West Germany: A Many-Titled Tycoon

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As a World War II prisoner held near Concordia, Kans., German Afrika Korps Lieut. Reinhard Mohn developed a command of English and an affection for American ways. Mohn returned to Germany and took over his family's small 111-year-old C. C. Bertelsmann publishing company, read all that he could find about U.S. management ideas—and made the firm the colossus of the West German book business, ten times larger than its nearest competitors. Lately he has made himself West Germany's movie king as well. He has bought the famed but financially troubled Ufa studio, and last month he acquired a 50% interest in Munich's Constantin Filmverleih, the country's biggest film distributor and producer. It specializes in grinding out Wild West films in the Yugoslav mountains.

Broadening Choice. Mohn grew rich by adapting to West Germany a U.S. success: the mass-market book club. He persuaded the closely bound fraternity of 5,000 book dealers and door-to-door book salesmen to solicit memberships by offering the solicitors plump 41½% commissions on each volume sold to any member they signed up. While his competitors concentrated on small editions of intellectual literature, Mohn brought out volumes with mass appeal from encyclopedias to schmalz. Applications rolled in—80% of them from young people who had never before read books outside of school. Mohn now has four clubs for books and records, and a membership of 3,200,000, including Chancellor Ludwig Erhard. This year he will put out 22 million books and write up sales of some $80 million. (The U.S.'s largest book publisher, Crowell-Collier-Macmillan, last year had sales of $113 million.)

Bertelsmann grew so fast that a few years ago it wobbled. "Our old patriarchal form of management collapsed," says Mohn. "We were practically forced into decentralization." With techniques gleaned from U.S. magazines and books and his biennial brain-picking visits to the U.S., he split Bertelsmann into 44 subsidiaries, each with its own boss and its own specialized function, such as printing, warehousing and collecting bills. Delegating with skill, he told managers: "I don't care what you do—as long as everybody in the company provides the world's best solution to his particular problem." Whenever a subsidiary shows signs of a sloppy performance, Mohn himself steps in and takes over.

Rejecting Controversy. In his own reading, Mohn, 44, confines himself to books on business (notably those of U.S. Management Consultant Peter Drucker) and the eight books a year "most recommended" for his book clubs. The members, with growing sophistication and independence, are tending to ignore the clubs' recommendations: the number making their own selections has risen from 20% in the early postwar years to 77% now.