You want a private limited company in India, but who will you appoint as director there? Do you send a Dutch manager there or is it smart to look for the right local candidate? The European market leader in fibre optic modems, Genexis opted for an Indian director with European experience for their subsidiary, but aircraft component manufacturer Fokker Elmo decided to put a Dutchman in charge of their Indian factory. What is wise for your organisation?
In India, you need a director who understands the Indian market and customer
There are few situations where it is really necessary to put a European manager or director in charge of the Indian branch. In fact, in many cases, an Indian executive will be more successful at home. Let us take the setting up of a sales office as an example. In India, having a good network of contacts, understanding the market you operate in and the service the customer expects is very important.
For the world's largest provider of poultry processing services, Meyn, having an aftersales team headed by an Indian director is crucial for this reason. "Our aim is for all our aftersales offices worldwide to run as autonomously as possible and therefore they need to become profitable. That is only possible if you have someone in charge who understands how and what services to provide in India. We got to know our director at the time as an employee of the Agriculture Council of the Dutch Embassy in Delhi. He knew our company, the industry, most of our customers and had experience with the Dutch culture, so it was a perfect match."
An expatriate CEO as a bridge builder to Europe
In India, a foreign CEO, General Manager or Director is looked up to, which can have a positive effect if you want to introduce a European company culture in your Indian branch. KPN therefore sent sourcing manager and transformation coach Jasper Fortuin to Pune to introduce the Dutch company structure, without management, in the Indian branch. "I want to work with everyone as equals, but here I am both customer and white, so I am automatically at the top of the ladder. That means that everyone listens to what I say and agrees with it, whereas I am looking for their insights. By being patient and showing time and again that criticism can be voiced safely, we have now made the switch."
Other important reasons for choosing an expat director include:
The Director has very specific skills and knowledge gained in Europe that should be transferred to the organisation;
The foreign company is making a large investment in India and must be able to protect the intellectual property and the investment;
Someone on the ground is needed who is not only fluent in English but also in the native language of the head office and can therefore serve as a bridge;
Or if there has been a major disruption in the operations of the Indian subsidiary and it is time for a drastic restructuring.
An experienced director for your Dutch office in India
A local or an expatriate director, which is the best choice? There is no single answer, as it depends on the goals you have, the type of business you want to set up and the skills needed to make the business successful in India. We regularly recruit experienced Indian CEOs, CFOs and CCOs for Dutch companies. They can quickly get your Indian office up and running or keep it that way because of their knowledge of the product and the Indian market ('double cultural fit') and have international experience which enables them to bridge cultures and ensure mutual clarity and understanding.
Want to know more? Feel free to contact us.