RESEARCH METHEDOLOGY

Survey based

There about 27 Indian software engineers who were working for at least five years in the US and

European countries were surveyed. All the professionals were born in India and for the purpose

of employment they were sponsored to foreign countries. Convenient samples, picked from the

MNCs of Chennai and Bangalore and some of the samples collected from European and Western

countries were administered for the study. Age of the participants ranged from 28 years to 35

years (M = 33.07 and SD = 1.82). Both women (37%) and men (63%) software engineers were

considered for the study. The qualifications of the respondents were graduates and post

graduates in engineering/technology stream. All the respondents were Hindus and their native

place is the State Tamil Nadu.

Research Tool and Measurements

Semi-Structured questionnaire is the tool for the study. The open-ended questions were

conveyed to the respondents through e-mails and telephones. The respondents were from both

currently working and returned from the foreign countries after having completed at least five

years of assignment. Initially, the questions were asked to get the background information like

education, experience, nativity, sponsored company etc. The important questions raised for the

purpose of the study were on cultural identity at expatriate country, continuance of cultural

influence, cross-cultural management in MNCs working environment, opinion of bicultural and

multicultural behavior, knowledge management practice and cultural influence. The open ended

questionnaire was classified into the domain of four categories namely cultural identity, cultural

influence, bicultural / multi-cultural behaviour and knowledge management. The questionnaire

also consists of many numbers of criterions which are perceived as suitable for this cross-

cultural study. Five points-scale (SS=Strongly Supported; MS=Moderately Supported;

NL=Neutral; PS=Poorly Supported; and NS=Not Supported) was used to measure the cross-

cultural behavior of the Indian software engineers. Only engineers with Hindu religion were

allowed to answer for the study.

Hypothetical based

Adaptability of national culture and relations between HQ and MNCs (subsidiary units)

The essence of a MNC to make its presence felt in the host country is through a new concept

“anticipation of worldwide innovation”. The forces of such concept provide required thrust for

an MNC to develop diverse and dispersed capability within its on subsidiary units (Bartlett and

Ghoshal, 1991). Although it is not practiced to become competitive, innovation should solely be

developed at home, where this innovation and knowledge is sought dispersed to the subsidiaries

and companies around the world. Most important aspect of any MNCs in the degree of

adaptation required to blend and merge its national culture of parent organization with that of the

MNC operating as subsidiary units in Host country. Therefore, to meet with the local and

regional competitiveness, it is ideal that MNCs demonstrate a greater deal of autonomous

decision-making in its subsidiaries and companies.

Kostova (1999), in her research based on resource dependence theory and institutional theory,

argues that MNC subsidiaries “may develop perceptions of dependence on the parent” due to

various resources such as technology, capital, and promotion of the subsidiary staff. She suggests

that “under such conditions of dependency and intra-organizational competition”, a subsidiary

will try to implement parent company’s practices as a way of gaining internal legitimacy.

Therefore, contextually, new ideas, innovation and knowledge are sought to be developed within

each individual subsidiary, or likewise sought dispersed to the entire network of the MNC. Many

modern MNCs will therefore, most likely, need to choose a transnational strategy, because many

MNCs must master both the art of cost reduction and local differentiation to maintain its

competitive edge (Bartlett and Ghoshal,

1991). In an interesting observation, Edwards (2004) points out that “employees, as actors at

various levels of plant may be reluctant to share their knowledge, expertise with their counter

parts expatriate employees, for fear of undermining their performance within the group”.

Therefore to conclude, there could be organizational politics could play a vital role in making a

decisive factor of what and how much of National cultural practices could transfer from HQ to

MNCs. The strategic choices made and tactics followed would result from either: (i) external

competition pressures or (ii) internal politics (Edwards, 2004) just to retain the competitive

advantage.

H1a: The degree of assertion of HQ to transfer their national culture dimensions to their MNCs in

host countries will be more in organizations with high centralization.

