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Economic and Socio-economic factors in India

Question:

Required to Prepare a Market cultural report on a country of your choosing. you are to provide insights on the culture of the host market. how it is different you’re your home country, and highlight what cultural factors to take note when doing business in that country.

India is one of the major economy across the globe. It is situated in South Asia and is the seventh largest country by the area and the second-most populous country after China. It is surrounded by sea in half of the parts whereas it is surrounded by land at other half of the locations. It share its boundaries with China, Pakistan and Bangladesh. In the recent years, the country has realized significant growth in terms of economy and the purchasing power parity. It is a newly-industrialized country and fastest growing economy in the world. The country has amiable relations with most of the foreign countries except its bitter terms with Pakistan. They share border and there is constant dispute between both the countries. It is the sixth largest economy in terms of the market growth and the third largest economy in terms of the purchasing power parity. Today, a large number of industries such as the telecommunication industries and automotive industry are growing in the country at a very fast rate. Due to the significant economic growth of the country, a large number of multinational companies have also entered the Indian market. Several technological giants and manufacturing companies have entered the Indian market. These companies are operating in India as well as other nearby locations (Gesteland & Gesteland, 2010). India is an industrialized country; therefore, the political and the economic environment of the country is also effective for supportive of the new business ventures. There is also an ongoing trend of startups and new business ventures which have strongly boosted the economy of the country.

However, there are also significant socio-economic issues which are still persistent in the economy. The economic conditions of the country has improved in the recent years; however, there is still economic disparity and income inequality. The corruption in the country is also high as the illegal capital flow in the country is also high. There are also significant social issues related to bonded labor and the child labor in the country. It is also a culturally-rich location and has a long history in the philosophy, mythology and theology. It is rich in religious diversity and there are several major religions in the country, namely, Hinduism, Buddhism, Islam and Christianity. The society of the country is characterized by its caste system which embodies social stratification and restrictions in the operations of the organization. The family values are important in the Indian tradition and multi-generation joint families are a norm here. The Indian customers are emotional in nature and are concerned for their families. Most of the Indians get their marriage arranged with the consent of their parents. The choice and the preference of the customers are also influenced by their families and peers. In terms of sports, the country is crazy for cricket; however, other sports such as hockey, kho-kho and kabbadi are fairly popular in the country (Stephen, 2016).

Culture and traditions of India


The customer market of the country is characterized by the growing middle-class and the purchasing power of the families. Recently, the ration of the working women has increased drastically which has increased the purchasing power of the families. People are spending more on luxury items and products. Other than that, the outgoing and the party culture has increased in the country drastically. The party and the drinking culture has increased in the country drastically. There is an extension in the wining and the dining culture of the millennial population with the rise in the income level (Dunung, 2015). The infrastructure of the country has also increased and the security issues for the women enjoying nightlife have also declined.

India, officially called as Republic of India is a Southern Asian country and the member of Commonwealth of Nations. The Indians like living in joint families and culture and tradition are of utmost importance. They also have different standards of time and are likely to delay things from the deadline. Moreover, due to the bureaucratic nature of the government, several business features such as delivery, custom clearance, meetings, approval, transportation and payment takes time. Therefore, it is difficult to perform the punctuality in India. Other than that, the administrative and the physical infrastructure of the organization also impacts on the punctuality of the organization. These factors create delays in the operations of the organization.

The culture and the heritage of India is quite unique and different from other countries. The religion, poverty and income distribution are the most sensitive subjects during communication; therefore, they should be avoided. Other than that, the Indians are not straightforward in nature. They avoid saying no to a specific person and tend to avoid the situation. Instead of saying outright ‘no’ to someone, Indians use terms which are more acceptable such as ‘maybe’ or they politely change the topic (Global Business Culture, 2017).

They avoid maintaining an eye contact with the seniors or with women. Touch or any other form of physical contact is generally avoided by the Indians. It is due to the traditional shy nature of the society.  The punctuality of Indians is always questionable. They appreciate punctuality; however, do not follow it. In Indian culture, it is important to engage in small talk and understanding the perspective of the partner. Engaging directly to the business issue can be considered as rude behavior (Ministry of Foreign Affairs in Denmark, 2017).

Business culture in India

Other than that, the business structure and the operations of the organization are quite flexible. The companies are likely to take urgent tasks at the last minute. It is because of the flexible nature of the workforce (UK India, 2017).

If the Indian culture is explored through different cultural dimensions, it can be critiqued that Indian culture is quite different from other cultures. It can be stated that the power distance in the Indian society is high. It means that Indians appreciate hierarchal structure in the society. Generally, the society has a top-down structure in the society. The power is centralized and the people have a habit of following the orders of their seniors. The psychological security and the attitude of the people with senior members of the society is also formal (Jondle & Ardichvili, 2017). In families, the communication is directive and top-down in approach.  The Indian society has collectivistic traits, which means that Indian prefers to live in a large social framework. In these frameworks, the individuals are expected to work for the greater good of different people in the group. In these situations, the individuals are influenced by the opinion of others, family members, neighbors and other member of social circle. Relationships are also given prime importance in the Indian society (Fischer, (2011).

