Rudi Gassner and the Executive Committee of Bmg International (a)

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This case explores the roles of CEO Rudi Gassner and the 9-person executive committee in leading BMG International. BMG International is the international music subsidiary of Bertelsmann, a German company that is the second-largest media conglomerate in the world. In particular, the case describes a 1993 decision that Gassner and the executive committee must make about whether or not to change managers' business plans and bonus targets as a result of a newly negotiate reduced manufacturing cost. Some of the major and important issues discussed include: the complexities of managing and growing a large global business; the tensions between centralized corporate control and decentralized local management in a global organization; the impact of leadership style on corporate culture and performance; the challenges of leading a senior management team; and the final proposed decision by CEO Rudi Gassner about the business plan and the reactions of the Executive Committee members. I will try to analyze the case by classifying it in to four parts: 1)Rudi Gassner’s Leadership Style

2)Power and influence Tactics
3)Evaluation of the Executive Committee Meetings

1)Evaluation of Rudi Gassner as a Leader
Rudi Gassner is a very effective leader. His leadership style can best be described as a transactional one although he also displays some qualities of transformational leadership. His transactional leadership characteristics are displayed decision to prepare a yearly business plan for each Managing and Regional Director. His focus on clarifying goals and providing rewards and bonuses contingent on performance is a typical behavior associated with transactional leaders. He also had displayed the four key sets of leader behaviors associated with transformational leadership, namely: inspirational motivation, idealized influence, individualized consideration and intellectual stimulation. His great vision for the future of the company; his ability to instill his values and vision in the subordinates; his provision of career counseling to some underperforming subordinates; and his continued advice to his direct reports to make decisions by themselves taking full responsibility for them are some good examples of the above mentioned four sets of transformational leaders behavior he displayed at BMG international. Amazingly enough, Rudi Gassner has most of the positive leadership traits identified by researchers. For example as it is described in the case: he is intelligent (understands the industry inside-out), he is self confident, determined and has high ethical integrity. I have also tried to analyze his leadership style using the behavioral leadership theory. Based on the pattern of behavior he displayed often; we can say he has a high structure and low consideration leadership style (using the Ohio University study) or as highly job-centered leader (using the University of Michigan study). Considering the variety of patterns of behaviors and styles he used to effectively lead BMG International for the last six years, I have come to the conclusion that he used the contingency approach to deal with different situations. 2)Power and Influence Tactics

Rudi Gassner is a very powerful person. This can be explained by the variety of bases of power he has at his disposal. He used his power in the most appropriated manner in different circumstances to effectively influence his subordinates and obtain the desired result. For example, he used his reward power to urge his subordinates exceed the challenging annual targets with a promise of getting an attractive bonus; he used his extensive experience and knowledge about the industry (Expert Power) to persuade and obtain compliance from his subordinates; he used his legitimate power to make decisions and force his reports to comply when he fails to convince them through other means. The high level of BMG’s performance during his tenure as a CEO can be associated with...
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