Global Firms with Local Roots
A Historical Perspective on the Indian Hybrid Firm
Tico Raaijman
Abstract:
• This paper is a reaction to studies that have used notions of hybridization in their descriptions of the transition of Indian management. While these studies have based their arguments on the presumption that Indian firms face a combination of both indigenous and global influences that pushes them to adopt new hybrid styles of management, this paper seeks to nuance this discussion by focusing on the strong historical sensitivity of practices whose implementation is seemingly driven only by globalization.
• The main proposition is that while many consider the Indian hybrid firm as the result of blending traditional Indian standards with the contemporary global imperative, in reality the Indian firm is actually shaped by two forms of hybridity: contemporary hybridity corresponding with the course of globalization and historical hybridity stemming from colonialism. In terms of this interplay, an institutional perspective is instrumental to understanding which aspects of the Indian firm are prone to such reciprocity.
• The paper consists of a theoretical discussion with several empirical illustrations taken from both extant research and recent interview data collected from two large Indian firms. The empirical illustrations serve to exemplify the presence of historical and global factors in shaping hybridity in the modern Indian firm, and show that a better recognition of the historical impact on the adoption of practices would improve our understanding of the constitution of India's current management culture and the potential scope of its future development.
Keywords:
Indian management, hybridization, globalization, colonialismAuthors:
T. Raaijman
Faculty of Economics and Business
Introduction
The active discussion on the disposition of Indian management fits well with today's academic interest in indigenous management styles. While many emerging markets show astounding economic progress, knowledge on their indigenous management concepts is still below the desirable level. In this respect, knowledge on the development of Indian business practices has become of increasing relevance and interest to both the Western and Indian scholar as well as the international manager. With India’s population projected to exceed that of China by 2025, India poses a thriving economic player in both the developing world and the global economy, both in terms of size and due to its orientation to the West (as a former British colony) and its relationships to other Asian economies (Davis et al., 2006). A continuous discussion that surrounds the development of Indian management systems concerns the degree to which certain features of Indian management are likely to be transformed by its new global context (Ibid). Indeed, the government-induced reforms towards a more market-based system that characterized India in the early 1990s have not only ignited a remarkable leap in economic development, but also forced Indian businesses to compete in a changing, global environment. Consequently, the contemporary Indian multinational enterprise (MNE) is bound to face a multitude of influences, both indigenous and international. Building upon this generally accepted premise, i.e., that the Indian MNE face both traditionally Indian and Western or global influences, recent literature has frequently used the term hybrid in association with the transition of Indian management (e.g. Chatterjee & Pearson, 2000a; Davis et al., 2006; Gopalan & Stahl, 1998; Gopinath, 1998; Kakar et al., 2002; Neelankavil et al., 2000). These theories of hybridization suggest that the Indian MNE are moving towards unique hybrid forms of management that blend both traditional Indian elements of behavior and a selection of global best management practices. Notions of hybridization have for instance been applied to describe the emergence of a new type of hybrid firm, which, according to some scholars, has become the dominant type of firm in India nowadays (e.g. Gopinath, 1998; Kakar et al., 2002). Moreover, studies have conceptualized models that describe a certain hybridized “duality of managerial values”
that would be partially drawn from managers’ own cultural background and from international parameters (e.g. Bedi, 1991; Neelankavil et al., 2000; Sinha, 2002).
This paper primarily argues that existing literature on the hybridization of the Indian firm has largely neglected the strong historical impact on the adoption of practices whose implementation is seemingly driven only by globalization. A historical perspective on the origin of Indian management practices shows that many of its aspects can be linked to colonialism. In this view, Indian hybrid firms can actually be argued to be shaped by two forms of hybridity: a contemporary form of hybridity corresponding with the course of globalization and a historical form of hybridity stemming from colonialism. Influences of historical hybridity are foremost visible in the British inspired institutional environment which has previously been argued to be a strong determinant of firm strategy (Peng et al., 2008) as well as the relevance of management systems for a specific context (Budhwar & Sparrow, 2002). Intriguingly, while the rhetoric of hybridity itself has historically developed mainly as an anti-essentialism discourse, recent studies that discuss hybridization in the Indian context have employed seemingly essentialist notions of culture and tradition, implying that Indian management culture was once completely indigenous. In this context, hybridization, it seems, has commonly been used only as a synonym for the cultural effect of globalization. Note that it is not the intention of this paper to deny the existence of Indian values or culture, for the uniqueness of the Indian management culture is precisely why this text was written. Rather, the goal of this paper is to offer a theoretical discussion on the dual hybridity inherent to Indian firms by focusing on both the Indian response to globalization and the heritage of Indian colonial institutions. An attempt is made to relate the notion of historical hybridity to the broader topic of Indian management transition by considering the strong influence of Indian institutions on both the constitution of India's current management culture and the potential scope of its future development.
