1. Transition to a transNational organization
International Management Fall 13/14
BOSCH GROUP IN INDIA
Transition to a transNational organization
Enterprise Group
Mariana Silva 10737
Filipa Malheiro 11500
Fermín Ezcurra 1489
Mei Wei Chee 1613
Javier Resúa 1436
Daniel Chow 1558

2. Organization Development manager Business Analysts
CEO
Javier Resúa
Business Development
Filipa Malheiro
Organization Development manager
Mei Wei Chee
Business Analysts
Fermín Ezcurra
Business Development
Daniel Chow
Business Analysts
Mariana Silva
Bosch Group in India

3. AGENDA Bosch group Organizational Structure
The beginning
Internationalization
Bosch group nowadays
Organizational Structure
New matrix structure in Bosch: Vertizalization
Bosch group in India
Bosch organization in India
Verticalization process
Challenges
Fragmentation of the organization
Confusion and conflict
Voice of the Region May Be Lost
Resentement Across Different Bosch Companies in India
Conclusion
Bosch Group in India

4. Who established the firm?
The founder, Robert Bosch ( )
Robert Bosch in 1886
He was a pioneer and inventor
He spent 10 years working around the world which shaped the future directions for Bosh

5. November 15, 1886 First workshop
Robert founded “Robert Bosch CmbH” in Stuttgart in 1886
It was a small workshop with a staff of just two
He started the company as the “Workshop for Precision Mechanics and Electrical Engineering”
Pen drawing of the first workshop, 1886

6. Internationalization
International sucess:
First office outside Germany in 1898, in London
United States in 1906; South Africa, South America and Australia in 1922
First Office abroad, London
Global Company:
75% of its revenues generated outside Germany
More than 350 subsidiaries across 60 countries
Products are sold in around 150 countries

7. Nowadays Leading multinational technology and services company
Diversification. Core products are:
Automotive components: brakes, electrical drives, motors, etc.
Industrial products: drives, packaging technology, etc.
Consumer goods and building products: household appliances, etc.
Revenue: In 2012 generated sales of 52.5 billion euros
Employees: 306,000 around the world
Equity: A non-profit foundation holds the 92% of the capital stock

8. Research & Development
Success in innovation and creativity
More than 4 billion euros for research and development in 2011
Over 4,800 patents applications worldwide in 2012
International research and technology structure
1,300 employees pave the way for the technologies of tomorrow

9. Bosch Group in India

10. Bosch Organizational Structure
1886 to 1900
Phase 1
No need for formal structure
Interact with employees on personal basis
1900 to 1925
Phase 2
Transit from craft to industrial production
Functional structure
Activities differentiated horizontally and vertically to obtain economies of scale
Begin international activity
1925 to 1960
Phase 3
Functional structure around assembly line system launched in 1925 due to the after effects of WWI
Begin diversification
Bosch Group in India

11. Bosch Organizational Structure
1960 to 1990
Phase 4
Restructuring of the company due to WWII
Three waves of diversification – Power Tools (1960), Packaging Technology (1964) and Telenorma (1982)
Adoption of product divisions
1990 to 2007
Phase 5
Required matrix structure
Primacy given to geographic structure
2007 to now
Phase 6
Verticalization achieved by transforming global matrix structure into transnational structure
Global divisions, Corporate departments, Regional organization and Global sales and marketing organization
Bosch Group in India

12. New Matrix Structure in Bosch
Bosch Group in India

13. Verticalization
Global Matrix Structure
Transnational Structure
With a transnational structure, Bosch generally organize its business along geographic, product and functional levels.
Integration is achieved within various product categories or within geographic areas or functions.
A transnational structure helps coordinate all related business activities simultaneously.
Bosch Group in India

14. Bosch in India Bosch Organization in India
Verticalization Process in India

15. 1. Bosch organization in india
▪ Bosch started operating
▪ 1953 – Development of manufacturing operations -> segments:
- automotive technology
- industry technology
- consumer goods and building technology
- engineering an IT services
▪ Over the years the company tried
to focus on innovation
In India, the Bosch group had about employees
Revenues around million
11 manufactoring sites and 4 development centers
IN 2011
Bosch Group in India

