Perfect Unit 5 Case Study

Case Study

Using your textbook, read the case study provided on pages 298-304. Once you have completed reading the case study, answer the questions on page 303.

Your Case Study should be at least 1-2 pages in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. Include an APA format title page and reference page with the assignment. The title page and reference page are not included in the required page length.

Dowling, P., Festing, M., & Engle, Sr., A. (2013). International Human Resource Management (6th ed., 298-303). Hampshire, United Kingdom: Cengage Learning.

298 CASE 4 STRATEGIC FORECASTS AND STAFFING FORMULATION

CASE 4

STRATEGIC FORECASTS AND STAFFING FORMULATION: EXECUTIVE AND MANAGERIAL PLANNING FOR BOSCH-KAZAKHSTAN^

By M a r i o n Resting a n d M a n f r e d F r o e h l e c k e ^

Introduction

Personnel planning and staffing issues are critical success factors in foreign subsidiaries of multinational enterprises. They must be designed in the context of corporate goals and issues and the specific situation in the host country. From a firm-internal perspective, human capital/talent planning and staffing decisions are related to a company’ s corporate strategy and e m b e d d e d in the corporate human resource strategy.

Thus, planning and staffing decisions must be coordinated with other HR activities within the MNE, such as human resource development . This perspective must then be balanced with a careful consideration of the particularities in the host-country context and the avail-ability of qualified individuals within the external labor market.

In this case study, w e will first outline the company background and then describe the situation in the country of interest, which is Kazakhstan. Based on this information it Is y o u r p a r t t o t a k e t h e r o l e o f a B o s c h c o r p o r a t e H R m a n a g e r You are sup -posed to analyze both, the company and country-specific context, and outline a proposed model for personnel planning and staffing of the Bosch subsidi-ary in Kazakhstan.

By drawing on the Ethnocentric, Polycentric, Regiocentric, Geocentric (EPRG) Model of Perlmutter (see Chapter 5), please decide which staffing strategy would be the best choice. Discuss on this basis h o w many expatriates and h o w many local employees you would plan in a short- or medium – term at the different hierarchical levels. If you should per-ceive any further information needs please explicitly define a realistic set of supporting assumptions . Please justify your decision. Which are the advantages and disadvantages of your decision?

Company Background: Robert

Bosch Groups

The Bosch Group is a leading global manufacturer of automotive and industrial technology, consumer g o o d s and building technology. It w a s founded in the year 1886 by Robert Bosch (1861 – 1942) and w a s called ‘Workshop for Precision Mechanics and Electri-cal Engineering’. The Bosch Group today comprises a manufacturing, sales and after-sales sen/ice network of over 3 5 0 subsidiaries and regional companies and more than 1 5 0 0 0 Bosch service centers in roughly 150 countries.”

One statement by the founder Robert Bosch is important t o understand the HR philosophy characterizing this MNE: ‘It is my intention, apart from the alleviation of all kinds of suffering, to promote the moral, physical and intellectual development of the people’. In fiscal 20 1 0, some 283 507 employees gen – erated sales of 47 . 3 billion Euros.^

FIGURE 1 Bosch sales by region in 2010

Including other countries

Source; Robert Bosch GmbH (2011:18)

CASh 4 STRATEGIC FORECASTS AND STAFFING FORMULATION

299

TABLE 1 Bosch Employees by Region

Worldwide

2 8 3 5 0 7

Europe

186602

Of these in Germany

1 1 3 557

Americas

33689

Asia-Pacific (including other

6 3 2 1 6

regions)

Source: Robert Bosch GmbH (2011:19)

Even if 77 per cent’^ of the business volume has been generated outside Germany (see Figure 1), about 40 per cent of the total numbers of employees are working in Germany (see Table 1).

Executive and Managerial Planning (EMP)

The international executive and managerial planning (EMP) activity at Bosch is part of the Strategic Planning Process of the company . Once a year, the global ex-ecutive staffing needs for selected countries are derived from each division’s long – term strategic plan-ning activities. Starting from the current local structure, the required number of managerial positions is deter-mined within the parameters of a rolling eight-year forecast.

Various measures are taken to meet the managerial staffing needs. They can be short – term (e.g. hiring of managerial staff from the external labor market, assignment of expatriates) or rather m e d i u m / long – term (e.g. development of high-potential employ – ees – see the employee development discussion below) or special programs like Junior Managers Pro-grams (JUMP).

The EMP is carried out using a standardized tool from the divisional HR department in cooperation with the various regional HR departments . Aggregated results are analyzed from division-, regional- and Robert Bosch World (corporate) levels. Continuous comparisons of the planned versus actual labor staff-ing situations provide feedback on those assignments which have to be initiated or redefined.

