Convergence of management practices in India’s IT sector with an a priori validation

DOIhttps://doi.org/10.1108/JABS-12-2016-0169
Pages402-421
Published date10 December 2018
Date10 December 2018
AuthorJayashree Mahesh,Anil K. Bhat
Subject MatterStrategy,International business
Convergence of management practices in
Indias IT sector with an a priori validation
Jayashree Mahesh and Anil K. Bhat
Abstract
Purpose The purpose of this paper is to document similarities and differences between management
practices of different types of organizations in India’s IT sector through an empirical survey. The authors
expected these differences to be significant enough for us to be able to group apriorithisset of companies
meaningfully through cluster analysis on the basis of the similarity of their managementp racticesalone.
Design/methodology/approach Using a mixed-methods approach, 73 senior-level executives of
companies working in India’s IT sector were approached with a pretested questionnaire to find out
differences on eighteen management practices in the areas of operations management, monitoring
management, targets management and talent management. The different types of organizations
surveyed were small and amp; medium global multinationals, large global multinationals, small and
medium Indianmultinationals, large Indian multinationalsand small and medium local Indian companies.
The differences and similarities found through statistical testing were further validated a priori through
clusteranalysis and qualitative interviews with senior-levelexecutives.
Findings The management practices of multinationals in India are moving toward Western
management practices, indicating that management practices converge as the organizations grow in
size. Though the practices of large Indian multinationals were not significantly different from those of
global multinationals,the surprising finding was thatlarge Indian multinationals scored betterthan global
multinationals on a few practices. The practices of small and medium Indian companies differed
significantlyfrom those of other types of organizationsand hence they formed a cluster.
Practical implications The finding that large Indian IT multinationals have an edge over global
multinationals in certain people management practices is a confirmation of the role of human resource
practicesin their current success and their continuing competitiveadvantage.
Originality/value This is perhaps the first study of its kind to document stateof specific management
practices across different types of organizations in India’s IT sector and then use measures on these
practicesto group a priori these organizations for validation.
Keywords HR practices, Indian IT sector, Management practices,
Convergence of management practices
Paper type Research paper
1. Introduction
The liberalization of the economy since the early 90s has changed the face of the Indian
business environment. India has the advantages of an open economy, large educated
English-speaking workforce, with good numeracy and software skills. It also has
tremendous intellectual and entrepreneurial potential. In the recent past, quite a few global
organizations have been acquired by Indian companies. A major change as a result of
Indian companies going global andglobal multinationals coming to India is in the dynamics
of management practices adopted by these companies. There has been an increase in
global competition which has forced managers to adopt novel management practices to
increase their efficiency and effectiveness. These recent changes lead to an increased
interest in the nature of “Indian” management, its sources and philosophy. It raises an
important question about unique attributes of Indian managers and “The India Way” of
Jayashree Mahesh and
Anil K. Bhat are both based
at the Department of
Management, Birla Institute
of Technology and Science,
Pilani, India.
Received 17 December 2016
Revised 18 May 2017
Accepted 18 July 2017
PAGE 402 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 12 NO. 4 2018, pp. 402-421, ©Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-12-2016-0169
management (Capelli et al., 2010). In spite of this increased attention, there is a limited
body of systematic management knowledge to explain how Indian firms operate and why
some have achieved phenomenal results. Hence, the focus of our study is to measure and
understand the status of Indian managementpractices in the emerging global context.
An important research question in this context is to find out if these management
practices are similar to globally accepted management practices or are different due to
the context of Indian culture. To address this question, we attempt to gain an insight into
the current state of “Indian” management through studying the practices of global
multinationals, Indian multinationals and Indian companies operating in the Indian
information technology (IT) sector. The IT sector is one of the most important sectors in
India and is a global player in providing world-class technology solutions and business
services. The distinguishing factors of this sector include a shift toward technological
innovations and adoption of novel management practices which are critical factors for its
success.
The purpose of this paper is to analyzedata from an empirical survey that was conducted to
find out the similarities and differences in management practices between global
companies and Indian companies operating in India’s IT sector to understand the actual
state of implementation of management practices. We expected these differences to be
significant enough for us to be able to group a priori this set of companies meaningfully
through cluster analysis on the basisof the similarity of their management practices alone.
The major findings were that the management practices of multinationals in India are
moving toward Western (universal!) management practices, indicating that management
practices converge as the organizations grow in size. Though the practices of large Indian
multinationals were not significantly different from those of global multinationals, the
surprising finding was that large Indian multinationals scored better than global
multinationals on a few practices. The practices of small and medium Indian companies
differed significantly fromthose of other types of organizations and formed a cluster.
2. Review of literature
2.1 Management in India
Various studies conducted over the years about management in India have discovered
the following commonalities about traditional Indian management predominance of
hierarchical perspective, political patronage, preference for personalized relationship,
social networking through status and role and importance of community orientation
(Sinha and Kanungo, 1997;Chatterjee and Pearson, 2000;Budhwar and Baruch, 2003;
Gupta et al., 2009). It has been observed that though most Indian organizations adopt
Western management practices of planning, recruitment, training, promotion, appraisal,
delegation, grievance handling, etc., they take cultural detours characterized
by familism, patronage, personalized relationships, obedience to authority and
centralization of power to get the work done. This is due to the context sensitivity of
Indian managers where a behavior judged appropriate for certain time, place and person
is not appropriate at others. As a result of this context sensitivity, though the managers
have adopted Western practices, the manager would behave either traditionally or
Western way according to context (Sinha and Kanungo, 1997). Therefore, Western
practices, instead of being integrated into the culture, have coexisted alongside the
practices of the home culture. Traditional Indian management called paternalistic
management primarily reflects in-groupism based on family and caste, hierarchical
arrangement of ideas, persons and relationships, personalized relationships, moralistic
orientation to meet obligations and harmony and tolerance for in-group members.
VOL. 12 NO. 4 2018 jJOURNALOF ASIA BUSINESS STUDIES jPAGE 403

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