News that Vikram Pandit will be the new chief executive officer of Citigroup, joining other Indians such as Pepsi’s Indra Nooyi at the top of major U.S. corporations, comes at the same time that we learn that Tata Motors may buy Jaguar from Ford Motor.
The Indians are on the move in several important respects and they clearly are ahead of their Chinese, Brazilian, and Russian counterparts, all members of the so-called BRIC club (Brazil, Russia, India and China.) Here’s why:
- Because of their experience with democracy and markets, plus the English language, Indians seem better able to exist in the ranks of large Western organizations than the nationals of the other BRICs. Brazilians have deep cultural and linguistic gaps; many Russians speak English but have little notion of how a Western corporation functions; and the Chinese have enormous cultural barriers to overcome. They know how to do things one way–the Chinese way. So now that Western corporations are seeking global expertise for their top positions, it seems only natural to them to turn to Indians.
- Indian companies also are proving adept at absorbing Western management practices, particularly from the likes of General Electric. So the companies that started out as mere outsourcers, such as Infosys and Wipro, are now vying to emerge as full-fledged multinationals that can compete against Accenture and IBM. Chinese companies such as Lenovo are absorbing Western managers from Dell and elsewhere. But overall, they find it very difficult to incorporate foreign practices or foreigners into their ranks. Ditto for the Russians and Brazilians.
- A third factor is that after being starved for capital for so many years, the Bombay stock market is at an all-time high and that is fueling the market capitalizations of many Indian companies. In this regard, the Indians are very much on par with their fellow BRIC nationals. Money is no longer a problem because they are sitting on huge foreign exchange reserves.
So expect to be hearing more about executives and companies from all the emerging markets, but particularly from India. Some of the best thinking on this subject is being done at the Boston Consulting Group, which has just updated its research.
