CASE SUMMARY
The Bosch Group is a leading global supplier of technology and services, specializing in the field of automotive technology, industrial technology, consumer goods and building technology. The case describes the structural changes in the company Bosch during its existence since its founding in 1886 to the most recent changes initiated in 2007 to make it into a transnational organization. Description focuses on two types of reasons for the change – one due to the growth of organization and the other is due to the internationalization/globalization. Until recently, Bosch was structured as global geographic divisions. In 2007, the organization has initiated a program to reorganize the structure as a global matrix. Some of the opportunities and challenges that have arisen in the operations of Bosch India as a consequence of global changes initiated at the headquarters described. Prior to the recent changes of the Bosch Group in India works like any other local Indian company limited interaction with other companies of the group, and little interference from headquarters. They also do very well, and managers and employees are not expected restructuring. However, as part of the change by global headquarters operation in India had to undergo tremendous structural and technological change – a closer integration between group companies in India, and greater integration with the global product divisions.
Top management had reviewed the process of “Verticalization” that was being implemented in the Indian operations as the changes suggested that relative to the past there would be a greater role for product divisions. The top management was very keen that the new structure were fully implemented and understood in India so that they could support the company strategy in India. But it has challenges and also opportunities. Basically, the philosophy verticalization is to have product strategy for the world. It has resulted in an international production network with all plant within the family of product being connected each other. Is allows best practices to be shared, ensures consistencies in manufacturing processes, facilitates balancing of production capacities to deal with surges in some regions and maintain quality standard across the world. Vishwanathan as a executive country head has crucial role to ensure that the Indian operations did not get bulldozed by the global product division to get the neglect of local needs of the Indian market and the Indian operations.
KEY ISSUES/PROBLEMS:
The case examines the challenges and opportunities of implementing organizational changes to ensure a smoother transition.
IMPLEMENTATION THEORY
The changes have offered several opportunities to the Indian unit to perform better such as:
a. Better visibility for smaller divisions
One set of beneficiaries of the new organization were the smaller divisions that earlier felt neglected, but now they are getting the attention they always deserved
b. New carrier opportunity
Several employee have got opportunities to pursue career in global divisions and obtain greater impact and visibility in Bosch operations
c. New opportunity to contribute globally
The new changes give the opportunity to participate more fully in the global operations in term of technology development. Local technology has been introduced in other regions with the support of the global group
d. Development of global perspective
The new changes give the opportunity for the Indian-based associate to develop global perspective. It allows them to take the initiative to examine how Indian operations could contribute the Bosch market globally, and how Bosch products and offerings in the other markets, could provide the new opportunities in India
It was somewhat early in the process of implementing the large-scale changes, but at the moment the challenges seemed to be many such as;
a. The fragmentation of organization
Previously, Bosch Group in India is one. Now, we are multiple organizations within the single organization and give several impacts such as;
– Multiple reporting within India and outside leads to conflict and often long delays in resolving simple issues;
– Loose identity of organization and identification of employees with the organization;
– Divisions egocentrism
– Conflict between units that were supposed to work together
– Affecting employees mobility across divisions
b. Confusion and Conflict
In addition to fragmentation of organization, the changes led to multiple reporting lines which were sources of confusion and conflict. When the confusion and conflict could not be resolved easily, and despite very good structure and well laid-out processes, it allowed for personality clashes.
c. Voice of the region may be lost
Since the new norms explicitly stated that in case of the conflict across the three types of reporting, the target responsibility would have the final authority, it was normal for the global product division to overrule inputs from Indians operations.
d. Resentment across different Bosch Companies in India
The new reporting relationship treated all Bosch operations in India there could be target, functional and administrative. It affected the target responsibility in organizations that operated as independent firms.
Lewin’s Change Model
Lewin developed a three stage model chafe which explained how to initiate, manage and stabilize the change process. The three stages are un-freezing, changing and re-freezing.
Unfreezing
The focus of this stage is to create motivation to change. In so doing, individuals are encouraged to replaced old behaviors and attitudes with those desired management. Top management of Bosch creates the motivation for change due to the growth of organization and the other is due to the internationalization/globalization. The new changes give the opportunity for the Indian-based associate to develop global perspective. It allows them to take the initiative to examine how Indian operations could contribute the Bosch market globally, and how Bosch products and offerings in the other markets, could provide the new opportunities in India. In this stage Bosch management need to devise ways to reduce the barrier to change.
Changing
Organizational change, whether large or small, is undertaken to improve same process, procedure, product, service or outcome of interest to management. Changing process in India operation faced some challenging such as; multiple reporting within India and outside leads to conflict and often long delays in resolving simple issues, loose identity of organization and identification of employees with the organization, divisions egocentrism, conflict between units that were supposed to work together and affecting employees mobility across divisions. In addition to challenges to change as mentioned above, the changes led to multiple reporting lines which were sources of confusion and conflict. And if this confusion and conflict could not be resolved easily, and despite very good structure and well laid-out processes, it allowed for personality clashes. The other concerns come from the risk of resentment across different Bosch Companies in India and the ideas/voices from some country like India might be neglected.
Refreezing
Change is stabilized during refreezing by helping employees integrate the changed behavior or attitude into their normal way of doing things. This is accomplished by first giving employees the chances to exhibit the new behaviors or attitudes. Ones these have been exhibited, positive reinforcement is used to reinforce the desired change. Additional coaching and modeling also are used at this point to reinforce the desired change. As part of the change by global headquarters operation in India had to undergo tremendous structural and technological change – a closer integration between group companies in India, and greater integration with the global product divisions.
RECOMMENDATION
Some of the opportunities and challenges that have arisen in the operations of Bosch India as a consequence of global changes initiated at the headquarters described. Prior to the recent changes of the Bosch Group in India works like any other local Indian company limited interaction with other companies of the group, and little interference from headquarters. They also do very well, and managers and employees are not expected restructuring. Vishwanathan as an executive country head has crucial role to ensure a smoother transition to the new structure and institutionalize the change that were already implemented. On the other hand he also needs to ensure that the Indian operations did not get bulldozed by the global product division to get the neglect of local needs of the Indian market and the Indian operations.
They could do some activities such as:
– Crate and implement a communication strategy that consistently communicates the new organization
– Conducted some socialization session to all Bosch employees in India regarding to the new change of organization to promote the new corporate culture and also the new organizational behaviors.
– Close coordination with headquarters to support this transition
– Sending managers and first line managers to leadership training to improve their individual global perspective, cross-function perspective, productivity and satisfaction
– Open minded towards the ideas and feedback from employee regarding to this transition process.
– Facilitate employee have got opportunities to pursue career in global divisions and obtain greater impact and visibility in Bosch operations
– Facilitate the employee to participate more fully in the global operations in term of technology development
– Recognize and reward the people who contribute to support this transition
– Develop methods to ensure leadership development and succession