Many subtle effects of the caste system stilt remain and affect life in organizations in the form of a strict adherence to hierarchy. Indians are disposed to structure all relationships hierarchically; for this reason they usually work better individually than in groups. Management in India is often autocratic, based on formal authority and charisma. Family norms emphasizing loyalty to the family authority figure underlie the limited decision-making experience and unfa- miliarity with responsibility found in some employees. Consequently, decision making is centralized, with much emphasis on rules and a low propensity for risk. In addition, intricate family ties and strong authority figures perpetuate a managerial style of paternalism.
Under the pervasive influences of religion, caste, and family on the life of the Hindu, the Indian culture stresses moral orientation and loyalty as in the pursuit of dharma, one's obligation to society, rather than personal goals. Work tends to be viewed primarily in the context of family or interacts relationships, rather than being valued for itself.80 Nepotism is common both at the lowest and highest levels. Unsurprisingly power based on expertise frequently takes a back seat to power based on position.81 Generally American managers in India need to make connections with the right families, make contact at the highest levels, and provide incentives for middle managers and assistants to help nudge proposals upward.
On the micro level of leadership - manager to employees - American managers in India are wise to tread slowly while trying to understand the culture and find what works. Various proposals have been put forward to help Managers move toward more effective leadership. Tripathi suggests that “indigenous values, such as families, need to be synthesized with the values of industrial democracy.” Similarly, Sinha proposes that, while a leader in India has to be a “nurturant,” taking a personal interest in the well-being of each subordinate; he or she can use that nurturance to encourage increasing levels of participation. The manager may accomplish this by guiding and directing subordinates to work hard and maintain a high level of productivity, reinforcing each stage with increased nurturance.84 According to Sinha and Sinha, a prerequisite to effective cross-cultural leadership in India is to establish work as the “master value.” Once this is done, “other social values will reorganize themselves to help realize the master value.”
Multiple problems abound on the macro level of leadership of a global enterprise in India, as discovered by companies such as Gillette, Rank Xerox, Texas Instruments, and Hewlett-Packard. Investment opportunities are very attractive, with a potential for great sales and a pool of cheap, highly educated, and skilled labor. But, even after getting through the entrenched bureaucracy to set up business, managers may face many operating problems because of the undeveloped infrastructure and difficult climate. Gaining control and integrating leadership styles with local managers are additional hurdles. American managers, used to being boss in their own companies, may have difficulty taking orders from Indian partners and prefer to operate at a faster pace. Gill, of Gillette, suggests, “You've got to find the right partner and convince him to give you complete management control.” Failure to include an Indian partner or to build local support was behind the cancellation of Enron's $2.8 billion power project in Dhabol, as part of a resurgence of ecofiomic nationalism in India in 1995 pending national elections. The project was reinstated in 1999; but as of 2001, problems between Enron and the Indian government continued and Enron decided not to build more plants in India. In other areas, such as telecommunications, liberalization is progressing well, to the benefit of companies such as AT&T, Motorola, and Texas Instruments (TI). It is noteworthy that these companies have Indian joint-venture partners and Indian CEOs. TI India's managing director, Srini Rajam, noted that the Bagalore plant was responsible for one-third of TI's design automation for semiconductor products wordwide.
India is expected to be an economic giant someday. Meanwhile, American managers must realize that setting up and running a successful business in India requires astute leadership skills, including integrating and collaborating at all levels of the community for the long term.
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