Doing business in India offers great benefits. However, there are a number of key cultural challenges that can generate direct and indirect costs for the companies involved. A study by EIM Business and Policy Research, commissioned by the European Commission, demonstrates that one of the main bottlenecks for doing business in India is the cultural gap, not only for European SMEs that need to understand the Indian business culture, but also for Indians who do not always relate to the business style of European companies.
When Europeans collaborate with Indians, certain kinds of misunderstandings arise on a regular basis. This is not only the case in new collaborations; it is also the case in long-lasting collaborations and even in friendships. These misunderstandings cause irritations, frustrations, lack of efficiency, and are often at the root of conflicts. Some particular examples are found when negotiating business deals or even in the everyday workplace.
Why does one negotiating process take so much time while the other decision only takes a couple of minutes? Why is it so difficult to make an appointment and to create clear agendas? Why do Indians agree to everything I say without asking questions, while the results at the time of delivering are far from what I expected? Does this involve plain lying or is there something else to it? When I ask a question to my European colleagues, why don’t I get an answer to my question while they think they give an answer? How can I motivate my Indian collaborators and partners to meet deadlines?
Are we talking about ‘communication problems’ here? Is this a language problem? Would it help if we explained ourselves better? The answer of the India Platform here is a plain ‘no’. When doing business internationally, it is not only borders that are crossed, but also cultures. A true understanding of the Indian culture on the one hand and the European culture on the other hand, leading to intelligent and appropriate action, is fundamental for conducting successful business in the long term. The cultural gap between European and Indian companies proves to be a non-tariff barrier hindering trade and impossible to penetrate through any Free Trade Agreement.
The India Platform recognises this need for training in coping with cultural differences when conducting business and is keen on further strengthening its insight into the relevant problems.
|· Cultural problems cause business failures
· Current knowledge about cultural problems does not offer adequate answers
· Competences are considered as so called ‘soft skills’: realization of the importance of training is only slowly growing
|· Increasing sense that cultural problems are deeper than either communication problems or irritations about practical differences
· Evolution of the research programme in the Comparative Science of Cultures: it is now possible to develop training modules to foster learning processes towards generating appropriate action in cultural problem situations
In this framework the reader will find a list of events organized in this focus domain below.
 Study on the opportunities for the Internationalisation of SMEs, Background document 6: Country Studies of the Seven Key Target Markets