Designation Matters!!!!!!!!!!!

i am working with MNC basically an engineering company, in a meeting with VP HR a point was raised by one of our colleague that:
"between engineers there should be difference in designation ie., engineers & lead engineers. Since there are many lead engineers with different work experience"
VP HR replied : "Designation only matters in india & few other countries but not in western."
Somehow he turnaround saying we are working on it.
Query: is designation matters only in india? How it really makes a difference if in the same group of managers or in the same level?

hi veena,
people are fickle about designations. don't mind doing the same job. for some it matters they have a fancy designation - no matter the pay or the role doesn't change.
there's always the difference between executive level, managerial level, VP roles. egos are the same across the world.
maybe role differentiation gives clear line of authority. c'mon ask a white guy who's on par with you to report under you, all hell will break loose. unions will come to the roads and political points will be scored. remember a couple of years ago, tata planning to buy Corus and Jaguar - a lot of people claiming that the brands should not go to Indian company
in fact, whites are more egoist and can't tolerate us moving up. the guy's trying to buy your silence. designation does definitely matter - how do you distinguish between a senior and junior?