India: Law and No Order

According to our textbook, in order for a country to become a fully developed country and to be able to capitalize on globalization for its entire citizen base, rather than just the elite, a legal system needs to be in place that will protect an individual's or business' property rights. Because the legal system in India is so complex, with layer upon layer of courts through which to process a lawsuit, and because it can take 10 to 25 years to resolve one, I would think many companies would be reluctant to invest here. There are certain situations in which a company may be willing to risk its investment even though there is no guarantee of protection under the law, for instance, if the cost/benefit analysis shows the potential for extraordinarily high profits, but that is rarely the case. If I remember correctly, foreign companies can not own land here, and that is the reason that Coca-Cola and other companies have pulled out of India. But Pepsi-co has a big presence here - so do they have joint ventures with Indian based companies? What protections do they have, and why are they okay with the inherent risks of doing business here, but Coke is not? Have they bribed some officials in order to get through the red tape of doing business here?

Besides the fact that resolution of grievances is unlikely to occur in a timely manner, the mere fact that it is impossible to get a straight answer to any question asked of anyone would lead to inefficiencies and frustrations when working with the people here. From the people at the Institution to the reception desk help, no one gives a direct answer when you ask them a question. It is always "5 minutes, Madam" which can mean 1 hour to 5 days - or longer. Five days is how long it took for me to get my soap dispenser replaced in my shower. On the morning we arrived we had a group picture taken outside the entrance to the hotel, which was published in that afternoon's newspaper. We were told we would have copies on Monday at class. Days later we are still waiting. "No problem" is the response we frequently get - what they don't understand is that, to an American, not following through on a promise is a problem. So considering this, how on earth have the foreign companies doing business in India gotten past this culturally based challenge? How have they been able to use services such as Infosys and gotten the message through that lying, even white lies, aren't acceptable when trying to satisfy a customer?

Well, quite frankly, I don't think they have succeeded in this. I believe companies, because of the profits they can reap due to the low labor costs, have been willing to accept lower standards of ethics. Take this example: My husband purchased a Dell computer, which was ordered via an India based customer service center. He was lied to, literally dozens of times, by the customer service reps over the course of several months. Upon arrival of the system, it was defective. After months of trying to get the original problem, along with all of the tag along problems that ensued, resolved, they finally acknowledged that they had not done what they promised, repeatedly, and sent him a new computer (which was still not set up with the correct software). I don't believe the world can truly be flat until there is a common understanding and accepted standard for basic business ethics and customer service. Otherwise, it is a haphazard and frustrating experience that can lead to the breakdown of business relationships.