by Ben Worthen

Globalization: A Passage to India

Mar 01, 20073 mins

One of the mantras reverberating through the halls of America’s universities is that business is global. But what does that really mean?

One of the mantras reverberating through the halls of America’s universities is that business is global. But what does that really mean? That’s what 25 MBA students from Babson College in Wellesley, Mass., set out to learn when they traveled to India in January. (Full disclosure: My wife was one of them and I traveled along.) On their two-week trip they met with business leaders and politicians, and even visited a Bollywood movie set.

“The world really is flatter,” says Jessica Yang, one of the students. One reality: Yang and an increasing number of U.S. managers will have to interact with employees, outsourcers or customers in India. These students gained communication skills and cultural insights. Such lessons included simple things like facial gestures that say “no” to Americans may mean nothing to Indians, and an understanding that many people in India are taught to say yes, not no.

Despite fiber-optic cable that lets work pass between countries in no time at all, the differences in daily life between India and the United States, the class learned, are vast.

For all the talk about India as a technology capital, the country itself is surprisingly low-tech. The airports are old, the big cities dusty, and cows wander around the streets, even in tech hubs like Bangalore. The latter makes the traffic—five lanes of scooters, cars, trucks and auto-rickshaws somehow squeezed onto a two-lane road—all the more harrowing. (Someone in the United States certainly wouldn’t want to gripe about his commute to a coworker in India, who typically commutes 90 minutes each way in this traffic maze.)

“It’s hard to know how a culture does business without actually knowing the culture,” says Jason Spaulding, who is working for IBM while finishing school.

While a largely rural voting base doesn’t approve public infrastructure projects like airports and roads, private infrastructure is another story, the class learned when meeting the India-based executives of a U.S. financial services company. The company, whose Indian headquarters are inside a modern glass building with desks and conference rooms that could be mistaken for any U.S. office, has been steadily shifting high-end IT and business analyst jobs to India.

The executives said it was easier to find the skills they needed in India, but the students weren’t biting. The skepticism only grew when they learned what the company paid to operate in India: about $6,800 a year in salary for an entry-level IT person and a little more than a dollar a square foot for rent in the brand-new office building.

After the meeting the students all seemed to agree that the cost arbitrage was the real reason the work was shifting—and one that would be impossible to ignore when they graduate. Those salaries, low by U.S. standards, are fueling India’s middle class.

“I feel like I came face-to-face with the reality of globalization,” Yang says.