Cross-cultural understanding of India and Germany with regards to business

Table of Content

1. Introduction Increased internationalization in the political, economic and social areas has led to greater interpersonal cross-cultural contact. In order to be able to effectively and cooperatively work on tasks together with people with different backgrounds one should be culturally sensitive. This involves having a good knowledge of cultural competences, which as described by Terry Cross (1988) are “a set of congruent behaviors, attitudes and policies that come together in a system, agency, and among professionals to work effectively in cross-cultural situations”.

Especially when doing business in countries with a highly diverse culture it is appropriate to be well prepared and to know about certain distinctions. These days, India is more and more becoming a focus of interest, particularly for people investing in Indian companies (Shira& Accociates, 2012,p. 4). Since the economic reforms made it to be one of the world’s fastest-growing economies (GDP (real) growth rate list by the CIA World Factbook) there is an incredible interest in doing business with India.

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But not only its huge economic impact but also the enormous cultural differences led to the consideration that it would be an excellent country to apply the project task. The purpose of this paper is to describe one of the most significant and well known theories of cross-cultural management the Trompenaars seven dimensions. Moreover, India and Germany will be compared by focusing on cultural differences in order to provide a general overview of the two countries. Furthermore several leadership styles will be explained using the direct comparison of India, Germany and also occurring dilemmas are analyzed and possible solutions are provided.

To make this theoretical content more tangible and to support the findings a case study is deducted by Catalina Esser, which is based on her personal experiences in India. As a last analysis, the most important findings are represented and a resulting conclusion is evaluated. 2. Cross- Cultural Differences Managers in today’s globalized business world have to face problems or misunderstandings resulting from intercultural differences day-to-day. These can interfere with successfully reaching a given aim. To avoid this, managers have to establish certain skills.

But in order to be able to acquire those skills also referred to as cultural competences becoming aware of one’s own culture and assumptions about values, human behavior and so forth is the first step into the right direction (Vicente Gannam Guidelines). 2. 1 German Culture To understand German culture it might be instructive to go back in the past. More than sixty years after the end of World War Two the past is still haunting on German population. Yet, there are ongoing discussions about responsibility and guilt which are a legacy of the Nazi regime.

Unlike almost any other country Germany was mainly involved in one of the most horrible and darkest periods in world history. And this has still and will always have a great impact on German life and thinking (Flippo, 1997,p. 58-61). Based on this past, it is especially for Germans enormously important not to underestimate the eventually upcoming thoughts or stereotypes of foreigners and to know how to cope with certain situations. It is very unlikely, that some business-partner accuse the other but nevertheless it is vital to put a particularly high focus on not behaving in any way that could somehow offend a partner.

In addition to the historical responsibility, there are also other factors, which need to be taken into account. When it comes to business style there are quite a few characteristics about which Germans should be aware of. First of all, it is part of the German attitude to put a very high focus on order and conformity. Hence, it developed a tendency to put rules and procedures before people. This can be problematic, especially when dealing with cultures which lay their focus rather on the opposite for instance on personal relationships (Flippo, 1997,p.

21) . Being aware of this universalism and trying to adjust it would be the appropriate way when dealing with people with another cultural background, such as Indians, in order to create a comfortable atmosphere in which both business partners like to work. Beside this, Germans are also famous for their Germanic sense of time. Punctuality is one of the most important values and highly rewarded. Being late on meetings or appointments can easily lead to confusion and irritation on German side and can cause a rather negative start in the negotiation.

Knowing this, it is recommended to expect that people with a more relaxed attitude towards time- management may not be on time but rather late on habit (Flippo, 1997,p. 125-126). In addition to punctuality there is still another aspect for which Germans are well-known worldwide. With plenty of different kinds of beer this might be a rather positive and likable part of the German culture (Flippo, 1997,p. 13). Even if dealing with people whose religion permits the use of alcohol this topic could be seen as an icebreaker and can create a relaxed atmosphere(Flippo,1997,p.

