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Discuss about the Pharmaceutical Economy Organization ?

Answer :


As the global economy has emerged into a more internationalization of business, one of the major challenges that contemporary multinational business organizations face every day is about effective communication processes in a cross-cultural environment. Cross-cultural communication has gained an importance position in various research disciplines. The main reason being as the number of business opportunities outside national borders are increasing, a lot of business organizations are deciding to develop and increase their business functions in a foreign country frequently without the recognizing that the probable financial success can twist into a catastrophic state because of lack of knowledge about cultural norms, values and principles which can result in failed cross cultural communications (Gore, 2013).

The author is the founder of an consultation farm, Going Global, which gives consultation to companies which wants to explore foreign market and develop a presence in foreign markets and he has been hired by a German pharmaceutical business organization to analyse and advise the key recommendations to enable the German pharmaceutical business organization to expand their business in India and adapt themselves and the business with the Indian culture. The basic main of this report is to identify the cultural factors that can affect the negotiations at the start-up phase for the German Pharmaceutical business organization and ethical standards when conducting business in Indian market. Also, while doing business it is extremely essential for the organization to interact with the locals and so it is extremely essential to understand local cultural customs and norms as an individual’s personality and perceptions largely influenced by their cultural background.


Understanding Culture and Cultural Diversity:

Culture is a word which has a very broader spectrum and can be simply defined as the complex structure of shared beliefs, principles, traditions, behaviours, and philosophies that individuals associated with the society or group utilizes to establish a code of law and uniformity within the community, and those set of shared values and principals are pass on from generation to generation (Trompenaars and Hampden-Turner, 2011). It also offers and permits a range of permissible behaviour within the community which can be different from one society to another. So culture is a homogenizing method of well-organized, reasonable rules, deliberately planned to encourage and persuade discipline and improvement within a group of individuals or society (Minkov, 2011). Culture provides a sense of identity and who we are to an individual. India is a very unique and rich cultural background of its own and deeply rooted with its manners and etiquettes, the communication style, philosophies, customs are very important elements of its culture even if it has adopted in the age of globalization (Magala. 2012).

Germany and India are two countries that are culturally very different. Cultural differences can be explained as the diversity in the standard of living, philosophy, customs and laws among different people of different countries, communities, political or religious groups, etc. (Hill, et al. 2013) In the age of globalization, with the help of technological improvements, India has adopted itself where Indians work in multinational companies, eat Thai food along with traditional Indian foods, rides German cars and wear American brand wears. India is at well pace with changing global economy although it is deeply rooted in its traditions and customs.  

Analysing India through Hofstede’s Cultural Dimensional Theory:

In the present contemporary business environment developing international management skills is one of the most required proficiency when applying for cross-cultural negotiations, interaction with culturally diverse workforce and decision making (Horst and Colonel, 2012). The practice of negotiation requires sensitivity as it is culture specific. The following issues can be faced by the German pharmaceutical business organization when expanding into Indian pharmaceutical market:

Power Distance:

In Hofstede’s cultural dimensional theory, it is argued that in a high power distance society, the employee and workforce trends to follow certain basic rules and instruction in workplace as they believe that they should follow the orders of the management to accomplish the work (Velo, 2011). According to social psychologist Geert Hofstede, proposes that India has a larger power distance society and scores relatively moderate in all other measures. So, it is evident from the high power distance score of India, that there is a greater level of inequality and capital within the society (Thomas and Peterson, 2014). It shows how the mass of the Indian society has accepted the unequal distribution of power and wealth as a social norm.



The individualism aspect reflects that at what level an individual give importance to self-determination as opposed to the behaviour of the individual in comparison to the collective will of the society, organization or community. In India, individuals gives more importance to family, friends and other group members which roots back to its traditions of Indian culture (Primecz, et al. 2011). The concept of individualistic is less in India, where as Germans give more importance to individualism. So, India people only deal positively and constructively with organizations that they are familiar with and can trust even at the cost of beneficial deals. Thus, it is extremely crucial for the management of the German Pharmaceutical organization to build an effective and strong relationship with Indian business partners.


