Xavier Institute of Management,

Bhubaneswar

ORGANIZATIONAL STUCTURE & DESIGN

Bosch group in India: Transition to a
transnational organization
Presented by: Group-
Ancit Gupta (UM14307)
CN Sreeram (UM14315)
Kishor Chandra Sahu (UM14323)
Neetesh Singh (UM14326)
Rahul Mandloi (UM1433
Faculty: Prof. Kalpana Sahoo
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
• No need for formal structure
• Interact with employees on personal basis
1900

• Transit from craft to industrial production

Phase 2 • Functional structure
1900 to • Activities differentiated horizontally and vertically to obtain economies of scale
1925 • Begin international activity

• Functional structure around assembly line system launched in 1925 due to

Phase 3 the after effects of WWI
1925 to • Begin diversification
1960
Bosch Organizational Structure
(Cont.)
Phase 4
1960 to
• Restructuring of the company due to WWII
• Three waves of diversification – Power Tools (1960), Packaging Technology (1964) and
Telenorma (1982)
1990 • Adoption of product divisions

Phase 5 • Required matrix structure

1990 to
2007
• Primacy given to geographic structure

• Verticalization achieved by transforming global matrix structure into transnational

Phase 6 structure
2007 to
now
• Global divisions, Corporate departments, Regional organization and Global sales and
marketing organization
Bosch Organizational Structure
(Cont.)
VERTICALIZATION
Global Transnatio
Matrix nal
Structure Structure

• 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 India
▪ 1951 Bosch started operating

▪ 1953 Development of manufacturing operations

- automotive technology
- industry technology
- consumer goods and building technology In India, the Bosch group had about
11 manufactoring sites and 4
Revenues 25.000 employees
around 113.000 million
- engineering an IT services development centers

▪ Over the years the company has tried to focus on

innovation

IN 2011

Bosch Group in India

India
Bosch Ltd
India’s 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
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 BEFORE AFTER

Some of the These smaller

Greater visibility for smallest divisions have
smaller divisions divisions were now the attention
neglected of the top
managers
Limited carres’ Employees can
opportunities pursue careers
New Career in the global
opportunities divisions

Indian
The interaction operations have
New opprtunities to betwee sectors now the
contribute globaly was limited opportunity to
participate

Indian bases are

The opportunity now able to
Development of a to understand develop a global
Global perpective the Dynamics of perspective
global industry
Bosch Group in India was unknown
CHALLENGES

1. Fragmentation of the organization

2. Confusion and conflict
3. Voice of the Region May Be Lost
4. Resentement Across Different Bosch Companies in
India
1. Fragmentation of the organization
Requires the approval of the Multiple reporting within
Global Product Group India and outside which
causes delays in resolving
simple issues

Difficult
Manyforunits
Profitabilityemployee
instead
became mobility
of one
public to
Conflicts between units
every employee

Conflicts between divisions

More profitable divisions are that are supposed to work in
reluctant to “subsidize” the synergies because of
less profitable ones different goals and
incentives
Bosch Group in India
2. CONfusion and conflict
The Head of the Division has
The importance of
to report to the MD of Bosch
command is no longer
in India and to a person in
there
the Asia region

Difficult to adapt to this new

Multiple reporting lines
Personality
Indian culture
methodcrashes

“We do not have the ability

to adjust. Some of us talk Strong and assertive
too much” 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!!