6). Showing that Germans also know how to enjoy life and do not always tend to have a pessimistic view on things makes them more sympathetic (Vermeer,2008,p. 46). 2. 2Indian Culture The Indian culture is highly diverse from the German. To get an overall understanding of actual, religious and also political occurrences, it is vital to have a solid knowledge of historical developments. Poring over a map of India it becomes quite obvious that there is a big division in states.

This suggests that India has always been a country consisting of many states, ruled in early times by so called maharadschas, also referred to as ‘big kings’. Due to this breakdown in several parts many cultural differences could flourish (Vermeer,2008,p. 31). At the time, when Islam expanded across India there was a colorful mixture of traditions from West and East and customs of Hinduism, Islam and also others. Until now, there have been plenty of dynasties which alternated. One important cut in Indian history not to forget to mention, is the control of the British empire of India.

In 1850 the Brits controlled almost every part of the country. Around 1920 Mahatma Gandhi initiated several protests against Britain which finally led to the independence of India in 1947 (Shira&Associates,2012,p. 9-10). Since then expect of some reverses India is more and more developing in a very positive way. For a basic understanding of the Indian culture it is also fundamental to know something about religion. India, compared to other countries, is a country in which spirituality is of enormous importance. No other country has so many different religions, spiritual leaders as well as Ashrams.

Interesting hereby is that even though the majority of the population is Hindu which is literally about 83 percent (Vermeer,2008,p. 74) they have a high tolerance towards other religions and beliefs. Hindus are also very liberal which is expressed in terms of having several gods that there is not one church or one spiritual head and so forth. Generally speaking it is very difficult to define Hinduism because it is more or less a collection of different religious beliefs. Moreover, Hinduism developed the caste system, which can be understood as an order of rank in which you are born in.

It basically ensures a fixed rang in the Indian society for everyone. One belief resulting from this system is that due to reincarnation Hindus believe that they can affect their after-life by positive and also negative actions. This leads to a higher appreciation for spiritual wealth rather than for tangible richness (Vermeer,2008,p. 76). This is one area where business partners always tend to struggle with. All the cultural differences such as social hierarchies and religious beliefs make it sometimes difficult to work together with managers from India. “Why stress in this life if you have more lives to come?

” (Doing Business in India:2012). 3. Trompenaars seven dimensions In the following part, the German and Indian cultures are going to be analyzed using Fons Trompenaars’ model of the seven dimensions of culture, which he published in his book “Riding the waves of culture”. 3. 1 Universalism versus Particularism There are two different types how the judgment of other people’s behavior can be justified: Universalist and particularist According to Trompenaars, universalistic cultures focus on rules and standards, which are assumed to be superior to the need of human relationships.

Particularistic cultures, however, focus firstly on friendships and personal relationships than on laws and formal rules (Trompenaars, 1998, p. 31). Considering the German culture, it can be said that it is a strongly universalistic culture. It is generally known that most of the Germans put emphasis on bureaucracy and correct implementation of rules and standards. One could even say that a lack of order and structure would cause an uncomfortable feeling for most of the Germans (Flippo, 1997, p. 21). As an example you could see that most of the people would not cross the street if the light was red, even if there was no traffic.

Even more, people who are passing it regardless of the others often get frowned at (Trompenaars, 1998, p. 31). It can be assumed that universalism comes along with modernisation and that a particularistic attitude is more common in rural areas where people know each other personally. Therefore one can say that the Indian culture tends to be rather particularistic, considering that approximately two third of Indians populations lives outside of cities (World Bank, 2011). 3. 2 Individualism versus Communitarianism These two types distinguish between the culture acting as a group or acting based on individual interests.

Therefore, in an individualist society, the individual is put before the group, meaning that individual happiness is more important than the welfare of the whole group. In contrast, a communitarian culture focuses on the whole community and assumes that serving the interest of the group leads to a satisfaction of every individual. (Trompenaars, 1998, p. 51). In this case, it is also assumed that more industrialized and modernized countries tend to be individualist, whereas less developed countries rather be communitarian (Trompenaars, 1998, p.

