Copyright © 2010-11 Hyrax International LLC, all rights reserved. Unauthorized reproduction prohibited.
Presented By
Bridg...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Bridging Cultural Divides and Building Successful Multin...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
‣Experts in Globalization
‣International team developmen...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
The “BRIC”
4
Brazil
Russia
India
China
...and more recen...
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 5
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 6
Donald Chan/Reuters
People flooded Foxconn Technology w...
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 7
“The speed and flexibility is breathtaking, there’s no
...
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 8
The center of global economic power is shifting east.
...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Changing economies: Top 10 (1990 vs. 2011)
9
6
GE Global...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Why you should care about the “BRIC”
‣Since 2008, the BR...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Indian IT-BPO exhibits spectacular rebound
‣India IT-BPO...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
The evolving face of outsourcing
“The era of cheap labor...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
The Chinese economy and outsourcing
‣ Real wages for
man...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
India: Big and confusing
‣$1.4 trillion economy in 2010....
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Market’s attracting foreign investment in India
‣ The Am...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Fast-growing sectors
‣Rising middle class demanding cons...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Retail sector growth opportunities in India
‣ Organized ...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Why you should care about the “BRIC”
‣Every BRIC country...
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 19
70% of all projects suck
Sucks
Doesn’t
suck
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Why?
20
Unfamiliarity with scope & complexity
Lack of co...
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 21
Reproduction of Singapore Airlines ad campaign.
Copyright © 2010-11 Hyrax International LLC, all rights reserved. 22
Three things for them
What three things do people in ...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Three things for us
What three things do Americans need ...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Q&A
24
‣At work, we do business with whoever has the bes...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Relationships and ventures
‣Westerners are “venture driv...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Blind to communication
26
‣ Western culture is
low conte...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Failure in management
27
Flat organizationsTall triangle...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
International business implications
‣Power distance and ...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Management
Western management theories (created mostly i...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
A different time
30
‣Westerners are “chronically” Monoch...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Learning to adapt to “BRIC” preferences
31
‣Robust proce...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Group orientation (individualist / collectivist)
‣Americ...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Cultural business preferences
Doing business with the BR...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Economy rankings: Ease of doing business
‣ Economy ranki...
Copyright © 2010-11 Hyrax International LLC, all rights reserved.
Doing business in the “BRIC”
‣Outsourcing vastly increas...
http://HyraxLLC.com
Go Global. Call us today to make it happen.
www.HyraxLLC.com
hello@HyraxLLC.com
U.S. +1 (805) 409 9550...
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The Changing Global Economic Landscape

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Exploring the cultural and business challenges U.S. companies face when outsourcing in the BRIC (Brazil, Russia, India, and China). Find out what being a Pacific Power means to U.S. business.

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The Changing Global Economic Landscape

  1. 1. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Unauthorized reproduction prohibited. Presented By Bridging Cultural Divides and Building Successful Multinational Business Relationships Exploring the cultural and business challenges U.S. companies face when outsourcing in the BRIC. ®
  2. 2. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Bridging Cultural Divides and Building Successful Multinational Business Relationships Exploring the cultural and business challenges U.S. companies face when outsourcing in the BRIC (Brazil, Russia, India, and China). Find out what being a Pacific Power means to U.S. business. Apple is one of the biggest U.S. success stories, yet they have fewer than 50,000 U.S. employees. Over 700,000 employees are estimated to contribute to Apple products, worldwide. How is the manufacturing and technology ecosystem here and abroad changing the face of business? Today’s global businesses need to effectively manage multinational, multicultural teams spread across the globe. Differences in work ethics, communication, culture, and language present barriers that few companies successfully master — and in today’s economy, the pressure to perform keeps businesses moving quickly. Find out where the challenges lie with international business and the cultural intricacies of international teams. This seminar touches on the future, covers recent changes in China's economic landscape, and opens up discussion on how the U.S. needs to change to preserve it's Pacific power status. 2 Synopsis
  3. 3. Copyright © 2010-11 Hyrax International LLC, all rights reserved. ‣Experts in Globalization ‣International team development. ‣Global program management. ‣Cross-cultural leadership. ‣Serving Global 2000 companies and
 selected emerging companies. ‣Our customers effectively manage differences in business cultural preferences, work ethics, communication, culture, and language. ‣Guiding companies to profit in Brazil, Russia, India, China (“the BRIC”), the Americas, and the Middle East. 3 About Hyrax International LLC globalPMguy
  4. 4. Copyright © 2010-11 Hyrax International LLC, all rights reserved. The “BRIC” 4 Brazil Russia India China ...and more recently,
 South Africa “BRICS?”
