Decision-Making in the Global Economy * India * Did You Know. Overview of Information Barn

Transcription

1 Decision-Making in the Global Economy * India * Michelle Beck Christine DiClaudio Lindsey Malpass Priya Khivansara Did You Know The IT sector is India s fastest growing sector with over 50% average annual compounded growth since Today, nearly two in five Fortune 500 companies outsource their software requirements to India. Overview of Information Barn Revenue: $96.3 billion Net income: $8.4 billion Total assets: $ billion Number of employees: 329,001 Areas of the Business: Business Consulting IT services Software products Hardware products Financing Solution packages

2 Quality & Cost of Labor Quality and Availability of Labor Population: 1,065,070,607 (July 2004) Age Structure: 0-14 years: 31.7% years: 63.5% 65 years over: 4.8% Life Expectancy: years Labor Force : 472 million Literacy 59.5% Software Niche Large population of English speaking, highly educated software experts Cost of Labor $0.50 to $1.00 per hour Economic Factors 1. Fifth largest economy in terms of purchasing power. 2. Large and expanding consumer market. 3. Liberal foreign investment regime providing easy entry and establishment. 4. Monetary and fiscal policies support economic growth with price stability. 5. Well-established science and technology base in India. Third largest scientific and technical manpower in the world. 6. Competitive labor force. 7. Second largest exporter of software, and home to software development centers of major international software companies. Over 200 of the Fortune 1000 companies use Indian software/services software professionals. Industrial Relations Climate Unionization: 2% of the total workforce is unionized Governing Bodies: Federal Republic with separation of powers into executive, legislative, and judicial branches Labor Relations Climate: U.S. investors generally provide Indian workers with better working conditions. Workers Rights: The Right to Association The Right to Organize and Bargain Collectively Prohibition of Forced or Compulsory Labor Minimum Age for Employment of Children Acceptable Conditions of Work

3 Cultural Differences Impede Operation Confusion and lack of clarity Lack of trust Unclear or inadequate communication Less productivity **Solution: Multi Cultural Training Facilitate Operation Language 24-hour development cycle Diversity...will be the engine that drives...the corporation of the 21st Century. Stephen H. Rhinesmith, A Manager's Guide to Globalization Other Relevant Factors Child Labor Largest number of child workers in the world Patents and Copyright Protection: Widespread piracy No protection of trade secrets Weak Judicial system Other Relevant Factors Labor Backlash Perceptions of American Consumers Perceptions of American Workers Affects on Indian Workers HOT TOPIC

4 Other Relevant Factors Time Differentials India is 10.5 hours ahead of Eastern Standard time. 3 pm it was 12:30 am in India. Security Concerns and Risks Data and physical security IT Firms targeted by Terrorists Formal & Informal Constraints Formal Trade Barriers Formal labor policies* Civil Service Procedures* Informal Cultural differences* Infrastructure Labor backlash* Security Concerns and Risks* * Previously discussed Can India Meet Information Barns Needs? Advantages Low labor costs Ease of entry Software niche Booming economy Off shoring trends Large labor supply Disadvantages Trade barriers Labor backlash Security risks Weak judicial system Copyright protection Infrastructure Civil service Procedures

5 Final Decision Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the U.S.A. or the European Union, provide India with a distinct cutting edge in global competition. Discover India: Complete References 1. CNET News.com (Accessed: April 17, 2005) How India is Handling International Backlash, 5/6/04. ( 2. CRM Buyer (Accessed: April 10, 2005) Terrorists Target Indian Offshoring Firms, 3/8/05 ( 3. Cultural Savvy (Accessed: April 18, 2005) India ( 4. Department of the State (Accessed: April 14, 2005) 1998 Country Report on Economic Policy and Trade Practices: India ( 5. Hindustan Times (March 31, 2005) US Accused India of Erecting Trade Blocks. TV Parasuram ( 6. HyTech Professionals (Accessed: April 18, 2005) Software Outsourcing Company ( 7. IBM (Accessed: April 15, 2005) IBM Financial Information: Consolidated Statement of Earnings. ( 8. Indian Embassy Seoul (Accessed April 15, 2005)The Indian Economy ( 9. Ministry of Economy, Trade and Industry: Japan (Accessed: April 17, 2005) Barriers to Business in India ( to Business in India.pdf) 10. Outsourcing Pipeline (Accessed: April 17, 2005) The Lure of Offshore, 4/9/2004. ( 11. Outsourcing to India (Accessed: April 15, 2005) Wage Comparison Data ( ) 12. The Central Intelligence Agency (Accessed: April 10, 2005) The World Factbook: India. ( 13. The Central Intelligence Agency (Accessed: April 10, 2005) The World Factbook: The United States ( 14. US Department of Labor: Bureau of International Labor Affairs (Accessed: April 15, 2005) India. ( 15. US Department of State (Accessed: April 17, 2005) 1998 Country Report on Economic Policy and Trade Practices: India ( 16. US Department of State (Accessed: April 17, 2005) India. ( 17. Wikipedia (Accessed: April 17, 2005) Federal Republic (