In the broader context of indigenous management research, an aim of this paper is to pose the fundamental question of how to define indigeneity. While the importance of context in general is commonly recognized in indigenous management studies, the issue of how to define what is indigenous and what is not becomes especially problematic in
postcolonial scenarios where much of the domestic status quo can somehow be related to the colonial condition.
The first section is a literature review, introducing first the concept of hybridity as the mixing of cultures, followed by a discussion of the Indian hybrid firm as a product of globalization, identifying extant research that describes hybridization as an implication of India’s current transitional course. The paper proceeds by offering an institutional perspective on historical hybridity in Indian management, followed by a number of empirical observations of the contemporary and historical hybridity that resides in the Indian firm. The fourth section contains some theoretical considerations and discusses a few practical implications of historical hybridity for the constitution of India's current management culture and the potential scope of its future development. The final section concludes.
Literature Review
The Hybridization of Cultures
In modern anthropology, hybridity refers to the mixture of elements or meanings from different cultures, which leads to the creation of entirely new cultural constellations. While the term hybrid has biological origins, commonly referring to the offspring of genetically dissimilar animals or plants, its use as an explanatory term can be traced to the emergence of a late eighteenth-century discourse on racial mixing (Young, 1995). Contrary to our current understanding that genetic diversity is rewarded by nature, these texts propagated that racial mixing would dilute the European race, and that “hybrids”, i.e., the offspring of racial interbreeding, were inferior beings. As a concept relating to racial purity and, indirectly, social hierarchy, hybridity was in clear correspondence with the era of colonialism, wherein the dominance of European societies was beyond contention (Ibid). Following the social transformations and economic liberalization that succeeded the ending of colonial times, the understanding and application of the term hybridity changed considerably. Ironically, it was the bulk of postcolonial discourse in which the hybridity concept played its main part.
Echoing the increase in multicultural awareness of the early nineteen nineties, postcolonial theorists have typically focused on the effects of mixture on culture and social identity. For example, seminal contributors to the postcolonial discourse include Bhabha (1994), Gilroy (1994), Hall (1990), and Said (1978), the first of whom argued that colonial hybridity as a new cultural form created a sense of equivocation among colonial rulers that led to a change in the authority of power. A key hybridity-inherent concept describes its so-called liminality or “in-betweenness”, which refers to the actual reality of cultural mixing when one is drawing from many cultures in a structural context, hybridity being the cultural end result of this mixing.
The role of hybridity theory in postcolonial discourse as a critique of cultural imperialism and solution to the coexistence of multiple cultures positioned it primarily as an anti-essentialist model. Broadly, as a philosophical concept, essentialism suggests that for any entity under study, there are certain essential qualities inherent to all entities of that kind, implying that terms or words should have a single definition and meaning (Cuyckens, 2003). It is thus a belief in the true essence of things, in the existence of attributes that exist beyond reference to contexts or interpretation. However, the idea of essentialism, while dating back to Plato and Aristotle (Hallett, 1991), has been universally contended precisely for leaving no space for contextuality and interpretation. Opponents of essentialist theory have generally taken a constructionist attitude which suggests that all qualities are in fact immersed in historically determined, contextually bound paradigms. The constructed nature of things means that everything is open to change rather than having a fixed essence.
The anti-essentialist stance that hybridity theory inherently takes has been articulated by some of the major hybridity theorists. Hall (1990) described cultural identities as the unstable points of identification or juncture which are made within the rhetoric of history and culture; cultural identity is thus a position rather than an essence (Hall, 1990, p 303). Hybridity, he argues, is what defines the spread of peoples by acknowledging a necessary heterogeneity and diversity among societies, by recognizing the need for difference. Hybridity thus carries a deconstructive potential towards essentialist viewpoints by challenging assumptions of fixed cultural dichotomies. Gilroy (1994) took a similar anti-essentialist approach to hybridity, albeit rejecting the idea that
constructed hybrid cultures have no distinctive element whatsoever; rather he proposes that the intercultural friction between local and global forces leads to hybridization in the sense that new cultural forms emerge which may challenge the Western hegemony.
