INTERNATIONAL BUSINESS MANAGEMENT

LESSON 21: BUSINESS CULTURE OF INDIA

Lesson Objectives
Students will be able to identify some Native Indian

values.
Students will be able to identify some mainstream

greeting them. The suffix ji after a last name is a general term of respect. Indians generally ask permission before leaving other people. Showing respect for others (especially those who are older) is very important. In a group, greet the eldest person first. Decision Making Decisions are made slowly. Indians require time to discuss every aspect of a deal, and then usually take more time before giving a final answer. Be patient and plan other activities while waiting. Impatience is viewed as rude, and high-pressure attempts to get things done faster will be resisted and resented. Decisions are made at the top of the hierarchy, so whenever possible cultivate and maintain good relationships with the highest-ranking executives.

Indian values.
Students will be able to compare the values between the

cultures. Students will be able to identify those values they agree/ disagree with.
Students will be able to identify possible conflict areas. Students will be able to generate some solutions to

conflicts.

Major Concepts:
Values are those beliefs our culture or we hold near and

Topics Of Conversation
Talking about your friends and family is an important part of establishing a relationship with those involved in the negotiating process. Indians tend to be enthusiastic about discussing politics and religion. They enjoy opinionated conversations and dont necessarily want to hear only bland pleasantries from a foreign guest. Nevertheless, refrain from tackling these controversial subjects unless you are well informed. Topics of Interest: Indian traditions, foreign countries, families, cricket, politics (if you know what youre talking about) Women India is a male-dominated society. Foreign businesswomen should experience few problems but, in general, women are not accorded the same level of respect as men. Indians who have had more exposure to international dealings will be more used to dealing with women; older men will usually be more traditional and less open. Behaving in a professional, confident, and poised manner will help overcome some of this resistance. Women should be particularly aware of any behavior that might be considered flirtatious. Women who wish to entertain a male associate should do so during the day (business lunches are more popular than dinners anyway). An Indian man will probably offer to pay the bill, but will not push the point if you politely insist on paying. Women should be prepared for personal questions about their age, marital status, and whether they have children. (These are common topics of conversation and are asked of both men and women.) Meetings Indians value punctuality in others, but will often be late themselves. Also, traffic is extremely heavy in Indian cities and sometimes prevents people from getting to an appointment at all. This can require rescheduling, so if possible build a few extra days into your travel plans. Indian executives generally prefer to meet in the late morning or early afternoon. Schedule appointments well in advance (30 days ahead is suggested) and reconfirm appointments when you arrive in India. Most meetings will begin with pleasant small talk over a cup of tea
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dear to us.
Native Indian and mainstream American values can and

do differ and these differences need to be recognized. Some cultural values may conflict but can be dealt with.
Understanding the values of a particular culture can aid

in adjusting behaviors and help avoid alienation and conflict.

Anyone can learn to adapt his/her behaviors to fit the

situation without

Interaction
Students will be able to compare some differences between Native Indian and Mainstream Indian values. Students will begin to recognize where differences And conflicts might arise and develop some possible solutions. The following Lessons are designed to help students begin to understand cross-cultural Communications and relationships. Emphasis should be given to helping Students remain flexible and open to a variety of values, behaviors and ways of Business Culture of India

Greetings and Courtesies

Indians greet each other (and say good-bye) with the namaste, which is formed by pressing the palms together (fingers up) below the chin and nodding the head. When greeting superiors or to show respect, a slight bow is added. When meeting foreigners, Indian men will shake hands. Indian men do not generally shake hands with or otherwise touch women (as a gesture of respect for a womans dignity and privacy). Indian women who are educated or familiar with international customs may offer their hands to foreigners as a courtesy. When meeting a woman, a man should wait for her to initiate a handshake. If she does not, smile and nod slightly. When in public, men should not initiate a conversation with an Indian woman who is alone. Indians value titles; if someone has a title use it when

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and perhaps food. Do not refuse any food or drink offered. Always accept; if you do not like it, leave it in front of you. Indians usually entertain in private clubs. Business Attire Business clothing is casual but neat. Standard attire for men is pants and short-sleeved shirts; however, a jacket should be worn to initial meetings or when seeing government officials. For more formal meetings (and during the cooler season) a lightweight suit will suffice. Do not wear leather clothing or any accessories made from animals. If you are traveling to New Delhi in northern India during the winter months, bring warmer clothes. During the monsoon season, bring a few extra changes in clothing and an umbrella and large plastic bags if you intend on keeping your things somewhat dry. The damp weather does not allow things to dry properly. A handkerchief or cloth may prove helpful to dry off any wet spots where you must sit. Women should wear casual dresses or pants ensembles. It is acceptable for foreign women to wear the traditional sari (Indian women in particular admire foreigners who do so), but wear a sari only if you feel comfortable in one. Women should always dress conservatively. Do not wear skirts that rise above the knee, and never wear a sleeveless dress or blouse. Men should not wear Indian caps (they are generally worn by villagers and lowerclass people). Business Gifts Business Gifts are not normally expected at the first meeting. Gifts may be given once a relationship with your counterpart develops. Suggested gifts could be: Imported Whiskey (only if the recipient drinks), pens, ties, calculators, desk accessories, etc. Gifts made in the U.S. are especially valued. Never give alcohol to a Muslim. Sikhs are not likely to drink alcohol either. Large or very expensive gifts could cause embarrassment. One should give gifts with both hands. A gift should not normally be opened in the presence of the giver. Why Invest in India There are several good reasons for investing in India.
One of the largest economies in the world. Strategic location - access to the vast domestic and South

Sophisticated financial sector. Vibrant capital market with over 9,000 listed companies and

INTERNATIONAL BUSINESS MANAGEMENT

market capitalization of US$ 154 billion (March, 1996)

Well developed R&D infrastructure and technical and

marketing services.
Policy environment that provides freedom of entry,

investment, location, choice of technology, production, import and export. Well-balanced package of fiscal incentives.
A sophisticated legal and accounting system. English is widely spoken and understood. Rupee is convertible on Current Account at market-

determined rate.
Free and full repatriation of capital, technical fee, royalty and

dividends.
Foreign brand names are freely used. No income tax on

profits derived from export of goods.

