Organizational Development

Casestudy BMW Group

By
Dennis Borscheid

Professor: Allesandra Castillo

SS 2014
Universidad del Desarollo
Executive Summary

This document shall summarize the process applied to the consultant project at BMW Group. The problem

identified by the client concerning the loss of the first place in the engineering workforce in the yearly

ranking of the “Graduate Barometer 2014 – Engineering Edition” by trendence . We approached BMW

with a proposal, which is attached to this summary. It included the goal, which was to get BMW back to

first place in the ranking and to do this we needed to improve the conditions for the employees at BMW

through a planned changed process, which was be guided by the theory of the action research model,

because this model allows for close collaboration between the client and the consultant, due to joint

diagnosis and joint action planning. We then established the resources and time needed to realize the

project. In the following we depicted responsibilities on both sides. We went on to propose the

intervention we thought would be appropriate. Since the problem at hand roots in problems the

employees have in the workplace, we chose employee stress and wellness interventions. This

interventions have the goal of reducing the stress experienced in the workplace and reduce the issues

imposed by this on attributes impacting the workflow. By choosing this intervention, we were making

clear that the problem we were trying to solve was really related to the employee’s feelings in the

workplace and we weren’t diverted to other areas, which might seem more reasonable or feasible to

cause problems in the workflow. We than included the fees related to our work in accordance with the

Castillo and Associates pricing scheme. After this proposal was presented to and accepted by the BMW

Group, we went on and developed a contract with the client. We stated mutual expectations in order to

avoid different expectations in all aspects of the process – design, execution, goals- and therefore it was

very important to not only state the expectations of both sides, but to make sure that each side

understood the expectations of the other one. Otherwise it happens that “the person and you thought it

was cleat – but, you didn’t understand it in the same way.”(Mavis & Company) Next on were the time and
resources. We already had stated out requirements in the proposal, but the client needed to express their

feeling about the time and resources they could spare for the process. To make matters clearer we

decided to divide the requirements into two parts: Essential requirements and desirable requirements.

This way both sides are clear on what they need and can give, and through that they can dedicate

resources in different amounts depending on their importance. The third and final part of the contract

were the ground rules. Those rules were important, so the client or the consultant wouldn’t act in ways

that would be harmful to the process, the organization, the consultant or ethical standards. Furthermore

the ground rules stated, how the relationship shall be terminated. The change model chosen was the

action research model due to its unique feedback approach, which we wanted to test in bigger

corporations as stated in the proposal. Action research involves continuous evaluation and modifications

can be made as the project progresses (Koshy), which is important when the research is done in an

organization as fast-moving and ever-changing as BMW, with their revolution of the electric car and yearly

inventions. Furthermore there are opportunities for theory to emerge from research rather than always

follow a previously formulated theory (Koshy). All this will be helpful in the future when similar projects

have to be done for similar clients. And due to its emphasize on collaboration, the consultant is a

participant within the company rather than being distant and solely observing. This helps to establish the

much needed trustworthy relationship to make it a success. Our plan for collecting data stems from the

action research model. We chose to start with a simple observation, to gain insights into the day to day

business of the BMW Group and to be able to form first assumption, which we later wanted to further

explore in the semi structured interviews. We chose to conduct semi structured interviews because a semi

structured interview “gives the freedom to explore general views or opinions in more detail” (SGSHC),

which is important as we were dealing with human beings of whom every single one has a different

opinion, and structured interview questions have the potential to discriminate certain answers. However

we decided not for unstructured interviews, because we still wanted to have some base for comparison,
especially because we wanted to form themes to find adequate questions for the questionnaire. The

questionnaire then was used “to measure precisely the problems identified by the earlier steps.”

