Business Communications The company is currently considering an expansion of its operations into the global arena. As a result of the organization specific features, initial emphasis was placed on China, due to its ability to present the economic agents with cost efficiencies at the level of the labor expenditures. But a more thorough analysis has in fact revealed...
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Business Communications The company is currently considering an expansion of its operations into the global arena. As a result of the organization specific features, initial emphasis was placed on China, due to its ability to present the economic agents with cost efficiencies at the level of the labor expenditures. But a more thorough analysis has in fact revealed that the more appropriate destination would be India.
The company only intends to outsource a small percentage of its operations into the foreign country, and this specifically means that it requires the support of a country specialized in diversified, customized and particular operations. While China does indeed offer the highest cost efficiencies, it is traditionally characterized by mass production, whereas India offers operations on niche sectors, just what the company needs (Khanna and Mohan, 2006).
In order to further assess the implications of operating in India, it is necessary to assess the country from various angles, such as its economic status, its political features or its business characteristics. At a political level, India is a federal republic, organized into 28 states and 7 union territories. Its legal system is based on the English common law and the country has accepted the compulsory jurisdiction of the International Court of Justice.
An intriguing element at the political level is represented by the fact that the legislation is differentiated based on religion. In this order of ideas, the law codes have been personalized to apply differently for Hindus, Christians and Muslims (Central Intelligence Agency, 2011). India is headed by a president (Pratibha Devisingh Patil), a vice president, a government and a cabinet. The president is not selected by the people, but by representatives of the two houses of the parliament. The judicial role is played by the Supreme Court.
At an economic level, India has the fourth largest gross domestic product on the globe ($4.046 trillion). The country is an emergent one, with numerous economic reforms underway. Most of them focus on the liberalization of the economic sector and the sustained efforts of moving away from the enclosed and self-sufficient past of the state. In 2010, despite the internationalized economic crisis, India registered an 8.3 per cent increase in its GDP. Following the international trend, most of the national revenue is generated by the services sector, followed by industry and agriculture.
India has the second largest labor force of the globe -- preceded by China. At the level of the labor force occupation, most of it is employed in agriculture, followed by services and then industry. The income per capita is of $3,400 (one of the world's lowest) and the unemployment rate is of 10.8 per cent. One quarter of the Indian population lives below the poverty line (Central Intelligence Agency, 2011).
In terms of business, it has to be noted that the government in New Delhi has developed and implemented a wide array of strategic efforts aimed at liberalizing the business sector and as such transforming it into an engine of economic growth. Important reforms include the deregulation of the industry sector, the privatization of state-owned companies and the reduction of the state controls in processes of international trade (especially imports) as well as in the operation of foreign investors (Central Intelligence Agency, 2011).
The business legislation of India is often perceived as difficult, yet its elements are known to the western attorneys. An advantage is represented by its unification across states. Commercial lawsuits in India are rare as they are often counterproductive due to the fact that they can spread out across decades. Important issues are generally solved through arbitrage. Foreign law firms are not yet allowed to operate in India (Amritt, 2011).
The success to operating in India is as such directly linked to the ability of the firm to understand the domestic complexities and to adapt to them. A useful recommendation in this sense is represented by the contracting of a local law firm to ease the company's penetration into the region and to help us understand and overcome the initial barriers. But aside from understanding and complying with the regulations, it is also essential to understand and comply with the cultural features.
India is one of the oldest and most impressive global cultures. And its culture has also impacted the means in which business is conducted. One specific means is represented by the language barriers which are raised. And not only that the representatives of the two countries would speak different languages, it is highly possible that the representatives of India speak different languages among themselves. This is because the states of India have different official languages, and some states even have more than one official language (Kwintessential).
In terms of actual relationships between the Indians, these are created and maintained with strong emphasis on hierarchy. "Indians are always conscious of social order and their status relative to other people, be they family, friends, or strangers. All relationships involve hierarchies. In schools, teachers are called gurus and are viewed as the source of all knowledge. The patriarch, usually the father, is considered the leader of the family. The boss is seen as the source of ultimate responsibility in business.
Every relationship has a clear- cut hierarchy that must be observed for the social order to be maintained" (Kwintessential). The family plays a crucial role in the life of the Indians, the individual often being defined in terms of the family to which he belongs. The family members create norms and rules of behavior which have to be obeyed.
At the level of the cultural elements which directly impact the business operations, these refer to the following: Indians cannot say "no" meaning as such that they will often offer the answer their interlocutor wants to hear. This is not to be perceived as dishonesty, but rather an effort of politeness. Business meetings are characterized by traditional hierarchy and religious segregation of genders; men shake hands with men and women shake hands with women; men and women do.
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