Incredible India and the New Year

Today was our first day of class at the Institute. The introductory talk by an SDM-IMD professor focused on all India has been able to do despite the huge problems facing it. He talked about rays of hope emerging from social entrepreneurs who are using business systems and technology to bring some of the benefits of modernization to the rural masses – from water for crops to prosthetics for amputees. Some of his statements seems a little unbelievable and over-reaching. For example, he talked about the failures in America after 9/11 and after the Katrina disaster and compared it to the successful operations in Mumbai after the bomb blasts and the record floods. While talking about the incredible caring in India for their fellow human beings, he said that unlike America, there has never ever been any recorded case of looting in India. When the system breaks down, he said, people come together and looting stores is completely unheard of in India. Really? I seem to recall quite a bit of looting in Delhi after Indira Gandhi was shot when I was there. It was also a bit of a turn-off when a primary source for his quotes were listed on his slides as “wikipedia,” something we tell our students NOT to do. Wikipedia is a fine starting point for research, but hardly the best source to cite to build credibility.

The students headed to a new year’s eve party that evening at a local club, while Al and I chatted at the hotel before being invited to Ramesh and Thangam’s house for a quiet dinner. We had some great conversation, drank some good Indian wine and beer, and gorged on dosas, poha, and aloo tikkis.

Corruption & Working Within the System

This morning was the engagement. After a relatively restless night’s sleep, I woke up, got ready, and we all headed to the “mandapam” for the ceremonies. There were the usual series of rituals and offerings. The most interesting was that there was actually a written contract between the parents that was read out to the gathered crowds and signed (to much fanfare) by both the parents. They essentially actually signed, in public, a written contract agreeing to have their kids marry each other. I wonder if this is an enforceable contract and if there are any specified damages in the event the engagement is later called off.

Later, while sitting around and discussing the state of world affairs, as is common in casual Indian gatherings, the conversation shifted to corruption and the ways in which people could pay bribes to get done, anything they wanted. There was one aspect of this conversation I found particularly fascinating. The group shook their head in apparent dismay when talking about how people could get almost anything past the customs officers with a well-placed bribe. They talked about how some of these processes were almost formalized, with the officer telling you how much the actual duty is and how much the unofficial duty would be if they wanted to pay under the table. They talked about how the key officials kept their hands clean and made innocuous statements that made their intention clear but never actually handled the money themselves. They could direct the person to another officer who would actually take the money and put aside a part to share informally later. All of this was said with head-shaking and a slight sense of disgust. However, they would spice each of these stories with personal examples of how they paid a bribe to get electronics pas customs, to get some paperwork expedited and more. I puzzled over how they could talk about how terrible and corrupt the system is, but still actively participate in that system. Based on my reading of Being Indian, I think that Indians may dislike a system and even consider it unethical to take bribes, but still see as using that corrupt system to achieve their goals quite acceptable. There is no moral conflict with paying bribes because that is the system. These same individuals would consider it abhorrent to ever take a bribe, but consider paying a bribe to get a task done an inevitable part of working within a corrupt system. The question always is, “what is the alternative?” If you don’t pay these bribes, you’ll never get anything done. So, some ethically questionable actions that are in the pursuit of acceptable goals is seen just as a part of getting through life. Maybe Pavan Varma is on to something. That afternoon, we headed to Mysore via Eagleton (Ramesh’s beautiful golf resort home). The day culminated in the “welcome dinner” at the beautiful Lalitha Mahal Palace Hotel. This is a spectacular palace built in 1921 for the visit of the Viceroy and then used by the Maharajah to house his important guests. We took a little tour of the palace and visited the Viceroy and Vicerine suites and then had dinner at the spectacular ballroom, which is now a gourmet restaurant.

Wealth & Power for Easier Access to God

We arrived in India after a long set of airplane rides."Still, the process was smoother than I imagined." While the Air India aircraft did seem old and poorly maintained on the inside, the flights were quite comfortable and the food was good. "While our flight arrived in Mumbai over an hour late, the onward flight to Bangalore was held for us (I assume because the main group of passengers on that flight was aboard our flight)." When we arrived in Bangalore, it was clear that we were the only flight coming in at that hour and so immigration was an absolute breeze and the customs didn’t even bother to stop anyone to ask questions.

