Globalisation encouraging managers without borders

‘Go East, young man’ should be the advice today to young professionals, reversing the direction in the classical advice.

In the past, the young were asked ‘to go West’, the sentiment originally emanating in America in the context of the wide empty spaces and the gold found on the west coast of the US.  But as it happened, west was also the natural direction for Indian migration to UK and then to America or Canada. Looking now at the number of expatriate managers heading to Shanghai, Singapore, Bangkok, or Bangalore, the direction of managerial migration is indeed changing.

 Migration and the search for better lives occurs at all levels: the Afghans or the Africans fleeing to Europe, people from Bangladesh or Nepal slipping into India, the construction workers leaving South Asia for the gulf, the Filipino and Indonesian maids going to Singapore and so on. But in this column I am focusing on migration at the managerial level, a phenomenon where Indians already play a role.

What are the factors leading to the exponential growth of expatriate managers i.e. foreign nationals managing companies in a country other than their own?

To begin with the size and scope of transnational corporations has steadily expanded with scores of giant entities having a presence in over a hundred countries. The classical examples are G E, Unilever, Shell, HSBC and so on, originally mainly the European or American behemoths.

But since the seventies the world got to know Toyota, Samsung, and Tatas.  It is not relevant for our purpose here to go into issues of their primary nationality, identity, structure of the capital, but the simple point is that the expansion of such companies necessitate the placement of senior and trusted managers from corporate headquarters to countries where they operate.

Thus if Pepsi starts its plants in India or the Taj Group of the Tatas, a hotel in Sri Lanka, it  is often natural and useful for an experienced professional from the headquarters to head the office in the new country. That Indra Nooyi, an American of Indian origin heads Pepsi at the global level or till recently Howard Stringer, an American headed Sony is only further testimony to the mobility of top managerial talent at the global level.

Though traditionally expatriate managers came from the home country of the corporate, increasingly the notion of the ‘home’ country and the nationality of the expatriate have become irrelevant as the example of Indra Nooyi shows. What is more relevant is the emergence of a global tribe of elite managers based on education and experience:  a good engineering, economics, or accountancy first degree, an MBA from a prestigious management school, internship in some well known enterprises and so on.

The underlying fact is that there are no shortages of countries where the business opportunities are huge, but management skill and experience are to be imported. Think of the airlines or the airport operations in Dubai. The capital and the ownership are with the local sheiks, the management largely expatriate.

Large presence

The management sent by the headquarters of multinationals is only one aspect of this story. Globalisation impacts on a number of associated aspects of business: banking and investment, consultancy, research and development and even education and entertainment. There is consequently a huge growth in senior and middle level managements too and these are areas where Indians figure prominently.

Why? It is a result of a culture of aptitude for education, analytical and mathematical skills, linguistic advantage with English, and hard work and application. It is for this reason that there is an unusually large presence of Indians – or people of Indian origin – all over the world in categories like banking, consultancy, ivy  league education, or R&D. 

Another aspect is ‘the flattening of the world’ as made famous by Thomas Friedman.  In today’s workplace, a complex job, be it manufacturing, design or service, can be stripped down into various elements; these elements worked upon and completed where it is most competitive and effective; and reassembled later to be shipped to the markets. In myriad ways this process has led to greater mobility and flexibility. ‘Outsourcing’ as we conventionally know it is only the most obvious example where at the lower end,  airline bookings or  bank transactions of an American or European corporate are processed in India and the ‘work’ done is transmitted digitally back to the client.

 We have since then moved up the value chain and already medical diagnostics or legal or financial analytics can be done where there is core competence and cost efficacy. What it means in terms of managerial jobs is that corporates like Infosys or TCS spearheading such processes need managers and trainers also to be placed outside. Hence we see the growing presence of Indian managers in diverse countries, not just the west, but Africa, East Asia and South America too. We are also beginning to see many non-Indian expatriates working for ‘Indian multinationals’, a new category in itself. 

The emphasis on ‘emerging economies’ like Brazil, Indonesia, Turkey apart from China and India is also altering the profile of the global manager. The growth in the next decade will be in these countries and hence we will see more offices in Shanghai, Istanbul or Gurgaon. Second, the well educated and the qualified from these countries will be in greater demand as they tend to know at least two cultures and are more adaptable. A world of managers without borders will only accelerate and a significant number of them may have an ‘Indian’ cultural marker whatever their official nationality.

(The writer is India’s ambassador in Brazil)