Conquering the Chaos: Win in India, Win Everywhere by Ravi Venkatesan Page B

managers with matrices in their minds.
    However, creating the culture that supports matrix management is hard. A fascinating
     case study by IIM Bangalore lays out the challenges of Bosch in India as it moved
     from a geographical to a matrix organization where global product groups dominate. 4 The new organization created fragmentation, conflict, and other challenges, while
     pursuing opportunities and managing across businesses in India. For instance, the
     authors write:
Previously, Bosch in India was one group. There was a country head and all issues
     pertaining to India were resolved efficiently. With multiple reporting within India
     … there are conflicts and, often, long delays in resolving simple issues. Since production
     divisions and sales divisions are different, they now fight over transfer prices …
     This often leads to a blame game. A lot of time is spent on conflict resolution. The
     head of a division in India has to report to the managing director of Bosch India
     for disciplinary (i.e., administrative) purposes and to a person in the Asia region
     for his targets. Within the division, there are three verticals: Sales, engineering,
     and manufacturing. The head of engineering reports to the head of the division for
     disciplinary purposes but to a different person in Asia for targets. The same holds
     for the head of manufacturing. Each also has a functional reporting relationship with
     a third person, who may be located in another geography. Earlier, investment decisions
     were made in India. Now that people in Germany drive these divisions, some of these
     investments may be unsuitable for the Indian context. For instance, they may want
     an investment in an automated assembly line based on the European context even if
     in the Indian context, manual assembly may be more suitable.
    In the past, the country head might see potential in the market that the business
     group did not see. The global group will have global priorities and may neglect India
     in preference to another geography. An Indian client may develop an engine and want
     us to develop a component but we might not be able to take it up, as it may not get
     the approval of the global products group. In the past, we developed things like a
     hand-held marble cutter, which has a market only in India. We might not be able to
     do that now. There is less discretion in maintaining practices unique to the Indian
     context. For example, taking high-performing dealers on a trip was possible with local
     approval. Since this is not the practice in other countries, it is difficult to get
     approval from the global products group, which is a norm in Indian industry. Executives
     in India also feel that the culture and low maturity of managers makes the matrix
     harder to work in India. Multiple reporting relationships give scope for personalities
     to come into play. Strong assertive personalities dominate weak and submissive ones. 5
    The dual reporting structure in many companies can be made to work, but it requires
     mature leaders, both at headquarters and in the regions, who are able to keep the
     best interests of the company ahead of their functional or divisional interests. Imprinting
     the matrix in the mind of managers and establishing processes for making dual reporting
     work—for instance, joint performance appraisals—take thought and effort, and many
     companies haven’t done what it takes. The global leaders of divisions and functions
     must have country-specific goals for major countries like India, so they are forced
     to engage with it.
    Even so, the matrix structure is a compromise. I am skeptical, particularly when companies
     want to grow faster than the industry. Companies that lack scale in India need to
     bite the bullet as GE has finally done. It is better to move to a simple structure
     where all the functions and businesses needed to execute the business plan report
     to a country head who becomes the point of