The Hindu Business Line : Mastering commercial diplomacy

Carefully designed training programmes are one of the key activities that support and strengthen Indian capabilities as a dynamic participant in the global economy. We have simply not paid enough attention to this area.

In this age of globalisation, the process of external policy management has become more `democratic'. Non-state actors are legitimised, even sought out by governments, to do the things that foreign ministries and other arms of government are unable to accomplish on their own. Two examples: One, the Ministry of External Affairs (MEA) taking the help of the apex chambers of business and industry, post the nuclear tests, to woo US business leaders and Congressmen in a sustained, successful campaign that ended with the India-US nuclear deal.

Two, when the Commerce Ministry found itself unable to operationalise the `India Brand Equity Fund', created in the mid-1990s, it joined hands with the CII, and handed over the running of the fund to a public-private partnership (PPP) arrangement, under its overall supervision.

Global Trend

This is also the trend the world over. In Germany, the current re-branding campaign, under the rubric `Germany — Land of Ideas', is funded and run by a PPP. Also, the British Foreign and Commonwealth Office (FCO) is run by a `Board of Management', headed by a Permanent Under-Secretary, but with CEOs of three top private companies as members. The UK's entire trade and investment promotion is done by a `joined-up' entity that is co-owned by the Foreign Office and the Board of Trade (that is, the Trade Ministry).

Against this background, it is axiomatic that economic and commercial diplomacy should be seen as a shared concern of the MEA, the Ministry of Commerce and Industry, and other official agencies. The private industry is indeed the key agent as it makes trade happen, and is the channel of investments, inward, and, increasingly, outward.

In such a milieu, it may be useful to train the company and government officials in the fine art of combining diplomacy with doing business. Carefully-designed training programmes can support and strengthen India's capabilities as a dynamic participant in the global economy. Ideally, the training programme must cover:

Negotiation technique: This must include theory that has direct, practical application, plus a multi-session simulation, with role-play. It is surprising how few corporate executives have undergone such training; as for government officials, this is entirely new territory. Business schools do teach this skill, but then few MBAs are to be found among middle/senior-level public sector executives and government officials.

Economic analysis: Government officials and business executives write analytical notes and policy recommendations with varying degrees of competence. But needed is a methodology that can be applied in all situations — a master template that looks at issues in all their dimensions. For instance, at the British FCO, all `submissions' (that is, policy recommendations) that go to the Minister must have a section on how the public will react to the proposed action.

Inter-cultural communication (ICC): Government and private sector executives are now becoming aware of how much they need to understand the value systems and the core beliefs of their foreign partners. This dimension can be ignored only at our peril. At one recent lecture, a business executive asked if there was one clear list of `dos and don'ts' that might guide the person making a first international foray. While such a list can be compiled, it would be too diffused, loaded with exceptions, caveats and footnotes to be of any use.

Culture awareness

In 1998-99, I was involved in a survey of top executives on business culture in India; the results are summed up in a co-authored book Managing Corporate Culture. One key finding: The Indian businessman has a limited awareness of foreign cultures.

Even the oft-assumed familiarity with the Anglo-American way of life is superficial. On the plus side, Indians have an innate capacity for working across cultures. The success of Indian executives in breaking into the top international CEO ranks, unmatched by the Chinese, Japanese or even Germans, owes much to this people skill.

India is still in the early stages of internationalisation, so Indians need `knowledge in action', as much as knowhow.

(The author, a former ambassador, is Professor Emeritus, Foreign Service Institute, New Delhi, and Senior Fellow, DiploFoundation, Malta and Geneva.)

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