(Cummings, Worley; 2009) The form of data analysis that we chose to be the one to be used is the content

analysis. The advantage of this approach is, that a “content analysis can reduce hundreds of interview

comments into a few themes that effectively summarize the issues or attitudes of a group of

respondents.”(Cummings, Worley; 2009) This is very helpful, since it reduces time needed, which, as the

client made clear, is very scarce. For the resulting questionnaire, being a quantitative tool, we chose a

different mean of analysis, namely means. This allowed us to display certain trends in the respondents

mass in numbers, which made it easier for the client to understand and gave a good bases for comparison,

once the new data after the action implementation was gathered. The scale chosen is 1-6, 1 being the

highest, 6 the lowest score, so people couldn’t take the middle way like it would be possible in a 1-5 scale.

The last question of the questionnaire was an open ended question, because we wanted to explore both

quantitative and qualitative data to come to better informed conclusion. The design of the feedback was

very important, because here the real collaboration begun. Together with the head of human resource of

the engineering department we developed a top-down approach to feed back the data gathered to the

key stakeholders of the process, so once we entered the joint diagnosis stage, everyone had the same

information. The top-down approach was the best design, since we didn’t want to include too many

people at once, so we could respect the wishes of the client to keep the disruptions of the workflow to a

minimum and only to interfere with it when it was absolutely necessary. It also made the whole process

easier to administer. Due to the use of a content analysis we never came into the danger of conveying

sensitive information, since the answers of the respondents were merged into themes. The goal of the

design of the joint diagnosis process was to turn a one-sided proposal from the consultant’s side, into a

collaborative effort of both sides. This was done by letting both sides make suggestions and merging those

similar to each other into themes. This also increased engagement of the client and made a joint action
planning easier, because the client felt that his input was valued and therefore was eager to justify it by

the planning of meaningful action. The approach taken in the stage of the joint action planning was

designed to clarify the change that needed to be done right away, could be done right away or should be

done later. By this approach the consultant makes sure the client doesn’t overload the change process

with changes which are not needed right away or need a longer time to be realized. This also helps to give

the client a realistic view on the change process and prevents disappointment in the future. The result of

all the previous steps is the action which will finally be taken. We chose to implement the changed

gradually to avoid overly extensive changes which might harm the performance of the BMW Group. Also

this gradually approach will make it easier to keep the change in tune with the developed Gantt chart.

Nevertheless there can be always changing conditions which affect the action process, but this can be

minimized by utilizing continuous feedback. The design of the new data gathering was different from the

first data gathering. As the core problem has been identified in the step “Data Gathering and Preliminary

Diagnosis”, the interviews don’t have to take place anymore, but only the questionnaire has to be utilized

in order to have a quantifiable result. To conclude this process, we can say with certainty, that it will be a

success due to the close client involvement and the continuous improvement which will help to not only

remedy the problem at hand, but transform the whole company in a learning organization.
Proposal
BMW - The Ultimate Driving Machine – states everything that is a BMW. Where in recent times the
machines have been driving up revenues and profit, and led BMW from one record year into the next
(ARD), it had been the drivers who were thrown out of the focus. The drivers of the success of BMW, the
creators, makers and developers – the employees. Whereas the business departments of BMW are still
seen as the best there is, the engineering and IT departments have lost the prestigious first place to AUDI.

BMW as a manufacturer of premium vehicles, obviously has this mindset in all part of its business. Because
of this, it is in their own interest to remedy this problem as soon as possible to be once again top employer
in Germany for engineers.

I am writing this proposal on behalf of the consulting firm Castillo and Associates, a consulting firm
prestigious and well-regarded in the industry for its expertise of people-related change processes. With
over 20 years of experience and continuous contributions by our employees to papers such as the “HR
Magazine” and “T+D”, Castillo and Associates has the skillset as well as the mindset to get your
organization from where it stands to where it would like to be. Therefore, I would like to present the
following proposal.

The goal of our project is the identification and removal of problems regarding the well-being of your
engineers. To do so we will implement an action plan called the Action Research Model, which will allow
us to closely work together with the key stakeholder in the engineering department and give constant
feedback to whom it might concern. By using this approach we encouraging the clients to actively
participate in the process which increases the chance of approval of the change identified. After the initial
contact with our practitioner to establish mutual expectations, ground rules as well as time and resources,
we begin to gather data and afterwards consult with the clients in the engineering department before
taking action. Once we have taken action we will once again gather data and give you feedback on how
the change has improved the current situation. When referring to the clients and key stakeholders we are
referring to the human resource manager of the engineering department and his subordinate human
resource managers for the single units (e.g. chassis, safety). Although the organizational development
practitioner acts as the change agent, he is also a co-learner, which means every input from the client is
highly valued and can help to speed up and smooth the whole process. Therefore the responsibility of the
client is not only to listen, but also to engage, challenge and support.

