Every action has an equal and opposite reaction. Two recent headlines in the newspapers attracted some attention in this context because they seem to speak in different tongues.

The first quotes a report from BNP Paribas and says that IT major Infosys could have a foreign CEO in two-three years. The report speculates that Steve Pratt, present chief executive and managing director of Infosys Consulting, could become head honcho of the parent company. The tradition at Infosys is for the founders to take over as CEO one by one; S.D. Shibulal is tipped to get the job in April this year when Kris Gopalakrishnan steps down. Two other founders — N.R. Narayana Murthy and Nandan Nilekani — have been CEOs before them.

The Infosys system has come in for criticism because it seems to imply that all the founders are equally competent to be leaders. It never happens that way. The other conclusion isn’t too happy either: Infosys is a well-oiled machine and it does not matter who the CEO is.

What could have prompted this new thinking at Infosys? Like all other major IT firms, it is changing its model. For many years, it functioned by moving people to the West (the H1B visa syndrome) or moving work back to India (outsourcing and offshoring). Now it’s beefing up its local strength in countries where it gets its orders from. Barack Obama and the Buffalo vs Bangalore campaign have had a role to play in this, of course.

The second headline reads “Mahindra & Mahindra readies Indian talent for Ssangyong integration”. According to the economic daily: “M&M has picked homegrown talent to head top management positions in Ssangyong Motors as it aims to quickly integrate operations and launch the South Korean company’s products in India. India’s largest utility vehicle maker has assigned responsibilities and relocated six executives to South Korea to oversee the process of integration.”

In a globalised world — especially in companies like M&M and Infosys which have extensive international operations — does it matter what the nationality of the CEO is? There are a few things worth noting.

First, in Infosys, the large mass of the people working abroad have been Indians. It’s only now that locals are being recruited in a big way. Thoughts of a foreign CEO come only later. In Ssangyong, the question of Indian workers in the Korean plant does not arise. The CEO and other top Indian honchos have to integrate two radically different cultures.

Second, Infosys isn’t a family business; the CEO could be anybody. The question of Anand Mahindra stepping down from M&M is not even on the horizon. In all fairness to him, however, he would probably not be averse to a professional and a foreigner taking over from him when the time arrives.

Third, anecdotal evidence seems to say that in cross-border takeovers, the more professional a group is, the more it tends to allow local management to run the show. There’s, in fact, a reverse trend: the local management is inducted into the ranks of senior executives in the parent company. This is not simply a comfort posting; there are several learnings to be shared.

Fourth, the fortunes of expat CEOs in India are going through a cycle. From a high a few months back (when even public sector Air India signed on top executives from abroad), many Indian firms are finding these imports have difficulty in managing the environment.

A final thought, though not very palatable. If an Indian company goes to Africa or South Asia, it appoints an Indian CEO. If it goes to the US or UK, it’s often happy with the local CEO. There’s a pecking order in this — which is applicable to all nations — with certain racist overtones. “It’s not racist, it’s economic,” counters a management consultant. “There are Indian firms in both Japan and China. Show me an Indian CEO in Japan or a Chinese CEO in China.” Like Newton’s law, opposites can co-exist.

EXILE’s DREAMS

The best places for expats

1. Singapore

2. UAE

3. US

4. Belgium

5. Hong Kong

6. Canada

7. Germany

8. The Netherlands

9. India

10. China

11. Australia

12. France

13. Spain

14. United Kingdom

Source: Forbes