While the development of hybridity theory as a rhetoric of anti-essentialism boosted its use in cultural studies, scholars have blamed hybridity for being prone to the very essentialist framework it seeks to eliminate (Friedman, 1994; Hutnyk, 1997). Indeed, one cannot deny that the idea of hybridity as the mixture of different cultures has the implication that there must have been pre-existing cultures from which to draw; the assumption of such cultures as distinct conjunctional entities attributes to them a sense of isolated existence. Ironically, this is precisely the kind of essentialist conception of culture that hybridity theory aims to dismiss. While this issue deserves concern, it may be considered a somewhat avoidable predicament if we argue that conceptions of culture as either bound or fluid are meant to facilitate theoretical discussion of hybridity rather than to refer to real life situations. Emphasis should be put on the process of hybridization rather than the source of the elements hybridized.
The current and perhaps more straightforward trend involves regarding hybridity as the cultural consequence of globalization. Scholars who have expressed such employment of the concept include Ger & Belk (1996), Kraidy (2005), Nederveen Pieterse (2004), and Ritzer (2003). For example, Nederveen Pieterse (2004) envisions hybridity as a cultural root, arguing that globalization as hybridization challenges views which regard it as a homogenizing and westernizing movement. Cultural hybridization is described as the development of “translocal mélange cultures”, a process bound not just to globalization as we commonly conceive it, but to the entirety of human history (Nederveen Pieterse, 2004, p 4). Kraidy (2005) presents hybridity as the “cultural logic” of globalization, suggesting that any given culture contains traces of other cultures, thereby enabling foreign commercial actors to use cultural overlaps for building emotional links between their products and local peoples. Nevertheless, none of these scholars have managed to refresh the discussion surrounding hybridity theory in terms of answering its inherent theoretical difficulties, leaving the term hybridity somewhat disputed due to its apparent tendency to withstand appropriation by various discourses despite its pliable nature.
The Indian Hybrid Firm: a Product of Globalization?
In the field of Indian management research, studies that discuss hybridization have typically followed the aforementioned current trend, in that they analyze the extent to which the Indian management culture is impacted by the forces of globalization. A common underlying belief in such studies is that globalization should have a hybridizing impact on Indian lifestyles and role relationships, especially as foreign MNE that establish operations in India’s previously “closed economy” affect Indian tradition and culture. To comprehend hybridity as a concept of cultural mixing and, with respect to Indian management, as the product of interplay between indigenous and global influences, it is helpful to consider the debate that has traditionally lived around theories of “convergence” versus “divergence”. Convergence theorists have argued that the dominance of Western input in the global economy causes indigenous players to adopt Western values and practices (e.g. Child, 1981; Weber, 1958). Contrasting, divergence theorists have suggested that certain powerful features of an indigenous culture are likely to remain despite the forces of homogenization (e.g. Hofstede, 1980; Laurent, 1983). Both viewpoints have received support from empirical studies (e.g. Chatterjee & Pearson, 2000b; Khanna & Palepu, 2004). In this light, hybridization theory can be considered a more holistic and contemporary perspective that accounts for both societal and globalization effects.
