Lost in Translation: Emerging Markets Success Hinges on Understanding Culture

Emerging Asia's heady economic growth and newfound confidence have begun to lure members of overseas ‘diaspora' communities back to their motherlands. But many ethnic Indians returning to take part in that country's transformation are finding that it's hard to go home again. Having developed professionally in Western business cultures, these returnees are discovering that doing business in India poses a whole series of unexpected challenges. These difficulties include navigating baffling government and corporate bureaucracies, dealing with a highly hierarchical management culture and managing employees in an environment where confrontation is frowned upon. Some of these returnees are even going back to the West after disappointing experiences in the Indian business world.

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Discussions of the role that cultural differences play in successful business strategies are often characterized by either excessive generalizations or outright dismissal. Yet new developments are highlighting the ways in which they impact areas ranging from startup success to venture capital funding models. After years in the US or Western Europe, many members of the diaspora community - even individuals that grew up in emerging markets - can misinterpret social habits or communication norms upon returning home. This can create misunderstandings or mismatched expectations when dealing with partners, employees or customers, leading to inefficiencies or worse. Such stumbles may be even less acceptable for a native of the country as missteps are sometimes expected from a foreigner.

Conscious investment in "localized" management skills can dramatically increase return on investments in emerging-market business growth. This includes hiring employees, whatever their nationality, who are familiar with the work or business cultures in question and who are flexible in their approach to problem solving. Additionally, even people who have at one time lived or worked in a particular country may still need a "refresher course" in local business culture, especially in emerging markets with their rapid rates of social and economic change.

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