Cross Cultural Management of India

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We choose India to be an observational country because India’s links with Hong Kong, dating back to the 1840s, have led to the territory having one of the larger Indian communities abroad, with current estimated numbers being about 35,000, of whom nearly 23,000 hold Indian passports. Due to their long presence, the Indians have been able to integrate themselves into the mainstream of Hong Kong life, as can be seen by the number of second- and third-generation persons of Indian origin who speak fluent Cantonese and feel quite at home in Hong Kong.

On the other hand, India as the same as China, the world's largest democracy, with the second largest population that reached 1.02 billion in 2001, is also one of the largest developing countries in the world to have gone in for a major revamp of its economic structures over the past decade.

The India Government's policies are relatively simple, transparent and geared towards promoting domestic and foreign private investment. External trade has been liberalised through lowering of tariffs and progressive reduction of import controls. Tax rates, both corporate and personal, have been rationalised and compare favourably with other major world economies.

The Indian economy has, since 1991, undergone profound changes not only in its direction, but also its fundamental structures and underpinnings. The deliberate change from a command economy based on a socialist market model to that of a market economy with a human face has led to major readjustments. As a result, there has been greater reliance on technology, improvement of systems, streamlining of procedures relating to approvals, and general reduction in the involvement of the government in the business of running businesses. These changes have been reflected across the Indian economic landscape, resulting in a faster growing economy, with increasingly stable fundamentals. At the same time, the economy has also been able to integrate itself into the global economic mainstream, with participation in global multilateral institutions, and a willingness to accept new ideas and challenges.

Benefits of the reform process are visible in the form of better growth rates, higher investment and trade flows in the post liberalisation era. The inherent strength of the economy is borne out by the fact that it has achieved an annualised average rate of growth of 6.5% over the past decade. This is targeted to grow to 8% over the course of the next Five Year Plan, with the aim of doubling the GDP within the next decade.

If there is one sector of the Indian economy that has been responsible for placing India on the global map, this credit would justifiably go to the export-driven IT software and services industry, backed by a highly talented pool of software professionals. Notwithstanding the global economic downturn and the IT slowdown following the burst of the dotcom bubble, over the past two decades the Indian IT industry - largely promoted in the initial stages by the private sector, without the least government interference - has not only relentlessly surged ahead on the path of robust growth, but has also acted as a catalyst in spurring major advancements in other sectors of the Indian economy affecting IT development, viz. telecom, etc. Before attempting an assessment of the achievements and future prospects of various facets of the Indian IT sector, it may be useful to first take a look at some of the broad pointers of the success, resilience and strengths of the Indian IT industry.

Power Distance Index (PDI)
PDI is degree of equality or inequality of power and wealth distributed in the society. High ranking indicates the inequalities of power and wealth within the society, while the low ranking represents the society de-emphasizes the different between citizen’s power and wealth. However, it is pointed out by Hosfstede, “power and inequality, of course, are extremely fundamental facts of any society and anybody with some...
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