54). Therefore, considering that Germany is an industrialized country and practising capitalism, it can be said that people are rather individualist and seeking for their own welfare (Flippo, 1997, p. 16). When several Indians have been asked if they think that unlimited freedom of individuals results in an improvement of their quality of life, 37% agreed (Trompenaars, 1998, p. 52) This shows that Indians had rather an communitarian orientation in the 90’s, considering that just that many inhabitants approved of this statement.

India is a country on his way to industrialization and considered as an emerged market (Khanna &Palepu, 2000, p. 266). Because of this, it can be assumed that there is no clear trend to either an individualist or a communitarian culture, but that the tendency for the future would be an individualist-orientation. 3. 3 Achievement versus Ascription Achievement versus ascription describes the distribution of status and authority among a community. In an achievement-oriented culture people gain status after having proved themselves by accomplishment.

Ascription-oriented cultures, however, base status on factors like social position, gender, age and wealth, not on the actual performance. (Trompenaars, 1998, p. 105). According to a research conducted by Trompenaars, there is a connection between Protestantism and achievement orientation as well as between Catholic and Hindu cultures and ascription orientation (Trompenaars, 1998, p. 108). Considering that Germany is about half Protestant, half Catholic (Flippo, 1997, p. 111), there is no clear tendency in either an achieving, or an ascribing direction.

Nevertheless, after asking the Germans if they think respect depends on family background, 74% disagreed with this statement, which shows rather an achievement orientation. India as a country with approximately 83% Hindu inhabitants (Vermeer,2008,p. 74) is assumed to have a tendency of an ascription-oriented society. Furthermore, considering that the caste-system, which orders people in different castes, plays an essential role in India, statuses always played a higher role than in other cultures. Due to this traditional pattern, the attempt to work hard in order

to gain a better status is very difficult (Beteille, 1996, p. 206). However, when several Indians have been asked the same question if respect depends on family background, only 57% of the questioned inhabitants disagreed (Trompennars, 1998, p. 109). This trend can be derived from the progress and development India is going through, as well as from cultural differences in big cities and in rural areas. 3. 4 Neutral versus Affective The next dimension deals with the display of emotions in public. Members of neutral cultures do not express their thoughts and feelings intentionally.

In contrast, members of affective cultures are characterized by talking about what they think and feel. Nevertheless, this does not mean that members of neutral cultures are unfeeling or cold, it rather derives from their cultures convention. In a research Trompenaars conducted, members of the German cultures were asked if they would express their feelings if they got upset at their work place. Of the people asked, 35% responded that they would hide their feelings (Trompenaars, 1998, p. 71). This shows that Germans tend to have an affective nature.

Nevertheless, Germans are said to be unfriendly in public and not smiling commonly, although this assumption derives from a European thought that smiling is superficial and has nothing to do with the German attitude itself (Flippo, 1997, p. 62). Considering the Indian culture, there is the perception from western countries that Indians are rather emotional in their public behavior. This thinking is also caused by the famous Bollywood movie scene coming from India, in which Indian people express their feelings loudly. This perception is not wrong, considering that people who lived with Indians could report a similar impression (Lynch, 1990, p.

3). Therefore one could say the Indian culture as well as an affective-oriented community. 3. 5 Specific versus Diffuse These two types distinguish the extent people separate their private from their working life. In a specific community, one would separate his private life clearly from his working life and with that also change his behavior in a group. A member of a diffuse community, however, would see no clear distinction between working and private life and behave similarly outside of the office. Both, the Indian and the German culture have a tendency to a more specific lifestyle.

As a research people where asked if they would paint their bosses’ house if he asked for their help. Of the Germans, 83% would not help him and of the Indians, 66% would deny as well. In both cultures the majority has a more specific attitude, whereas in Germany the tendency is much clearer. (Trompenaars, 1998, p. 90) 3. 6 Internal versus External Internal versus external describes the attitude a community has towards their environment. In this case, an internal or inner-directed society tries to control their environment and dominate it.

In comparison, an external, our outer-directed society prefers to conform itself to the nature and tries to live with it in harmony. (Trompenaars, 1998, p. 145) An American Psychologist, J. B. Rotter questioned people from different geographical areas if they think it is necessary to control natural forces. Resulting from this research, of both German and Indian respondents, 30% believed one should try to control the nature. Even if they did not react strongly in one direction, it nevertheless can be said that the cultures have an external tendency.

