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  1. International Management Fall 13/14 BOSCH GROUP IN INDIA Transition to a transNational organization Mariana Silva 10737 Filipa Malheiro 11500 FermínEzcurra 1489 Mei Wei Chee 1613 Javier Resúa1436 Daniel Chow 1558 Enterprise Group

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

  3. AGENDA • Bosch group 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 Fragmentationoftheorganization Confusionandconflict VoiceoftheRegionMayBeLost ResentementAcrossDifferentBoschCompanies in India • Conclusion Bosch Group in India

  4. Whoestablishedthefirm? Thefounder, Robert Bosch (1861-1942) Robert Bosch in 1886 • He was a pioneer and inventor • He spent 10 yearsworkingaroundtheworldwhichshapedthefuturedirectionsforBosh

  5. November 15, 1886 Firstworkshop • Robert founded “Robert Bosch CmbH” in Stuttgart in 1886 • Itwas a smallworkshopwith a staff of justtwo • He startedthecompany as the “WorkshopforPrecisionMechanics and ElectricalEngineering” Pen drawing of thefirstworkshop, 1886

  6. Internationalization • International sucess: • First office outsideGermany in 1898, in London • UnitedStates in 1906; South Africa, South America and Australia in 1922 First Office abroad, London • Global Company: • 75% of itsrevenuesgeneratedoutsideGermany • 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 Bosch Group in India

  11. Bosch Organizational Structure Bosch Group in India

  12. New Matrix Structure in Bosch Bosch Group in India

  13. Verticalization • 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 BoschOrganization in India VerticalizationProcess in India

  15. 1. Bosch organization in india ▪ 1951 - Boschstartedoperating ▪1953 – Development of manufacturing operations -> segments: - automotive technology - industry technology - consumer goods and building technology - engineering an IT services ▪ Overtheyearsthecompanytried to focusoninnovation IN 2011 Bosch Group in India

  16. Bosch Group in India

  17. Bosch Group in India

  18. ImplicationsofVerticalization For BoschGroup 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. Consequencesoftheserecentchanges: • 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. Bosch Group in India

  21. 2. Verticalization process in india - Started in 2007 andofferedseveralopportunities to Indianunitsperfomebetter What are theseopportunities? Bosch Group in India

  22. Verticalization Process: Opportunities AFTER BEFORE Thesesmallerdivisionshavenowtheattentionofthe top managers Some ofthesmallestdivisionswereneglected Greatervisibility for smallerdivisions Employees can pursuecareers in the global divisions Limited carres’ opportunities New Careeropportunities • Indianoperationshavenowtheopportunity to participate Theinteractionbetweesectorswaslimited New opprtunities to contributeglobaly • Indian bases are nowable to develop a global perspective Theopportunity to understandthe Dynamics of global industrywasunknown Developmentof a Global perpective Bosch Group in India

  23. CHALLENGES Fragmentationoftheorganization Confusionandconflict VoiceoftheRegionMayBeLost ResentementAcrossDifferentBoschCompaniesinIndia

  24. 1. Fragmentation of the organization Requires the approval of the Global Product Group 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 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