Complete exemption from Customs Duty on industrial

inputs and Corporate Tax Holiday for five years for 100 percent Export Oriented units and units in Export Processing Zones.
Corporate Tax applicable to the foreign companies of a

country, with which agreement for avoidance of Double Taxation exists, can be one, which is lower between the rates prevailing in any one of the two countries and the treaty rate. A long history of stable parliamentary democracy.

Business Opportunities in India

While looking at the prospect of doing business in India it would be prudent to see what are the options available to a Non Indian company to invest in India. Since 1991 India has undergone a sea change in its outlook toward foreign investment and global collaboration. Add to that the phenomenon called Internet and you really have an explosive combination. Its no wonder that software and Internet services have really led Indias outward push. Indias economy continues to progress on a higher growth path, due to the economic reform process stepped up since October 1999. India is committed to implementing fully economic reforms, encouraging investment and technology flows, and actively promoting and facilitating greater private sector participation in all sectors of the economy. India is the fourth largest economy in the world, and has the second largest GDP among developing countries, based on purchasing power parity. Economic indicators are promising. It is the worlds largest democracy, with a long established and robust democratic, federal system. India has a large market, and a growing middle class with substantial purchasing power. India has a long established legal and accounting system, an independent judiciary, a free and vibrant press, and a strong tradition of entrepreneurship. The use of English is widespread in business and commerce. Indias engineers, scientists, technicians, managers and skilled personnel are among the best in the world. The Information Technology sector continues to show robust growth. Indias vast reservoir of knowledge workers has attracted many global companies to do business in
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Asian market.
A large and rapidly growing consumer market up to 300

million people, constitute the market for branded consumer goods - estimated to be growing at 8% per annum. Demand for several consumer products is growing at over 12% per annum. Foreign investment is welcome; approval is required but is automatic in sixty categories of Industries.
Skilled manpower and professional managers are available at

competitive cost.
One of the largest manufacturing sectors in the world,

spanning almost all areas of manufacturing activities.

One of the largest pools of scientists, engineers, technicians

and managers in the world.

Rich base of mineral and agricultural resources. Long history of market economy infrastructure

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India. Seldom mentioned is Indias advance in bio-technology As India moves ahead with its economic reforms, opportunities wait to be exploited in sectors such as energy, telecommunications, insurance and financial services, manufacturing, transportations, urban development, and other areas of infrastructure. Procedures are being simplified and streamlined to facilitate business. This booklet provides a comprehensive view of the many promising business opportunities that India offers. Indian Embassies and Consulates are at your service to assist you to do business with India. We welcome you to India. Doing Business in India
Location

India lies entirely in the Northern Hemisphere, the mainland extends between latitudes 8 deg. 4' and 37 deg. 6' north, longitudes 68 deg. 7' and 97 deg. 25' east and measures about 3214 kms from north to south between the extreme latitudes and about 22,993 km from east to west between the extreme longitudes.
Physical Background

The Republic of India forms a natural subcontinent with the Himalayan mountain range to the North. Two sections of the Indian Ocean - the Arabian Sea and the Bay of Bengal , lie to West and the East respectively . India borders Pakistan to the northwest ; China , Bhutan gand the Nepal to northeast ; and Bangladesh and Myanmar to the east . Near Indias southern tip, across the Palk Strait, is Sri Lanka. India occupies the greater part of the sub continent of Southern Asia.
India: Investment Policies

Federal System India, a union of states, is a Sovereign, Secular, Democratic Republic with a Parliamentary system of Government. The Indian polity is governed in terms of the Constitution, which was adopted by the Constituent Assembly on 26 November 1949 and came into force on 26 January 1950. The President is the constitutional head of Executive of the Union. Real executive power vests in a Council of Ministers with the Prime Minister as head. Article 74(1) of the Constitution provides that there shall be a Council of Ministers headed by the Prime Minister to aid and advise the President who shall, in exercise of his functions, act in accordance with such advice. The Council of Ministers is collectively responsible to the Lok Sabha, the House of the People. In the states, the Governor, as the representative of the President, is the head of Executive, but real executive power rests with the Chief Minister who heads the Council of Ministers. The Council of Ministers of a state is collectively responsible to the elected legislative assembly of the state. The Constitution governs the sharing of legislative power between Parliament and the State Legislatures, and provides for the vesting of residual powers in Parliament. The power to amend the Constitution also vests in Parliament. The Union Executive consists of the President, the VicePresident and Council of Ministers with the Prime Minister at the head to aid and advise the President. Notes:

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Indias economic policies are designed to attract significant capital inflows into India on a sustained basics and to encourage technology calibration agreements between Indian and foreign firms. Policy initiatives taken over the last few years have resulted in significant - ant inflows of foreign investment in all areas of the economy, except those reserved for the public sector. Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition. Government of India
Political structure

India - Sovereign, Socialist, Secular, Democratic Republic The Indian Union - 28 States and seven centrally administered Union Territories Form of government - Parliamentary, based on universal adult franchise Legislature - Parliament, consists of President and the two Houses, known as Rajya Sabha (Council of States) and Lok Sabha (House of the People) Executive - Consists of President, Vice-President and Council of Ministers led by the Prime Minister Judiciary - Independent of executive

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