Bosch Case Study

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ORGANIZATIONAL STUCTURE & DESIGNBosch group in India: Transition to a transnational organizationPresented by: Group-Ancit Gupta (UM14307)CN Sreeram (UM14315)Kishor Chandra Sahu (UM14323)Neetesh Singh (UM14326)Rahul Mandloi (UM1433Nibedan Kumar Bhawsinka (UM14327)Faculty: Prof. Kalpana Sahoo

Xavier Institute of Management, Bhubaneswar

BackgroundThe founder, Robert Bosch (1861-1942)He was a pioneer and inventorHe spent 10 years working around the world which shaped the future directions for Bosch First workshop November 15,1886

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

Sreeram2

International success:

First office outside Germany in 1898, in London

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

Global Company:

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

Products are sold in around 150 countries

Internationalization

Bosch At PresentLeading 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 2014 generated sales of 48.9 billion eurosEmployees: 290,000 around the worldEquity: Robert Bosch GmbH is privately owned, and 92% of its share capital is held by Robert Bosch Stiftung GmbH, a charitable foundation.

Research & DevelopmentSuccess in innovation and creativity

More than 4 billion euros for research and development in 2013

Over 4,800 patents applications worldwide in 2012

International research and technology structure

1,300 employees pave the way for the technologies of tomorrow

In 2009 Bosch was the leader in terms of numbers of patents at the German Patent and Trade Mark Office (GPTO) with 3,213 patents

Key Focus Areas

Bosch Organizational Structure

Bosch Organizational Structure (Cont.)

Bosch Organizational Structure (Cont.)

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 organization in IndiaBosch Group in India 1951 Bosch started operating 1953 Development of manufacturing operations - automotive technology- industry technology- consumer goods and building technology- engineering an IT services

Over the years the company has tried to focus on innovation IN 2011

Business divisions in IndiaBosch LtdIndias 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

Robert Bosch Engineering Business Solutions LtdLending global supplier of technology and servicesBosch Rextroh India LtdFocus its production on industrial hydraulics, electric drives, controls, linear motion

Bosch Group in IndiaImplications of Verticalization Genesis in poor North America performance (sales and profitability were not too good)

Recent changes:

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.

Advantages

Facilitates coordination of the value chainDecisions consistent with strategic objectivesDuplicating activities across subsidiariesReduces the risk that lower-level of employees make mistakesConsistent dealing with stakeholders

Disadvantages

Discourage initiative among lower-level employeesDemoralized employees simply wait to be told what to doLoss of innovation from bottom-up information flowSlow information flow

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 perpective

Bosch Group in India

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

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1. 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 Group

2. 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 much

3. 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 India

Integration related Challenges

Because of cultural difference, it is difficult to integrate acquire firm fully in terms of workforce. Also inexperience of Indian Managers in this area is posing major challenges in fully integrating the facilities the abroad and real benefits of acquisition Indian firm had never been leaders in Innovation and research, which is challenge to acquire firm which are innovation centric

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

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