Culture and capital -- that's how emerging market companies are beating rich country rivals in developing countries. The founder and chairman of India’s Satyam Computer Services, B. Ramalinga Raju, noted at the World Economic Forum in February,that culture can be as important to multinational success as capital. Satyam is developing a more international workforce by recruiting entry-level professionals from 20 different countries to live and work in India alongside the company’s domestic managers.
On the same panel, Mazen S. Darwazeh, Chairman of Jordan-based Hikma Pharmaceuticals, also stressed the importance of building nationally and culturally diverse management teams in the earliest stages of a company’s expansion.
While emerging market firms can learn from employees from other countries, they also have important advantages developed from operating in their home markets. According to the UN Conference on Trade and Development, a key advantage of developing country investors over their developed country rivals is their greater familiarity with the economic conditions of host developing countries.
Operating in emerging markets, firms based in developing countries are more familiar with challenging investment climates and may be better able to tailor products and services to consumers in developing nations. Cross-border investments by these firms typically reach poorer and more remote developing countries than FDI from firms based in developed countries.