The planning period of eight years consists of two parts: The input for the first four years stems from business plans and succession planning. Forecast for the last four years is based on more global – macro

assumptions, e.g. changes in the leadership projected at a figure of 5 per cent. Therefore, EMP is linked to instruments of employee development in the Bosch Group .

Employee Development in the

Bosch Group

Bosch understands that employee development is a continuous process of maintaining and further devel-oping those employees qualifications needed to c o p e with present and future challenges, A major principle in this respect is the promotion of employees from within Bosch rather than the acquisition of new hires from outside.

HR departments support employees and m a n a g – ers by providing tools and programs and giving guid – ance. The universally standardized systems and processes for employee development are depicted in Figure 2.

An important procedure for the development of employees is the Management Potential Review (MED, see Figure 2)/, which is conducted on a worldwide level. It pursues the following objectives;

• Full utilization of the c o m p a n y ‘ s resePi’es of high-potential employees without compromising performance standards.

• Staffing requirements and development planning (middle and upper management) for the upcoming four years (succession planning – see EMP above).

• Consistency in planning and a systematic tracking of employee development and career advancement measures.

• Use of overseas assignments, project tasks, and cross-functional moves as c o m m o n development measures.
• There are four production sites in different rural locations. Each one belongs to a different product division: Gasoline, Bosch – Rexroth, Security Systems and Diesel motors .
• Organizations are characterized by different market/product maturity stages: Gasoline, Bosch – Rexroth, Security Systems are consolidated. Only a small or no growth in headcount is planned over the next ten years. In contrast, Diesel is still growing fast (present headcount plus 30 per cent estimated in the next three years).
• Bosch’s major production sites are by and large not attractive locations to most qualified employees.

Fill in your figures in the planning chart below (see Figure 5).Finally, prepare an action plan describing how you will meet managerial staffing targets. Look especially at information provided in the ‘Employee development’ and ‘Talent management’ sections of the case for activities and timetables. Write d o w n your action plan.’

‘®304 CASE 4 STRATEGIC FORECASTS AND STAFFING FORMULATIONFIGURE 5 Planning chartStaffing needCurrent 2013-2016Prognosis 2017-2020Sources1 I MIj MM1 UMLMI MM1 UMTotalExpatriatesLocal MDP attendentsDevelopment Program (JMP)External hiresTotal Staffing need7 43 525 43 622 0 3Source: List of Bosch-specific abbreviations and definitions:MDP/DG: Management-Developing-Program/Development Group JMP = Junior Managers ProgramLM = Lower Management, MM = Middle Management, UM = Upper ManagementN O T E S A N D R E F E R E N C E S1 .

Tlie case study is imaginary. Boscti tias no such activities in Kazakhstan. However, the described HR measures reflect current practices within this MNE.Marion Resting is Professor of Human Resource Management and Intercultural Leadership, ESCP Europe, Berlin/Germany; Manfred Froehlecke, Vice President, Corporate Department Human Resources Management – Executives, Robert Bosch GmbH, Stultgart/Germany.

See also www.bosch.com and Robert Bosch GmbH. (2011). Annual Report 2010. Retrieved October 10, 2011, from http://www.bosch.com/worldsite_startpage/ flashbool</GB2010„EN. pdf.Robert Bosch GmbH (2011:41, 80).Robert Bosch GmbH (2011:19, 82),Robert Bosch GmbH (2011:139)MED is the German abbreviation for “Mitarbeiterentwicklungs-Durchsprache” or in English “Management Potontial Review”.The standardized entry Program JUMP is still in the implementation phase.

Other – comparable programs, e.g.. Management Trainee Programs, have been in place for some time.Robert Bosch GmbH (2011: 59)This section is mainly based on Agency of Statistics of the Republic of Kazakhstan (2011 a). Demographic Yearbook of Kazakhstan [in Russian). Retrieved November 18,2011, from http://www,stat.i<z/publishing/20111/ Dem2010.rar and Agency of Statistics of the Republic of Kazakhstan (2011 b). Kazakhstan in 2010, Retrieved November 18, 2011, from http://www.eng.stat.kz/ publishing/DocLib/2011/Statyear2010.pdf.1 1 .

Agency of Statistics of the Republic of Kazakhstan (20118:8,25). _Agency of Statistics of the Republic of Kazakhstan (2010). 2009 Population Census Results [in Russian], Retrieved Retrieved November 18, 2011, from http:// wwwy.stat.kz/news/Pages/n2_12_11 _10.aspx,Agency of Statistics of the Republic of Kazakhstan (2011b: 9,10,167,400).The case study is imaginary, Bosch has no such activities in Kazakhstan.The Case Study is simpilfied. A detailed planning of functional areas Is not the intent of this case exercise. The student should learn to ask the right questions about how to source manpower, what challenges the company faces in a difficult environment and what measures must be taken to meet the future demands.