Importing a toxic work culture into India

An Indian woman in her twenties, working in Pune for a major consultancy firm, died one day after returning home from work. Her mother believes that this had resulted from exhaustion due to overwork at the office. While the deeper cause would be difficult to ascertain, her parents have spoken publicly about their daughter informing them about the long hours she faced at work and the stress she endured from unreasonably close deadlines for reports. Moreover, soon after the news of her death broke, at least one former employee has written or spoken in the public domain regarding the work culture that they experienced at the same company, which led him to leave. Ironically, on the website of the firm’s ‘India Office’ the first entry is a banner declaring that the company’s purpose is “building a better working world”.

An American imprint

The firm concerned is a so-called multinational. This term is somewhat of an oxymoron, reflected in the reality that every multinational company has a distinct national affiliation, and national governments avidly work to further the prospects of their own multinationals (MNCs). Thus, when United States President Bill Clinton visited India in 2000, where he was mobbed by our parliamentarians in the Lok Sabha, he had come with a posse of American CEOs seeking opportunities. Most of the world’s multinationals are American. This explains their work culture, the essential part of which is an emphasis on long hours apart from the relentless pressure to fulfil stringent targets, whether of sales or, in the case of accounting/consultancy firms, commissioned reports for clients ranging from for-profit firms to governments. It is useful to understand the provenance of the work culture found in multinationals. With the collapse of the Soviet Union, the U.S. came to have an outsized influence on global affairs, and its economic architecture, including the work culture, came to be seen as the gold standard. From accounting practices to what is considered normal when it comes to hours of work, ‘the American way’ became the norm. Now, the culture of the multinationals came to possess the cachet of being of American origin even if the company itself may not be. This culture has a history.

The German sociologist, Max Weber, showed how the reformation of Christianity in northern Europe altered the view of work. Protestantism, especially Calvinism, doctrinally supported worldly activities dedicated to economic gain, seeing them as endowed with a moral and spiritual significance that was equal to working for the Church, which Catholicism had privileged. Weber identified the protestant ethic as a driver of early capitalism. As America was founded by northern Europeans intent on establishing a community based on Protestant beliefs, it is not difficult to see where the glorification of work that came to define the American way of life came from. Weber relies on the writings of the American thinker, Benjamin Franklin, to make his case. The point of all this is to see that the work culture at MNCs is not based on ergonomics or organisational psychology but is actually of religious extraction.

A country comparison of work, productivity

For the economist, it remains pertinent to ask where the American obsession with work has got Americans. I shall base my investigation on data issued by the International Labour Organisation. If we were to make a global comparison of national per capita incomes, a standard measure of the standard of living of a population, we would find that hard work has got the U.S. quite far for sure but not as far as others without the same approach to work. In 2023, the U.S. was the 12th globally in terms of GNP per capita. If we take Guyana out of this list — it was only barely ahead — 10 countries were ahead of the U.S. These were Austria, Belgium, Denmark, Ireland, Luxembourg, Netherlands, Norway, Singapore, Sweden and Switzerland. Note that apart from a tiny Asian country, the rest of the list is exclusively of western European countries.

There is, though, an aspect of the comparison just made that needs mentioning. As productivity measures are based on value, the country that makes more valuable goods would tend to rank higher even if its physical productivity is not higher across all goods. So as to avoid relying on a comparison of value-based productivity levels alone, we may compare how the value-based productivity measure grows over time across countries. When we do this for the period of half a century from 1970, we find that U.S. GNP per capita has grown faster than only Switzerland’s, and that too marginally (paucity of data meant that Austria and Singapore had to be excluded from the exercise). So, we find that neither is the population of the U.S. the richest in the world nor is its productivity growth faster. A further assessment of the economic value of hard work is conveyed by the following indicator. In the above sample, except for Singapore, the average hours worked per person in a year were lower than that in the U.S. in every other country listed above. So, we can see that it is possible to get richer than the U.S. even when working less. There appears to be a difference between working, a creative mental and physical engagement, and just labouring, as defined by hours worked.

However, talk of national cultures glorifying work can go only this far in accounting for the long hours allegedly worked by employees of multinationals, such as the employee who died. As observed by Karl Marx a 150 years ago, the length of the working day is a factor determining profits under capitalism. When only a part of a day’s labour by the worker is needed to pay for their maintenance by way of the wage, the rest accrues to the capitalist as profit. As competition among capitalists lowers the rate of profit, capitalists strive to recoup profits by increasing the length of the working day or getting workers to do more and more faster. For consulting firms such as the one in question, the latter would mean producing more reports in less and less time.

An add-on to foreign investment

It is useful to remember that the work culture allegedly existing at the firm was not always present in India. It came along with the foreign investment that was courted as part of the liberalising reforms of 1991. Foreign investment was seen as a route to raising capital formation and bringing along global best practices in management. As for the promised global best practices, the incident involving the Pune firm is at least one data point by which to gauge outcomes. Whatever may be the actual benefits for India of having kept an open house for them, the multinationals seem to have done quite well for themselves since.

It has been reported that during 2017-22, the ‘Big Four’ among the global consulting firms bagged 305 assignments from the Government of India. The same source reports a figure so large for the revenue that accrued to them from India that I thought it wise to ascertain it before citing it. But in all these cases, it would be of interest to know if expertise as good was not available in India. There is also a record of the governments of some southern States favouring external consultants over local experts who are far more knowledgeable on economic matters.

An upshot of the incident at Pune is that the working hours and practices in the multinationals working in India must be regulated by the government. So should the working hours at the Indian companies directly serving offshore entities, where stress-induced suicides have been reported recently. That these companies, which serve a global clientele, would require them to run shifts that cater to different time zones to ply their business is well understood, but they would have to adhere to Indian norms.