Xavier Institute of Management,

Bhubaneswar

ORGANIZATIONAL STUCTURE & DESIGN

Bosch group in India: Transition to a
transnational organization
Presented by: Group-

Faculty: Prof. Kalpana Sahoo

Ancit Gupta (UM14307)

CN Sreeram (UM14315)
Kishor Chandra Sahu (UM14323)
Neetesh Singh (UM14326)
Rahul Mandloi (UM1433
Nibedan Kumar Bhawsinka
(UM14327)

Background
The founder, Robert Bosch (1861-1942)

He was a pioneer and inventor

He 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

Internationalization
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

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

Research & Development

Success 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
Phase 1
1886 to
1900

Phase 2
1900 to
1925

Phase 3
1925 to
1960

No need for formal structure

Interact with employees on personal basis

Transit from craft to industrial production

Functional structure
Activities differentiated horizontally and vertically to obtain economies of scale
Begin international activity

Functional structure around assembly line system launched in 1925 due to

the after effects of WWI
Begin diversification

Bosch Organizational Structure

(Cont.)
Phase 4
1960 to
1990

Restructuring of the company due to WWII

Three waves of diversification Power Tools (1960), Packaging Technology (1964) and
Telenorma (1982)
Adoption of product divisions

Phase 5
1990 to
2007

Required matrix structure

Primacy given to geographic structure

Phase 6
2007 to
now

Verticalization achieved by transforming global matrix structure into transnational

structure
Global divisions, Corporate departments, Regional organization and Global sales and
marketing organization

Bosch Organizational Structure

(Cont.)

VERTICALIZATION
Global
Matrix
Structure

Transnatio
nal
Structure

With a transnational structure, Bosch generally organize its business along

geographic, product and functional levels.
Integration is achieved within
geographic areas or functions.

various

product

categories

or

within

A transnational structure helps coordinate all related business activities

simultaneously.

Bosch organization in India

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

In India, the Bosch group had about

11 manufactoring
sites and 4
25.000
employees
Revenues
around
113.000 million
development centers

Over the years the company has tried to focus on

innovation

IN 2011

Bosch Group in India

India
Bosch Ltd
Indias largest autocomponent 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

Implications of Verticalization
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

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
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

Verticalization process in india

- Started in 2007 and offered several
opportunities to Indian units perfome
better

What are these

opportunities?
Bosch Group in India

Verticalization Process:
Opportunities
Greater visibility for
smaller divisions

New Career
opportunities

New opprtunities to
contribute globaly

Development of a
Global perpective
Bosch Group in India

BEFORE
Some of the
smallest
divisions were
neglected
Limited carres
opportunities

The interaction
betwee sectors
was limited

The opportunity
to understand
the Dynamics of
global industry
was unknown

AFTER
These smaller
divisions have
now the attention
of the top
managers
Employees can
pursue careers
in the global
divisions
Indian
operations have
now the
opportunity to
participate
Indian bases are
now able to
develop a global
perspective

CHALLENGES
1.
2.
3.
4.

Fragmentation of the organization

Confusion and conflict
Voice of the Region May Be Lost
Resentement Across Different Bosch Companies in
India

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

Difficult
Manyfor
units
employee
instead
mobility
of one
Profitability
became
public
to
Conflicts between units
every employee

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

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

Difficult to adapt to this new

Multiple reporting lines
Personality
Indian
culture
crashes
method

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

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

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

4. Resentment across different bosch

companies in india
Due 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

THANK YOU!!