In many ways, business structures mirror Indian society. Both are extremely hierarchical in nature, where people have an allotted position which they do not attempt to overturn.
It is absolutely essential to understand how deeply these hierarchical thought-processes impact on Indian attitudes to business. If overlooked, this simple fact can make working into India much more costly and inefficient.
Thus, companies tend to be run by one very strong individual (especially in the ubiquitous family companies) who will issue direct instructions down the chain of command. Everybody expects that these instructions will be given in a fairly authoritarian manner and that they will be followed unquestioningly by those further down the chain. People do not question either their position within the organisation or the validity of decisions taken – greater forces (karma and dharma) prescribe all of these.
As the boss is respected, his instructions must be correct and it is unlikely that they will be questioned even if it might appear that the instructions are wrong. Even raising a red flag could be seen as disrespectful behaviour.
This hierarchical approach means that when doing business in India it is usually necessary to liaise as near to the top as possible. A great deal of time can be wasted dealing with middle management who may have very little impact on the final decision. If dealing in the middle, try to deal with those who have some influence over the real decision-maker.
Many MNC’s try to introduce a flatter, more egalitarian structure to their Indian subsidiary in order to align it with other offices in the group. This may prove difficult in a country where hierarchy is unquestioningly accepted. It may not be impossible to take this approach but it is certain to require a great deal of explanation, retraining and patience.
Written and Produced by Keith Warburton
India is notoriously difficult. It scores badly on the ease of doing business index and a lack of investment in infrastructure over the past twenty to thirty years can test even the most seasoned of business travellers. So why bother with India when there are easier potential markets?
We feel you really do need to look at doing business in India for a number of very strong reasons. Firstly, India stands poised to become one of the world’s largest economies over the coming years as economic liberalisation kicks in after decades of political stagnation. It has a population of almost 1.3 billion of which 50% are under the age of 30 and therefore the consumer potential of the country is almost limitless. Secondly, the lack of historical investment in the country means that India needs everything. You cannot point to a sector which is not crying out for investment and new product ideas. Thirdly, and very importantly, India has a highly educated, aspirational workforce who can help you build your business on the ground.
India is the ‘next big thing’ – you really cannot afford to ignore it.
You cannot ignore India but if you want to business in India successfully, you need to understand it. You need to understand the cultural drivers and expectations of the people you will be working with when you get there and you need to understand how that cultural knowledge can help you succeed in-country.
This country profile provides an overview of some of the key aspects of Indian business culture in a concise, easy to follow-format. The document includes information on: