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Managing across cultures - Building bridges

As India Inc. racks up acquisitions overseas, it’s come square up against a new challenge: managing across cultures. Here’s how industry vanguards are dealing with it.

Kapil Bajaj | Print Edition: Dec 02, 2007

  • A large Indian IT company, after acquiring a much older but small European firm, sought to eliminate the secretarial staff support customarily provided to some of the senior executives at the acquired company, causing serious resentment among those affected. The HR experts attribute the problem to generational gap between people at Indian IT companies and those at European IT companies. (Average age of Indian IT workers is much lower than that of European IT workers.)
  • When some non-Indian Infosys workers, freshly recruited and posted in India, had some difficulty with food, a chef was brought in to cook for them. The Bangalore-based IT major also provides services like repatriation of money for its foreign employees.
  • Since acquiring Infocrossing, the US-based IT infrastructure management company, in August 2007, Wipro continues to bring Infocrossing's 950 employees in batches of 25-30 for detailed induction at its centres in India.

In the gung-ho world of ambitious corporations building trans-border businesses, which is an area where sense, sensitivity and sobriety count the most? It's also an area where hardnosed corporate strategists wrack their brains, comprehending abstract concepts like ‘culture’ and ‘values’. If people management is your answer, you’ve guessed it right because HR managers at India Inc., dealing with their increasingly multinational and multicultural workforce, think so too.

 
Pratik Kumar/Executive Vice President (HR)/ Wipro Ltd
“In our subsidiaries, we need to ‘contextualise’ our HR practices”
“Manageability of workforce and other HR issues are an extremely important consideration in making a decision to set up foreign operations. In the due diligence for a possible foreign acquisition, for example, the role of the HR department is to provide critical inputs about the existing local workforce and the labour market,” says Rajeev Dubey, President (HR & Corporate Services), Mahindra & Mahindra.

After an acquisition, M&M is primarily concerned with talent management at the top; beyond that it will not interfere with local work culture and HR practices, he adds.

Sunit Sinha, Principal and M&A Consulting Business Leader, Mercer, says most Indian companies going global have adopted the strategy of ‘not rocking the boat’ at their newly acquired foreign operations— aside from putting in place a few people whose job would be to facilitate the integration. “Indian companies have been wise enough to listen and learn from the people at their foreign operations and not interfere too much with the local HR policies and practices, but, on the flip side, they often do very little to enable better people integration,” he says.

So, what have Indians learnt in managing their increasingly multinational workforce and what does effective people integration entail?

Fostering Trust

 
Piyush Mehta/Senior Vice President (HR)/ Genpact
“Cross-cultural communication is inbuilt in the BPO environment”
Santrupt Misra, Director (HR and IT), Aditya Birla Group, says winning the trust of people in a foreign land is the first challenge a company faces when it sets up a new business abroad or acquires an old one.

“There is always a test of credibility that a foreign-promoted employer has to pass with its words and deeds and that takes a while. It also means that you need to make the effort to understand the local culture and ways of working,” he says.

The Aditya Birla Group has a total workforce of more than 100,000 that includes about 27,000 people from 30 non-Indian nationalities. In the case of foreign acquisitions, there is inevitably an apprehension among the local workforce about job cuts or any other kind of disruptive restructuring, points out Dubey, recalling Mahindra’s experience of acquiring forgings businesses in Germany where “there was definitely a very serious concern about restructuring”.

“We had to take a lot of pains, through our German management, to alleviate the apprehensions of the trade unions and in making our intentions clear. Today, our German businesses are growing faster than before as part of the Mahindra Group,” he adds.

 Fact Box

Who’s hiring: DLF, Unitech, Nagarjuna Construction, Larsen & Toubro, Currie & Brown, Davis Langdon & Seah Consulting, Cyril Sweett, Ansal Housing and Construction, among a host of others
Who’re they hiring: MTech, BTech in Civil Engineering or Degree/Diploma in quantity surveying
At what level: Across all levels—fresher’s, mid-level (fourto-five years of experience), and senior level (more than 10 years of experience)
At what salaries: A fresher gets around Rs 2-3 lakh per annum. A person at the middle level can earn anywhere around Rs 6-8 lakh p.a. Senior level surveyor can command Rs 12-20 lakh plus other benefits
What are the numbers like: Currently, top 50 construction and consultancies employ more than 5,000 executives. The demand for professionals is likely to grow at around 25-30 per cent p.a. for the next three years
S. Padmanabhan, Executive Director and Head (Global Human Resource Development), Tata Consultancy Services (TCS), where 8.5 per cent of 104,000 people belong to non-Indian nationalities, says sensitivity to local laws and customs and reliance on local talent go a long way in faster establishment of trust with the workforce.

“It’s important for people-intensive businesses like TCS’ to build local ‘HR networks’, which include the local HR team and all those who will act as a bridge between the company and the skills that are available in the job market. In the US, for example, 50 per cent of our HR team consists of local professionals,” he says.

For many Indian companies, building the brand as a reliable employer becomes important, especially in territories where India as a country suffers from a negative image or the company in question is little known, points out Sinha.