Due to the high population and the poverty, the competition in various sectors of life is also very high. The society can be characterized by competition, achievement and the success. Along with it, other factors such as caring for others and quality of life are also dominant in the Indian society. In the Indian society standing out from the crowd is not appreciated by the people. India is also a religious society and spiritual country. It has millions of deities and people follow different religious philosophies. It is an ancient country and has a long surviving tradition of cultures which increases the humility and the abstinence of the people living in India. It can be observed in the Indian society that the focus is on success and achievements and they are validated by the material gains. The work is the center of one’s life and it is symbol of success at the workplace (Chandra, Rau & Ryans, 2002).

The mentality of the managers and the employees is still different in India and the tradition is followed in most the business dealings. There are two types of companies in India, namely, family-run business and hi-tech corporations. As family hierarchy and age is given utmost importance in the country, the managers and the boss are treated like the supreme power. They do not perform the work which can be done by other people or the customers (Milligan, 2006). Most of the decisions are made at the top level of the organization and the middle-level as well as the lower-level of the employees have a significantly small part in the decision-making of the organization. The society has a hierarchal structure and the elder and the senior persons are greeted and treated with respect. There are two official languages in the country, namely, English and Hindi; however, English is commonly used as India is a diversified nation in terms of language (Girdham, 2009).).

Important Cultural Considerations for Business in India

It is important to conduct small talk between the meetings and ask questions about the family. Generally, Indians give high importance to the use of formal titles and the business dress code comprises of smart and comfortable clothing. As the country has hot climate, the people wear comfortable and easy clothes. The business relations are of utmost importance to the people; however, their decision making style is different. They base their decision on trust and intuition rather than on the statistics and the data (Olivelle, 2011).

Hierarchy plays a critical role in the Indian business culture. All the decisions, negotiations and other important aspect of the organization decision-making are conducted at a senior level. Therefore, if a business meeting does not include the senior managers, it is highly unlikely that the decision is going to be taken at that meeting. The bargain mentality is another important feature of the Indian culture and it is considered that Indians rarely declines a deal (Martin & Chaney, 2009). It is important to have patience and perseverance so that each deal can be negotiated in the organization. Bureaucracy is also widely prevalent in India with a large number of government organizations engaging in corruption. There is also lots of delay in work with the widespread corruption and government bureaucracy. The Indian government is aware of the problem and working to ease the situation (Davis, Chatterjee & heuer, 2006).

On the other hand, the business culture in Singapore is quite different. Singapore is a multiethnic society which comprises of people from different origins. It includes Chinese, Malay, Indian and Eurasian communities. The local customs of different societies have a great influence on the business style of the country. The people of Singapore are open and cosmopolitan in their outlook and have a great sense of humor. They do not take offense if a social faux pas is committed as they understand that people from different culture have different customs. In Singapore, it is important to avoid discussions regarding religion, racial issues and the politics. In Singapore, the working language is English; however, there are other official languages such as Chinese, Malay and Tamil (Kwintessential, 2017).


There is significant proportion of Muslim and the Indian population in the country; therefore, it is important to avoid conducting business on Fridays or during Ramadan. It is also important that alcohol, beef and pork is not served during the business meetings. Other than that, contrary to the Indian population, the Singaporean population is punctual for their appointments and expect that the other party will be punctual in their appointments. There is also emphasis on gender equality in the Singapore society. In several places, women hold the position of authority in business. It is also important to establish relationships with the co-workers in Singapore. The dining and entertainment are an important part of the country’s culture and they are considered as the time when people socialize and build relationships (IOE, 2015). 

The Singaporean people have different communication style in comparison to the Indian people. The Indians have indirect communication style. They try to preserve the harmony, relationships and the pride with the help of indirect communication. The disagreement and negative responses are avoided specifically with the senior people (Visscher, 2007). The relationships determines the nature of communication between the people. The disturbing information is communicated in non-verbal manner or with the assistance of the third party.

Hofstede’s models provides different dimensions which can be used to differentiate cultures of different communities.  The model has stated that there are five different dimensions which creates difference in one culture from another. These dimensions are: power distance, individualism, masculinity, uncertainty avoidance and long-term orientation. The power distance demonstrates the extent to which a society accepts the power in institutions and the powerful persons. It is the acceptance that the power is distributed unequally and it shows that the less powerful members of the society accept the norms imposed by powerful persons. The power distance is highest in Indian society, which shows the strong hierarchal structure of the society. The individualism-collectivism is another dimension which shows the difference between loosely knit social framework and the tightly knit social network. In the loosely knit social framework, people take care of themselves and their immediate family members. On the other hand, the closely knit social network shows collectivism which states that people expect that their group comprising of the relatives, organizations and clans will support them in the future. In retrospect, they owe loyalty to these members of society. The third dimension in this model is masculinity-femininity which states encompasses qualities at the opposite side of the continuum (Hofstede Insight, 2017).


