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The Secret Cultural Advantage Of Indian Firms

Fast growing international Indian firms have a built-in cultural advantage. It hardly seems apparent to their rivals in the west. The competitors’ perception is wrong and has cost them dear. Many have lost out to highly competitive Indian companies.

Blaming this loss of business on cheap labour, a plethora of committed millennials, or even ruinous pricing simply won’t do. Something else is happening which adds up to a cultural advantage. This is central to some firms–it’s having a strong social mission.

JRD Tarta neatly summed up what this means for a company:

JRD Tata2“In a free enterprise the community is not just another stakeholder, but is in fact the very purpose of its existence.”

In contrast, few western firms would acknowledge their reason for being, their core purpose in this way. While many boast a commitment to CSR, for example, hardly any would go so far as proclaiming it’s the “very purpose of our existence,”

For highly competitive Indian firms fighting for a share of world markets, their cultural tradition provides a hidden competitive advantage. To successfully compete in such markets they need sound ethical governance—one that builds trust, not only with potential customers but within the firm itself.

The most recent study of trust by Edelman in 2016 produced this picture across nations:

Trust6Only Mexico and Colombia emerged with a higher score than India’s 83% of employees who trust their companies. Such a level of trust is normally associated with ethical leadership at the helm. In all three countries’s firms have to try particularly hard to communicate they are indeed trustworthy.

Many of the big Indian international firms have adopted an ethical leadership approach.

wiproWipro for example is a global information technology, consulting and outsourcing company with a 170,000+ workforce. It regularly appears high on the annual lists of Ethisphere for the world’s most ethical companies. In recent years, Wipro has been named at least once as the world’s most ethical company.

Another aspect of the cultural advantage that few companies in the West would appreciate is the inspiration of Mahatma Gandhi. He once argued that business without ethics is one of seven things that have the power to destroy human beings.

The seven are:

He epitomised ethical leadership, embodying principles of sincerity, integrity, voice, vision and moral values. Gandhi was inspired by Lord Rama, depicted as the essence of ethical leadership in Hindu Mythology. For Gandhi, modelling integrity, for example, was an essential part of his message– see box

Gandhi2Gandhi dreamed of a national administration based on such high ethics.

Sadly, India today scores relatively poorly when compared to other corrupt nations–see table of rankings below.

Table of rankings for corruptionIt’s not hard to find Indian companies that seem to embody the ethical leadership tradition. They include for example

Integrity Indian firms

Within India, the challenge for those companies wanting to compete on the world stage, the inescapable message is: ethics pays.

Yet for many Indian firms, the last things on leaders’ minds is how to be ethical. What dominates their thinking is short-termism, quick wins, maximising profits and avoiding the boring complications of compliance.

Many Indian firms, though, do attempt to integrate ethics into their corporate cultures and business practice. For these aspirational firms, three essential actions stand out:

  • Create a climate where it’s the norm to regularly talk about ethics
  • Promote regular ethics education across the company
  • Ensure all company leaders have a strong grasp of what it means to be ethical
Andrew Leighhttp://www.ethical-leadership.co.uk
ANDREW is author of Ethical Leadership, (Kogan Page 2013) and writes regularly at www.ethical-leadership.co.uk. He believes business needs to re-discover the importance of ethics and integrity. As an expert on leadership Andrew writes regularly on ways to help managers be more effective as ethical leaders. His blog stays close to the zeitgeist with a unique perspective on many aspects of leading organisations ethically, including compliance, and engagement. Andrew is a joint founder in 1989 of Maynard Leigh Associates (www.maynardleigh.co.uk) pioneers of using ideas from theatre in business. He was a hands-on practising manager for many years in the public sector, ending his time on the front line running a division with over 1000 staff. Andrew also spent several years as a business and financial journalist, including time at The Observer newspaper. He has written over 20 books on management, leadership teams and so on. Originally trained as an economist, he is a Chartered Fellow of the Chartered Institute of Personnel and Development. He is available for speaking engagements, interviews, feature articles and consultancy.

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