Thus far, studies that discuss the hybridization of the Indian firm have documented how the rise of globalization has induced a shift from a principally Indian management culture to one comprised of both Indian and international features (e.g. Chatterjee & Pearson, 2000a; Davis et al., 2006; Gopalan & Stahl, 1998; Gopinath, 1998; Kakar et al., 2002; Neelankavil et al., 2000). Hybrid firms have been argued to be the dominant type of firm in India today, prevailing over Western industrialized firms (including both the successors of the British managed firms and subsidiaries of large Western MNE) and indigenous firms (constituting the bulk of small to medium companies that operate in the agriculture, manufacturing and service sectors) (Kakar et
al., 2002). They are described as a transformation of the large, private, family owned
companies that traditionally dominated the Indian business community. As these firms grew and became involved in joint ventures with Western multinationals, so grew the need to move away from their traditional culture in order to professionalize certain structural aspects. As a result of this partial professionalization, the hybridity of these firms reflects a conjunction of heterogeneous elements of both Indian and Western culture (Garg & Parikh, 1995). For example, top management has often received their management education at well-known Western institutions while, at the same time, these top leadership positions are still occupied by the owner’s family’s members, especially that of the CEO. Chatterjee & Pearson (2000a) found that traditional Indian values are increasingly giving way to more “global” value archetypes. When looking for instance at the composition of mid- and high-level employees in such firms, most now come from upper and middle classes of urban India rather than belonging to the traditional owners’ business community, and have enjoyed education at institutions which have significantly exposed them to Western management values (Boer & van Deventer, 1989). However, despite the increasing integration with the global economy and the associated shift in social background for managerial employees, some suggest that Indian managers may be less westernized than one would expect given the circumstances (e.g. Kakar et al., 2002; Sinha, 1995). Indian culture, these scholars argue, continues to have a pervasive influence on the conduct of business and the perceptions of managers, especially with regard to the perception of leadership and authority. Sinha (1995) stated that the westernization of Indian managers is a mere surface phenomenon that does not change their core personality. A related concept corresponding to this conviction entails the presumed coexistence of multiple modes of behavior rooted in either Indian or Western approaches. For example, Neelankavil et al. (2000) suggest that Indian management culture has evolved into a hybrid approach that consists of a primary mode of behavior supported by the traditional Indian system, as well as a secondary mode driven by Western influences. Comparably, Sinha (2002) provides a cultural framework that describes both primary and secondary modes of value expression; primary modes are supposedly grounded in traditional Indian culture while secondary modes are brought about by the subjection to Western management concepts. The supposed existence of dual behavioral modes can be considered a cultural consequence of partial transferability of Western management
concepts to the Indian business environment. According to Gopalan & Stahl (1998), who studied the transferability of American management concepts to India, the increased acquaintance with Western education, the Internet, and the English language is causing Indian managers to develop a hybrid approach to management that combines indigenous and Western approaches. Some Indian values, such as loyalty and idealization of leaders, are argued to persist despite the Western imperative because they foster effective business relationships, while others, such as preferential hiring, are expected to disappear in favor of Western methods.
To summarize, in an effort to describe the post-liberalization development of Indian management practices, the majority of academic texts has used the notion of hybridization to describe the outcome of the Indian reaction to globalization. As Davis et
al. sum up this general disposition in management literature: “it is reasonable to suggest
that India is moving towards developing a unique hybrid form of management that seeks to remain grounded in selected “traditional” patterns of behavior, while embracing many of the best practices of global management systems”(2006, p. 12). Hybrid firms are thus expected to have mixed management styles; some functions may be predominantly Western while others may rely more on traditional methods.
A Historical Perspective on Indian Management Hybridity
While the contemporary form of hybridization in the Indian firm as a reaction to globalization is undoubtedly real, there is a certain historical form of hybridity, the presence of which is commonly neglected. This historical form of hybridity stems from Indian history in general and colonial institutions in particular. While India has a history of foreign invasion, ranging from the Aryans during 1500-1200 BC, to Alexander the Great in 325 BC, Genghis Kahn in 1221 AD, and the Moguls in the fifteenth century (Budhwar et al., 2011), it is predominantly the period under British ruling that has left a discernible imprint of hybridity on Indian society. Contemporary Indian management practices basically evolved from the British system prior to decolonization and took on a similar shape in terms of management agency systems thereafter (e.g., Bhagwati & Desai, 1970; Jones, 1989). The notion of hybridity as a natural outcome of colonialism has been
extensively documented in postcolonial discourse, to which hybrid talk as a rhetoric on the mixing of cultures owes a large part of its existence. However, while postcolonial theory has traditionally been concerned with challenging cultural imperialism (the domination of one culture over another) and the conceptualization of hybridity herein primarily with stressing the residual effects of colonialism in terms of the inability of the colonized to express their indigenous authenticity, this paper does not care about such a purpose of hybridity. Rather, the goal here is to show that certain elements of colonial hybridity affect the working of what recent literature has labeled the contemporary Indian hybrid firm.
To understand the impact of colonial hybridity on the Indian firm, an institutional approach is instrumental. While institutional perspectives have actively theorized the social embeddedness of organizational practices, it is only marginally that scholars have started to apply institutional thought to describe patterns of hybridization. Moreover, rather than examining historical forms of hybridity, these studies have focused on hybridization in the sense of cross-national mixing of organizational forms and practices wherein firms from one country establish subsidiaries in another (e.g. Becker-Ritterspach, 2005; Saka, 2003; Sharpe, 2006).
