While the number of Indian CEOs at Western firms is higher, Chinese prefer starting their own business

By Xu Ming Source:Global Times Published: 2017/10/18 18:18:05

Do Indians have better management skills than the Chinese people?

○ Among Fortune 500 US companies, 10 CEOs are Indian; China claims zero

○ India's history and culture makes their managers more adaptable to foreign work environments

○ Chinese executives and start-up entrepreneurs prefer to stay in or return to China

Programmers attending Alibaba's annual conference for Internet industry and scientific and technological innovation in Hangzhou on October 11. Photo: VCG

It is risky to generalize either India or China. Wang Tao, former CEO for ZTE's branch in India, did not expect his recent article praising Indian corporate management capability to arouse so much praise and criticism alike.

In the article, entitled "Will Indian corporate management become a secret weapon to overtake China?," Wang wrote that China has fallen far behind India in management, citing the number of Indian CEOs at large international companies.

"If one day India has the chance to surpass China, it must rely on management," Wang wrote.

Indeed, the growing number of Indian CEOs working for top US companies has attracted international attention over the past decade. Several years ago, in analyzing the phenomenon, one Time magazine article was titled "India's Leading Export: CEOs."

Wang's article has renewed online debate about the subject, and as Wang revealed, even government think tanks and professional researchers are contacting him to further discuss the matter.

Some Chinese netizens said they were happy to see an article "focusing on India's good side" to serve as a reminder to China. Others felt the author was unreasonably generalizing Chinese management and making a big fuss over what they see as a minor issue.

"Such discussions are good. It is an undeniable fact that India has its strong points in management. It is important for us to see others' good points, instead of defections, to make real progress in ourselves," noted Sun Shihai, honorary director of the Institute of Indian Studies, China (Kunming) Institute of South and Southeast Asian Studies.

Increasing influence

Satya Nadella, Indra Nooyi, Sundar Pichai, Anshu Jain, Satya Nadella ... the list of Indian-born CEOs who now run the world's biggest companies is growing.

As statistics from Apex Recruiter show, among the top Fortune 500 US companies, there are 75 foreign CEOs, 10 from India and none from the Chinese mainland. Among the 10 Indian CEOs, seven work in science and technology.

A study published in 2005 showed that one-third of all engineers in Silicon Valley were from India and 7 percent of high-tech company CEOs were Indians. That ratio is probably much higher today, which shows increasing Indian influence in Silicon Valley and within US science and technology sectors.

Indians are also now managing many of the world's most reputable business schools. In 2010, Indian-born Nitin Nohria became the 10th dean for Harvard Business School, the first non-American president in its history.

Even though India's share of CEOs among the Fortune Global 500 companies (at 30 percent) falls behind that of Belgium, Australia, Switzerland and Britain, as a study from Harvard Business Review revealed, it far surpasses China (0 percent).

Many found Wang's article alerting, saying it has made them think deeper about the issue. But others found it unfair to generalize China's management style simply by the number of Chinese CEOs abroad.

"It is too partial to use a proportion to represent a country's management. For example, even though Japan does not export as many CEOs as India, it is still strong in management," said Mike Wu, an IT consultant for Tencent.

"Besides, the difference is probably because Chinese who immigrated to the US between the 1960s and 1980s have chosen other fields instead of technology, as Indian immigrants tend to prefer," Wu added.

According to a 2014 report by Harvard Business Review, the proportion of Silicon Valley tech startups led by Indians has risen from 7 percent in the 1980s and 1990s to at least 13 percent (and by some estimates more than 25 percent), even though Indians make up less than 1 percent of the US population.

"India has been doing great in software development and the country puts great emphasis on education in this aspect," said David Yang, a programmer for Sina.

As a matter of fact, engineering is now the most popular major in India. The country also has many professional business schools, including the Indian Institute of Management, that produce management-level graduates for companies around the world.

Great adaptability

Most of the named Indian CEOs, such as Satya Nadella and Sundar Pichai, received their higher education outside of India and gained their management experience at top foreign firms outside of India as well.

Most notably, in recent years, top international corporations, particularly those in Silicon Valley, probably have lost their appeal among Chinese talents, who are not content with working on behalf of someone else's venture.

