Johannes Klemeyer | Managing Director  | change.project gmbh

First published in M+V’s India Insight in June 2013

Modern India is characterised by the two extremes of rapid economic growth and a society shaped by ancient traditions, many of which are clearly reflected in the country’s business culture. Understanding these cultural differences is crucial for business success in India. There are a number of important themes one needs to be aware of in this context. Here is a brief overview of some key issues.

Polite conduct

Interactions between staff and management in India tend to be very polite. It is customary to give plenty of praise. Compliments and positive feedback ensure and sustain a good atmosphere. The primary objective of all communication is to foster good relationships, and all rules of conduct and etiquette are designed to serve this purpose.

Even though a conversation between two Indians may seem highly animated and even loud, it will very rarely involve any real controversy or conflict. Discussing or even mentioning actual issues or problems will be done indirectly. Communication tends to be subtle and indirect, and problems will be carefully circumnavigated – this is the way they are expressed.

It is, therefore, especially important to listen closely, if the objective is to find out where action or intervention is necessary. What helps, here, is that key messages will often be repeated several times throughout the conversation. So, problems are in fact mentioned, indirectly, and by repeating key messages.

No open criticism

Harsh, direct criticism can quickly lead to the termination of a business relationship or for the person being addressed to immediately resign. Once things have been said the damage cannot be undone, as the person in question will have lost face in front of everyone else. On the other hand, once a good personal relationship has been established, criticism in the context of a joint project can be voiced quite openly in India. While a business relationship still lacks this solid foundation, however, difficult issues should always be breached via an intermediary.

Negotiations with Indian business partners

Meetings with Indian business partners concerning negotiation topics generally don’t take place at the host’s office, but are more likely to be conducted in a neutral location, such as a 5-star hotel with every imaginable comfort.

Especially during the initial meetings, a vast range of topics will be discussed that don’t really have to directly deal with the business venture in question – still they are nearly always indirectly relevant. In India, people prefer to do business with persons they trust, so partners become friends. An intensive getting-to-know process to establish a positive personal relationship is, therefore, an essential prerequisite for any business partnership (this is also the reason for the vast range of topics: creating a common ground). For the same reason, the initial contact in India usually relies on a “door opener” in the form of a recommendation or a good referral from an existing business contact.

Punctuality is of secondary importance in India. Delays and interruptions can occur in business meetings as in joint projects – though not really as a standard! This is not a sign of lack of respect or even considered impolite. If it repeats itself, then the project will most probably fail. So, the important thing is to define the time frame together.

Small cogs in a big machine

There are cultures in which employees tend to be given scope for taking decisions at their own discretion. Staff in India can also fulfil their specific tasks quite independently, but within a much more narrowly defined framework. Their range of roles will be more clearly defined and workers will carefully avoid taking on anything outside their defined area of competence.

Workers will also expect their superiors to check their output regularly and provide clear and detailed instructions for every step of the workflow or process. Employees see themselves as small cogs in a big machine, and responsibility for the smooth running of operations rests solely with the manager in charge.

Business negotiations will, therefore, always involve several feedback loops between different departments and senior management. When dealing directly with team members it is very important to be aware which member of staff is responsible for which specific aspect of the business.

Leaving margins for business negotiations

In business negotiations in India, it is customary to aspire to the biggest picture, and for more structurally minded cultures it may seem as if anything is possible. That doesn’t mean though, that Indian negotiators are less rational, they are just differently strategic.

Scenarios of a potential collaboration will be described in the rosiest colours, but this must by no means be taken at face value. This behaviour is good salesmanship and by nature aspirational. And this tendency to exaggerate is also reflected in price negotiations: When doing business in India you have to be prepared to negotiate fiercely. Consider it a kind of ritual – it is good manners to have room for negotiation.

In this country of wide bandwidths it can be very difficult, if not impossible, to adapt fully to the different culture and mindsets. But to be honest: this is difficult everywhere, isn´t it? You will just have to come to terms with and eventually understand and accept some of the cultural idiosyncrasies and learn to live with them. Nevertheless, with sufficient awareness and respect for the cultural traits of this multifaceted country, you will come to appreciate the openness, enthusiasm and strong work ethic of your Indian business partners and their teams.