When been asked if they think that what happens to them results from their own doing, 66% of German respondents and 63% of Indian respondents agreed. Their attitudes are very similar and underline a more external orientation of both cultures. (Trompenaars, 1998, pp. 146-148) 3. 7 Time management The last dimension measures the willingness to either do one thing at a time or work on several things at a time. Members of a sequential culture prefer to concentrate on one activity at a time, whereas members of synchronic cultures rather do several activities simultaneously (Trompenaars, 1998, pp.

123-124). Considering the German culture, one can easily say that it is strongly sequential. Time and punctuality play an important role in the German society and strict scheduling is an implemented manner in every business. (Flippo, 1997, pp. 125-126) In contrast, Indian people are assumed to be synchronic in their way of managing time. Their attitude is completely different from the German perception of time, considering that they think that things will happen when they happen. Punctuality and deadlines are not

considered important and their attitude of “do it later” can also be derived from the belief in reincarnation (Joshi, 2009, p. 59) 4. Differences in management tasks between India and Germany 4. 1 Differences In general, management is “the process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources. ” (Nickels ,McHugh and McHugh, 2010, p. 179) Through the great historical, social and cultural differences, the countries Germany and India have, it is evident that the single management tasks in the particular countries differ to a great extent.

The Indian business culture these days is still very much influenced by the imperialistic history of the country and the existing caste system which arranges the social structures in a hierarchy. Thus, the Indians are conscious to their caste and they know that the people in higher castes have a greater authority. They accept their positions which also imply that people are fixed in these positions and are not very flexible in doing things other than their usual tasks.

Hence, Indians usually do not like spontaneous changes or any kind of uncertainty because they are simply not used to react to these kinds of events and they do not know how to cope with it. (Budhwar and Varma, 2011, p. 50) Of course the Germans are aware of their supervisors and their own job positions as well but the fact that half of the people in India would not show their feelings openly at work whereas just one third of the Germans would not do it shows that the structure of hierarchy and the aloofness is more typical for the Indian culture.

(Trompenaars, 1998, p. 71) It is obvious that the Indian societal culture has a strong impact on the management tasks. Especially the task staffing is important in the societal aspect. Staffing basically means hiring, motivating, and retaining people who are most suitable for a particular job and fit to the company’s objectives. (Nickels, McHugh and McHugh, 2010, p. 189) Different than in Germany, the hiring for top managerial positions is in most of the cases “restricted by familial, communal and political considerations.

” ( Budhwar and Varma, 2011, p. 50) Positions are often filled with people from the family or close friends of the family. It shows that nepotism is very common in the Indian business life and not only in higher but also in the lower levels of the castes. Consequently it is very difficult for people from the outside to get a top position in a company. ( Budhwar and Varma, 2010, p. 51) Certainly networks and connections are also important and advantageous in Germany but at the end it is the educational background and the qualification that is essential.

Employees in India are seen as a relatively fixed resource but not with very high potential because they do not get more responsibility than their position requires. (Budhwar and Varma, 2011, p. 53) This can be underlined by the fact that in the Indian management culture “particularism” which means focusing on the interests of one group and also “stability” are very important features. In the Western culture it is the complete opposite since “Individualism”, so the interest of a single person and also “mobility” are in the centre of interest.

(Budhwar and Varma, 2011, p. 54) Indians are very restricted in their acting within a company but they are not expected to do anything else than what is related to their job. Empowering staff as it is a great issue in German companies is not essential or necessary in the Indian business environment. A further difference between the two cultures is that the management style in India is quite paternalistic where the leader is seen as kind of a father that is responsible for the decision making process.

This so called familial culture has as mentioned before a very steep hierarchical structure whereas the familial culture in Germany is not that distinctive because the hierarchical structure is lower and the management style in general more participative and democratic as managers and employee work together more closely. (Trompenaars, 1998, p. 165-167) It is very difficult to change an autocratic leadership style especially when its characteristics are also anchored in the culture of a society as it is the case in India.

