, enabling the company to sustain innovation over time. The transformational aspects of leadership are powerful catalysts for any company seeking to translate its vision into reality (Mancheno-Smoak, Endres, Potak, & Athanasaw, 2009). The first example of this is senior management's commitment to continually offer profit sharing, even during years when the company struggled to remain viable. This illustrates one of the core aspects of transformational leadership: a sustained commitment to core values and the retention of trust through authenticity and transparency (Hirst, van Dick, & van Knippenberg, 2009).

A second defining aspect of BMW's culture is its willingness to allow creative competition in the design of new vehicles. The competition between design centers — at DesignWorks in Los Angeles and in Germany — underscores a more transformational, collaborative approach to leadership than one purely focused on transactional performance metrics.

Third, BMW's culture concentrates on transparency and the sharing of data that other companies might conceal to reduce accountability. The sharing of production quality audit data signifies how open the organizational culture is to continual improvement. Only in organizations with an exceptionally high level of trust and transparency can potentially controversial data be shared across the enterprise (Sull, 2007).

Leadership Model and Organizational Impact

The model of leadership that BMW relies on is highly transformational in approach, while incorporating transactional components to reward near-term performance. Many organizations find that taking the positive aspects of transactional performance and integrating them into a transformational leadership structure can deliver exceptional results (Mancheno-Smoak, Endres, Potak, & Athanasaw, 2009). This hybrid approach can also be seen in how the company creates and manages its global supplier and dealer networks, as noted both in the case study and in research on BMW's supplier and production network performance over time (Fleischmann, Ferber, & Henrich, 2006). The transformational aspects of the leadership model are further visible in how BMW has moved away from hierarchical barriers to embrace a more collaborative organizational structure.

Employee Job Satisfaction at BMW

There are many reasons why BMW employees report a high level of job satisfaction. There is strong task significance and autonomy given the company's transformational leadership orientation, in addition to a continual stream of job feedback. This feedback is framed in terms of how individual performance affects the entire organization. In these two clusters of attributes — which help explain BMW employees' high job satisfaction — the role of the hybrid transactional and transformational leadership models is evident, with the transactional element providing frequent, structured performance feedback (Mancheno-Smoak, Endres, Potak, & Athanasaw, 2009).

Meaningfulness, responsibility for outcomes, and knowledge of actual work results all contribute to BMW employees having a solid sense of their role and understanding why their performance is critical to organizational success. Together, these attributes foster a high level of job mastery — a critical element in job satisfaction (Sull, 2007). Finally, the dimensions of personal and work outcomes — including high internal work motivation, high satisfaction, and low turnover — indicate that BMW employees have achieved genuine competency in their roles. The reliance on transformational leadership techniques creates a sense of purpose throughout the company. When combined, competency, mastery, and purpose serve as a highly effective catalyst for BMW to continually grow and renew itself through learning and a commitment to change over time.