The rest of the day was filled with meeting relatives I hadn’t seen in a long time. A big group of relatives from around the region had gathered for the engagement of my niece tomorrow and so it was a blast catching up with them. The engagement, set for tomorrow morning, is surrounded by lots of rituals and so the day was busy with preparations. One interesting visit was to the local temple where the family purchased some offerings to the Gods. Basically, you pay a some of money to the priests and they will do a special, personal prayer to the Gods on your behalf. Since we had purchased a rather large “package” of prayers, we were ushered in to the front of the line and into a private viewing area in the front which was inaccessible to the throngs of worshippers visiting the temple to pray. Our front row seat often blocked the views of the others, but I guess that’s the advantage of paying for the special prayers. After a while, my uncle and I moved to the outskirts of the group and talked about how this system worked. He explained how pilgrims could come from far and wide for a “darshan” of the Gods, but were basically constantly told to keep moving and often got short glimpses of the idols. He made an interesting comment, “But people with wealth and power get much easier access to the Gods.” He said that in very popular temples, which had throngs of thousands of devotees, people who paid a significant some of money for some offerings to the Gods were shuttled to the front of the lines and given access to a private viewing area of sorts which were closer to the front and off limits to the common person. He then laughed and said that it wasn’t just money, powerful politicians and movie stars also never had to stand with the common man in line waiting for a view – they were just led past the waiting devotees to the front, bypassing the often interminable waiting queues. That’s what led to the “access to Gods” comment. The comment struck a chord with me because I immediately related it to the Being Indian book and how wealth, status and power could provide high levels of access and could result in things “getting done” that would otherwise take a long and tortuous process. I guess even access to Gods is easier for the rich and powerful.

Indian Regulations on Transfer Pricing

An important issue for multinational corporations is how different countries deal with transfer pricing (e.g., the method used for determining the price of products sold by a parent country to its international subsidiary).

A recent article in the Economic Times gives India high marks for its regulations regarding transfer pricing and the expertise of government officials dealing with transfer pricing. Read the brief article here.

One highlight of India as a business partner has always been its developed and transparent legal and regulatory system (quite unlike China), and this article even highlights the fact that regulations on transfer pricing in China are still under development.

On the UMD Home Page

An article about this trip to India has made it to the University of Minnesota Duluth home page. Go to http://www.d.umn.edu/ and you'll see a link to the article "Business in India" right below the main homepage picture.

You can also link directly to the article by clicking here.

Ginger Hotels - A Marketing Case Study

I found a great blog written by an Indian professor that is well worth browsing if you are a marketing major (or even just interested in marketing). It's called Marketing Practice and bills itself as a resource on Indian brands. This site may also serve as a resource for those of you intrigued by various brands in India and writing your reflection papers on marketing.

Most interesting to you will be the little post on Ginger Hotels where we will be staying during our trip. This is really an innovative concept that is based on solid and extensive consumer research. How do you maximize the service elements that your target market considers important, while eliminating overhead and keeping costs and prices super low? The answer - "Please help yourselves ..." Provide services "on call" and outsource when possible. Eliminate any "nice to have" service that adds to prestige but is not actually used by a majority of customers (e.g., swimming pools).

Click here to get to the Ginger Hotel post. You will need to scroll down to the post of MARCH 13, 2007 (or use Ctrl-F to search for "Ginger Hotel" on the page).

From Minneapolis to Bangalore with Target

I know many of you are apprehensive about your 3-weeks in India, wondering what the experience will be like for someone who has lived in Minnesota for most of your lives.

Well, you can experience it vicariously by following the incredibly well-written blog of a Minnesota family who moved to Bangalore. Bob Fischer (who grew up in Duluth) works for Target and was sent to India for a few years. They have been there a few months (the entire family moved - with young children!)

