The Long Game: Why Japanese Businesses Need Extended Managerial Tenures to Succeed In India

By Mr. Siddharth Deshmukh

President, Indo-Japan Business Council.

As the economic relationship between India and Japan deepens, several Japanese companies are trying their luck in vibrant India for the numerous opportunities India offers. From the fast-growing rural economies to the bustling metros, India presents a gamut of possibilities for growth. Yet, despite such strong potential, many Japanese companies struggle to tap into the Indian market's complexity. One primary cause of this is the practice of sending managers on short-term assignments of two or three years.

Though this may be highly effective elsewhere in Asia, including Thailand, Japanese companies operate differently in India. Japanese companies need to send managers on longer tenures, up to a decade at the best. It is through longer stays that expatriate managers will be able to derive more value from cultural insight, build better local relationships, and collect more meaningful knowledge of India's diversified economy.

The success of Maruti Suzuki, India's largest car manufacturer, tells the story of long-term commitment. When Suzuki Motor Corporation entered India in the 1980s, the company soon realized that success here was more than a matter of operational efficiency.

Adaptation came from integrating local knowledge into decision-making and the rise of Indian leadership within the company. Today, Maruti Suzuki commands a dominant share of India's automobile market. The success of the company was not possible by a short- term, one-size-fits-all approach.

Another recent example is KAI India—a subsidiary of Japan-based KAI Group—which realized the potential of appointing Indian leaders at the top for Indian operations. KAI India is already becoming popular for its high-quality kitchenware and personal care products, which are suited to Indian consumers by adapting and committing to the long term in India's competitive market.

Japan has succeeded in the likes of Thailand and Vietnam, with more regular instances of long-term expatriation. Japanese managers commonly feel more at ease with such markets, where infrastructures and business cultures are more in line with what they might expect from home. Cities such as Bangkok boast well-established Japanese expatriate communities, cultural centers, and good international schools that make them, arguably, far more attractive than their Indian counterparts for longer periods of posting.

India, on the other hand, presents a set of challenges. Major Indian cities are modernizing rapidly, but traffic jams, pollution, and healthcare represent significant infrastructure gaps. Japanese managers often perceive India to be less predictable—but at the same time more complex—compared with other Asian markets, thus making them hesitant to commit themselves to long-term stays.

Moreover, India's regulatory environment is more decentralized, with state-specific rules and governance structures that are hard for any expatriate to handle within a short period.

In India, personal contact plays an important role. Trust has to be earned over time, and long-term presence allows for deeper relations with local partners, employees, and government officials. Those connections are critical in finding one's way through the often bureaucratic processes in India and learning the unwritten rules of the game when doing business in a highly diversified country.

Cultural adaptation takes time as well. Unlike the rest of Asia, business practices may be somewhat similar to Japan; in India, diversity is such that no two regions are the same. Business ways, consumer behaviors, and styles of communication caution in a big way across states, and the nuances must be made clear if one is to get on to success.

Such was the diversity that the managers could hardly develop the required cultural fluency to function well in such a brief time.

Why Reluctance To Stay Long-Term?

Although many Japanese companies are aware of the requirement for a long-term presence, many Japanese managers seem reluctant to stay in India for extended periods. 

Firstly, this relates to perceived quality of life: although gradually becoming expatriate- friendly. Mainly concerns over personal safety, healthcare, and schools for children. These are getting better but can easily deter managers from moving their families to India for an extended period.

Migration worries Japanese managers, who also fear losing contact with headquarters in Japan. Years abroad may be seen as a period of isolation, especially in a firm culture as tight as that of Japan. A manager could likewise fear that years abroad may negatively affect career advancement or dimensionalize ability to adjust upon returning to operational tasks.

Addressing The Challenge

While Japanese companies do provide support for the managers sent to India, such as relocation-related packages with high-quality housing, international schooling possibilities, and access to quality healthcare are minimums. Cultural and language training for managers and their families can make the process easier and make life in India more pleasant.

Policymakers in India can make this path more attractive for a foreign expatriate on the Indian side by developing infrastructure in key cities where business is conducted, smoothing out bureaucratic processes for foreign professionals to work within India, and promoting initiatives whereby international workers find themselves included.

The rewards of long-term immersion in India are huge. Japanese companies investing in long-term leadership will build relationships, gain local knowledge, and provide continuity, which will position them for success in one of the fastest-growing economies in the world.

Long-term assignments for managers, providing the requisite support, and deep local engagement will allow Japanese firms to unlock the full potential of India's dynamic economy.

The keyword for Japanese businesses to be successful in India will, in the end, be a long-term commitment to understanding the culture, the economy, and the people.

Only then will they be better placed to address their challenges with lasting success in this demanding yet rewarding market.

About Siddharth Deshmukh:

Siddharth Deshmukh is the President of Indo- Japan Business Council based in Pune, Maharashtra. He is also the founder & CEO of Shimbi Labs.