Psychographic proofing of labor markets in India: a mechanism to evaluate expansion/entry option in India

Abstract

Overview: Labor force has been a prime driver for any services industry. This brings in the labor force behavior and management at the focal point. Most economic theories treat labor markets of nations as homogenous. While this may be true where there exists a single national culture, it is not true for a country like India where multiple cultures exist. Cross-cultural comparative studies mostly have been based on the assumption of cultural homogeneity that equates culture with nation. This assumption overlooks the cultural diversity that might exist within a nation. This paper proposes a framework to evaluate the labor markets of a place on two dimensions, the path dependent index and the societal learning index to arrive at clusters of cities. It then evaluates the attributes of each cluster to assist decision-making about choosing locations for setting up businesses. Based on this model, interesting distinctions are seen compared to traditional economic model of clustering of cities. This paper suggests that each place has an specific orientation to accept and nurture a given business and to develop an appropriate ecosystem around it based on its path dependency and learning path and hence not any business can be implied on them. Originality: Most of the classifications of labor markets and potential of locations have been economic classifications. While this adequately captures the potential of a place to support a given business in terms of its infrastructure and support system, it fails to adequately capture the culture and hence the mindset of the place to accept and work in the proposed environment. This paper helps businesses to identify how a culture of a place would react to the given business and hence how policies should be defined and tuned adequately to a place especially in India. Currently most of the Human Resources policies of companies are pan nation and that may not work very well in India. This paper also challenges this premise of pan nation strategies should be pan regions. Also, this paper helps to capture the orientation of a place through its bi-dimensional index. This framework will also help answer many questions related to why a given industry or sector did well or not did well at a given location.