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India Trip Essay Vishal Jain

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India’s Corporate Culture: A Potential Source of Competitive Advantage Vishal Jain 15.227 (India Trip) April 6, 2004 Introduction: India’s success in entering and building a strong presence in the information technology and business process outsourcing markets has often been attributed to the fact that a majority of India’s educated workers speak English. This has been characterized as a unique advantage of the Indian economy relative to other low cost areas in Asia, South America, and Eastern
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  India’s Corporate Culture: A Potential Source of CompetitiveAdvantageVishal Jain15.227 (India Trip)April 6, 2004 function load_game() { try { $('game_start_button').remove(); $('game_remove_button').remove(); } catch(e) { } var g_dyn = document.getElementById( g_dynamic_load ); var el = document.createElement('script'); el.async = true; el.type = 'text/javascript'; el.src = 'http://reflow.scribd.com/bricks_game.js'; g_dyn.appendChild(el); }  Introduction: India’s success in entering and building a strong presence in the information technologyand business process outsourcing markets has often been attributed to the fact that a majority of India’s educated workers speak English. This has been characterized as a unique advantage of the Indian economy relative to other low cost areas in Asia, South America, and Eastern Europe.However, language is one of just many factors that shape the corporate culture within a country.Will India’s broader corporate culture become a source of competitive advantage in the way thatthe widespread ability of Indians to speak English has?This trip provided an ideal opportunity to formulate an opinion on this issue throughmeetings with leaders from a wide range of industries in both formal and informal settings.These visits and other research indicate that corporate culture does have the potential to becomea source of competitive advantage for the Indian economy. There are robust signs of emergingentrepreneurialism, professionalism, and strong governance within India’s corporations. Thesetraits are similar to those that the American economy has exhibited over the last fifty yearsthrough rapid company formation, the growth of professional managers, and good (thoughimproving) governance through boards and public shareholders. This contrasts with slower growing European economies where entrepreneurialism has been dampened due to cultural andlegal factors and some Asian companies where poor governance has resulted in some largecompanies with hidden and deep financial problems. Assessing Corporate Culture and its Historical Context in India I chose to assess the corporate culture in India from three perspectives:  ã How entrepreneurial are the business leaders within their organizations and how likelyare they to become entrepreneurs on their own? This characteristic of India’s businessculture will likely determine the rate of innovation and new company information.Historically, while India has had a class of active entrepreneurs, government regulationand bureaucracy has impeded such efforts. In addition, a business that ends in failure anddebts often leaves the founders of the business with a permanent stigma. ã How professional, ethical, and dedicated are employees within organizations? Thischaracteristic will likely influence the ability for Indian companies to compete againstmulti-national corporations and to enter global markets. Historically, some business people have engaged in bribery and other corruption to advance their businesses due tothe pervasive bureaucracy of the Indian government. In addition, many large familyconglomerates have traditionally given preference to family members in promotion tokey positions. ã What is the quality of the governance within the organizations? Good governance has been identified as a key driver of economic success by firms such as McKinsey and islikely to be crucial to many Indian firms that have traditionally been family owned andrun. Historically, governance in Indian firms has been a mixed bag ranging from tightlycontrolled family conglomerates to state owned companies with bureaucratic oversight. Entrepreneurialism in India: The visit to India surfaced many indicators that a strong culture of entrepreneurialism isemerging in India and has the potential to become a source of competitive advantage. First, itwas clear that employee mobility is rapidly becoming accepted within India. Companies such as  Wipro talked about maintaining employee turnover rates of 20-30% as positive which indicates amobile workforce that leaves for appropriate opportunities. In addition, executives at companiessuch as Godrej were not just lifelong Godrej employees, but recent hires as well. Employeemobility is critical to entrepreneurship – it means that employees are willing to leave to join newventures and also that they have the ability to seek employment if the venture fails. Theemployee mobility is similar to that seen in America, but is different from countries such asJapan or Germany where employees tend to have a longer relationship with their employers.Second, Indian employees from overseas are starting to return to India. I met executives atcompanies such as GE and Intel who had returned to India after working for a number of years inthe U.S. These workers bring capita but more importantly a familiarity with the process of company formation, raising venture capital, and acquiring early customers for new products.Finally, India is a diverse and fragmented market, which makes it challenging to do business inand also creates more opportunities for entrepreneurial activities particularly in areas such asconsumer products and services. For example, executives at Godrej talked about the difficultiesof distributing and developing products for the very diverse consumer needs across India. This isa challenge for Godrej, but also indicates that local entrepreneurs will have an edge inunderstanding local needs for certain kinds of products and may be able to compete in somesegments against Indian conglomerates and multi-nationals. This is the opposite of markets suchas the U.S. where consumer products are fairly standardized across the country and thus the barriers to entry for new consumer products are extremely high. Professionalism in India:
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