ABSTRACT
In the present competitive business environment, radical changes are taking place and it is difficult to keep track of many such changes. The new economic environment, although presenting a number of threats to local firms, also offers many opportunities to learn, collaborate and adapt to the new context. To make the best use of existing conditions, Indian firms need to be flexible and demonstrate readiness to change. Regular interaction with competitors and relevant stakeholders is becoming a necessity in the modern networked organizations. In this regard, much may be learnt from HR managers working in MNCs operating in India who are very open and flexible in their approach to managing human resources. For example, a recent research investigation with sixty-five top HR managers in as many foreign firms operating in India (see Budhwar and Björkman, 2003) reported that local firms are more rigid to change, less transparent in their operations, provide less learning opportunities and operate on traditional ILMs. However, the HR managers also perceived that the scenario is rapidly changing and such a gap between the working of MNCs and local firms is going to decrease in future. This should be one of the main agenda for Indian firms. The liberalization of economic policies, globalization realities and the operating practices of foreign firms will all put pressure on Indian firms for a more professional performance. The increasing number of Indian students graduating from the developed countries and going back to India will also contribute a great deal towards resorting to a greater degree of professionalism by visionary Indian firms.