As the problem identified concerns the human resource aspect of your company, the recommended
interventions will concern the management of workforce diversity and employee stress and well-being
and shall take place on the group level in order to keep the disruption as small as possible. Part of the
intervention will make “human resource practices more responsive to a variety of individual
needs.”(Cummings, Worley; 2009) Furthermore they employ employee assistance programs, so called
EAPs, which will advise individuals on how to cope with problems associated with work and working
performance. They also will help managers develop skills on how to identify those problems before they
become a serious issue in the workplace.

Costs and fees:

Our firm charges by project. In your case the fee amounts to $1 million. See below the break out of the
costs.
Client’s company size (the engineering department): 20.000 employees = $3.5 million

Time needed: 3 month = $2.5 million

Consultant location: 100% company-based = $1.2 million

Total: $7.2 million

Contract
To avoid any misunderstanding in the course of the change process, this contract shall be used to establish
a common ground for the following course of action. The contract will be between the BMW Group, also
mentioned as client, and the organizational development practitioner, also mentioned as consultant or
practitioner, and shall be binding to both parties upon signing.

Firstly we shall form mutual expectations. The consultant understands that the most important
expectations the client has, is the reinstatement of BMW as the number one employer in Germany.
Furthermore the client wants to be able to get the employees to actively embrace the change in order to
minimize negative disruptions in the work place. The client also wants to fully understand the problems
of the employees and want to be presented a sustainable plan on how to remedy this problem from a
long term perspective. The consultant wants to try an extensive feedback process across the organization
to see if it is possible in big corporations and would like to forward the gathered information to other
clients, without giving out any delicate data concerning the BMW Group.

The client insists, that the workflow is not disrupted for too long, which means that only limited amounts
of people shall be interviewed for a maximum of an hour per person and the whole process shall be
finished before the industry-wide shut down at the beginning of July, today being March, 15 th, 2014. The
practitioner will however need the full support of the human resource manager for the engineering
department, so this is an essential requirement, as well as the input of the divisional human resource
managers. It would be good to have the leaders of the different engineering workgroups, too, but this
would be a desirable requirement and it is not necessary if the client cannot spare them from their tasks.
This are the requirements needed to structure the feedback process in a top-down manner. Each manager
can expect to be needed for a maximum of six hours.

The ground rules concerning the process are the following: The client shall not intervene during the
process and shall not influence employees in the interview process. Also, the client shall not have insights
into the answers given by the employee. The practitioner will discuss company and division related
matters, but not individual ones. The practitioner has the right to withhold sensitive information about
individuals if he considers them to be irrelevant to the process of change in the organization. Due to the
cyclical nature of the action research model, the consultant will return to the company once the initial
action has been implemented. The relationship shall be terminated once the results created are in tune
with the expectations stated.