They are socialized in an environment where family bonds and dependence on others are most valuable so they are simply not used to express themselves in the working context and it is not natural to them. (Budhwar and Varma, 2011, p. 53) However, the business culture in India is rapidly changing through the influence and presence of more and more multi-national companies. So they need to improve their work processes and work dynamics in order to stay competitive in the world market. (Budhwar and Varma, 2011, p.

54)In the human resource context it would be definitely beneficial to encourage the employees to actively participate in work processes. Therefore the managers and the supervisors should motivate and empower their workers. (Budhwar and Varma, 2011, p. 51) However, because of the rapid changes it is very difficult to characterize a specific management-style. Especially during the last years more and more managers in India are trained in colleges that teach the Western education models.

On the other side there are still the values and moorings from the strong family culture which stand in contrast to the Western management styles. (Budhwar and Varma, 2011, p. 51) To summarize it is inevitable that the employees and the managers from both cultures keep in mind that there are differences between the management styles and the cultures. This is the only way to cope with it and to do successful business with each other. India is a country with a long history and probably the country with the greatest mixture of ethnic, religious, linguistic and caste collectives (Budhwar and Varma, 2011, p.

49). Nevertheless, it is worthy and a duty to learn about their business habits as they economy is rapidly growing and they are “likely to be among the top two or three leading economies of the world” (Budhwar and Varma, 2011, p. 3) 4. 2 Dilemmas As already mentioned the Indian and the German culture are totally different. In Germany it is considered to be normal, for example being on time whereas in India it is considered to be normal when being late. Because of a different cultural background, in India things are understood totally different.

“As a result, what may be reasonable in Germany is not reasonable in India and vice versa. ” (Doing Business in India, a cultural perspective : 2004) This is why dilemmas and problems can occur when negotiating with Indian people. Considering for example a joint venture or a German company being outsourced to India, it is essential to know the cultural habits and how to react on them to have a successful negotiation. Although Indians might be late at work or at a meeting, it is still supposed that the other side is there on time.

(Working in India, Cultural Awareness; Tips on doing business in India; 2012) An important tradition in India is to take off the shoes before entering a room or a building. Therefore every Western manager should look for shoes in front of a building or room. (Working in India, Cultural Awareness; Tips on doing business in India : 2012) It is expected to be dressed formally. Indians will show up in traditional clothes, especially the woman. They will wear a Sari. For western women it is likely to dress conservative rather than dress casual or even generous.

(Working in India, Cultural Awareness; Tips on doing business in India : 2012) During a negotiation it is important to understand the Indian body language. Without knowing the Indian body language it will be difficult to understand the other side and it may cause a conflict that could have been prevented. Whereas moving the head from one side to the other means in Western countries “no”, in India it means acknowledgment. In addition Indians do not like gestures; too much physical contact could intimidate them. This could lead to a lack of communication and negotiation would fail.

(Working in India, Cultural Awareness; Tips on doing business in India : 2012) Before going into business with India it is important to know that they work in a hierarchal structure. The Boss has to be treated with high respect and has to be welcomed warmly. In a meeting or a negotiation it is not usual to criticize someone’s idea. It might be seen as disrespectful. Especially the ideas the supervisors have are not criticized due to the high respect. (Doing Business in India, a cultural perspective : 2004) It is not common to show feelings in Indian companies so it might be a problem to show deep feelings and emotions in a negotiation.

Also aggressiveness is not very likely to be seen in Indian companies. It can lead to a conflict and to negotiation would fail. It is also important to build up a trustful relationship but this will take time. When built up a good relationship Indians are likely to talk about their family, children and their home. (Doing Business in India, a cultural perspective: 2004) They often connect private and business life so they might invite one to their home. Furthermore they will offer one a wide range of traditional food and it is impolite not to take the invitation.