16. Business divisions Bosch Ltd
India’s largest auto-component manufacturer
Bosch Chassis systems India Ltd
Business areas: actuation, foundation and modulation of the braking systems and produce hydralic brake for a wide range of vehicles
Bosch Rextroh India Ltd
Focus its production on industrial hydraulics, electric drives, controls, linear motion
Robert Bosch Engineering Business Solutions Ltd
Lending global supplier of technology and services
Bosch Group in India

17. Bosch Group in India Joint Venture
Bosch Automotive Electronics India Private Ltd
MH Filter India Private Ltd
Bosch Electrical Drives India Private Ltd
Bosch Group in India

18. Implications of Verticalization For Bosch Group in India
Genesis in poor North America performance (sales and profitability were not too good)
Recent changes:
Link Indian operations to other countries
Increase the set of product divisions
Allows best practices, ensues consistency in manufacturing processes and facilitates balancing of production
Produce more units at competitive prices
Bosch Group in India

19. PROBLEM: Regions may become weak
Consequences of these recent changes:
Mobility of resources between subsidiaries
Uniformity of products and manufacturing methods
Development of a global product strategy
PROBLEM: Regions may become weak
Solution: Country Head. The country head is the head of all entities in India. Local needs of the Indian market and Indian operations are preserved.
Bosch Group in India

20. Disadvantages Advantages Facilitates coordination of the value chain
Decisions consistent with strategic objectives
Duplicating activities across subsidiaries
Reduces the risk that lower-level of employees make mistakes
Consistent dealing with stakeholders
Disadvantages
Discourage initiative among lower-level employees
Demoralized employees simply wait to be told what to do
Loss of innovation from bottom-up information flow
Slow information flow
Bosch Group in India

21. 2. Verticalization process in india
- Started in 2007 and offered several opportunities to Indian units perfome better
What are these opportunities?
Bosch Group in India

22. Verticalization Process: Opportunities
AFTER
BEFORE
These smaller divisions have now the attention of the top managers
Some of the smallest divisions were neglected
Greater visibility for smaller divisions
Limited carres’ opportunities
Employees can pursue careers in the global divisions
New Career opportunities
Indian operations have now the opportunity to participate
The interaction betwee sectors was limited
New opprtunities to contribute globaly
Indian bases are now able to develop a global perspective
The opportunity to understand the Dynamics of global industry was unknown
Development of a Global perpective
Bosch Group in India

23. CHALLENGES Fragmentation of the organization Confusion and conflict
Voice of the Region May Be Lost
Resentement Across Different Bosch Companies in India

24. 1. Fragmentation of the organization
Requires the approval of the Global Product Group
Many units instead of one
Conflicts between units
Profitability became public to every employee
Difficult for employee mobility
Multiple reporting within India and outside which causes delays in resolving simple issues
Conflicts between divisions that are supposed to work in synergies because of different goals and incentives
More profitable divisions are reluctant to “subsidize” the less profitable ones
Bosch Group in India

25. 2. CONfusion and conflict
The Head of the Division has to report to the MD of Bosch in India and to a person in the Asia region
Difficult to adapt to this new method
Personality crashes
Indian culture
Multiple reporting lines
The importance of command is no longer there
“We do not have the ability to adjust. Some of us talk too much”
Strong and assertive personalities dominate over the weak and submissive ones
Bosch Group in India

26. 3. Voice of region may be lost
Target responsibility has final authority in case of conflict.
Other markets might be more attractive than India.
Bosch Group in India

27. 3. Voice of region may be lost
Products unique to India may be neglected by Global Product Group.
Administrative decisions used to have more freedom before verticalization.
Bosch Group in India

28. 4. Resentment across different bosch companies in india
Due to verticalization.
Human resources decisions were put into place separately.
Bosch Group in India

29. CONCLUSION
Steady transition from a functional structure to a transnational organisation through the verticalization process.
Verticalization presents beneficial opportunities for India, but challenges must be met to facilitate the needs of the Indian market.
Bosch Group in India