Doing Business in…India

Reading time: 6 minutes

20 Mag
20/05/2014
Foto del profilo di Olga Annushkina

by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

20130905_175714-1_Snapseed_SnapseedOne of the BRICs economies, India certainly attracts a lot of attention from multinationals from all over the world. The peculiarities of doing business in India and with Indians were discussed with Dr. Asha Bhandarker, distinguished Professor of Organizational Behaviour and Human Resources of International Management Institute (India, New Delhi) who recently visited SDA Bocconi School of Management with a group of top managers of Indian Banks.

Dr. Bhandarker, thank you for your availability and willingness to share your knowledge and experience. Before investing or starting working in India, what should one be aware of?

Well, India is like a continent: it is very complex and diverse. We have 28 states and 7 union territories and 22 official languages, without counting hundreds of minor languages and English. English and Hindi are the most widespread languages in India, so any educated person on average would speak at least three or four languages: English, Hindi, his or her mother tongue and the official language of the state where he or she lives. Even if the diffusion of English facilitates communication with foreigners, one has to account for difficulties with accents and Indian idioms and terms routinely used in daily conversations. On another hand, many Indians might have difficulties with understanding foreigners that are not native English speakers: so slowing down the pace of the conversation is advisable. Religions add to the diversity too: for example, India has a larger population of Muslims than Pakistan.

Often a lot of Westerners remain overwhelmed by the cultural variety and diversity they encounter in India, but Indian people connect very well among themselves across state and regional borders as there are three widely diffused connecting elements: English language, Bollywood music and food.

What are the key factors to consider in the attempt to create constructive business relationships in India?

Dictionary definition of the word Respect.Most importantly, to achieve success in India foreigners and foreign organizations have to respect the Indian partners and the Indian community. I remember a case of a high-tech foreign multinational that opened a subsidiary in India. The headquarters appointed managers with no international experience and less qualified than their Indian subordinates apparently thinking that India is a technological outpost. The autocratic style of the expatriates also contributed to important organizational conflicts and inefficiencies. Another foreign company working in the telecom industry appointed an expatriate executive that arrived to India with a habit of keeping feet on his desk, swearing on people and with few industry competences expected from a person of his position: the Indian colleagues got together and he had to leave.

The respect I am talking about is not limited to the workplace or your direct business partner. The lack of good relationships with the local community may at a certain point create some obstacles to the business. To be successful in India, an individual entrepreneur or an organization has to dedicate some time to contribute with something to the local society, to show the sensitivity towards local problems, to create the goodwill and the local acceptance of your enterprise.

Would you try to describe the best possible behavior for a Western foreigner in India?

You can’t be direct! You must have a lot of patience, the pace of life and of decision-making is very different. At a meeting, it is a good habit to start with a formal address and to end the meeting with a closure in which you sum up the meeting conclusions and thank the participants. In the offices, people are very polite and courteous, in particular with regard to senior people with grey hair. So is it advisable to avoid the first names, if not specifically requested by your Indian partner. I would recommend an appropriate dress code, for both men and women, a person dressed in a provocative way or a man wearing his hair in a ponytail will not be taken seriously. Being conservative and polite in manners is particularly important while dealing with people working in the public sector or for a state-owned enterprise, due to their less intensive exposure to the Western culture.

castleIn many countries meals are very important in building business relationships, does it apply to India as well?

It is also true for India: during a meal the business partners are establishing a good comfort level among each other before proceeding to the business matters. So it is good to plan the conversation wisely, avoiding the straightforwardness in the beginning of the meal. If you are offered hospitality, it is good and advisable to accept it. In case you are planning to host a dinner at a restaurant, make sure to be informed about the diet preferences as many Indians are vegetarians or vegans, while others eat only certain types of meat. In cosmopolitan cities alcohol is acceptable at dinner tables while more traditional Indians are more likely to avoid it. The same rule applies to the handshakes, diffused in larger cities that are more exposed to the Western culture and are less frequent elsewhere. There is also a tradition of giving small gifts, representing your country or city of origin, at the end of the first meeting; also bringing a small gift to a house if you are invited, will be appreciated.

Finally, many Italian entrepreneurs and managers observe that the decision-making seems to be really long in India, could you please comment on that?

One always has to remember that the Indian society is very hierarchical, so what looks to the external observer as a long and inefficient process is in fact the necessary procedure of collecting the approvals from all the hierarchical levels involved in the decision. It might also happen that a foreigner is waiting for something to happen in vain: an Indian instead of saying “no” may prefer a face-saving expression “I will try”, bringing a certain confusion to the negotiation. And if the person is scratching his head while saying “I will try”, there is absolutely no point of waiting for him “trying” to address your request: move on to the second best alternative! The festival calendar also has to be taken into consideration: as for Christmas in Europe, during the Indian festivities all businesses stop working for some days.

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