H1b: The negative effect of cross-cultural assertion on non-adaptation towards HQ parent

cultures will be stronger when host countries follow liberal decision-making framework.

Linkages Between Cross National Culture and Role of Government and Regulatory Agencies

It has been an emerging concept of ‘conformity to the codes of conduct being drawn up the

international organizations that address aspects of industrial relations. The OECD guidelines,

1976, which form the basis for tripartite declaration on social policy of MNC’s, were ultimately

adopted in 2000 after a long deliberation and revision. Under the patronage of UN, 50 large

MNCs have signed a global compact which quiet signifies that these MNCs will follow

principles laid under the code to maintain freedom of right to form association, right to

collectively bargain, prohibit child labour etc, health and safety of the employees, levels of

wages, and anti-discrimination. With the growing upsurge in MNCs across the globe, the need is

being felt to incorporate the principles relating to codes of conduct in the international trade

agreements in it. There needs to be a degree of compliance and conformity to be followed in the

host country where these codes are strictly adhered. More so, the local governmental agencies,

enforcement agencies and regulatory authorities would be tracking the performance of MNCs in

the host country. It is obligation of the HQ in parent organization, to ensure that appropriate

declarations are duly disclosed. Managing the issues connected with employment and

employability are related to bringing about a balance between commitment and control (Walton,

1985). The MNCs do often face the criticism of having a struggle for legitimacy of

management’s decision-making process to ensure smooth internal functioning in a host country.

Thus, resulting into constant forces to be present from within and outside the MNC. On one

hand, MNCs face a continued comparison of employees to be treated on par with the HQ in the

home country and on the other, to main the trust and faith of the external stakeholders is always a

challenge. The HQ strategization to meet local needs and responsiveness may be to such an

extent that, managers may be forced to appreciate local culture, although there may ideological

clash to acclimatize to existing differences. According to Marginson et al, 2004 , there are six

factors which are potential influencing factors namely business alignment, management

structure, industrial relations platform, management policy, employee side orientation and

European works council. To conclude, when MNCs operate in multiple regions, through various

integrated systems like internal joint ventures, mergers and acquisitions, or wholly owned

subsidiary units etc, it would be difficult to anticipate a best picture perfect outcomes unless

there is parallel political power/authority of substance is present to support such cross cultural

MNCs to operate. Such MNCs should also have strong HQ coordination in shouldering the

integrated management systems to face the force of directly opposite country with strong

industrial relations systems. Therefore, cultural alignment and compatibility becomes an

essential ingredient for successful MNCs functioning with effective governance system in the

right perspective.

H2a: The degree of conformation between MNCs towards governmental demands is less where

National Cultures are more democratic in their approach.

H2b: The increase in governmental interaction and compliance with MNCs will be perceived as a

source of interference and threat by MNCs than in HQ Culture.

Linkages between cross national culture and workplace environment (external vs. Internal)

In order to maintain cordial business relations with the HQ and host country, the MNCs have to

explore ways and means to attain the right balance between the expectations of both the

environments. Most of the times, it might appear the workplace environments are similar in order

to actualize the objectives, but the inherent difference could be in designing the employment

contracts, treatment being given to the employees, compensation differentials, adherence to

labour practices and issues connected with compliance with local laws. MNCs are often prone to

have labour performance comparisons, which are important aspects in management decisions on

investment or divestment (Marginson et. al. 1995). When the question arises as to what and how

much of Employee Relations to be transferred, it has been pointed out that coercive comparisons

may intensify the pressures for nonmanagerial employees and cause tensions between

management and labours (Ferner and Edwards, 1995; Marginson et. al., 1995; Martin et.al.,

1998). Large organizations do intend to carry forward their corporate culture like mission,

CEO’s corporate statement, relevant corporate projections, to create the brand value and

distinctive image even in host country. To face realistic challenges, MNCs do have best

approaches from both HQ and host country culture. (Doeringer et.al. 2003). Further he states that

patters of transfer and accommodation differ from country to country n ways that suggest new

management practices are blended with traditional practices to create distinctive national

‘hybrid’ management regimes. When there is presence of strong bargaining process in the host

country and persistence of trade unionism as an active force amongst their workforces, MNCs

would intend to have either high performance driven cultures or lean organizational structures,

this is to avoid the perceived threat by the trade union workers.