Generally speaking, the Indian institutional environment is in many ways a clear reflection of British tradition, as is demonstrated in many of its constitutional and administrative matters (Basu, 1998; Jones, 1989). These institutions shaped under the colonial rule are necessarily hybrid institutions, exhibiting both British and Indian elements. Given the high degree of regional variation in India, it is difficult to draw out one exhaustive set of institutional factors that causes hybridity. Nonetheless, certain institutions have proved to be strong determinants of the modern Indian work environment. One factor of considerable influence concerns the country's educational and vocational set-up. Largely founded during British colonialism (Thete, 1999), the Indian educational and vocational training system has been characterized as discontinuous and compartmentalized (Becker-Ritterspach, 2005). These two properties are very much related. The Indian vocational training system broadly comprises three separate levels, the lowest one consisting of skilled worker training, usually taught at Industrial Training Institutes (ITI). The second level involves technical programs taught
at the so-called Polytechnics which produce technical engineers commonly known as diploma holders, while the highest level constitutes graduate and post-graduate education in engineering and technology, taught for instance at the much respected Indian Institutes of Technology (IIT). The vertical discontinuity residing in the system results both from the sharp differences in practical and theoretical training among these levels and the financial aptitude required for the higher ones, making upward development, while theoretically possible, a practical rarity. It is important to acknowledge that such a system surely contributes to maintaining a degree of socio-economic disjunction among groups of Indian residents. While Indian society, embodying its own culture and value system, may determine what is nowadays expected of educational institutions, it is still the colonial institution of education that arguably shapes the social order of people.
Education, however, is not a sole actor. A reinforcing institution that deserves mentioning is the Indian system of caste which, although officially abolished, is still causing significant stratification at the socio-economic front (Desai & Kulkarni, 2008). While caste has quite widely been considered a typical remainder of ancient India, several recent scholars have argued caste as a rigid system of social strata to be a colonial construction of British administrators who sought to relate the original Indian caste system to their own class system, regarding caste as a useful indicator of occupation and social status (Cohn, 1996; Dirks, 2001). Prior to the British arrival, castes did not constitute such a rigid description of occupation or social status and their relative ranking differed across regions.
A third institutional dimension of broad influence constitutes the Indian system of employment relations. During the process of decolonization, the Indian government expanded on British colonial labor institutions in order to construct a system of industrial relations that aimed to minimize industrial conflicts in the interest of economic development (Kuruvilla & Erickson, 2002). The abundance of protective labor legislation installed included detailed laws on safety and health, dismissals and layoffs and industrial disputes (Ibid). One particularly influential embodiment of this strategy concerns the Industrial Disputes Act, originally approved in 1947, just before the British retreat. The Industrial Disputes Act can be seen as a direct legacy of British government acting during the Second World War (Kazi & Townsend, 2001). In order to assure a stable production
of military supplies, the British found it in their best interest to convert all power of employment and dispute resolution to government hands. Accordingly, the Defense of India Rules in place at that time were amended along with the introduction of several new provisions to ensure that distress pertaining to industrial employment was avoided at all cost (Ibid). The Industrial Disputes Act that followed after decolonization was a straight copy of these laws, meaning that what initially started as a mere political measure became the foundation for Indian employment relations for an indefinite period of independence. While such a critical aspect of industrial relations touches all of India, it should be noted that there is much regional variation in the system of Indian industrial relations, even to the extent that it could be considered inappropriate to think of one “national” Indian industrial relations system (Bhattacharjee, 2001).
Some Empirical Examples
This section presents several empirical examples that serve to illustrate the two forms of hybridization described in the previous sections. Since extant research has largely considered the Indian hybrid firm to be a product of globalization, i.e., the result of blending traditional Indian standards with the contemporary global imperative, there are sufficient archival examples available for this contemporary form of hybridity. Contrasting, historical hybridity in the Indian firm has not been well documented. Consequently, the examples hereof were taken from recent interview data collected from two large firms in the Indian automobile industry. These case firms have distinct characteristics of what recent literature would describe as a hybrid firm, blending both traditional Indian elements of behavior and a selection of global best management practices. The following is a description of two examples of contemporary hybridity, followed by two examples of historical hybridity, along with an illustration of their impact. The examples show that in addition to the contemporary form of hybridity, involving a selective adoption of global management practices together with a persistence of certain Indian traditions, colonial institutions bring into being an inevitable dimension of historical hybridity that affects the day-to-day workings in firms as well as the implementation of new practices.
