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 ...