H3a: The degree of assertion of HQ on MNCs will be more if workplace environment is favorable

to HQ to strategically operate its MNCs activities.

H3b: The negative effect of workplace environment will prevent MNCs from expanding their

operating in host country.

Sample:

The paper forms a part of cross-country survey conducted to study the prevalence of adaptability

between national culture and relations between Head Quarter and MNCs as subsidiary units. The

study sample was received from 43 MNCs, which comprised of 137 respondents. Of the total

questionnaire sent, 52 responses were rejected because they were not filled in a required manner.

The respondents comprised of ex-employees of MNCs (23%), personal contacts (25%), Client

contacts (21%), Academicians and Professors (19%) and Law Graduates (12%) who interned in

various MNCs in China, India and Africa. Most of the responses obtained by respondents from

China were not completely relevant or were not of much utility.

Seventy Eight percent of the sample respondents were male and ages ranged from 26 to 45 years

(mean age=33). We conducted a random sample survey, to ask questions relating to the

completion of the survey. The respondent’s interaction occurred occasionally through emails,

web-chats, and telephonic conversations. Under scheduled Phase 1 phase of the study,

respondents were provided with questionnaire relating to their reflections on home country

national culture and how they perceived and understood their experiences in Home country on

the variables provided (Hofstede, 1980). In Phase II, six months later, I emailed the second set of

questionnaire relating to the cross-country experiences in MNC. The focus of the study was to

understand whether the variables regarding regulatory framework of host country and workplace

environment did play a vital role in determining the manager / expatriate’s roles and

responsibilities.

3.2 Research Objective

• To study about Cultural Adaptation in India Market by Multinational Enterprises

(MNs)

3.3 Research Questions

How difficult is India as an assignment location;

Which aspects of expatriates’ life in India are the most challenging; and

What should an expatriate expect before embarking on his Indian mission?

To what extent do Multinational Corporations (MNCs) adapt or standardize their

products internationally?

Whether Indian software engineers are losing or retaining their cultural identity in a

MNCs’ working environment?

Do the Indian software engineers having cultural influence in their behavioural pattern?

Are the Indian software engineers interested to adapt bicultural/multi-cultural behaviour

on their expatriate assignment?

Whether the Indian software engineers are able to gain their “knowledge management”

without losing or compromising their cultural values?

Is there any implication in the study on strategic human resource management?

How dimensions of national cultures propounded by Hofstede and Tromperaans affect

the MNCs effectiveness?

How does compliance with: (i) governmental & regulatory framework

(ii) Cultural alignment between HQ and subsidiary Units in Host Country and

(iii) Workplace environmental factors affect the performance of MNCs.

LIMITATION

Semi-structured interview schedule is most suitable for this kind of socio-psychological

research. Due to time and resource constraints, questionnaire is used in the survey. As it is

mailed survey and some of the software engineers are still working in the foreign countries,

personal observation and face-to-face interview was not possible.

There could be many factors, which might be responsible for drawing accurate information to the

test the hypothesis. We find that there is negative inference about the variable ‘advantageous

liberal policies in host country and MNCs effective performance. In the absence of verifiable and

observable data relating to which government policies, bilateral treaties, or modalities of MNC

formulation, the respondents may not be aware of the information relating to policy matters.

As subsidiary managers, the expatriates may be over-concerned about employment contracts

during the international assignment and reluctant to share crucial information. Moreover,

ethnocentric approach of expatriates may also provide a gap in appreciating the degree of change

that has actually taken place from Headquarter to MNCs in host country. Thereby their

contribution does not elicit change, which can term as ‘substantial” to understand the impact on

MNCS performance. Future research is required in these intervening variables.