Understanding the Corporate Mindset that Lands Indian Companies in U.S. Hot Water

It’s difficult for a lot of us Americans to wrap our heads around the corporate mindset underlying the fact that Indian IT services providers so frequently engage in activities that get them into legal hot water in the United States. A recent discussion in the Indian media sheds a helpful light on that phenomenon.

A Feb. 7 report on India’s Economic Times website indirectly quoted Sivaramakrishnan Balasubramanian, an India-based senior consultant with the global management consulting firm Hay Group, who said, as paraphrased in the report, “The ‘Indian-ness’ among the IT companies in terms of their attitude towards processes and the habit of reacting after trouble crops up rather than proactively working on compliance is beginning to change as they learn from mistakes.”

The Indian cultural phenomenon of a lax approach to standardized processes was cited by several Indian readers who posted comments on the report. One in particular drew my attention:

“Again, the Indian ‘Chalta [hai]’ and ‘Jugaad’ habits are the culprits. When will we Indians understand and realise the importance of systems, procedures and methods?”

Understanding those cultural references might help us Americans understand the Indian corporate mindset underlying the activities that have led to the legal problems that Indian companies have been facing in this country. Here’s an explanation of chalta hai:

In Hindi, chalta hai literally means “it goes” and is often used as shorthand for a certain careless approach to life and flexible attitude to rules which many Indians think characterizes their country’s collective psyche. Opinion there is sharply divided as to whether this supposed chalta hai mindset is a charming idiosyncrasy that makes India the diverse and exciting place it is, or a cultural millstone that keeps the nation from performing to its potential on the world stage.

And here’s an explanation of jugaad:

Jugaad (also sometimes jugard) is a term applied to a creative idea providing a quick, alternative way of solving or fixing a problem. Jugaad literally means an improvised arrangement or workaround, which has to be used because of lack of resources. As such, the jugaad movement has gathered a community of enthusiasts, believing it to be the proof of Indian bubbling creativity, or a cost-effective way to solve the issues of everyday life. It is commonly used when describing a workaround to get through commercial, logistical, or legal issues. Sometimes, jugaad may refer to an idea from which a person can control his or her budget, or from which they may acquire luxuries through illegal means, such as the theft of electricity, gas, etc.

The thrust of the reader commentary suggested that these realities are so entrenched in the Indian culture that even the country’s multinational companies are deeply influenced by them. But there is, no doubt, a positive dimension to the fact that Indian IT companies have found themselves in so much hot legal water in the United States in recent years: It’s that these companies are being compelled to finally standardize and monitor their processes to ensure they conform to international business norms, and that they’re compliant with the laws and regulations of the countries in which they operate.