"China's domestic business environment has become very attractive and many (overseas returnees) are choosing to build their own business back in China," noted Yang, adding that China's IT industry is thriving.

Nonetheless, India still trumps China as far as the absolute number of CEOs. There is little controversy over an Indian beating out a Chinese for a top spot at an international company. As a matter of fact, China self-examined this aspect in 2014 after Satya Nadella was pronounced the new CEO for Microsoft.

There is also no unified answer to Indians' advantage in international companies, but their English skills, multicultural environment and familiarity with Western culture are cited most when comparing them to their Chinese counterparts.

"They [Indians] grow up in a diverse culture and have great adaptability to varied kinds of cultures, which earns them points in large international companies with a similar environment," Sun told the Global Times.

In their bones

Wang, however, does not think English language is an advantage for Indians because, "overseas Chinese speak no worse English than Indians." But Wang did say that Indian history and culture contribute to their renowned communications and management abilities.

"After India's independence in 1947, there were severe problems in management due to its complicated domestic situation (e.g. multiple ethnic groups, religions and languages)," noted Wang. "This situation resulted in its emphasis on management into their bones." 

"They are doing better in combining management and professional knowledge. They have advantages in communication and management compared to their Chinese counterparts," Wang concluded.

As Sun also observed, the Indian characteristic for being brave about expressing themselves also makes them adapt better in an international environment compared to Chinese, who are generally "introverted."

Above all, some Indian CEOs were educated at top business schools in the US and Europe and found acceptance in the West, where they eventually gained a firm footing.

Ironically, exported Indian CEOs, who are considered "the pride of India" are also their pain because the country cannot convince them to stay.

It is often reported that India's low salaries are a major factor that drive Indian managers away. While the salary for top-level managers in large Chinese companies is practically the same as comparable American ones, the salary for the exact same position in India is much lower.

A study by Towers Watson in 2014 showed, in dollars, that the salaries of Chinese executives doubled their Indian counterparts.

Arun, an Indian who used to study medicine in China, told the Global Times that his brother, an engineer, has worked in the US and Singapore and now works in Australia. "He never considered India," Arun said.

Comparatively speaking, China remains one of the most-liked work destinations among top-level international talents in spite of its pollution.

A start-up paradise

The excellent performance of Indian managers abroad has also been attributed by many to the notorious "red tape" bureaucracy of their motherland, which prompts them to look outside India.

"To build a factory in China, a CEO will have to get two or three different permissions from various departments. An Indian CEO may have to get 80 different permissions from 80 different places," noted Signe Spencer, co-author of The Indian CEO, a 2007 study from the HayGroup consultancy, quoted by Time magazine.

Arun confirmed that the start-up environment in India is not encouraging. "India has many problems: corruption, limited resources and so on, within itself. Only if one overcomes all of them can he successfully win," said Arun.

"Most of India's biggest companies like Reliance, Tata, etc. are old. There are very few new start-ups," Arun added.

In comparison, China in recent years has become a veritable paradise for start-ups, particularly in the IT industry, which are attracting more overseas Chinese IT talent returning home.

According to Wu, it has become a trend among Chinese IT talents, including several he personally knows from Microsoft, to return to China to start their own business.

"Compared to Indians, Chinese have more advantage starting their own business in their own homeland, where they will find it easier to survive compared to their Indian counterparts," said Wu.

"Now we have our own Google, our own Amazon, our own Twitter, our own Uber. We have Baidu, Alibaba, Sina Weibo, Didi and so on. While the Indian elite are working for Europe and US tycoons, our own enterprises are innovating their way into the world and performing well," noted Yang.

"I guess there is no Indian management mode for us to learn from, but it is important for us to learn from their communication skills, their adaptability and their self-marketing," said Yang. "Meanwhile, we should keep going with our own competitiveness."

Sun said that such discussions, such as the debate inspired by Wang's article, are very helpful for Chinese people to learn more about India, which he considers a very complicated country that is often misunderstood by China.

"What we know about India is shallow and extreme. Even some Chinese researchers specializing in Indian studies are biased when writing their reports," said Sun. "This needs to be changed."

Newspaper headline: Management myths


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