BOSCH GROUP IN INDIA

Transition to a transNational organizationBOSCH GROUP IN INDIAInternational Management Fall 13/14Mariana Silva 10737Filipa Malheiro 11500Fermn Ezcurra 1489Mei Wei Chee 1613Javier Resa 1436Daniel Chow 1558

Enterprise Group Bosch Group in India

CEOJavier Resa

Organization Development managerMei Wei Chee Business DevelopmentDaniel ChowBusiness DevelopmentFilipa MalheiroBusiness AnalystsFermn EzcurraBusiness AnalystsMariana SilvaAGENDABosch Group in IndiaBosch groupThe beginningInternationalizationBosch group nowadays

Organizational Structure

New matrix structure in Bosch: Vertizalization

Bosch group in IndiaBosch organization in IndiaVerticalization process

ChallengesFragmentation of the organizationConfusion and conflictVoice of the Region May Be LostResentement Across Different Bosch Companies in India

Conclusion

He was a pioneer and inventorHe spent 10 years working around the world which shaped the future directions for Bosh

The founder, Robert Bosch (1861-1942)Robert Bosch in 1886

Who established the firm?

November 15, 1886First workshopRobert 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, 1886International sucess:

First office outside Germany in 1898, in London

United States in 1906; South Africa, South America and Australia in 1922Internationalization

First Office abroad, LondonGlobal Company:

75% of its revenues generated outside Germany More than 350 subsidiaries across 60 countries

Products are sold in around 150 countries

6

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 eurosEmployees: 306,000 around the worldEquity: A non-profit foundation holds the 92% of the capital stock

Nowadays

7Research & 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 tomorrowBosch Group in India

Bosch Organizational StructureBosch Group in IndiaBosch Organizational StructureBosch Group in IndiaNew Matrix Structure in Bosch

Bosch Group in IndiaVerticalizationWith 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 IndiaBosch in IndiaBosch Organization in India

Verticalization Process in India

141. Bosch organization in indiaBosch Group in India 1951 - 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 2011Bosch Group in India

Bosch Group in India

Bosch Group in IndiaImplications 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 IndiaConsequences 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 India2. Verticalization process in indiaBosch Group in India- Started in 2007 and offered several opportunities to Indian units perfome betterWhat are these opportunities?

Verticalization Process: Opportunities

Some of the smallest divisions were neglectedThese smaller divisions have now the attention of the top managersLimited carres opportunities

Employees can pursue careers in the global divisionsThe interaction betwee sectors was limited

Indian operations have now the opportunity to participate The opportunity to understand the Dynamics of global industry was unknownIndian bases are now able to develop a global perspectiveBEFOREAFTERGreater visibility for smaller divisionsNew Career opportunitiesNew opprtunities to contribute globalyDevelopment of a Global perpectiveBosch Group in India

CHALLENGESFragmentation of the organizationConfusion and conflictVoice of the Region May Be LostResentement Across Different Bosch Companies in India231. Fragmentation of the organizationBosch Group in IndiaMultiple reporting within India and outside which causes delays in resolving simple issuesMore profitable divisions are reluctant to subsidize the less profitable onesConflicts between divisions that are supposed to work in synergies because of different goals and incentivesRequires the approval of the Global Product Group2. CONfusion and conflictBosch Group in IndiaThe Head of the Division has to report to the MD of Bosch in India and to a person in the Asia regionThe importance of command is no longer thereStrong and assertive personalities dominate over the weak and submissive onesWe do not have the ability to adjust. Some of us talk too much3. Voice of region may be lostBosch Group in IndiaTarget responsibility has final authority in case of conflict.

Other markets might be more attractive than India. 3. Voice of region may be lostBosch Group in IndiaProducts unique to India may be neglected by Global Product Group.

Administrative decisions used to have more freedom before verticalization.4. Resentment across different bosch companies in indiaDue to verticalization.

Human resources decisions were put into place separately.Bosch Group in IndiaCONCLUSIONSteady 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