Culture Clash: A Case Study of Rover and BMW

Nerys Fuller‐Love

doi:10.5539/ibr.v1n1p93

Abstract

This paper examines the culture clash at Rover when BMW took over the company from British Aerospace. Research hasshown that the globalisation of business across national and cultural boundaries has resulted in some culture-clashes andthere has also been an increase in interest in the impact of culture on business. This paper explains the breakdown incommunication and the different approaches to car manufacturing in Rover under BMW’s ownership.Both Rover and BMW were symbols of national pride and therefore deeply embedded in their own culture. When BMWtook over the Rover group, the company was making profits and Rover had won numerous quality awards. Six years later,BMW decided to sell Rover at a substantial loss but retained the new mini which has been very successful. Although someof the problems faced by BMW were outside their control, the culture clash certainly exacerbated the problem.

Highlights

This paper examines the culture clash at Rover when BMW took over the company from British Aerospace
This paper looks at the way in which Rover managed to turn itself around by re-inventing itself as a learning organisation and how that contributed to the culture clash with BMW
Research Method The case method was chosen for this study as it provides the opportunity to gain an in-depth understanding of the impact of cultural diversity facing the management of BMW following its take-over of Rover

Summary

Introduction

This paper examines the culture clash at Rover when BMW took over the company from British Aerospace. British Aerospace had turned the company around since the purchase of Rover from the government and the company had been hailed as the learning business. When BMW took over there was a culture clash and the company was eventually sold to Phoenix after substantial losses. In the late 1980’s losses at the Rover group were £100 million a year, quality was low and employee morale was getting lower. By 1994 profits were £56 million a year Both top management and employees attributed the turnaround to Rover’s learning organisation initiatives. When BMW purchased Rover there were concerns that the last British volume car manufacturer was to be sold. The advantages for Rover included investment in technology and engineering

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