__________ ___________
Castillo and Associates BMW Group
The Change Process
The chosen change process is the action research model. This model emphasizes on the collaboration
between the practitioner and the organization and its members. It states that data gathering prior to
implementing change is crucial and that the process of change is not a setting of fixed steps with an
eventual end, but an iterative cycle in which the change process gets ever-improved. The steps which are
part of the model are the following. Firstly the process starts with the problem identification, meaning
that someone at the organization realizes a problem in the processes, or in this specific case the
dissatisfaction of employees as measured by various surveys associated with the yearly “Best Places to
Work” ranking. He or she then goes on and contacts a behavioral science expert for consultation. In this
stage the client and expert establish a relationship by the revealing their intentions for the relationship
and ultimately develop a contract to state this relationship, as shown in the attached contract document.
Once both parties were satisfied with the proposed relationship, the practitioner moves on to gather data
and form a preliminary diagnosis, already together with member of the organization. To gather the
appropriate data, the practitioners will utilize an approach to use those forms of data gathering to form
an effective and relevant diagnosis, which means he will start with observation, then a semi structured
interview, and conclude with a questionnaire to have the opportunity to measure observed problems.
Important in this stage is to acknowledge that every action by the practitioner is an intervention which
will alter the effect the process has on the organization. After the data has been gathered and a diagnosis
has been formed, the data is shown to the client, because the action research model proposes a
collaborative relationship. In this case the data has been gathered by the above described methods and
was analyzed using the method of content analysis, forming the most frequent answers into themes. The
resulting themes will be ordered by importance and the most important, which is the one with the most
common responses, will be chosen as the reference point for change. The design of this feedback will be
to firstly give the feedback the manager for the entire engineering department and then go on to a group
or work team meeting, consisting of the various divisional human resource managers. In this stage the
practitioner has the choice on how to present the data to the client and how much data he will reveal,
due to ethic consideration or potential harm certain data might do to the client’s willingness to
collaborate. This means that no answers concerning the exact reasons for dissatisfaction will be given, but
rather will be shown as themes developed through the content analysis. After every relevant member has
received the data gathered, the diagnosis will begin. The practitioner will make his remarks on the data
and where he thinks the root of the problem lies. He does not say that it has to be true, but rather invites
input and constructive criticism by the members involve. The process that should be used is a whiteboard
which is separated in three pieces. In the middle one the consultant writes the themes discovered and
the points each close ended question recorded. Left of it, the consultant will write his suggestions on what
the root might be. On the right side the client can write his suggestions. Like in brainstorming sessions, at
first, “no idea is stupid”, and every idea will receive attention. By this approach the client can be free with
his input and might reveal important information about the information of which the consultant was
unaware of until then. When the brainstorming session is over, the consultant and the client try to identify
inputs of the consultant and the client which go into the same directions, much like afore used themes.
Once those are identified, the rest is deleted and the remaining few are taken under closer observation.
When the amount of root causes is minimized to a feasible amount and connected to the collected data,
the team goes on to the joint action planning. The consultant should let the client take the lead on this
topic, because he knows the organization’s culture, technology and external factors better than the
consultant. The before identified and minimized root causes and the related gathered data, will be formed
into possible action plans to remedy the problem and get rid of the root cause and those action plans will
be categorized by the following criteria: Feasibility, importance, short – or long-term, and member
involvement. The goal is to create a timeline, such as a Gantt chart, in which the steps needed to
implement the change a clearly documented and understood by everyone. Starting with very feasible,
high importance, short-term changes with low member involvement to difficult feasibility, lo importance,
long-term changes with high member involvement. In this stage, the consultant is merely a writer and
guider, making sure that all action plans are adequately categorized according to the input of the client of
internal knowledge. After the categorization is complete, the client and the consultant pick the first
category and develop a plan for implementation. In this stage the consultant will have to draw from
previous experience and principles learned in order to help the client choose the adequate
implementation method. The second last step is taking action. Once the action plans are categorized and
the execution is planned, the implementation begins. Depending on the method chosen in the previous
method, this will involve training of the human resource managers in order to make them more sensitive
to the problems identified. We will set up EAPs (Employee Assistance Programs) and manage those
through the above introduced employee wellness intervention. It also can include a certain program for
employees to be educated about programs to help themselves with their programs. Part of it also might
be the implementation of new procedures and methods, reorganizing work structures and processes and
to educate members of the organization on new behavioral guidelines. Although simple on paper, the old
structures need a “transition period as the organization moves from the present to a desired future
state.”(Cummings, Worley; 2009) This has to be clearly communicated by the practitioner in order to avoid
disappointment and loss in faith by the client. To finish the cycle and build the bridge to the renewed
feedback, new data has to be gathered. As there will be more than one action taking place, the data
gathered has to be allocated to the appropriate action. The practitioner will therefore have a continuous
relationship with the client to make sure that the change results in the wanted changes and that he can
fine tune or radically change the action plan to create the needed results. Only the questionnaire has to
be utilized in order to have a quantifiable result. This result will be compared to the result of the
questionnaire before the action was taken and the result of the comparison will be fed back to client and,
if needed, new joint diagnosis and joint action planning will be needed to come up with new, more
adequate actions to be taken.
Plan for Collecting Data
Since we apply the action research model, experience and expertise suggest that one starts with
observation, then uses a semi structured interview and concludes with a questionnaire. The data which
we will obtain during the interview process shall be categorized in themes and the most recurring theme
shall be used to structure the questionnaire to be able to explore the problem identified even more.