Contemporary Hybridity in the Indian Firm
Career Management Practices
Baruch & Budhwar (2003, 2006) studied the development of career management practices in 108 Indian organizations. They were among the first to gather empirical evidence on career planning practices in organizations from developing countries by testing the applicability of career planning activities typically covered in Western academic literature in the Indian business context. The practices under study fell into five groups: formal planning, formal active management, developmental, career stages and assessment. Their results indicated a hybridization of career planning practices involving a selective adoption of certain practices due to the active interaction of diverse groups caused by globalization. In a comparison with a British sample of organizations, they uncovered that Indian organizations mostly relied on performance appraisal as a basis for other career management activities such as career planning, succession planning, formal education/tuition reimbursement, and horizontal job movement. In addition, assessment centers were found to function more prominently in Indian organizations, while other techniques like peer reviewing remained underused. According to the authors, plausible explanations for this hybridity included the facts that a large number of Indian managers received their training either in the West or by the use of Western management tools (e.g. text books), or that many Western MNE have entered India after the liberalization, enabling Indian firms to learn from their foreign counterparts. While this may have caused the adoption of certain practices, the complex cultural context of India, which is argued to strongly influence human resource policies (Budhwar & Sparrow, 1998), may have prevented the adoption of others.
A Managerial Approach to Ethics
Chatterjee & Pearson (2000a) sought to improve our understanding of the extent to which Indian social and organizational value orientations have changed during the time of
economic liberalization and globalization of corporate philosophies. Examining the perceptions of 421 senior level managers in Indian organizations, they found evidence indicating the emergence of a distinct hybrid managerial approach to ethics that combined both indigenous traditions and global parameters. This hybrid approach materialized into an increasing feeling of ethical dilemma among managers caused by the growing importance of global value paradigms. On the one hand, a general consensus existed among managers in terms of organizational ethics, while, on the other hand, a certain tendency remained to resort to traditional patterns of action at the individual level. Although the influence of pervasive traditions was found to remain at the background, the authors distinguished a growing importance of non-financial work goals such as quality, learning, teamwork and customer service, indicating a certain dislocation of traditional goals regarding pay and working conditions in favor of a paradigm more in line with contemporary global managerial approaches. The ability of the managerial elite to reconcile the role of indigenous tradition with the localization of global practices in a unique hybrid way contrasted some conservative views advocating that the post-globalization world would create irreconcilable conflicts between dominant global imperatives and local cultures.
Historical Hybridity in the Indian Firm
The Social Segregation of Employees
One persistent example of historical hybridity resulting from colonial institutions concerns the segregation between blue-collar and white-collar employees. Blue-collar employees are members of the working class who typically perform manual labor and earn an hourly wage, while white-collar employees perform clerical or sitting jobs, including supervisory or management positions. Despite corporate efforts to reduce the gap between blue-collar and white-collar (e.g. by reducing bias in the selection of employees for certain positions), a degree of social demarcation between different employee categories is still maintained by both the Indian vocational training system and the institute of caste (D'Costa, 2003). While the vocational training system, intermittent
and categorically divided as it is, often impedes blue-collar workers to enjoy higher education and grow into white-collar jobs, the obstinate connotation of caste conserves the general socio-economic stratification that prevents certain groups to develop higher standards of wealth and education.
To illustrate the practical impact of this historical hybridity, consider the implementation of a performance measurement system for blue-collar employees. For white-collar employees, such a system that focused on creating alignment between individual employees' aspirations and the organizational strategy included a clear development perspective. The system also entailed several reward systems, both tangible and intangible; tangible rewards included cash awards, either in terms of salary or increments, while intangible rewards included more subtle methods, ranging from typical pads on the back, to appreciation letters, recognition forms and appreciation walls. By contrast, the performance measurement system for blue-collar employees was structured in a completely different way, encompassing an approach aimed more at daily output targets, including team goals on a day-to-day basis. Unlike the performance measurement system in place for white-collar employees, the blue-collar system provided no scope for career development whatsoever, maintaining their professional disadvantage.
The Inertia of Labor Relations
A second example of historical hybridity concerns the arduous implementation of human resource practices within the contemporary Indian firm due to the inertia of Indian employment relations. According to Kuruvilla & Hiers (1997), the persistence of old practices due to institutional inertia restrains an optimal adoption of many international best practices such as variable compensation, job enrichment, and job rotation.
