The recently published 2010 Global Trends Survey reports a 46% decrease in corporate international assignments, a fall directly linked to the global financial crisis. On a positive note, 44% of multinationals surveyed expect the number of employees sent on international assignments to rise in the future. Surveying 120 multinationals, the report also provides an overview of what countries are the most popular destinations for employees on international assignments, offering considerable insight into the cross cultural challenges faced when doing business on an international scale.
According to the report, India is now the second most challenging destination for expatriates, and tops the list of countries for failure rate of international assignments, falling to fourth place in the list of emerging assignment locations. Despite its roaring economy and membership of the emerging BRIC bloc, establishing and doing business in India still poses a considerable challenge to multinational organisations.
Why is India such a problematic destination for international employees? After all, as a former British colony it is not new to Western culture and business practices. English is the official language – used throughout India’s civil service and legal system – which should theoretically facilitate cross cultural business interactions, particularly for US and UK companies. Furthermore, unlike China, India does not have a system of government many international companies could perceive as a cultural risk and a hindrance to trade.
When you look at the core values of Indian business culture, the greatest differences with the world average are in power distance and uncertainty avoidance. Indian indexes for the first are well above the world average, suggesting a widespread acceptance of uneven distributions of power within the workplace as well as a certain adversity to embracing Western management styles that encourage empowering staff and delegating decisions. As a result, despite the strong work ethic Indians are renowned for, managers on international assignment in India may find Indian employees reluctant to take on responsibilities, preferring to be told exactly what to do, when to do it and how. Furthermore, nepotism is strongly present within Indian companies, which contrasts with Western values of ascendancy by merit.
Indians have a fairly high tolerance for uncertainty, in other words, Indian business people generally accept unstructured situations and are able to successfully adapt to different business scenarios. Although this may seem in line with other Western business values, Indians seem to take it a step further. This is where potential cross cultural misunderstandings and risk begin. Such a high acceptance of uncertain situations can push adaptability to new boundaries, where honesty becomes relative and experimentation dominant. Coupled with the influence of the concept of karma and fatality, decision-making processes can appear highly volatile in the eyes of foreign business people who are unaware of Indian business culture.
There are, however, risks to approaching cross cultural business interactions from such a broad stance as offered by some of Hofstede’s research highlighted above. Often, a much more bespoke solution is both necessary and more effective in order to take into account a business’s unique corporate culture and the cross cultural skills that its managers and employees may well already possess.
This is even more the case when doing business in India, a country both as vast and diverse in territory as in population, resources and business opportunities. If you or your organisation are managing an Indian team or negotiating a merger with an Indian business, the dynamics of the business interactions will most likely be determined by the specific context in which all parties are operating, as well as the wider context of Indian business culture. A lack of tailored cross cultural awareness training solutions could well be one of the reasons for such a high rate of failure in international assignments there.
Recognising the need and the benefits of combining a general overview of culture with an organisation’s specific business needs and context, Communicaid has developed a tailored approach to intercultural training for international business. Communicaid’s Intercultural Training India programmes include Doing Business in India and Living and Working in India, providing business people and their families with concrete intercultural skills to ensure international assignments in India do not pose such a cross cultural challenge.
© Communicaid Group Ltd. 2010