You must read this entertaining blog to get an idea of what you may encounter:

http://wherearethefischers.blogspot.com/

Outsourced

Okay, so the movie night is confirmed. Here are the details and a link to a trailer of the movie:

What: A screening of the movie “Outsourced”
Where: Vaidyanathan Home Theatre, 675 Ridgewood Road - Duluth
When: Friday, December 7 @ 6:00 p.m.



The movie was a "critic's pick" by the New York Times (click here for a review). The reviewer even says, "In its modest way, “Outsourced” may be unique: a charming culture-clash romance that could be taught in business schools." Another review, from Crosscut Seattle says "Outsourced doesn't try to resolve the issues it raises, but it should be required viewing in MBA programs.”

$100 million for an acre of land

Some people wonder why hotels in Indian cities are so expensive, even by international standards. Well, here is a news announcement about a recent real estate deal outside of Mumbai: the winning bid in an auction of some undeveloped land was US$100 million per acre. You'll find the article here.

Just so you know, the terms "lakh" and "crore" are commonly used in India. Expect to hear these terms during presentations. 1 lakh = 100,000 and 1 crore = 10 million.

Hello to all!

It was great meeting many of you this week as we held our "orientation sessions" in Rochester and Minneapolis. Many of you also met each other for the first time. Although we'll be spending three weeks together, it's never too early to start to get to know each other.

As soon as you have your "blog" created, why don't you post a comment here with your blog address. I will compile them into a single post to this blog and you can start checking each other out! Make a simple first post to the blog introducing yourself - your major, your background, interests, etc. and telling us why you signed up for this trip.

I look forward to learning more about all of you. Have a happy thanksgiving week.

India Does Work!

Things look chaotic, but things do work!

That's how the InfoSys Chairman responded to the question "Is there anything about India you think outsiders don't understand about India?"

That's one thing you should expect when you hit India. As you may already have imagined, you're going to be hit by noise, crowds, pollution, traffic, and poverty unlike anything you have likely seen before. But, as Gopalakrishnan explains, you have to get used to ambiguity, uncertainty and a willingness to "go along with the flow" when you're in India.

Take a look at this 3.5 minute video that is part of Fortune Magazine's "Global Forum" on India.

You can find all the videos here.

Outsourcing Parts of the Value Chain

One of the important insights from The World Is Flat (have you started reading the book yet?) is that with the spread of technology as a flattener, any element of the value chain that can be disaggregated and performed more efficiently elsewhere will be outsourced.

Watch this short video from PBS' Nightly Business Report to see how the outsourcing of homework tutor services may only be the start of the outsourcing of services.

Click Here (goes to Windows Media Player Video, but you can switch)

Think of other services that you think will lend themselves to such outsourcing as the technological abilities of the Internet expand.

As an aside, pay attention to the accents you will soon start to hear in India. Also, it's interesting to see how the tutor responds to the question "Are they good students?" She responds "Most of them are." However, note the famous Indian head shake - she is saying yes but shaking her head from side to side that is often interpreted as a no in the US.

Culture Clash

One of the movies I hope to screen at my house at a "pre-departure" party is an award-winning independent film called Outsourced. I have not yet seen this movie, but have heard many good things about it. At the very least, it should provide a great starting point for some discussion of cultural differences you may encounter as you head to India.

Take a look at the trailer for this movie above (Nov. 29 post) and post any comments you have ...

Students - Start Here: What's Up With Culture?

The University of the Pacific has created an excellent online training module for US-based students heading abroad as part of an international course.

Visit the site here: http://www3.uop.edu/sis/culture/ and click on MODULE 1 to get started.

This quick online training covers some key do's and don'ts when you're traveling abroad and will help you better appreciate the experience of being in a completely different culture.

Trip Preparations

I don't know if most students realize how much preparation goes into getting a trip like this off the ground. We have spent hours working with the folks in India to ensure that the students have a positive cultural and educational experience.

Al and I have been working on tweaking the syllabus, trying to outline key topics, find speakers, identify appropriate site visits, create solid assignments and quizzes, and decide on dates, times, and content for a student orientation.