To illustrate the practical impact of this type of historical hybridity, consider the case of a recently introduced career planning initiative for laborers, prior to which career planning activities were in place only for employees in a management position. Rather than providing these employees with opportunities for vertical mobility within the company's ranks, the career planning initiative entailed the introduction of so-called multi-skilling systems. This multi-skilling initiative involved a horizontal expansion of
the employees' skill capacity, allowing them to learn up to several trades. According to the interviewed human resource manager, an important reason for introducing this multi-skilling system related to the process for laying off employees, which is very difficult in the Indian business context. In the words of the respondent: it is better to have a surplus in skills, than a surplus in manpower. These lay-off problems can be considered a clear reflection of the Indian construction of labor law. The Industrial Disputes Act (1947) allows employers to lay off employees only temporarily, with compensation up to 180 days and under the requirement of governmental permission which has historically rarely been granted because of the close ties between unions and political parties (Ali, 2005). In 1976, the act was amended so that organizations employing 300 or more workers must get government permission to retrench employees, and in 1982 this was lowered even further to 100 or more employees (SAAT, 1996).
Discussion
Contributions
Thus far this paper has:
(1) suggested that the Indian firm is shaped by two forms of hybridity: contemporary hybridity corresponding with the course of globalization and historical hybridity stemming from colonialism;
(2) argued that an institutional perspective is instrumental to understanding which aspects of the Indian firm are prone to historical hybridity; and
(3) outlined several empirical illustrations that exemplify the presence of both historical and global factors in shaping hybridity in the modern Indian firm.
Two main contributions come forth. First, within the specific context of Indian management, this paper shows that while many consider the hybridization of Indian
management as a process of blending traditional Indian standards with the contemporary global imperative, the concurrence of such modern hybridity along with a distinct historical hybridity implies that Indian management is actually hybrid by definition, possessing an intrinsic hybridity brought about by the imprint of history. Following this, any literary conception of post-liberalization hybridization in India up until now has failed to take into account this intrinsic hybridity that is associated with postcoloniality. The British inspired Indian institutional environment and its profound impact on management practices have induced a continuous process of amalgamation of a wide and enduring extent.
Second, in a broader theoretical sense, the paper underlines the importance of historical legacy for the modern workings of management in postcolonial contexts. The idea that institutions matter is nothing new, as scholars have long been stressing their role in shaping organizational environments. However, although scholars have expressed the importance of historical institutions for the economic development and development policy of former colonies (e.g. Bayly, 2008; Woolcock et al., 2009), their impact on these countries' management conduct is yet to receive much attention and, as such, poses an interesting avenue for future research.
Theoretical Considerations
Having said all this, a number of theoretical issues come to mind. A first concern that deserves scrutiny relates to the theoretical position that hybridity theory has historically taken in postcolonial literature. Taking into account the historical development of hybridity as a concept of cultural mixing, and particularly its position as an anti-essentialism discourse, literature on the transition of Indian management has employed remarkably essentialist notions of Indian traditions and culture. By accounting only for the contemporary, globalization-driven form of hybridization, both the Indian and the international scholar have implicitly assumed that there was once something of a purely Indian managerial approach. In this context, it seems, hybridization theory has been applied completely in line with those scholars who position hybridization literally as a synonym for the cultural effect of globalization. Although it is not uncommon for
decolonized states to adopt essentialist cultural positions in search of cultural authenticity (Ashcroft et al., 2000), and quite understandable for notions of Indian management hybridization to be formed in line with the current scholarly trend, it still evokes a sense of inadequacy when the theory is applied to that exact context in which it developed its anti-essentialist character, namely that of the postcolonial. To expand on this issue, consider the condition of intrinsic hybridity arguably following from the impact of colonial institutions. If the Indian management culture is inherently hybrid, then how are we to describe the current transitional process? If we, conform to extant studies on the transition of Indian management, are to keep documenting the hybridization of something that is arguably hybrid to begin with, we contribute to a confusing discussion that is perhaps even semantically nonsensical. The central question thereupon would be how to treat the theoretical concept of hybridity in a way that sensitizes it to its respective (postcolonial) context. Within the context of India, the academic challenge would boil down to developing a more comprehensive approach to describing patterns of hybridization that incorporates both historical and contemporary forms without resorting to idiosyncratic constructions that overshoot their explanatory purpose.