  5. 5. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 5
  6. 6. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 6 Donald Chan/Reuters People flooded Foxconn Technology with résumés at a 2010 job fair in Henan Province, China. I want a glass screen. Source: The New York Times.
  7. 7. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 7 “The speed and flexibility is breathtaking, there’s no American plant that can match that.”
 — Apple Executive, post iPhone redesign
  8. 8. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 8 The center of global economic power is shifting east. In 10 years, three of the world's five largest economies will be in Asia: China, Japan and India. 
 — Fareed Zakaria, Time Magazine (Jan 30, 2012) “The United States is a Pacific power, and we are here to stay.” 
 — President Barack Obama
  9. 9. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Changing economies: Top 10 (1990 vs. 2011) 9 6 GE Global Investor Day March 7, 2012 Changing economies – top 10 0 2 4 6 USA Japan Germany France Italy UK Canada Spain Brazil China 0 5 10 15 USA China Japan Germany France Brazil UK Italy Russia India Markets constantly evolving … growth markets ~50% of GDP by 2025 New entrants 2011 1990 U.S. U.S. ($ trillion, GDP in current U.S.$)
  10. 10. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Why you should care about the “BRIC” ‣Since 2008, the BRIC has met yearly to discuss cooperation. ‣Europe has 35 cities with a population over 1 million. ‣By 2030: ‣India will have 68 cities with over 1 million residents ‣China will have over 1 billion people living in cities. ‣Brazil's 8.9% growth topped the BRIC in the 1st half of 2010. (But, has markedly slowed, to 2.7% in 2011). 10
  11. 11. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Indian IT-BPO exhibits spectacular rebound ‣India IT-BPO growth 18.7% FY2011. ‣India’s Global outsourcing share: 55% (up from 51%, 2009). ‣China, India have over 500 million Internet users, projecting 800 million by 2016. 11 Source: National Association of Software & Services Companies (Nasscom), Economy Watch. 0 15 30 45 60 FY 2010 FY 2011 $33.5 $27.3 $14.1 $12.5 $11.3$10.0 IT Services BPO Software & Engineering IT-BPO Export Revenue (USD billion) 18.7%
  12. 12. Copyright © 2010-11 Hyrax International LLC, all rights reserved. The evolving face of outsourcing “The era of cheap labor in China is over.” — Harley Seyedin, President, American Chamber of Commerce in Southern China 12
  13. 13. Copyright © 2010-11 Hyrax International LLC, all rights reserved. The Chinese economy and outsourcing ‣ Real wages for manufacturing: Growing 12% per year. ‣ Two decades of double-digit growth. 13 Average Wage Rate Compared to U.S.*
 (adjusted for productivity) Source: Boston Consulting Group.
  14. 14. Copyright © 2010-11 Hyrax International LLC, all rights reserved. India: Big and confusing ‣$1.4 trillion economy in 2010. ‣Fourth largest Global economy in PPP terms. ‣Indian to U.S. exports grew 30% in FY 2010. ‣Economy growing at about 9%. ‣Government receipts growing at ~16%! ‣Democracy, legal system based on UK law, respect for IP, predominant use of English in business. ‣Closer to U.S. in thinking than Brazil, Russia, China. ‣(But, not necessarily culturally...) 14 Source: Amritt Inc., Gunjan Bagla.
  15. 15. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Market’s attracting foreign investment in India ‣ The Americas and Europe are the largest customers for the Indian outsourcing industry. ‣ India will be 5th largest consumer market by 2025, worth over $1,500 billion. 15 Source: Sourcing Line, McKinsey Institute.
  16. 16. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Fast-growing sectors ‣Rising middle class demanding consumer products: ‣Ford India sales up 300% on made-for-India “Figo.” ‣Amway expects to double its $395 million sales. ‣Whirlpool India, sales up 32 percent. ‣Infrastructure: ‣$1 trillion infrastructure upgrade. ‣Highways, toll roads, mass transit, rail. ‣Entertainment: ‣Reliance invests $325mm for 50% of Dreamworks. ‣Defense & aerospace: Shopping list exceeds $100 billion. 16 Source: Amritt Inc., Gunjan Bagla.
  17. 17. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Retail sector growth opportunities in India ‣ Organized retail estimated at $28B+. ‣ Will become a $260B segment over the next decade. ‣ Huge opportunity for supply chain investment, IT infrastructure, expertise from International retailers. 17 2007 2008 2009 2010 2011 2012 2017 Organized Retail Total Retail $1,011 $590 $527 $471 $421 $376$336 $282 $97$74$51$29$17$12$12 $17 $29 $51 $74 $97 $282 Source: IBEF, Boston Consulting Group.
