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International Management Fall 13/14

BOSCH GROUP IN INDIA


T R A N S I T I O N T O A T R A N S N AT I O N A L O R G A N I Z AT I O N

Enterprise Group

Mariana Silva 10737


Filipa Malheiro 11500
Fermn Ezcurra 1489
Mei Wei Chee 1613
Javier Resa 1436
Daniel Chow 1558

CEO
Javier Resa

Organizatio
n
Developmen
t manager

Business
Development
Filipa Malheiro

Business
Analysts
Fermn Ezcurra

Mei Wei Chee

Business
Development
Daniel Chow

Bosch Group in India

Business
Analysts
Mariana Silva

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
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

Who established the firm?


The founder, Robert
Bosch (1861-1942)
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

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

Internationalization
International sucess:

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

First Office abroad, London

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

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

Bosch Group in India

BOSCH ORGANIZATIONAL STRUCTURE

Bosch Group in India

BOSCH ORGANIZATIONAL STRUCTURE

Bosch Group in India

NEW MATRIX STRUCTURE IN BOSCH

Bosch Group in India

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

Bosch in India

1. Bosch Organization in India


2. Verticalization Process in India

1. BOSCH ORGANIZATION 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

Bosch Group in India

Bosch Group in India

Bosch Group in India

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

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

Bosch Group in India

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

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

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

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

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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