In the wider context of indigenous management research, the notion of intrinsic hybridity raises the question of how to define the indigenous. When something is hybrid by definition, holding no elements that are really fundamental, then how do we pinpoint the original? If we are indeed to define indigenous as that which is utterly native, classifying what is indigenous and what is not becomes inevitably problematic since most matter can ultimately be traced to stem from somewhere else, especially in postcolonial scenarios like India. Along this line of thinking, one could even wonder whether there is an Indian culture at all (Ramanujan, 1990). Regardless of the answer to this question, the problem with defining the indigenous as it stands is arguably that indigeneity as a theoretical concept is unreceptive to the dynamic process that culture really is. Ironically, it is its somewhat essentialist construction that troubles it. A better conceptualization of indigeneity should thus give some acknowledgment of the dynamic nature of Indian culture. This is particularly true for Indian management culture which, among all of India’s cultural faces, is arguably the most exposed to forces of modernization and globalization and therefore to processes of cultural transition (Kakar et al. 2002). Despite
its theoretically contested position, that is, the fact that even the concept of hybridity itself evokes the myth of pure indigenous cultures existing prior to hybridization, hybridity provides recognition of the fluid substance that culture is, making it perhaps the finer concept of the two when it comes to describing it.
Practical Implications
While an institutional perspective with a strong focus on the resilience of social structures lends itself to an examination of historical hybridity, it also allows for a discussion of the practical implications of dual hybridity (contemporary and historical) for both the constitution of India's current management culture and the potential scope of its future development. In line with previous work (e.g. Budhwar and Sparrow, 2002), this paper has shown that Indian socio-cultural and institutional factors determine the practical applicability of management practices for a specific context, implying that there is variation in the transferability of certain global organizational forms. In terms of practical benefits, this suggests that a better grasp of the institutional embeddedness of management practices can help Indian firms understand the true potential of whatever selection of global management practices they plan to adopt. This benefit may also apply to foreign entrants that are in the process of transferring some of their own organizational practices.
Recent scholars have argued that post-liberalization changes in India's political, legal, and societal institutions have played an important part in shaping firm strategy (Peng et al., 2008). While the assumption that institutional change may facilitate positive firm developments indicates the importance of institutions for today's management conduct, it also confirms that institutional inertia may have an impeding or detrimental effect on its further development. In this respect, it is important to remember that while general economic growth is somewhat of a natural process, realizing enduring social development requires active intervention. Although the immense lag in welfare that surfaced right after decolonization fully explains India's initial inclination to simply follow the West, such a strategy aimed solely at material growth ignores the socio-cultural dimension of societal development (Singhal & Tiwari, 2009).
Conclusion
Overall, this paper has shown that the contemporary Indian hybrid firm as it is described in recent literature is shaped by more than just globalization. While the global imperative pushes the Indian firm to blend traditional methods with global standards through a selective adoption of best practices, historical hybridity involves an institution-based impact of colonial legacy on the day-to-day workings in firms as well as the implementation of new practices. Several illustrations have exemplified both forms of hybridization. Despite all effort, this paper only sheds a preliminary light on the exact workings of historical and global factors in shaping the modern firm. Further research could attempt to draw a more comprehensive picture of the way these factors behave and interact. To say the least, history and globalization seem to have led Indian management into following a distinctly Indian way that affects and patterns all things that enter it, forming a unique system that comprises both historical remnants and modern Western organizational practices.
This paper has also posed the question of how to define the indigenous. While an inherent ambiguity of the concept generally applies, it is especially in postcolonial environments that determining what is really indigenous becomes problematic as many of the domestic conditions can somehow be related to the influence of colonialism. In these contexts, its power as a descriptive cultural tool should not be overvalued.
Finally, the paper has addressed a development issue associated with institutional inertia. Despite its excessive growth in macro-economic terms, India should keep up all efforts to stimulate the socio-economic development of its people. Indeed, a mismanagement of human resources has been argued to contribute to India's inability to realize its true potential in the international domain (Tayeb, 1996). Transformational institutional change is arguably a prerequisite for achieving expedient social development. This is no novel remark, as scholars have addressed the need for long-term institution building to bring about real change (e.g. Virmani, 2005). Positioned at the crossroad of Indian institutional heritage and global competition, the Indian MNE possesses perhaps the best resources to induce such change.
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