Leveraging Cultural Heterogeneity in Swedish-Indian Offshoring Teams - A Managerial Perspective

Sammanfattning: In today's global business environment firms strive to increase their competitiveness and reduce costs by various means. As a consequence the trend towards offshoring has accelerated at a fast rate and become increasingly relevant for the developed economies of the world, including Sweden. India is one of the world's most popular offshoring locations and in the Nordics it is ranked as number one. Offshoring projects imply the management of a culturally diverse team, which according to cultural diversity research can be viewed as either a major risk for the project or a critical factor for success. In the case of Swedish companies that have offshored to India there have been increased hidden costs related to cross-cultural differences in work-related behaviors. The majority of research has in a similar vein addressed the negative effects rather than the positive effects of cultural diversity. In this thesis we have thus aimed to explore how one can extract value from a team's cultural heterogeneity (and hence reduce such hidden costs) in the context of Swedish-Indian offshoring projects. This was accomplished by identifying which cross-cultural differences a Swedish manager experience as challenging when managing an Indian-Swedish offshoring project team and how these cross-cultural differences can be leveraged by the manager. Our findings revealed three major cross-cultural managerial challenges, namely: (I) the Hierarchical Structure (II) Orientation to Time and Scheduling and (III) Project/Task Management and its relation to "Face". These results allowed us to adapt Maloney and Zellmer-Bruhn's (2006) four propositions regarding how to leverage cultural heterogeneity by promoting Social Integration and Self-Verification processes into revised propositions that are specifically adjusted for Swedish-Indian offshoring teams.