The case study concerns a French automotive supplier who wished to reduce its production costs through the outsourcing of its IT activities. After consultation with a firm in Paris, the company's choice fell on India. However, for various reasons which will be specified later, the strategy implemented by the OEM was a failure. However, we must now note that the choice of India was justified because of its leadership in the IT market and the scope in the market for new technologies. Indeed, 80% of foreign investments that are made in India are related to computer software.
[...] Similarly, there are holidays that do not match the French holidays, and a corresponding fluctuation in production must be taken into account On the sociological level, The Company must also take the time to understand and build a bond with the Indians. Personal relationships are given a lot of importance in India. In the case of the OEM the haste with which the case was concluded, probably did not permit the establishment of this trust. It would have been preferable for the supplier to hire a manager to manage Indian production [...]
[...] The third option, most viable option would be the establishment of a liaison office located on the site to observe and understand the Indian market. We also found that only Indian lawyers are permitted to practice in India. It was therefore appropriate that the supplier should remain in contact with an Indian lawyer in order to secure his contract and also for intervention in case of difficulties or disputes. Furthermore, we have also concluded that the preparation also requires knowledge of the cultural specificities of the Indian market. [...]
[...] Furthermore, although there was a lot of movement between India and France, the decisions were taken in Paris, without any consultation with the subcontractor. There was, therefore, a lack of confidence of the supplier with respect to the subcontractor. Such lack of confidence can be paralyzing, as Indians place great emphasis on trust in business relationships. A CONTRACT THAT WAS NOT SECURE ENOUGH Several questions have arisen about the contract that was signed between the supplier and the subcontractor. The many changes requested by the OEM, the sudden fluctuation of prices and longer delays seem to indicate that the contract is not sufficiently accurate and secure. [...]
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