(Doing Business in India, a cultural perspective: 2004) As India has a particularistic culture it might be difficult to find a solution or to reach the goals in a business meeting, because in India no one would make a decision by himself. Even though it is a collectivistic culture, in an organization they would still not make any decisions alone because they do not have the flexibility the western cultures have. This comes from the hierarchal structure they use to have in work life. Supervisors are the ones who make decisions and who are responsible for deadlines. Due to the fact that many managers are studying

or have studied at Western universities, the structure in many companies changed and employees are given more power and flexibility. (Budhwar and Varma, 2011, p. 51) It is very important to know that India is a very big country and that it has people from different cultural backgrounds. So you will always meet new people who are totally different and who can have totally different habits. Nevertheless it is essential to prepare a manager or an employee before going into a Indian company. The human resource department of a company should provide the managers cross-cultural understanding lessons.

Workshops have to be offered about Indian culture and their organizational culture. Also supervisors who go to India to take over a company or a position have to be well prepared. They have to get taught the Indian negotiating styles, how to treat employees and how to lead in a hierarchal structure. Coming from a individualistic culture it might be difficult to adapt to a collectivistic culture and to understand the corporate culture of an Indian company. So all in all preparation and help provided from the parent company is very important to prepare the managers in the best way to succeed their goal (Welge, Holtbrugge, 1998: p.

198). 5. Case Study India Focusing on the business life, this case study will deal with one day of my life in the business world of India. After my graduation I realized an internship in India, in the city of Pune. I stayed there for 6 weeks at the “Geographic Institution of the Bharati Vidyapeeth Deemed University”. There I supported the University lecturers with a school-project where young students were sensitized on climate change and sustainability in the education sector. During my internship we traveled twice to Goa where we had two schools where we presented the project.

During my stay I got an inside view of the Indian business life, how colleagues worked together, how they had lunch together, how they made business travels and how supervisors treated the stuff. As I lived with one of the university lecturers I had an inside view of the private life but also on the business life which is totally different from our daily lives. In the morning we got up very early. The family got up earlier than me because they began their day with a prayer. After this we had breakfast all together.

Then we had a long trip to the university in the very dense and chaotic traffic. Due to the traffic in this city it almost took us one hour. We started work at around 10 o? clock in a two room bureau. Everyone had his task and there was almost no team work. When someone had a question he could ask but most of the time everyone worked for himself. As I was sitting in the room with the two women who were the head of the department I could observe that they were obviously treated differently.

Everyone demonstrated respectfulness and only named them with their title. The superior of the institution is a man who is highly respected at the whole university and I experienced that students talked to him in a very polite way. Also the employees were very respectful. When I was traveling to Goa I stayed with some other lecturers from the university and I experienced it different this time. Between them there was not this kind of respect. They treated each other like friends and made jokes but they never talked about private life or personal problems.

They even did not talk about their castes or religion but when I asked them about this topic they all knew who of them was member of a higher caste due to their names. Talking about the caste system they told me that it would not exist nowadays. I observed something different because I had a private talk to one of the lecturers about her wedding and she told me that she would not love the man she had to marry but the other man she is really in love with is not in her caste so the relationship or even a marriage would be impossible.

During the lunch break we all sat together and everyone brought food from home. But everyone ate from everyone and shared his meal. First I was confused when someone took my sandwich and ate it but then I understood the system. During the lunch the head of the department and the boss sat together whereas in another room the other colleagues where having lunch. When someone from outside came to a meeting they went out to a nearby restaurant to have lunch there. The dress code at the institution was a Sari.

Every woman with a higher position had to wear it. The lecturers wore mostly other traditional clothes but were not obligated to wear Saris. My day at the institute normally ended at about 6 or 7 o? clock. We also worked on Saturdays as it is a usual working day and they work from about 10 to 3 or 4 o? clock. All in all I can say that the internship was a very good experience for me. Not only the experience that I made outside the institution but also the business life and the treatment among each other.

All these things I experienced and observed became part of me and still influence my way of thinking and treating people of this culture. I learned a lot about their religion, the caste system and how everything is based on this. Sometimes it was very hard for me but even though I would never had missed to make this great experience. 6. Conclusion Becoming aware of one’s own culture is an essential aspect of cross- cultural understanding. Due to applying Trompenaars’ seven dimensions

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