The observation will be used to familiarize the consultant with the day to day business of BMW, so he can
allocate the answers given in the process of the semi structured interview. It is important to note, that
due to the nature of the semi structured interview, certain questions cannot be formed ahead of time,
but instead general questions will be stated here which have potential to be developed into further
conversation topics. Another important consideration is, that the questionnaire was designed according
to the responses given by the interviewees, this is the reason the questions are related to the career
options of the employee.

Interview question:

1. How are you?

2. What’s your name?
3. How old are you?
4. How long have you been working for BMW?
5. Which position(s)?
6. Have you recently encountered problems in the work space?
7. Have you in the last two years looked for other jobs?

Questionnaire questions:

1. Age:
2. Marital status:
3. Position:
4. Do you find the career opportunities at BMW sufficient?(1-6)
5. Do you feel supported in your career aspirations? (1-6)
6. Do you understand the career opportunities? (1-6)
7. Is the work satisfying (1-6)
8. Where do you see yourself in 5 years?
Analysis of Data
The data which we will obtain during the interview process shall be categorized in themes and the
most recurring theme shall be used to structure the questionnaire to be able to explore the problem
identified even more. In return, the answers mostly given in the questionnaire will be used to develop
new themes, which in return will be used to form a diagnosis The process of content analysis can be
viewed as a three step process: At the beginning the responses to a particular question are read to
make oneself acquainted with it and to see what kind of answers were given most often. After this,
the themes are developed which capture the essence of certain answers. Finally, categories, such as
social aspects or technological aspects, are formed and the themes are placed onto them. Then the
practitioner chooses the category with the theme that was mentioned most often to further explore
it, for example with a questionnaire. This steps are used often in the context of the action research
model. The questionnaire, being a quantitative tool, needs another approach to a potential analysis.
As questions are predesigned, one can easily apply quantitative analysis tools, such as means,
standard deviations or frequency distribution. In this case we have designed a questionnaire with four
closed ended questions and four open ended questions. Due to that we can apply means to the
responses to the closed ended question to clearly identify the problem in numbers, which makes it
easier to understand for the practitioner and the client. Where the first three unstructured questions
will be used to identify the individual, the last one asking: “Where do you see yourself in five years?”
will be used to develop themes about the respondent’s future vision for himself. Those themes will
be divided into clear vision for future and unclear about future.

Feedback Process:
The feedback process is an important part of the change process, especially in the action research
model as it emphasizes on a collaborative relationship between the practitioner and the client. As
defined under the point in the proposal, the responsibility of a successful change process on the client
side’s lies with the human resource manager for the engineering department and his subordinated
human resource managers for the various divisions. As stated in the mutual expectations agreement
in the contract, the practitioner wants to try a wide-spread approach to the feedback process.
Nonetheless it will be designed in a pyramid fashion, sharing the feedback with the top executive,
which in this case is the human resource manager for the engineering department, who then, together
with the practitioner, meet with his subordinate managers, which then meet with the engineering
leaders of the division. Important in this stage is, that the consultant gets the client to own the data
gathered and is completely engaged in the process. It is achieved through the combination of
qualitative data, which makes the data tangible to the client, because he understands certain concerns
of the employees and quantitative data, which shows that this problem is not a stand-alone issue.
This also builds the base on every further step in the action research model. This approach does not
include the lowest level of the pyramid, the normal engineers.
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