“A hugely trusted Indian company, bidding for some assets in South Korea, made the disturbing discovery, through a survey, that the employees of the targeted organisation ranked it lowest among the 17 companies from different countries as potentially desirable employers. So, Indian companies could be swimming against the tide in certain geographies if they do not become aware of negative perceptions about them or their country,” he says.

A lack of sufficient brand visibility could result, at the very least, in reduced ability of a company to recruit and retain employees. Centralise or Decentralise? Indian companies building global businesses have also been grappling with the question: How much uniformity and standardisation in HR policies and practices across subsidiaries is desirable?

“Uniformity per se is not desirable, but it’s desirable in some initiatives like quality, business review process, and certain HR metrics. In our subsidiaries in different countries, we need to ‘contextualise’ our HR practices rather than try to create artificial uniformity,” says Pratik Kumar, Executive Vice President (Human Resources), Wipro Ltd, whose 25 per cent of foreign workforce in IT services is made up of people of non-Indian nationalities.

For example, in certain European countries, hiring is done in line with the ‘employment at will’ principle (which means the employee or the employer can terminate the relationship any time with no liability if there was no contract for a definite term), he adds.

Infosys, another transnational IT player, has sought to standardise HR policies and practices across its cross-border subsidiaries but does allow certain amount of flexibility in complying with the labour laws pertaining to a particular country, says Somnath Baishya, Head (Global Entry Level Hiring & Campus Relations), Infosys.

While Padmanabhan says TCS has a ‘common framework’ in terms of HR policy and practices, it inevitably gets localised in line with country-specific requirements. “For example, your vacation policy, retirement and housing policies will have to respond to local conditions; they can’t be the same across subsidiaries,” he adds.

Most Indian companies with multinational operations, however, have group HR philosophy that flows down to all the subsidiaries. Dubey says Mahindra derives what it calls ‘group human resources’ from the top three layers of management across all subsidiaries engaged in different businesses.

“People from group resources are invited to India to receive induction in Mahindra ways and core values and are transferable across countries. That also results in optimal use of our international talent.”

 A prescription for change

 

Dr Reddy’s, in the last one year, has had to ship six cats from the US to India because the wife of one of the senior executives could not afford to leave the pets behind while relocating to India. Not just that, the company helped the lady, an American, also find a job where she could work once the family relocates to India. “I think we need to be flexible. We need to understand what people need and be willing to make our systems flexible enough to absorb them,” says G.V. Prasad, Vice-Chairman and CEO, Dr Reddy’s Laboratories. The last one year has been a significant one for Dr Reddy’s because of its business ramp-up—from around $500-odd million (Rs 2,000-odd crore) to over $1.5 billion (Rs 6,000 crore). It has had to integrate two very significant acquisitions: One in Mexico with about 300 employees and the other in Germany also with about 350-odd employees. “Integrating these global companies into our culture was a great experience and helped bring in more diversity into our organisation,” says Prasad.
What’s more, while going global, the company has been able to retain employee loyalty. Says Prasad: “In these acquisitions, we have retained the talent and have not lost a single person whom we had wanted to retain and we have not had any loyalty bonus, golden handcuffs or anything special to retain them.”

Most companies also tend to put in place across subsidiaries a common IT system that supports a number of HR functions like payroll accounting, leave management, travel management, and performance management.

Cultural Cross-currents Piyush Mehta, Senior Vice President (HR), Genpact, an NYSE-listed BPO company whose 32,000 employees work from eight countries, sometimes in considerably multicultural environments, says cultural issues such as difference in languages are a part of the complexities of doing business across borders.

“BPO industry has been unique in that it successfully challenged the notion that certain services can only be provided within borders. So cross-cultural communication is inbuilt in the BPO environment and is based on sensitivity to other cultures,” he says.

Misra says different languages and food habits do present challenges to those who need to go and work overseas. “At an acquired business in North America, you may find that local workers have never worked with anyone other than North Americans. Even if you can speak English, there are difficulties in communication due to difference in pronunciation, intonation and phraseology. Similarly, an Indian working in China may get offended by the extreme form of non-vegetarian food that some Chinese eat,” he says.

Kumar says India’s own mindboggling variety of cultures and their inclusiveness make Indians eminently capable of surmounting the cross-cultural issues they face in foreign geographies or multi-national workplaces.

Adds Baishya: “Language and cultural differences are not something that obstructs Infosys’ expansion plans. We have set up operations in Mexico and China, which are non-English speaking countries, as well by training our workforce in the local language and culture.”

Padmanabhan says the key competency of his company has been to manage scale, not an increasingly multinational workforce, which can be handled by hiring locally and delegating work.

To put it in plain words: Do what you can do best and let others do the rest for you. After all, it’s all in a day’s work.

Measured growth

Demand for quantity surveyors is on the rise.

It's time to size up another big opportunity. The Unprecedented real estate boom has resulted in a 25-30 per cent increase in jobs for quantity surveyors. These surveyors estimate and monitor construction costs of major building and construction projects as consultants to the owner--from the feasibility stage of a project through to the completion of the construction period. Says Dheeraj Singh, Country Head, DLF Laing O?fRourke India: ?gA quantity surveyor should be conversant with technical building and engineering aspects of construction as well as commercial aspects related to contracts.?h As decisions involving large sums of money are often made using information produced by quantity surveyors, they must be accurate in all aspects of their work, he adds.

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