Introduction

Kazakhstan
Kazakhstan is located between Russia and China right on the side of Mongolia. Culture
of Kazakhstan is deeply influenced by Russia, their official languageisRussianbutin2011,the
government started to advocate the use of Kazakh language. Due to the geographical location,
Kazakhstan is a verydiversecountry.Around66%ofthepopulationisKazakhand20%ofthem
are Russian, others like Tatars, Ukrainians and Uzbeks and so, occupied the rest of the
population.
With 230 billion US dollars, Kazakhstan ranked around 46 of GDP globally (maybe
different base on the organization). Manufacturing labor cost for Kazakhstan is close to 2000
dollars per worker per year. It is not the lowest, but its geographical location will provide a
better distribution channel for manufacturers. With its huge reserves of gas, oil and other
minerals,Kazakhstanalsoattractedalargeamountofforeigninvestment.
WeaknessofKazakhstanincludesbankingsectorcrisis,authoritarianpoliticalregimeand
weak monetary policy track record. Geographically, Kazakhstan has a large temperature
difference between Summer and Winter(40~100 Fahrenheit), and also 98% of its territory is
land,ithaslimitedaccesstowaterresource.
Bosch
Robert Bosch established his Workshop for Precision Mechanics and Electrical
Engineering on Nov. 15, 1886, in Stuttgart, Germany, laying the foundation for what has

become a leading global supplier of technology and services. One statement by the founder
Robert Bosch is important to understand the HR philosophy characterizing this MNE: It is my
intention, apart from the alleviation of all kinds of suffering, topromotethemoral,physicaland
intellectualdevelopmentofthepeople.
As part of the third largest appliance manufacturer in
the world, Bosch has been selling
high performance Germanengineered major home appliances and cooking appliances in the
United States since 1991. Known nationwide for raising the standards in appliance quietness
,
efficiency and integrated design, Bosch frequently receives top ratings in leading consumer
publications
.(
http://www.boschhome.com/us/companyoverview.html
)
The Bosch Group is a leading global supplier of technology and services. It employs
roughly 360,000associatesworldwide(asperApril1,2015).Thecompanygeneratedsalesof 49
billion euros in 2014.* Its operations are divided into four business sectors: Mobility Solutions,
Industrial Technology, Consumer Goods, and Energy and Building Technology.
(
http://www.bosch.kz/en/kz/our_company_5/ourcompanylp.html
)
After years of boomtimes, fuelled by high oil prices, the economy has slumped. In
response to the global crisis, Kazakhstan devalued itscurrency,tookcontrolofthecountrystop
banksandpumpedbillionsinstatemoneyintotheeconomytogetitbackontrack.
Kazakhstans rapid economic growth since the turn of the century came mostly from
major foreign investment in the attractive Caspian oil sector. Sellingsomeofitsvastoilandgas
reserves built up big enough cash reserves to avoid economic and social collapse at the peak of
crisis.Butitisadoubleedgedsword.

The countrys economy is fragile, based as it is on that abundance of oil and gas.
Kazakhstans struggling banking system proved to be another weak spot: it flourished on cheap
liquidity which has now dried up. The local banks troubles have allowed Western investors
greater leeway, though some seem to be ignoring transparency issues and other peculiarities of
the

emerging

market.(

http://www.euronews.com/2010/01/15/kazakhstanseconomicchallenges/
)
Bosch targetscordlesslonglasting power toolsGrowth inEasternEuropehelpstoreduce
Western Europe reliance Skil and Dremel strong in niche categories. Their main focus is on
Competencyinautomobilecomponents,Industry/homeappliances,EnergyandHealthcare.
SWOTanalysis:
Strengths:
Weaknesses:

ExtensivefocusonR&D,3800patents
Highdebt
Internationalfoothold
Employeeproductivity
QualityofproductsCustomerloyalty
Slowtorespondtodynamicmarket
BalancedportfolioDifferentsectors
demand

Extensivelyprocessoriented
Opportunities:
Threats:

Renewableenergysector

Hybridcarcomponent
Lowsalesthroughhighpricing
Innovativenewtechnologies,products
Newplayerinsector,higher
Increaseddemandforqualitylong
competition
servingproducts

(
https://prezi.com/l0lp2mmrufyt/boschswot/
)

Objectives
We are taking the role of HumanResourceManagerat Bosch andplanninganeightyear
forecast strategy for Bosch Kazakhstan. The plan will describe howthedemandofthecompany
would be met specifically, such as use of expatriates, MDPs and other hiring channels. Some
facts that we are required to taken into consideration are: thelocationandnumberofproduction
in rural locations Product/market maturity stages lead to the characteristics of theorganization
Low qualification of managers andspecialistinthelabormarketBoschsmajorproductionsites
are not attractive to most of the qualified employees. Based on these facts, we are going to
prepare a staffing strategy for Bosch Kazakhstan that is most suitable forthem.Theexpectation
of the staffingplanistofinishashortterm(20132016)andlongterm(20172020)staffingplan
to achieve the companys goal. The staffing plan will consider the source of staffing as well as
theplanofmeetingmanagerialstaffingtarget.

