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Posts Tagged ‘Globalization’

Doing Business Abroad: Cultural Differentiator

Posted by Raunak Mahajan on March 7, 2013

Here is an interesting piece from “Breakout Nations: In Pursuit of the Next Economic Miracles” by Ruchir Sharma. It highlights a very subtle yet significant difference between two types of nations/societies, the “high context” and the “low context”. An important lesson for corporates looking to expand business across the globe.

Both India and Brazil are “high context” societies, a term popularized by the anthropologist Edward Hall to describe cultures in which people are colorful, noisy, quick to make promises that cannot always be relied on, and a bit casual about meeting times and deadlines. These societies tend to be family oriented, with tight relationships even beyond the immediate family, based on close ties built over long periods of time. In an environment this familiar, there is a lot that goes unsaid- or is said very briefly-because values are deeply shared and much is implicitly understood from context. The spoken word is often flowery and vague; apologies are long and formal. “Low context,’ in contrast, describes societies like the United States and Germany in which people are individual oriented, care about privacy, and are more likely to stick to timelines and their word. People tend to be on the move, to have many brief relationships, and thus rely on simple, open communications and codified rules to guide behavior.

Business is not just about numbers.

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Posted in Management Consulting | Tagged: , , , | 4 Comments »

Dear Americans, Please take your jobs back!

Posted by Raunak Mahajan on September 8, 2012

Free Market is a wonderful thing. If its “free” it has to be! But when the boundaries of the market disappear, the concept of freedom becomes a curse for many. A specter is haunting the world, the specter of globalization.

Profit maximization drives ambition which is a core ingredient of enterprise. But enterprise can only prosper when it is facilitated by  a free market. The gains resulting from a capitalist economy, however, display a cyclic progression. When labor is in shortage in a particular industry, the salaries increase. Soon, attracted by higher salaries, more people  equip themselves with necessary abilities to be part of that sector. Eventually, the supply-demand ratio rationalize the salary growth. In most case, salaries begin to see a reverse movement.

On the consumer end, since there is a limit to what consumers would pay for a product or service, the revenues a capitalist earns are bound to stabilize with time. The only way left to maximize profits is improving the bottom line and that inevitably leads to lower salaries.

Good Salaries….Bad Salaries….Good Salaries….Bad Salaries….and the cycle goes on. And this cycle does not hurt people, because in the utopian world of capitalism, the phase of bad salaries will be accompanied with lower prices. So everything looks normal.

So what ruins this system? Why are people complaining?

Answer: Globalization!

Pure capitalism within a pre-defined limited border works, because even though salaries decrease, people still have their jobs! Working people are happier people!

Globalization gives the capitalist the opportunity to move his capital beyond the shores of his land, to places he can find cheap labor to replace the one in his own country. With jobs lost, there is less money in people’s hand and hence you would expect prices to fall too. But no, that would not go down too well with the capitalists who want to steal a high price from you for things they now make in third world countries for a pittance. So what do they do? Get the government to put more money in your hands. Get the banks to lend you more, so you can spend more. All the while trapping you in a web of debt that you cannot come out of.

So why do I want an end to globalization when my third world country is “benefiting” from it?

1) Because I want to see Americans happy. Because when you are not happy, your government goes around invading other countries and messing them up. Please take your jobs back, be happy and let the world be at peace.

2) India removed its trade barriers in 1990 and espoused globalization. Here is what a typical rural family looked and lived like before and how it lives like now:

Before 1990: Two parents raised 2 sons and 2 daughters. When the children grew up, one brother would head to the cities to find work or join the military. The other brother would stay back in the village to take care of their parents and also continue  farming their land. The two sisters would be married to men from neighboring villages. Every festival, and there are many in India, the family would get together and celebrate the occasions. The brother who worked in the city would send his love at most festivals and would make it to the village at least twice a year to celebrate the main festivals with the extended family. He would also share his savings with the parents for them to sustain a good life in the village.

After 1990: Two parents raise 2 sons and 2 daughters. When the children grow up, both brothers head to the cities to find work, leaving their old parents behind.  The price of their arable village land is so high that the four children decide to sell it and share the spoils. It is a miracle if the division of the wealth takes place amicably. Odds are that one of the four is going to feel bitter and betrayed and gradually cut all ties with the family. The remaining three, who have never had so much money in their hands naturally do not know how to manage it. Soon, all the money is lost in unintelligent investments and the resultant tensions split the family forever.

The sudden injection of wealth into a culture that always espoused minimal living led to a collapse of our moral fabric. This collapse works well for Capitalists because it is the only way that Indian labor can be exploited for hours on end. Make the people fall in love with money and thus enslave them.

3) Spirit of Innovation has been done away with in India. The IT boom in India brought in work that involved bug fixing, maintenance and support. None of this required anything more than a 6-month crash course in computing language. The IT revolution and the US dollars it brought resulted in millions of young Indians blindly seeking admissions into Engineering colleges. Not once did they think whether they enjoyed doing what they did. They didn’t have to. The money was too good to be true.

It was easy. Learn a few coding languages, a few scripting languages, master a couple of the databases and you are ready to tackle any mundane back-end stuff that the U.S companies expect you to do. This approach didn’t encourage the students to delve into the vast possibilities of the computing world they were studying. The innovative mind had been killed by the glow of money!

4) Millions of Indians are suffering from lifestyle disabilities from working as your “Customer Service” or “IT Helpdesk”. The Call Center business employs over a million young Indians, 75% of who work the graveyard shift so that they can attend to your calls when you wake up. Needless to say, working night shifts has had a major physiological impact on their lives and some of the damage in irreparable.

5) Call Centers have created a generation of college drop-outs. When the call center business took off in India, the demand for call operators was so high that the only eligibility to work in these companies was completion of 12th grade. Young students saw the opportunity to earn good money without having to go to college and were quick to join the bandwagon. This created an entire lot of young Indians who either dropped out of college or decided not to go to one.

6) I am fine with Asians having an English name when they travel abroad. Asian names can get very difficult to pronounce and it is understandable that they have pseudo names. But isn’t it blatant cheating that call center operators in India have to use pseudo names when talking to an American caller? And I just find it demeaning that we Indians have to use a pseudo name in an attempt to veil our identity.Its plain stupid and hurts national pride!

7) Since we have become your back end employees, everything in India is about cost cutting. Every plant that you visit, every company that you study, the emphasis is only and only on cost cutting. Every new idea is suppressed because we are not allowed by our Global masters to spend anything. We are a raw material and we should only focus on making ourselves cheaper and cheaper. Leave the innovation to the developed world.

So please, take your jobs back. Someday, people will wake up and realize that it is not we who need you, but it is the greed of your capitalists that needs us. And don’t worry about our economy collapsing if you leave. My guess is, we’ll do just fine.

 

 

 

Posted in Philosophy | Tagged: , , , , , , , , , , , , , , , , | 10 Comments »

 
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