August 2017JIBS Book Review

Conducting Business in China and India: A Comparative and Contextual Analysis

By: Deepak Sardana and Ying Zhu

Palgrave Macmillan, 20179781137547194

Reviewed By: S. Tamer Cavusgil

Georgia State University


The interest in Asian Business scholarship has been growing steadily and it is seeking to carve a niche for itself in the wider management and international business literature (Meyer, 2006). As this line of scholarship increasingly draws attention of a variety of scholars, there has been a systematic shift in scholarship. From an increasingly decontextualized research for the sake of generalization in the US and Western Europe, the shift now is towards context-driven and context-grounded research in the emerging market context, particularly within Asia (Meyer, 2007; Tsui, 2007).

Yet our understanding of business, social, and institutional context, and how they interact among themselves to shape the overall context in an Asian country is limited. I must hasten to add that while we have a general understanding on the institutional context and the resulting milieu in Asian countries, we lack depth and details in our understanding. With the political, business and academic interest peaking, and at an all-time high, for China and India, this is a timely and an important account on the business context of China and India.

Depending on one’s past experience, the two countries can either inspire extreme sense of euphoria or engender depression. Often these perceptions are borne by limitations in making a complete sense of the environment that is highly complex, opaque and competitive. The authors of the book empathise with people for finding it difficult to grasp the multifariousness of the context and offers to provide help by making the ‘context’ central to their analyses. By making context the focal point of their exposition and rendering, Sardana and Zhu take their audience in a fascinating journey that is systematic and analytical, but at the same time highly engaging. The readers develop more nuanced understanding on the context of these two vast Asian neighbours as they subsequently provide comparative accounts for every significant aspect that they discuss.

Sardana and Zhu initiate the discussion on the context by providing a chronological and fact based account of the economic reforms that China and India undertook. Despite socialism being the founding ideology for both China and India in 1940s, the nature and process of reforms over time in these two countries resulted in a vastly different context and society of present times.  The enumeration of economic reforms is complemented with the account of social impact that the reforms resulted in. This establishes a strong basis for the readers to understand the current developmental and business context within China and India.

It is argued in the book that the process of economic reforms in China and India that has resulted in the current business context was shaped by the social, historical, cultural and political context in the respective countries. Sardana and Zhu use colonial history, homogeneity and division within the society, extent of rebellious nature of the rural or peasant population, and influence of religious belief systems as some of the points to forcefully argue their viewpoint. Since social system is likely to impact the polity and governance, the authors make an effort to establish these relationships in China and India context. To say the least, their arguments are provocative, yet lucid and convincing.

The regulatory and institutional system play an important role in shaping the social context, while they themselves are shaped by society and culture. Perhaps, it is for this very reason that the authors put substantive amount of effort to discuss a variety of regulatory institutes in China and India, including market and economy, bureaucracy, judiciary, agencies to curb corruption, civic authorities and media. Seemingly dry narrative on the nature and purpose of these institutes becomes interesting as they provide several facts and examples to demonstrate functioning and outcome of these agencies. Complementing this is a lengthy discourse on the policy formulation and implementation.

From time to time, the authors also delight the audience by springing surprise by questioning perceptions that are widely prevalent across the globe about China and India. For example, the authors discuss ongoing experiments with democracy at the grassroots level in China and the support it receives from the leaders of the communist party who are ruling the country in an autocratic manner. Contrasting this is the case of India, widely acclaimed as the largest democracy in the world. Yet, the grassroots democracy and governance (i.e. panchayati raj institutions) is often sabotaged and stifled by the democratically elected state and central leaders for their own hegemonic interests. Doubts are raised on the true nature of democracy in India as the authors’ question several ills that have become deeply ingrained in the polity and election process.

Sardana and Zhu discuss extensively on the subject of corporate governance and business management in these two countries. Drawing on multiple examples and excerpts of senior managers who they interviewed, they make a forceful attempt to highlight the extensive nexus and syndication between business and polity in both the countries. However, the authors also point to the systemic changes that is happening within the institutions as part of regulatory transformations to bring corporate governance at par with the global standards and expectations.

In the same chapter, the authors advise practitioners to not treat China and India as one homogenous mass while establishing market context for their products and services in these countries. While it is easy to get lost in the hyperbole and excitement of entering fast growing emerging economies with large population, it will be more prudent to do a thorough research and be aware of the actual needs of the people, the cultural context that defines those needs and purchase decisions, and the extent of competition, often high in the two countries.  Often neglecting any of these aspects can result in an outcome that is less than appealing.

Relying on tell-tale experiences of senior managers of MNCs (some of who were expatriates), authors seems to paint a more balanced and realistic account of opportunities and challenges of living and functioning in either countries. From human resource and strategic perspectives, they highlight the need for the managers and decision managers in subsidiaries of MNCs to acquaint themselves to the local norms and idiosyncrasies (Paterson and Brock, 2002). There is also an interesting short note on the expatriate managers living in China and India and their perception on living there.

Finally, drawing on multiple perspectives, it is easy to see hope and promise in their concluding remarks on the direction of transformative progress. Their suggestions are targeted to make the society more equitable and just as the two nations seek to further grow and prosper. The concluding remarks thus has full potential to provoke several meaningful policy debates that will shape the business context.

This book serves as a practical guide for the readers to draw insights from, and then seek to develop more nuanced meaning for their specific observation. The readers are nudged to see inter-relationships between various features that contribute to the context, such as past history, culture, society, normative rules, polity and regulatory institutions. This dispassionate analysis of the context of China and India is thus a robust application of institutional theory (Mudambi and Navarra, 2002; Peng, Wang and Jiang, 2008). Scholars looking to anchor their research in China and/or India context will find this book useful.

 

 

References:

Meyer, K.E. 2006. Asian management research needs more self-confidence. Asia Pacific Journal of Management, 23(2): 119-137.

Meyer, K.E. 2007. Asian contexts and the search for general theory in management research: A rejoinder. Asia Pacific Journal of Management, 24(4): 527-534.

Mudambi, R. and Navarra, P. 2002. Institutions and international business: a theoretical overview. International Business Review, 11(6): 635-646.

Paterson, S.L. and Brock, D.M. 2002. The development of subsidiary-management research: review and theoretical analysis. International Business Review, 11(2): 139-163.

Peng, M.W., Wang, D.Y.L. and Jiang, Y. 2008. An institution-based view of international business strategy: a focus on emerging economies. Journal of International Business Studies, 39(5): 920-936.

Tsui, A.S. 2007. From homogenization to pluralism: International management research in the Academy and beyond. Academy of Management Journal, 55(6): 1353-1364.


Published at http://aib.msu.edu/JIBS/BookReviews/HTML/2017-01.html
Reviewed on: August 29, 2017
(c)2017 - Academy of International Business

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