Considering Hofstede’s cultural dimensional theory, masculinity in Indian culture is very high. Generally, the higher the ranking in this aspect the greater is the gap among the values of men and women. India has a higher rate of inequality among the male and female population and the main reason behind this is because of its religious and socio-economic norms that have been practiced since centuries (Radhakrishnan, 2011). But with globalization and modernization, the situation is rapidly changing and more number of female working professionals can be seen in business organizations. Still the changes are only limited to urban areas only. So, generally the working class women in India are highly educated and women in general are respected in Indian society.

Uncertain Avoidance:

In this aspect of Hofstede analysis of uncertainty avoidance is apprehensive about the employee’s acceptance of doubt or uncertainty about their job roles or work environment. Generally, a low score is regarded as a good for the organization, as it implies that the society is not concerned about employee welfare and does not control all outcomes and results (Moran, et al. 2014). It implies a larger point of acceptance and tolerance for ideas, judgment, and philosophy and also has a high acceptance for ambiguity in workplace. India’s low score in uncertainty avoidance shows that the country assists in accomplishment and achievement in low set of rules and regulations in comparison to western countries.

Long Term Orientation:

According to Hofstede analysis of long term orientation, India rank is very high which indicates that India has a very strong and deep rooted cultural background which is both consistent and well-protected. Indian’s are more committed towards their work and prefers to stay in one job for long term orientation. But this scenario is fast changing due to globalization and modernization.

Cultural factors effecting negotiations at the start-up phase:

  • As India has high ranks in power distance, so there is a system of hierarchy at workplace is much common in India business organizations. So, it would be difficult for the German pharmaceutical organization to conduct negotiations. As, the business decisions are often taken the top bosses only in Indian business organization so the management of the German Pharmaceutical organization has to fix meeting through middle managers to arrange meetings with the top level managers or decision makers. The total process is very lengthy and slow in comparison to the German counterpart.
  • In Indian society the concept of individualism is not given prior importance rather family, friendship and trusts are given more significance than individuals. Germans on the other hand are more concerned with individual success and achievements. So, to conduct effective business with Indian markets, the German pharmaceuticals have to win the hearts and trusts of the Indian population. The marketing strategy of the German pharmaceuticals should focus on positioning the organization as a trusted and reliable drug manufacturing organization.
  • The country has shown a constant economic growth since past couple of decades and also rich in highly skilled workforce, who also attracts massive prospects for foreign investments and as a result a number of multinational business organizations come across to work in a culturally diverse market in India. Indian customs and cultural traditions are very distinctive and rigid as a result foreign business organizations that come to explore Indian extensive markets often find their path of success in Indian soil very difficult as this country has different customs and traditions in different parts. So, it is extremely important to understand different cultural variation in Indian market and cross-cultural issues and recognizing cultural diversity and its potential for organizational success. To understand these matters, the management of the German Pharmaceuticals should acquire basic skills allied to accepting cultural diversity in the organization, developing an effective team with culturally diverse background, respecting and recognizing different and diverse custom, principles and behaviours of the soil of business operation (Minkov and Hofstede, 2012).

Ethical standards when doing business in India:

When conducting business in India the following aspects should be kept in mind:

  • Elders are respected in Indian society and they are responsibilities of their children. So the German Pharmaceutical organization has to keep in mind when performing business and marketing strategy that there is nothing that could possibly hurt the sentiments of the elderly people.
  • India has different regions with different cultures and traditions, so it can be confusing and complex to track all those cultural and traditional but it is extremely important to follow those when engaging in business with them. For instance, some parts of India are sticky vegetarian in diet so if there is a lunch appointment, it is better to know if your guest if vegetarian or not in advance to avoid any embarrassing situation.
  • It is not a common practice in India to call by the first name specially is the person holds an important position in an organization or senior. In western organizations it is often a practice to all people by their name but in India it is a culture to respect other and so they usually don’t call people by their first name. But often address by the position they are holding.
  • Female employees are treated with respect and any kind of harshness towards them is not accepted. Shaking hands or touching females in Indian society is seen as a rude gesture so officials engaging in professional meetings should generally greet Indian female business persons by traditional folding palms or “Namaste”.
  • Indian buyers often buy products and services with which they are emotionally attached so hurting local sentiments will increase the negative publicity for the organization.

