Learning from the "India Way" of Managing

One of the benefits of studying International Business and working with people from other cultures is that you realize your own way is not the only way... or always the best way.  You gain new perspectives and approaches that can help you be more effective in whatever part of the world you may work.

We all learned something about India through the movie Outsourced earlier this semester.  India is an extremely important country in our global economy, and there is much more to be learned by studying more about India and the India Way of thinking about business and managing people.  These lessons are highly relevant even if you plan to spend your whole career focused in your home country. 

As a starting place, I recommend this article:  People Management: How India Does it Better 

Ratan Tata, one of India's leading executives

The article, from the Australian School of Business (a partner with the Wharton School), offers some excellent insight into how Indian managers approach business and lessons Western managers can learn.  The article summarizes key points from a 2010 book, The India Way: How India's Top Business Leaders Are Revolutionizing Management.

According to the research reported in the article, "Indian business executives overwhelmingly believe that competitiveness derives from people – not just for their own businesses but for India as a whole."  As a result, Indian companies put much more emphasis on Human Resources management, and HR strategy is a very important part of their approach to business. 


This approach apparently pays off.  During the economic downturn, Indian companies returned strong results.  According to Peter Capelli, author of The India Way,  "The Indian economy largely sidestepped the financial crisis because of wise banking practices; its overall growth rate is second in the world, only to China. Its major corporations are growing at rates of 20 percent to 40 percent per year, competing and winning in precisely the international markets where the United States sees its future: high-skilled service industries."

Like Jack Ma of China's Alibaba Corporation, Indian executives don't have the shareholder at the top of their priority list.  (See here to see how they rank their top five priorities; this is a very readable short article by Capelli about the Indian way of managing.)  Like Ma, they see their business purpose as a social mission-- not primarily to make money.

According to Capelli, "Indian companies do a lot of things that reinforce their success. They focus on a social mission for the business, which ties into worker motivation. They take care of their employees and they invest in their development.  They also spend a lot of time trying to tap engagement. They track it carefully, they worry about fostering 'reciprocity norms,' which send the message to employees that 'we take care of you, and you in turn look after the company'."

If you want to understand more about the India Way of managing, you should learn about the Tata group, now one of the world's largest companies and involved in a wide variety of industries.  (The company reported revenue of $67 billion in sales in 2009-2010.)  This article from the Economist provides a lot of insight into the Tata group, its founder Ratan Tata, and the company's culture:

Out of India: The Tata Group

This description of the Tata Group culture from the Economist article is a good illustration of the India Way of managing:

"Tata prides itself above all on its culture, which it argues is defined by three things: loyalty, dignity and what is now called corporate social responsibility (CSR). It is not unusual to find a Tata lifer whose spouse works for the firm and whose father also did. Tata is admirably restrained by the flashy—it is tempting to say money-grubbing—standards of modern India. It has always eschewed “sinful” industries such as drink, tobacco and gambling. It is as committed to public service as it was when Jamsetji Tata was laying the economic foundations of Indian independence.

"Tata charitable trusts own two-thirds of the holding company, Tata Sons. Alan Rosling, a former Tata executive who spearheaded the group’s globalisation, liked to say, “We’re making money so that our shareholders can give it away.” The trusts funded worthy causes, from clean-water projects and literacy programmes to the various Tata institutions, to the tune of $97m in 2010. But the commitment to CSR is deeper than this."

I'm looking forward to my trip to India in early January and the opportunity to gain some personal insights into Indian culture and business and the India way of managing.  What can managers from other cultures learn from these stories of the Indian way of approaching business and managing people?  Do you think some of these Indian ways would help Western businesses be more successful?