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Flexibility key to success for New Zealand firms in India

23 May 2012

Flexibility key to success for New Zealand firms in India – report

A new report on business culture in India provides vital insights for New Zealand firms wanting to tap into one of the world’s fastest-growing economies.

The Asia New Zealand Foundation’s Getting to Know Indian Businesses report highlights the huge potential for companies wanting to engage with India – but also identifies challenges in dealing with India’s regulatory environment and distinctive business culture.

Author Val Lindsay, Associate Professor in International Business at Victoria University of Wellington, says New Zealand managers must invest time and effort in understanding India’s business culture, and be flexible about adapting their products, services and pricing.

India was ranked 134th out of 184 countries in the World Bank’s 2011 Ease of Doing Business report, while New Zealand was ranked third. “That is a stark difference that comes about primarily because of that regulatory environment,” Dr Lindsay says in an audio interview accompanying the report.

India is New Zealand’s seventh-largest export market and the subject of ongoing Free Trade Agreement negotiations. Prime Minister John Key launched the Government’s Opening Doors to India strategy in October, setting out six goals that include growing merchandise exports to $2 billion by 2015.

Getting to Know Indian Businesses draws on the experiences of 14 New Zealand managers operating in India, and 14 of their Indian counterparts. They provide a range of insights into doing business in India, including the need for face-to-face communication and the importance of using local contacts to help navigate the bureaucracy.

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In the report, New Zealand email security firm SMX says one of the biggest differences is the style of meetings. “Everybody’s got about two phones ringing at the same time. There are people walking in and out of the office all the time. Messengers bringing papers on the desk which are signed and then sent off again in the middle of the meeting.”

Asia New Zealand Foundation director of business James Penn says the report provides a useful framework for New Zealand businesses wanting to engage with India, so they can anticipate the challenges they may encounter.

“Managers will need to adopt a more flexible approach when operating in Indian markets than they are perhaps used to, and will need to demonstrate cultural awareness. Established disciplines and sources of competitive advantage are only going to be part of the equation for successful outcomes.”

Dr Lindsay says some New Zealand firms have already been “extremely successful” in India, including SMX, Gallagher Group and Vista Entertainment Solutions.

There is also “huge potential” for New Zealand firms to tackle India in a more coordinated way, she says, pointing to the successful approach taken by Aviation New Zealand.

“One of the key things about the Indian market is the size and the need to meet the scale requirements. For New Zealand firms, the collaborative approach is clearly one that would provide a lot of potential.”

The report also identifies the value of building connections with Indian businesspeople in New Zealand. “The growing, well-educated and well-connected Indian diaspora in New Zealand provides a valuable resource for building sustainable businesses, as well as cultural and social links between the two countries,” it says.

Download the Getting to Know Indian Businesses report and listen to Asia New Zealand Foundation director of research Dr Andrew Butcher interview report author Dr Val Lindsay: http://www.asianz.org.nz/our-work/knowledge-and-research/outlook-series

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