Solutions

We decided to approach the staffing by dividing the departments into three different
levelsUppermanagement, Middle,andlowerlevel/laborers.Eachlevelwillbeassignedstaffing
from different countries depending on the skills that are required. Since Kazakhstan does not
produce that many high level managers it is our best bet to try to staff by sending managers
experienced with the company to initiallysetupthenewplantusinganethnocentricapproachto
send managers from Europe. Uppermanagementbutwewilltrytorecruitqualified peopleusing
the the polycentric approach in order to enroll HCN inthetrainingprogramstodevelopthemas

future managers starting off as laborers/lower management to give the subsidiary an eventual
levelofautonomyeventuallyandtrainthemtobepotentialUpperManagement.
AdvantagesofDecision
There are many reasons for this structure that we have decided.First,Kazakhstandonot
consist of many skilled workers that are in high level management according to our research.
However, there are many who canstilldolaborpositions,whocanpotentiallyworkuptohigher
managementoncetheybecomefamiliartothecompanysstructure.
Secondly, for Middle and Upper Management positions, we decided to send managers
experienced with the company to initially set up the new plant. We will mostly be bringing in
PCN in upper management but we willtry torecruitqualifiedHCNthatwaywecanenrollthem
inthetrainingprogramstodevelopthemasfuturemanagersandgivetheplantsoautonomy after
the initial phases of establishment has been implemented. Giving the HCN a chance to be a
stakeholderinthecompanywillincreaselikelihoodofsuccessandavoidlanguagebarriers.
Using our gathered information of both Kazakhstan and Bosch, we have calculated the
approximate distribution of LM, MM and UM depending on the different levels of sources we
have.
DisadvantagesofDecision
The biggest obstacle within our decision is the challenge of convincing the expatriate to
travel toKazakhstan. Kazakhstanisaharshcountrywithcoldwintersinaregionthatisunstable.
In order to compensate we have given those who decide to take the assignment free travelback
home every 6 months. There is also a chance of asymmetrical activity we have decided to
approach this giving theexpatriatetheoptionsofabandoningtheassignmentandreturninghome

in the event of any asymmetrical activity. There is also the cost of training and developing of
expatriates. Since they are going to be setting up a new plant the expatriates need to be highly
trained in order to interact and possibly train the HCN to be future managers. In relationtocost
we must also find a balanceinpayingtheUpperManagementwhatistheirannualcompensation
whilenegotiatingsalaryfortheHCNmanagers.

Advantagesforthisdecision:
Byimplementingthisstrategyforsendingexperiencedworkers,therewillbenoneedfor
training costs and save on time. It will also help transition in early period of internalizationand
thecompliancewithinastandardizedlevel.Bringingworkerswithexperiencewillhelpeliminate
risk and uncertainty. And lastly, the training program will allow to build relationships with the
hostcountry.
Disadvantageofnewimplementation

This will increase the chance of creating income gap in Kazakhstan that will affecttheir
overall GDP. This will also be difficult to convince managers to move to new location. There
will be many strategies that will requireustorecruitasmanyaswecantomovetosuchisolated
country.Oncerecruitmentissuccessful,trainingcosttogotoanewcountrywillbehigh.
Strategyforrecruitment:
RecruitingfromKazakhstanforlaborer
Since the economy and the unemployment rate is high, it may not be so difficult
recruiting local citizens. We decided to pick the most experienced worker, who are willing to
work for an average pay. There are many dedicated workers who are willing to work for their
familiesandsuch,soitwillbebeneficialforbothBoschaswellasthelocalpeople.

RequitingfromRussiaforUpperandMiddleManagement
Looking at Russian history and geographic location, the culture and theenvironmentare
very similar to Kazakhstan. When deciding to relocate workers from Russia who already work
forBosch,weatherandculturemaynotbethebiggestissue.Theyareusedtoacold environment
andthelanguageisalsoverysimilaraswellastheirculture.
In order for Russian workers to advance in their career, international experience is
required that we can use to ouradvantage.WorkingforBoschinKazakhstanwillgivethemthat
opportunityandtheywouldnothavetotravelveryfar.Wewillalsoprovidemoreadvantagesfor
those who decide to recruit inKazakhstan.TheywillbestationedinKazakhstanfor3yearswith
opportunities of traveling anywhere they want 3 times each year free of charge. We will also
increasetheirsalaryeachyear.ThiswillalsoguaranteeadvancementintheircareerinBosch.


RecruitingGermansforUpperManagementlevel

We will have a similar approach as the Russian recruiting strategy with the Germans.
However, the number of recruitment is limited, because it is not necessary to have manyUpper
management positions in one department. It would be more difficult to convince Germans
becauseunlikeRussianenvironmentandculture,theyquitedifferent.
Guarantee advancement of their career will be given as well as the free trips will be
offered. We hope to convince German workers in order to increase the success of Bosch in
Kazakhstan.
ActionPlan
Since Bosch likes to invest in developing their talents internally this new assignment
would be a perfect way to recruit new talents and help acquired talents reach the next level in
growing within Bosch. HCN lower management recruits who meet the requirements and show
aptitude will be admitted into the manager development program (MDP). They will have the
opportunity to learn more within Bosch and given extensive training in order to become Upper
Management within the plant or other global operations. This international assignment would
also be used to assess the growth potential along with the strengths of recruits in the entry
programs for junior managers (JUMP). Finally the the international assignment will be used to
test the aptitude ofthosealsointheMDPtoseeif theyareacceptablewithinthe Bosch standard.
The assignment will act sort ofasafinal examforthoseintheendoftheMDPprogramtoseeif
theyhavetheskillsettobepartofuppermanagementortoseeiftheyneedmoredevelopment.
Conclusion

In the context of export of Bosch in Kazakhstan, we thus planned as Human Resources

Managers, an eightyear forecast strategy for the German company. Its important to have them
to avoid risk and uncertainty but that also means saving money for training costs and saving
time. Although costs are high, these phases are importantinordertobuildrelationshipswiththe
host country, to give a chance to HCNs to develop themselves as future managers, and to be
successfulinouractivity.

WorkCited