South Asia: Managing your international sales force.

This post is going to focus on the most successful country in the region which belongs to the so called BRIC group. Yes, it’s India and its fast growing economy.

The first part of this post is going to be the relation of the management styles and the cultural features of a country. The second part is the answer to the proposed question about India as well.


For this first part I will recur to the document titled “Leadership Behavior and Organizational Commitment: A Comparative Study of American and Indian Salespersons” written by Agarwal et al. 1999, which most important feature is the inclusion of a model to analyze the impact of the leadership styles in the performance of a company’s sales force.

In order to explain the results of the study it is necessary to elaborate a little bit on the concepts the authors use. As variables for the investigation the authors used the:

• Organizational Commitment: “degree to which an employee exhibits (a) a strong belief in, and acceptance of, the organizations' goals and values; and (b) a willingness to exert considerable effort on behalf of the organization”[Agarwal et al. 1999]
• Leadership Behaviors: these are two; “Consideration [is] the degree to which managers develop a work climate that promotes (…) trust and respect for subordinates' ideas and feelings (…) [and] Initiation of structure [is the] degree to which managers define the roles of their subordinates”[Agarwal et al. 1999]
• Role Stress: “(....) lack of role clarity (…) [and] conflicting demands from different constituents” [Agarwal et al. 1999]
• National Culture: this is focused on Hofstede’s Cultural Dimensions, specifically the Power distance (PDI) and the Individualism (IDV), the comparison is shown in the image below for India and the United States. Then the cultures of the countries are classified in two grops: High power distance/Low individualism (HPD/LI) or Low power distance/ High individualism (LPD/HI).

Taken from: Hofstede, n.d.

With the previous concept the authors draw a conceptual model which links managerial attitudes with the cultural responses and they tested it in India and the United States’ sales persons. The results are synthesized in the following chart:

Own creation with information from: Vijaya et al. 2007.

The next part of the post is about answering the proposed question for this topic: What do you think are the reasons behind the fast-growth outsourcing industry in India?

In order to answer this question I will turn to the book “The world is flat” written by Thomas Friedman from which I will extract some quotes in order to set the points that I consider the most important factors as well as the author, and finally will proceed to compare these factors with CAMS the case exposed in Vijaya et al. 2007.

“What does characterize the history of contemporary India? (…) That is really efficient in one thing: exploiting the talent of its people.” (Friedman, 2008)

This means that the decision of India to provide highly qualified education in Technologies has paid off, since this made possible for the regions such as Bangalore to provide professional services. This education that the Indian State granted was good enough so the people who go there could be literally exported to the US, more precisely to Silicon Valley, so they could open a communication channel with the western world which is currently propelled by the use of the information technologies and the low cost communications which are the indirect result of the dotcom crisis. Add to this that most Indians speak English and there is the perfect combination for service exports.

“(…) sent their books to India paying a monthly salary of 50 dollars (faced with the 1.000 dollars it had to pay in monthly salaries in the U.S.A.)” (Friedman, 2008)

The low costs of labor is the main factor driving the outsource growth in India, in the competitive world we live in is important to maximize the value the shareholders and one of the ways a company can do this is “by doing more with less” [Amat, 2002]. Thus India is a place where companies can make really important cuts on their costs, take for instance the quotation above this particular company is saving 950 dollars in monthly salaries.

“Any service, any call center, any support operation and any task related with the information technologies that can be digitalized is susceptible of being outsourced” (Friedman, 2008)

So basically what Mr. Friedman is telling us is that anything different from the core activities of a company can be outsourced, so the Indian economy can receive all sorts of activities and from many different fields.

So how can apply this to CAMS? Let’s check one by one the aspects I’ve pointed out hereinabove:

• Education: CAMS is an organization that is often encouraging its employees to acquire new skills and is very often interested in learning. Checked.
• Low Cost: In India salaries are significantly lower than in the rest of the western world, even with the bonuses they give to their employees. Checked.
• Any service: specialized in trust funds with a wide portfolio. Checked.

For further references check:
Agarwal, Sanjeev, Thomas E DeCarlo, Shyam B. Vyas, & Source:. 1999. Leadership Behavior and Organizational Commitment: A Comparative Study of American and Indian Salespersons. Journal of International Business Studies, 30(4): 727-43.
Amat, O. (2002). EVA - Valor Económico Agregado. Bogota: Edited by Editorial Norma
Central Intelligence Agency - CIA. (n.d.). South Asia. Retrieved April 19, 2010, from World Factbook: https://www.cia.gov/library/publications/the-world-factbook/region/region_sas.html
Friedman, T. (2008). The world is flat - La tierra es plana. Bogotá: Planeta.
Hofstede, G. (n.d.). Country Scores. Retrieved April 19, 2010, from Itim International: http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=42#compare
Vijaya, T.G., D`Netto, Brian and España, Juan. 2007. HR Challenges at Computer Age Management Services (P) Ltd. The Management Case Study Journal 7 (2): 41-51.