BMG International: A Case Study: BMG International

1478 Words 6 Pages
Register to read the introduction… His decision to appoint Regional Directors with an autonomous decision making authority in their respective region can serve as a good example of delegation of authority.
3) Evaluation of the Executive Committee Meetings
Basically the Executive Committee Meetings (ECMs) are not effective in achieving their intended purposes. This is not to say that they are a total failure and a waste of time since they have brought some unforeseen advantages in addition to partly achieving their objectives. I would like to point out the strengths and weaknesses of these ECMs.
 The Executive Committee Meetings have helped to create mutual respect and trust among top level executives.
 They have helped to prepare clear business plans for each region and country.
 Through the periodic performance review of each region, the ECMs have helped to create a healthy and constructive competition among Regional Directors.
 The ECMs have created an opportunities for the Regional Directors to influence Rudi on a one on one discussion outside meetings.
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4) Recommendations
Rudi Gassner has led BMG International to a phenomenal success during his six years tenure as CEO. He has effectively led the company though so many ups and downs by preparing a long-term strategy, forming an effective corporate culture, structure and systems. Currently BMG international is at a cross road. It is faced with the challenging task of maintaining a balance between increasing market share and reducing costs.
My recommendation will focus on two important areas.1) Recommendations to improve the EC meetings and; 2) Recommendations about adjusting the betriebsergebnis targets.
a) Recommendations to improve the Executive Committee meetings
In order to overcome some of the limitations of the ECMs and achieve the meeting’s purposes effectively the following changes have to be
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Since it would be too easy for the Managing Directors to achieve the nominal targets if it is not adjusted, there is a high possibility of creating a complacent behavior among them. This would eventually lead to a lower level of performance than if they were given a challenging goal.
On the other hand, since such kind of target adjustment have never been done before even when Managing Directors were facing challenging conditions in the past, there is a high possibility of discouraging them and hurting their morale. It might be seen as unfair and inconsistent with earlier practices. It seemed unfair to expect higher results without changing the targets to adjust for highly unfavorable conditions and yet adjusting them when conditions become favorable to them. Simply it might be seen as a double standard: applying different rules in the same situation
Thus considering the possible negative effect it might have on subordinates morale and motivation, it would be wise not to adjust the betriebsergebnis targets. But if Rudi Gassner insists on adjusting the targets, then he should be willing to provide more bonuses than normally given to maintain their motivation and

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