India is extremely hierarchy-oriented – including in personnel management. How to successfully manage your Indian subsidiary: examples and instructions on the subject of leadership in India.
Strong hierarchical structures are part of everyday working life in India. In India, classic leadership behavior means that the superior gives instructions that are carried out without contradiction by the subordinate hierarchical levels. From our Western perspective, this is a completely unusual, not to say strange, situation.
Furthermore, Indian employees are also not used to receiving orders and direction from anyone other than their direct manager. Questions from third parties are not part of their “hierarchical routine” and they therefore do not respond to them. The following example should make this clear:
Why things often aren't delivered in India (an example)
For example, it happens that the assistant to the German CFO is completely frustrated because, even after asking 15 times, she still hasn't received the agreed monthly financial reports from India. From the Indian perspective, however, it simply did not have sufficient “authority” for this task.
Instead, it should have been agreed from the start (!) at management level that all reports would only be sent to this assistant and that she could also decide on sanctions if deadlines were not met.
In India, leadership means: structuring tasks for India, clarifying responsibilities and defining sanctions
Human resources management India
India has its own laws: what is not expressly forbidden is permitted. This fact alone leads to complex requirements for specifications. Because not only what is to be achieved must be agreed upon, but also everything (and really everything!) that is forbidden.
The prerequisite is to structure the activities on site in such a way that clear responsibilities are decided jointly by all those involved and can then be adhered to. However, these responsibilities do not only refer to the Indian branch as such, but it must also be made clear which employee from the German headquarters will and is allowed to speak to which employees in India about which topics, when, why and with what authority.
German managers often risk losing control in their Indian subsidiary through careless communication
Kindly meant but thoughtless words are among the biggest and unfortunately most common mistakes in communication that German managers in India can make. Here is an example, which is unfortunately no exception in this form:
The German CFO is responsible for arranging an internal company loan from the German parent company to the Indian subsidiary. He rejects a corresponding request from India in order to maintain economic pressure on the Indian subsidiary.
Shortly afterwards, the German owner of the company traveled to India. Also met the Indian managing director at a dinner in honor of the German guest. At the end of this dinner together, he is met by the Indian managing director in a quasi “random” and informal manner – without the presence of the German CFO! – asked about this loan. The company owner doesn't want to jeopardize the good mood and promises to talk to the CFO again and check whether “something else can be done”.
This promise alone immediately dismantles the position of the CFO and endangers his future acceptance by Indian management!
The Indian managing director has “learned” that in the future he can “use” the German owner to present his concerns to the German management in a “more promising way”...
A small statement with a dramatic effect! With a simple answer, such as “For us, only the head of finance is responsible for this, please speak to him” The future complications that were easily foreseeable in our case could have been prevented.
Clear structures and clearly defined competencies are a must in India! Indian employees have a very keen sense of competencies and power relations in a company and they are “merciless” when it comes to finding weak points.
The active management of the Indian business is YOUR job!
The active management of the Indian business is your task!
This example shows that when it comes to managing and controlling Indian subsidiaries What matters is not just the behavior of the Indian employees, but also clear structures and communication channels in the German headquarters.
It is not uncommon for far too many (German) employees to talk to far too many employees of the Indian subsidiary without adequate coordination before and after: the technology, sales, controlling, the company boss and so on and so forth. Different departments, different people and different interests act alongside and unintentionally against each other. This in turn offers the employees of the Indian branch wonderful opportunities to discuss relevant aspects with very different interlocutors and, if necessary, even play them off against each other.
Even if the comparison is flawed and seems a little inappropriate, it fits wonderfully with behavior that we know well from our private lives: If mom forbids ice cream, I just ask dad. And if he says no, Grandma is there if necessary. And when the ice cream was served and mom got upset, I could easily say, “Grandma allowed it” - and in the worst case scenario, I would shift my focus from my mom to a fight with grandma.
Instructions for practice
As complex as it may sound, the solution seems simple: Either there is only “one” communication channel in the German headquarters to India that bundles all the information. Or (if that is not possible), there are clear responsibilities: who can discuss what – when – and with whom, and how will all other affected functions be informed.
Sounds simple, but experience shows that it requires considerable effort over a long period of time until all employees (in India and Germany) consistently adhere to such guidelines.
We would be happy to support you in developing the “right” communication guidelines for dealing with the Indian subsidiary. Simply contact our WB human resources® department.
