BMG公司是貝塔斯曼公司的子公司，一家德國的媒體集團，在一九九二年成為第二大的媒體企業，該公司的銷售額為九十七億美元。在那個時候，貝塔斯曼公司是由超過兩百多家公司所組成的，在三十七家公司有五萬多名員工，它主要經營的范圍包括音樂，廣播，電視，電影，書籍，雜志，和報紙出版發行，印刷和制造業務。總部設在德國小鎮居特斯洛的一個小農村，公司并沒有進入美國市場，直到1986年通過收購幾家公司，其中一個是RCA唱片，通過一位藝術家將他的標簽放置在地圖上：普雷斯利艾維爾斯。RCA收購貝塔曼斯音樂集團從而升至到六大唱片，其他五家公司分別為CBS，華納，寶麗金，MCA,和國會EMI，這六大唱片公司當時占據全球音樂唱片銷量的百分之八十。

 

Rudi Gassner and the Executive Committee of BMG International 
 

BMG International is a subsidiary of Bertelsmann AG, a German media conglomerate that became the second largest media enterprise with 1992 sales of $9.7 billion. At that time Bertelsmann was comprised of over 200 companies and 50,000 employees in 37 countries whose business interests included music, radio, television, film, book, magazine and newspaper publishing and distribution, printing and manufacturing operations. Headquarted in a small rural German town called Guetersloh, the company did not enter the US market until 1986 through the purchase of several companies, one of which was RCA Records, a label that had put its name on the map in the 1950's through one artist: Elvis Presley. The acquisition of RCA elevated Bertelsmann Music Group (BMG) into the ranks of the "Big Six" record companies. The other five companies ? CBS, Warner, PolyGram, MCA, Capitol-EMI ? and BMG were responsible for supplying 80% of worldwide music sales at that time. 
 

Rudi Gassner became CEO of BMG International in 1987. At that time the company operated in 17 countries with headquarters in New York. Gassner described the organization as "a patchwork of companies around the world. It had no mission, no goals, and in total, it didn't make any money..." (p 369) Due to the lack of structure, Gassner was able to build his idea of what a global company should look like, and he wasted no time in getting started. The structure he created for BMG was a centralized corporate structure and decentralized local management structure emphasizing a flat hierarchal form. He established this in creating five regional divisions led by regional directors (RD's) who were responsible for the strategic development of the region in conjunction with the whole company, in addition to managing the managing directors (MD's). This structure tackled two crucial business issues: globalization and domestic repertoire. After he created the regional structure, Gassner established an executive committee consisting of the regional directors and four members that were corporate staff. At the end of the case, the executive committee was having trouble reaching a consensus about some major issues. #p#分頁標題#e#
 

Rudi Gassner is credited with expanding BMG's overseas presence from 17 countries to 37 in his first six years. He accomplished this by forming joint ventures, purchasing small labels, and launching new satellite companies. With Gassner leading the company, annual sales increased at an average of 20%, hitting $2 billion in 1993, accounting for two-thirds of BMG's overall revenue that year. International market share was at 17% compared to 11% when Gassner first took charge. According to Gassner, a 1% worldwide market share gain was equivalent to approximately $250 million in revenue. How can you argue with results like that? Its hard to suggest that there may be alternative courses of action for a company on a hot streak like this. However, the complexity of managing and expanding a global business like BMG International is enormous; and the success they have experienced with Gassner as CEO is not sustainable long. Therefore, I am inclined to disagree with the executive committee, regarding the decisions that need to be made. A fiscally conservative choice would be in the best interest for BMG International. 
 

I have to agree with Gassner that they should change the business targets for each country to reflect the new manufacturing price, and then using these figures as the basis for calculating the managing directors' bonuses. This route would be the best for the company, preventing employees from complacency, but more importantly holding MD's accountable for their own performance. BMG International should take full advantage of these savings, and use the $20 million in a way that benefits the company as a whole. It appears that the regional directors' are taking the path of least resistance and not looking at the situation from a business perspective. The organization of BMG makes it imperative that the business targets be adjusted ? the delegation of responsibility and authority is supported by performance linked compensation for managers and profit sharing by all employees ? this structure can thrive only so long as employees are held accountable for their own performance (and not for windfall profits.) 
 

However, the most important thing in making this decision is that the result is something the entire executive committee agrees with. At the end of this case, it felt as though the executive committee would never reach a consensus. The RD's all agreed that the business targets should not be altered because they had never been changed in the past. The leader of the committee completely disagreed with this argument for reasons previously stated. As CEO of the company, Gassner was concerned about maintaining and increasing the success that BMG had achieved over the previous six years. He knew that they would have to carefully monitor the economics of the business and maintain their agility in order to meet future challenges. 

If I were Gassner, I would have the executive committee come up with some ideas of how the savings would be spent in each region. If RD's felt like their region would directly benefit from these savings they might agree that it would be best for the entire company to adjust targets. Coming up with ideas for future projects in their region might enable them to look at the situation from the long-term perspective. If the RD's do not change their mind, then perhaps Gassner needs to take a step back to look at the bigger picture. If he decides to overrule the committee, they are going to feel inconsequential and probably harbor feelings of resentment toward Rudi, which could have devastating effects on employee morale and company culture.
 

Gassner has been fairly effective in managing the executive committee, which is "the group which will lead BMG International." (p 375) The committee meets four times a year to discuss current operating issues and to examine long-term strategy. Gassner polls members before each meeting for agenda items, which he then edited before he establishes the official agenda that is distributed to the group. The group has made progress in teamwork which always takes time to learn for any new team that comes together. Gassner did a great job in choosing a diverse group (which was predetermined from promoting employees to RD, or hiring the NY corporate staff). "Everybody in that room is the best at what he does." (p 378) Individuals bring different qualities to the table which allows the committee to be a well-rounded but can present challenges such as finding a common ground. 
 

One area where Rudi seems to be less effective, is in making other committee members feel significant to the management process. One RD called him a dictator, which is an authoritarian, often totalitarian ruler and usually implies an oppressive nature, or even an abusive ruler. Another RD said: "In reality, there is not a team "working together" at the top; there are executives implementing predetermined policies in different areas." (p 379) It seems as if the RD's feel like that they do not matter except for the implementation of policies, which can be detrimental to employee morale. 
 

On the other hand, it would be wise for BMG to have a clearly defined strategy to guide the company through millennium, as they are approaching a new generation that is going to change the face of the music industry forever. If executive committee cannot work together to move forward, then perhaps they have to have a dictator define strategy and policy for the organization. A strong leader or dictator may be necessary to keep the company afloat during challenging times. For instance, from 1999 to 2003, global sales of sound recordings declined from 38 to 32.5 billion dollars. There is no way that BMG could know what the future has in store for them; but they have to find a way to get past the tensions between centralized corporate control and decentralized local management. If they don't, they risk the company's demise in the near future. 

 

Bibliography 
 

Bartlett, Christopher A., Ghoshal, and Birkinshaw, Transnational Management, Text, Cases and Readings in Cross-Border Management. Fourth Edition, McGraw-Hill Irwin, 2004