Interview with: Looking at India from the Inside .... and Outside

Week 04 Assignment 01: Application Assignment


Interview with:  Looking at India from the Inside .... and Outside

This week we've taken at look at alliances and partnerships among organizations, and have been provided with examples and cases that illustrate different methodologies and practices for organizations and companies.
In 2010, Kanter concludes that one of three important elements of business alliances is that the partners must benefit in other ways besides the key details of the particular deal.

I took some time to sit down with Todd A. MacCallum,  MBA, a Senior Director at Salesforce.com, who has more than 10 years working with companies such as Infosys Technologies Limited, Accenture and IBM Global Business Services in India through various partnership models. 
(he spoke from his home in Orange County, California)

Before we began the interview Mr. MacCallum noted that nearly all of his work was initiated and created by the partnership or alliance entity before he began his work at the ground level (T.A MacCallum, personal communication, February 18 - 19, 2012). 



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AA:  So you've worked in India since the late 90s.  What kind of partnership models work best? Did...did they differ?

TM:  They... you know, they were different,  they seemed different, the way each project was handled, but at my level, especially at IBM, I was brought in to sell or manage the project.  The length of the project seemed to be the driver. And the type of work, of course.

AA: What do you mean?

TM: If the project was already sold and budgeted, it had a finite shelf life to it and say the owners.... the principals...they would be profit sharing at specific junctures, so they would structure it, or it would be structured to facilitate that kind of result. For me, for us, IP -- intellectual property -- was the key in securing because one piece of IP could drive an enterprise's revenue stream.  So making sure that key assets were shared and protected were written in at the beginning of the project. 

AA: There was one paper that we read  in the Harvard Business Review on how organizations and companies choose between a joint venture and whole ownership venture -- that based on the company and their strengths ...or how they operate... and how they transfer their expertise, they select a strategic partner and settle on the optimal choice of partnership for both companies Gomes-Casseres, (1993).

TM:  Yeah, I'm sure there are many types [of joint ventures]. And most of our partners were not first-timers; they might have worked for an American company previously. So sometimes the only thing that changed was their business card.

AA:  Wow.  Interesting.
          We are working -- I'm working with my class group on a paper written about the Wal-Mart Bharti partnership -- the strengths and weaknesses of the partnership... and opportunities     
    and threats for entering the Indian market together.  Recently the government pulled a proposal that would have allowed that type of partnership. (Bose, 2012)  Is that kind of      partnership going to work  well?  They seem to be a kind of dream team as far as resources and know-how.

TM:  (sighs).... It's really hard to do business in India (laughs). It's easier to do business in China than in India.

AA: Why? Because ....

TM: Because... Well, there are something like 26 languages that are used in India daily...and like 100 dialects.  In each state, a different language is spoken. They call it their "mother tongue."
 And India is a democracy. In China, there is no political process -- or multiple processes, let me say -- to slow a project down. In India, everybody has a vote.     It's just a longer process in getting approval.  The polical winds change so much..and like here, the people can vote someone new in office.

AA: So the language issue -- multiple languages - that's a problem?  Or was it a problem?

TM:  Well, when we had team meetings, with 10-15 people from  many states around the country, we had to do the meeting in English. Even though Hindi is the national language, one of the team members only spoke his language and English.

AA: Not Hindi? Do you speak it?

TM: Yeah, but not enough to run a meeting.  English is the primary business language.

AA: The language issue, then, would be more of an issue for a retailer, rather than IT infrastructure you were doing there. 

TM:  Surprisingly, most of the business community speaks English. Like customer service reps, you know lots of companies here outsource there.  

AA: Right.

TM:  That's why their different. In China, they are good in manufacturing. In India it's service industries

AA:  So do you think the Wal-Mart model will work in India?  The government tabled it until March. Is waiting until March going to make much of a difference.

TM:  The supermarket concept - Wal-Mart - is an enormously disruptive model.  Over there, they [consumers]  get their stuff at different stores.  They get their spices from one store.  They get their produce, their vegetables at another store, vendor.