  18. 18. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Why you should care about the “BRIC” ‣Every BRIC country represents: ‣Resource opportunity ‣Market opportunity ‣BRIC countries are rapidly coming on-par with the U.S. ‣If we don’t become a Pacific Power, we (as a country, and as companies) will be left behind. 18
  19. 19. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 19 70% of all projects suck Sucks Doesn’t suck
  20. 20. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Why? 20 Unfamiliarity with scope & complexity Lack of communication Inadequate project management
  21. 21. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 21 Reproduction of Singapore Airlines ad campaign.
  22. 22. Copyright © 2010-11 Hyrax International LLC, all rights reserved. 22 Three things for them What three things do people in your country need to understand to work with the U.S.?
  23. 23. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Three things for us What three things do Americans need to understand to work with other countries in the BRIC? 23
  24. 24. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Q&A 24 ‣At work, we do business with whoever has the best product, regardless of our relationship with them. ! ‣To avoid a conflict of interest, I avoid doing business with someone solely because of a personal connection. Agree Disagree 1 2 3 4 5 Agree Disagree 1 2 3 4 5
  25. 25. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Relationships and ventures ‣Westerners are “venture driven:” ‣It’s about the deal, the best price for performance return. ‣The BRIC (and especially Asians) are “relationship driven:” ‣It’s about building trust and entering into long-term, healthy partnerships. ‣Americans seem impatient, disrespectful, opportunistic. 25
  26. 26. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Blind to communication 26 ‣ Western culture is low context, focusing chiefly on words. ‣ BRIC cultures are intensely high context, relying on many forms of communication!
  27. 27. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Failure in management 27 Flat organizationsTall triangleTall Organization
 Hierarchical Thinking Flat Organization
 Empowered Thinking
  28. 28. Copyright © 2010-11 Hyrax International LLC, all rights reserved. International business implications ‣Power distance and high-context communication leaves Americans “blind” to the message. ‣Lack of relationships and social structure leave a vacuum... no way to subtly and respectfully inform the superior. ‣Problems are ignored until too late. Subordinates irrationally blamed, even if it’s beyond their responsibilities. 28
  29. 29. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Management Western management theories (created mostly in America and France), like Management By Objective, don’t work in Asia. 29
  30. 30. Copyright © 2010-11 Hyrax International LLC, all rights reserved. A different time 30 ‣Westerners are “chronically” Monochronic, thinking of time as a finite resource that is “spent.” ‣Most of the rest of the world is Polychronic, thinking of time as an infinite resource. ‣Do several things at once, shifting from one to another. ‣Time is important, but other things (relationships) vie for attention.
  31. 31. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Learning to adapt to “BRIC” preferences 31 ‣Robust processes avoid lack of understanding. ‣Slow down your meetings, especially with India and China. ‣Long pauses in response times let your partner: ‣Gather thoughts. ‣Translate them. ‣Send them back.
  32. 32. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Group orientation (individualist / collectivist) ‣American thinking (individualist): ‣Promoting one self. Looking out for one self. Being the “best.” Achievement by accomplishment. ‣The rest of the world (collectivist): ‣Looking out for the group. Building long-lasting relationships. Ensuring well-being for all. Achievement through longevity and ascription. 32
  33. 33. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Cultural business preferences Doing business with the BRIC requires mastering different cultural business preferences: 1. Relationship driven versus venture driven 2. Communication style 3. Power distance and organizational structure 4. Polychronic versus monochronic time orientation 5. Individuality versus group orientation 33
  34. 34. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Economy rankings: Ease of doing business ‣ Economy rankings on the ease of doing business (World Bank Group). ‣ Multinational businesses must master foreign regulations, customs, business cultural preferences, and laws. 34 30 72 87 96 117 137 134 127 123 79 65 35 5 183 Russia Brazil India China Turkey Mexico United States OECD high income Eastern Europe & Central Asia East Asia & Pacific Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa 167 Afghanistan Source: World Bank 
 Ease of Doing Business Index
  35. 35. Copyright © 2010-11 Hyrax International LLC, all rights reserved. Doing business in the “BRIC” ‣Outsourcing vastly increases the complexity of your business. ‣But, the payoff is there. ‣Engage with experienced partners that have proven track records. ‣Make sure your team has relevant International experience on board. 35
  36. 36. http://HyraxLLC.com Go Global. Call us today to make it happen. www.HyraxLLC.com hello@HyraxLLC.com U.S. +1 (805) 409 9550 YOUR FUTURE IS GLOBALSM +1 (805) 409-9550

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