MGMT 302 – Multicultural Management
Prof. Edward W. McMahon
JAN 24, 2008
# Homework assignment: Page 31 India, all 3 questions.
1. What is the climate for doing business in India? Is it supportive of foreign investment? In the past, doing business in India has been quite difficult because of too many barriers to effective operation. As a result, some MNCs left India. In recent years, the government has been relaxing its bureaucratic rules, particularly those relating to foreign investments. From 1981 to 1991, total foreign direct investment in India increased by $250 million, and after that time the climate for foreign investment has improved markedly. One reason for this change is that the government realizes that any monies not invested in India may be lost to China forever. Additionally, it can be seen that foreign investments are having a very positive effect in the Indian economy.
2. How important is a highly educated human resource pool for MNCs wanting to invest in India? Is it more important for some business than for others? English serves as the national language among the educated Indians. Higher education in science and engineering is in English. However, more than 70 percent of Indians are directly or indirectly dependent on agriculture. Three quarters of Indians live in over 600,000 villages. Many of these communities lack infrastructure such as roads, power, and telecommunications. These are why India needs highly educated people.
3. Given the low per capita income of the country, why would you still argue for India to be an excellent place to do business in the coming years? The Indian government’s new approach is helping a great deal. In addition, there are other attractions that entice MNCs to India. These include (1) a large number of highly educated people, especially in critically short supply areas such as medicine, engineering, and computer science; (2) widespread use of English, long accepted as the international