Mr. MacCallum and I discussed more about the strength of Bharti, Wal-Mart's partner (Bose, 2012). I mentioned the cultural changes among women and youth that helped spur retail growth (Bose, 2012).  He shared his view on  the speed of these changes below (T.A MacCallum, personal communication, February 18-19, 2012).   


AA: So kids wearing the brands the American kids wear, that's not going to help push demand in that category?  How about for other demographics?

TM: I'm not a retail expert but there's other stuff going on there.  I mean, it's happening.

AA: Yeah, it seems there is a lot happening --

TM: Yeah,  it's amazing.  Its blowing up there.  When I got there in 1999, it was just starting to blow up.   What I mean- what I mean is there's lot of things - like India is still a country where most marriages are still arranged. 

AA: Uh huh, right, a lot of Indians living in England still arrange marriages

TM: Exactly. It is extremely traditional.  China is also traditional.

AA: But India's democracy makes things more challenging when added to the mix. 

TM: Yes.

AA: And language.

TM: Yes, but India's cool. It's very social, very open. I know they still have a caste system, but they are still growing. they just got their independence something like 46 years ago.  They are still coming out of another time in their history-- In the 1990's Omar Singh was the economic minister who opened it up after relying on the Soviet Union's support.

AA: I think that's the same Singh who is the current Prime Minister?

TM: Yeah.  It's kind of weird....when you go the airports there, you can still lots of soviet influences -- there are still lots of signs in Russian, lots of the planes still have the old soviet airline names.  They (India) are still growing?

AA: So do you think it -- the Wal-Mart / Bharti partnership -- could work?  Wall-Mart will be doing the back end supply stuff and Bharti will run the front end of the retail.  We don't know how far, if at all, the Wal-Mart brand will be in the background.

TM: [They] Bharti might be able to make it work. They know the target demos, they know where to be. 

AA: You've been traveling there for years and seen lots of changes. So it just is going to take time? Or what will it take?

TM: You know.....it's different as far as how long it takes to get some things -- not everything -- patience. it's going to take patience. I don't see why they can't be successful once they [Wal-Mart and Bharti]  get on the ground.

(While he did not have direct retail experience in India, Mr. MacCallum  did point out that he sees change -- a  change that is constant -- occurring. The Indian retail market will speed up, slow down, but continue to grow like other developing countries.)

We discussed more about differences between Indian culture and Western (specifically U.S.) culture regarding companies in joint venture.  I mentioned that one reading underscores some common characteristics of organizational relationships that are successful (Kanter, 2010).  Noting that he has received education and training on Indian life and culture by his aforementioned employers Mr. MacCallum agreed with those principles in general.  He asserts that many of his relationships with his partners in India have lasted well beyond his project life and turned into friendships and sometimes back into business contacts(T.A MacCallum, personal communication, February 18-19, 2012).

I learned that there are so many factors affecting success in the Indian retail environment, and this complexity in the external environment may affect the speed (and forecasting) of results for foreign companies entering the marketplace.  Some of these factors are language, religion and government.  The B2B community there is familiar with foreign partnership models. But the maturity on the retail side isn't there and while I believe there will be change, no one can predict how that growth curve will look.

Once that door is open, the challenges will present themselves without prompting. Perhaps  at that point, clarifying (or re-examining, in some cases) objectives and goals for these  retail organizations' projects will provide for achievable, meaningful growth on many fronts (credibility, trust and loyalty) and help build a bridge to new relationships with other organizations and consumers. 

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                                                            REFERENCES  

Gomes-Casseres, (1993). "Managing International Alliances: A Conceptual Framework." Harvard
               Business School. pp. 1-20.

Bose, I. (2012). "Wal-Mart and Bharti: Transforming Retail in India." Asia Case Research Centre.
             pp.    1-18.

Kanter, R. (2010). "Collaborative Advantage: The Art of Alliances."Harvard Business Review. pp.
          1-16.

Gulati, R. (1998) "Alliances and Networks" Strategic Management Journal, Vol. 19, pp. 293-317