The masculinity characteristic comprises assertiveness, attraction towards money, carelessness and quality of life. The Indian society is characterized by masculinity which shows that the population is competitive and more assertive. The fourth dimension of the Hofstede’s model is uncertainty avoidance in which examines the extent to which a society feels threatened by uncertain and ambiguous situations (Kumar & Pruthi, 2003). Career stability, formal rules and avoidance of uncertain situations are the best options for the situation. The ranking of the country is low which states that the people are more open to unstructured ideas and situations. The fifth dimension is long term and short term orientation: The long-term orientation are thrift and perseverance whereas the short term orientation are respect for the tradition and fulfilling social obligations. The long term orientation score of the country is high which shows that the culture is perseverant and parsimonious (Juhasz, 2014).

Conclusion

It can be concluded that the culture plays a critical role in the business operations of a country. The culture of India is quite unique and different from other countries. The Indian population is family oriented and are influenced by their long history and culture. Other than that, the people of India are not punctual of their time and avoid saying ‘no’. They give indirect responses instead of direct negative response. The business values and system is heavily influenced by the traditional culture of the country. There is a hierarchal system in the family structure and there exists joint families. The decisions of the people are heavily influenced by the extended family members and the distant relatives. In contrast to it, the Singaporean population is very punctual. They also believe in hierarchal family system and the importance of giving respect to the seniors. In Singapore, senior professionals and employees are given utmost respect. They are also always on time and expect the other party to be on time. Therefore, it can be critiqued that it is important to understand the culture of different nation before establishing a business deal in that country

References

Chandra, A., Rau, P.A., & Ryans, J.K. (2002). India Business: Finding Opportunities in this Big Emerging Market. Paramount Market Publishing.

Davis, H.J., Chatterjee, S.R., & heuer, M. (2006). Management in India: Trends and Transition. SAGE. 

Dunung, S.P. (2015). bWise: Doing Business in India. Atma Global.

Fischer, M., (2011). Cultural Guide to Doing Business in India. GRIN Verlag.

Gesteland, R.R., & Gesteland, M.C. (2010). India: Cross-cultural Business Behavior: for Business People, Expatriates and Scholars. Copenhagen Business School Press DK.

Girdham, M. (2009). Culture and Business in Asia. Palgrave Macmillan.

Global Business Culture. (2017). Doing Business in India. Retrieved 7 November 2017 from https://www.worldbusinessculture.com/country-profiles/india/

Hofstede Insight. (2017). COUNTRY COMPARISON. Retrieved 8 November 2017 from https://www.hofstede-insights.com/country-comparison/india/

IOE. (2015). Doing Business in Singapore. Retrieved 8 November 2017 from https://www.singapore.doingbusinessguide.co.uk/the-guide/singapore-business-culture/

Jondle, D., & Ardichvili, A. (2017). Ethical Business Cultures in Emerging Markets. Cambridge University Press.

Juhasz, I. (2014). The Workforce in Indian Organizations. An Analysis Based Upon the Dimensions of Hofstede’s Model. Economics Questions, Issues and Problems, pp. 38-45.

Kumar, R., & Pruthi, R. (2003). Essays on Indian Culture. Discovery Publishing House.

Kwintessential. (2017). Guide To Singapore - Etiquette, Customs, Culture & Business. Retrieved 8 November 2017 from https://www.kwintessential.co.uk/resources/guides/guide-to-singapore-etiquette-customs-culture-business/

Martin, J.S., & Chaney, L.H. (2009). Passport to Success: The Essential Guide to Business Culture and Customs in America's Largest Trading Partners: The Essential Guide to Business Culture and Customs in America's Largest Trading Partners. ABC-CLIO.

Milligan, A. (2006). Singapore - Culture Smart! The Essential Guide to Customs & Culture. Kuperard.

Ministry of Foreign Affairs in Denmark. (2017). Business culture. Retrieved 7 November 2017 from https://indien.um.dk/en/the-trade-council/business-culture

Olivelle, P. (2011). Language, Texts, and Society: Explorations in Ancient Indian Culture and Religion. Anthem Press.

Stephen, B. (2016). India - Culture Smart!: The Essential Guide to Customs & Culture. Bravo Limited.

UK India. (2017). BUSINESS CULTURE IN INDIA. Retrieved 7 November 2017 from https://www.ukibc.com/india-guide/how-india/business-culture/

Visscher, S. (2007). The Business of Politics and Ethnicity: A History of the Singapore Chinese Chamber of Commerce and Industry. NUS Press.

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[Accessed 05 March 2024].

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