Recommendations for building long term relationships with Indians:

The German pharmaceutical organization should focus on code of behaviour, ethics and traditions at workplace when conducting business meetings with Indian business partners as they are totally differently from the German counterpart. Business actions and performance are often implications of social behaviour of individuals, and in India society has a very strong personal relationship and faith among individuals (Khan, and Banerji, 2016). So, the organizations should build a working environment in Indian soil where the work is done on co-operation and relationship that has a foundation on mutual confidence. Individual actions and principles are guarded communally & accompanied by judgment and emotions in Indian society. And also, Indian organizations generally follow a strong hierarchical structure at workplace.

The German Pharmaceutical organization should arrange training programs for the management as well as for the employees to recognize and understand different cultural and traditional differences and value them. This process of recognizing and understanding diverse cultural values is known as cultural intelligence (Ang and Van Dyne, 2015). As a result, the training will provide skills and approaches for undergoing the process of cultural change as a result it will reduce cultural shock. Also, the management should also arrange this type of training for the Indian employees so that it will be easy for them to understand the organizations goals and objectives and also work culture. The whole process will create a global environment within the organization which will not only attract best talent around the globe but also diversely talented (Ferraro and Brody, 2015).

India has a very high score in power distance, so the German Pharmaceutical organization should strategically plan and implying the power distribution of the workplace. Indian employees prefer hierarchical organizational structure and are excellent team players so the management of the German Pharmaceutical should focus on a more pyramid structured organization (Cliffe, 2015).



The globalization and technological advancement has enlarged scopes for business organizations to go global and explore the untapped market opportunities. But it is important for the management to keep in mind about the capability to adjust in new society and circumstances of business operations can be the most significant issue for sustainability and success in socially and culturally diverse market. Diverse workforce is often regarded as the most beneficial for an organization’s cultural and traditional growth but managing one can be difficult. In this report, the author is hired by the German Pharmaceutical organization to analyse and identify the cultural challenges they may face while expanding to Indian pharmaceutical markets and recommend the best possible ways to tackle the situation and plan for long term sustainability and growth. The report has extensively studied the different cultural, traditional, socio-political and wide range of other factors of Indian society. Lastly, it is recommended that the management should hire an Indian cultural expert to guide them in recognizing the more fine-lined details about the diversity in Indian culture and assists them in Indian business environment.



Ang, S. and Van Dyne, L., 2015. Handbook of cultural intelligence. Routledge.

Cliffe, S., 2015. "Companies don't go global, people do": The international management expert Andy Molinsky advises us to get past abstractions about cultural differences. 93(10), 82.

Ferraro, G. and Brody, E.K., 2015. Cultural Dimension of Global Business. Routledge.

Gore, V., 2013. The Importance of Cross-Cultural Communication. IUP Journal of Soft Skills, 7(1), 59-65.

Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill Education (Australia).

Horst, P.R. and Colonel, L., 2012. Cross-cultural negotiations. Biblioscholar.

Khan, M., and Banerji, A., 2016. Corporate Governance and Foreign Investment in India. Indian Journal of Corporate Governance, 9(1), 19-43.

Minkov, M. and Hofstede, G., 2012. Cross-cultural analysis: the science and art of comparing the world's modern societies and their cultures. Sage.

Minkov, M., 2011. Cultural differences in a globalizing world. Emerald Group Publishing.

Moran, R.T., Abramson, N.R. and Moran, S.V., 2014. Managing cultural differences. Routledge.

Primecz, H., Romani, L. and Sackmann, S. eds., 2011. Cross-cultural management in practice: culture and negotiated meanings. Edward Elgar Publishing.

Radhakrishnan, S., 2011. Appropriately Indian: gender and culture in a new transnational class. Duke University Press.

S.J. Magala., 2012. Organizing change: Testing cultural limits of sustainability. Management Decision, 50(5), 900-908.

Thomas, D.C. and Peterson, M.F., 2014. Cross-cultural management: Essential concepts. Sage Publications.

Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding diversity in global business. Nicholas Brealey Publishing.

Velo, V., 2011. Cross-Cultural Management. Business Expert Press.

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