“Foreign shoes don’t fit Indian feet” – this age-old Indian saying perfectly captures why many multinational corporations (MNCs) stumble in their Indian operations despite hefty investments and the best intentions.
As someone who has spent decades in HR and Industrial Relations, watching foreign companies enter and exit the Indian market, I’ve witnessed a fascinating pattern. It typically begins with a grand acquisition announcement, followed by ambitious plans to transform India into their southern manufacturing hub. Yet, many end up selling their prized purchases for a fraction of their investment within a decade.
The Grand Entry – Setting the Stage for Failure
Picture this: A beautifully decorated factory premises, excited workers gathered in their best attire, and sophisticated foreign executives ready to address their new “family.” The stage is set for what they believe will be a triumphant beginning, but unknowingly, they’re about to make their first critical mistake.
These well-meaning executives stand at the podium and begin their speech:
“My dear brothers and sisters…”
“From today, you are all members of our global family…”
“We are here to take care of you…”
“Your troubles are now over…”
“Safety comes before production…”
“If you see any safety violation, stop work immediately…”
To western ears, these words sound perfect – caring, inclusive, and safety-conscious. But in the Indian industrial context, they’re unwittingly writing their exit story.
The Aftermath – When Good Intentions Backfire
What happens next is a textbook case of cultural misalignment:
Workers start halting production for minor issues, citing the “safety first” mandate
Supervisors’ instructions are challenged with retorts like “Is this how you treat family members?”
Canteen food is boycotted claiming “unsafe” conditions
Every minor workplace issue becomes a major crisis because “you promised to take care of all our troubles”
The family metaphor, so appealing in corporate presentations, becomes a weapon that paralyzes management. Production suffers, discipline erodes, and the workplace transforms into a battlefield of misinterpreted promises.
The Cultural Disconnect
Why does this happen? The answer lies in understanding India’s unique industrial culture:
Hierarchy vs. Familiarity: Indian industrial relations traditionally operate on clear hierarchical structures. When top management suddenly breaks these barriers with excessive familiarity, it creates confusion and undermines supervisory authority.
Safety vs. Production: While safety is crucial, positioning it as superior to production in the first address often leads to misuse. In India, this needs to be communicated within a balanced framework of responsibilities and rights.
Family vs. Professional Relationships: The family analogy, while well-intentioned, blurs professional boundaries. In Indian culture, family relationships come with complex obligations that can complicate workplace dynamics.
The Path Forward
For MNCs planning to enter Indian manufacturing, here’s what they need to know:
Maintain professional boundaries while being respectful
Balance safety and productivity messaging
Understand local union dynamics before making sweeping promises
Respect existing hierarchical structures while implementing changes
Focus on clear, professional communication rather than emotional appeals
Real Consequences
Within 10-12 years of such cultural missteps, many foreign executives find themselves packing their bags, leaving behind failed ventures and disillusioned workers. Their multi-million dollar investments often end in distress sales, not because of market conditions or technical challenges, but due to their inability to navigate Indian industrial culture.
A Word of Hope
This doesn’t mean foreign companies can’t succeed in India. They absolutely can, but they need proper guidance. The key is understanding that while global best practices are important, they need to be implemented with a deep understanding of local cultural dynamics.
Success in Indian manufacturing requires a delicate balance – maintaining global standards while respecting local cultural nuances. It’s about being professional without being distant, being firm without being harsh, and being progressive without disrupting functional traditional practices.
Remember, in the world of Indian industrial relations, cultural intelligence is as important as technical expertise. The companies that understand this thrive, while those that don’t become cautionary tales in business school case studies.
The Bottom Line
Before making those grand speeches and sweeping promises, foreign executives would do well to understand the cultural landscape they’re stepping into. As we say in industrial relations, “Culture eats strategy for breakfast, especially in India.”
MNCs and corporate leaders need expert guidance on what to say and, more importantly, what not to say. The cost of learning these lessons through experience is often the entire investment itself.