India is huge, lucrative, but also a very complex and challenging market. Finnish businesses are increasingly interested in operating in India, due to the large customer base and the high professional knowledge of partners and employees.
Nevertheless, many companies face huge challenges due to the cultural differences that dominate business in India. Things can easily go wrong in the Indian business environment and while dealing with Indians if cultural differences are not addressed well, according to a new doctoral study by Narashima Boopathi.
Doing business in India without having a deeper understanding of its culture is like swimming in the sea without knowing how to swim. India is a country of contrast and is highly pluralistic in terms of culture. Therefore, it is highly important for the business leaders from abroad, to possess a high Cultural intelligence Quotient (CQ) capability, in order to be successful in the Indian marketplace.
“The main aim of my research is to investigate how Cultural Intelligence Quotient (CQ) helps Finnish business leaders in an Indian business environment,” said Boopathi.
Cultural intelligence is a capability to work effectively in a culturally diverse setting that is different from one’s own. Boopathi interviewed Finnish business leaders from top management level, about their experience in India. The findings of the study revealed the differences between Finnish and Indian cultures, the challenges that are faced by the Finnish business leaders and the capabilities that are highly essential to work in the Indian environment business environment.
Cultural Intelligence is the key to do business in India
The most important finding of the dissertation identifies what particular skills and capabilities leaders must have and develop in order to be successful in India.
Experience, relationship and trust are the most crucial to be successful in India, said Boopathi. Building relationships and trust in any culture opens up the possibility to develop that deep sense, because only when local people invite you to their network can a person experience what they have been reading about. This is extremely important in an Indian context, where cultural plurality and complexity is so high. However, to establish a relationship, trust and to sense the experience in Indian business environment high level of cultural intelligence is very important.
The study points out that communication is the major difference and challenge faced by the Finnish leaders in an Indian environment. That is because the logic of communication in both nations is very different.
As Finnish leaders noticed: “Indians are very polite I think it is sometimes difficult for them to say “no” or “this is not possible. ”In Finland, the manager does the speaking. In India, the manager delegated the speaking to the subordinate”. Business leaders must understand the logic behind these communication patterns and this requires not only good cultural knowledge but also a high level of cultural intelligence as well.
“Employees should be micromanaged”
The key findings also demonstrate that it is not only important to have knowledge about India, but more importantly to have a deeper understanding (sense) about how certain things work within Indian culture.
For example, it is crucial for Finnish business leaders to understand how leadership style differs from their own. In Indian culture, leadership is based on paternalism and leaders are someone with ultimate power. Likewise, the employees should be micromanaged with frequent intervention often required when tasks are delegated.
In addition, hierarchy structures are stronger in India compared to Finland. If Finnish business leaders exhibited a similar leadership style as they would with Finns in India, it could lead to consequences including miscommunication, misunderstanding and numerous other issues. Therefore, Finnish business leaders should understand that Indians cannot be lead as they would lead Finns.
“I would say Finnish exports to India can be further boosted if only Finnish organizations and leaders pay a deeper attention to highly pluralistic Indian culture,” said Narashima Boopathi.
“It is important to understand that building a relationship in an Indian environment is the key to business success, as business always occurs between people where emotion drives the motion. So likewise, no matter how great the quality of product or service developed by a company, it becomes irrelevant if it is not adapted to the local conditions of the market in question. For example, McDonalds in India sells burgers without beef or pork because of religious sentiments. Therefore, when the Finnish organizations and leaders approach the Indian market in a culturally intelligent way, then they are able to offer culturally appropriate products and services that will lead to sustainable long-term business success.”