International Business in India

Topics: Sweden, Cross-cultural communication, Project management Pages: 6 (1885 words) Published: September 7, 2013
WM-Data is currently one of the leading IT service enterprises in the Nordic countries, which is based in Stockholm, Sweden (WM-Data AB, 2005). In 2006, LogicaCMG, a European business and IT company has suggested to acquire WM-data (Logica Plc, 2012). WM-Data was supportive of the suggestion, as it will strengthen its competitiveness and be able to give global access and support to both existing and new customers (Merrill Corporation Ltd, 2012). With 41,000 employees across 41 countries, LogicaCMG provides business consulting, outsourcing and system integration to their customers (Logica Plc, 2012).

Problem Identification
WM-Data faced difficulties that arise from the culture management challenges due to the lack of understanding of culture difference between India and Sweden, which consist of planning, organizing, interacting and controlling in a global economy. Prior to the acquisition, WM-Data was endeavoring to enter other markets including India. Due to pre-liberalization in India and an unsuccessful attempt of co-operation with another Multinational Corporation (MNC) with high cost of doing business, WM-Data was failed to enter India market. Whilst LogicaCMG has acquired WM-Data, WM-Data automatically entered India as LogicaCMG already has existing offshore centers in India.

Causes of the problem (Cultural Influence on management)
LogicaCMG has employed Indian employees for their operations in India so when they acquired WM-Data, WM-Data automatically set up their operations through the offshore centers in India. When WM-Data began their operations in India, it was known that they had to hire an Indian project leader who knows best on how to manage the Indian employees. With no experience of working with the Indians, WM-Data faced cross-cultural differences when leading virtual teams, which include communication, leadership and decision-making with the Indian employees.

According to Hall (1976), high context cultures in Asian and Arab nations involve of having a broad range of implicit communication and expressions, people in authority are responsible for their subordinates’ actions, reluctant to change as the culture patterns are instill, acknowledge verbal agreement, are polychronic and they preferred to work in group than the individual.

One of the cross-cultural issues that WM-Data faced was communication. Implicit communication arises more often in India as what the anthropologist Edward Hall referred to as a high-context culture. In WM-Data, the Swedes use explicit communication as part of their culture. WM-Data managers noticed Indian employees trying to mean the other way even when they gave verbal acknowledgement. Thus, this often caused un-necessary misunderstanding between both cultures.

The next issue is geographical distance between Sweden and India. Often, by using electronic communications, the virtual teams have less direct communication and lose some cues like body language compared to face-to-face teams. In addition, WM-Data finds it hard when encountering issues concerning of describing technical problems in detail in English to the Indians as they are not comfortable speaking English. Thus, this make the situation more complicated in understanding each other. Kolanad (2008, pp. 232-267) stated that most of the Indians speak English especially Indian managers are good in English as they need to make their living through the interaction with foreign visitors or employees in India.

Before acquisition, WM-Data had all its documentations and communications in Swedish, as WM-Data was predominantly a Nordic company so they have no problems in communicating among them. Consequently, when WM-Data manager faced huge difficulties trying to describe an assignment and wanting to reach out for explicit agreements on how Indian employees will perform their work. The Indians will find it difficult to answer if they do not comprehend what was instructed as they deem...
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