Presentation is loading. Please wait.

Presentation is loading. Please wait.

Transition to a transNational organization

Similar presentations

Presentation on theme: "Transition to a transNational organization"— Presentation transcript:

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

Download ppt "Transition to a transNational organization"

Similar presentations

Ads by Google