Emerging Indian multinationals and hw are they different from their western counterparts?

Prof Mohan Githe Professor at Griffith University has written a recent book on Indian multinationals.

In this post, he sums up the lessons:

While Western multinational corporations (MNCs) have traditionally taken their domestic strengths ‘outward’ to the rest of the world to exploit already existing firm-specific competitive advantages, the multinational from emerging economies have no such pre-existing strengths and therefore, their motive for internationalization is primarily to acquire competitive advantages that they lack, such as marquee brands and managerial expertise. Most of their overseas growth has occurred in the last decade or so and in a very short span of time, they have spread their global network, mainly via acquisitions in a constant cycle of ‘linkage, leverage, and learning’.

Indian multinationals have been quick learners in internationalization both in scale and speed. One of the core strengths of Indian firms is to extract maximum value from even ailing businesses by applying innovative and cost effective methods that they have developed over the years in an extremely resource constrained and uncertain domestic environment. Their unique approach to international growth, which some label as ‘compassionate capitalism’ manifests in several ways, such as a preference for sustainable growth without compromising core values, long-term commitment to their businesses despite economic turbulences, faith in the management team of the acquired overseas companies and commitment to employees in terms of job security and investment in training. The ‘fire in the belly’ attitude of emerging multinationals is evident in the way they are pushing the top management in the companies that they have acquired abroad to stretch their goals.

While their management philosophy is grounded in Indian heritage that focuses on social mission and employee welfare, they have adopted several best practices from developed markets, such as metrics driven performance management. However, unlike Western multinationals which tend to adopt an ethnocentric approach to managing subsidiaries in developing markets, Indian multinationals seem to adopt a highly localized approach as reflected in their staffing and decision making process. They also show clear signs of an ‘adaptive approach’ in managing subsidiaries in developed markets.

Hmm. Well for a history reader it is actually going back to past. Reading several books under Penguin series on Indian Business history, one sees this avatar of Indian MNCs earlier as well. One pretty much saw similar strategies of compassion and cost effective methods earlier as well. The stress even then was on simplicity and yet aggressive.

Good stuff. Should be a great book to read..

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