Rudi Gassner And The Executive Committee Of Bmg In

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Rudi Gassner became CEO of BMG International in 1987, building his idea of what a global company should look like. As a result of company growing and covering more territories, Gassner created an executive committee, consisted of five regional managers and four senior staff members. There had been a manufacturing price reduction that affected only European countries; as a result, some regions targets would not be affected by the change while other’s profit would be increased by more than 50%. Targets for previous years were not changed to reflect pricing and exchange rated. Still, Grassner’s main concern was that directors might become complacent if their targets were easier to achieve. Gassner proposed that business plans and bonus targets for each country needed to be modified, while regional managers didn’t want to take it even into consideration. On the one hand, 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 managing directors 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 to 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. Another argument,

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