In the first of a series of new features, FM examines how business is carried out in countries around the world, with local experts acting as business guides
From a macro perspective, Indian business culture is a mixed bag of traditional entities and emerging transnational or multinational companies, says Ravindran Balakrishnan, ACMA, CGMA, chief financial officer of medical supplies giant International SOS, India.
“There are Indian entities that have been in existence for more than 100 years that have slowly but surely crawled along to keep pace with the present-day situation. Yet there are numerous Indian outfits that have either ceased to exist after failing to keeping up with the times, or have disintegrated because of splits in family-run businesses,” he says.
From a statutory standpoint, the messages are mixed and there is no indication of a clear and long-term policy by the government to woo foreign direct investment inflows, says Balakrishnan.
“The retrospective implementation of taxation laws has not helped and many international organisations and governments are concerned about the policies and regulations of the Indian government in the long term.”
Much of Indian business culture extends back to the time of British rule, explaining why English is the common language, says Arati Porwal, chief representative of CIMA’s India Liaison Office.
Much of Indian business resembles the public sector, she says, as a large part of industry, including insurance and banking, is publicly-owned following a major nationalisation programme in the 1950s.
Although large chunks of industry have now been privatised, this only happened quite recently.
“The result is that India has a very bureaucratic way of doing business, especially in the oil, natural gas, insurance and banking sectors. This is tempered in areas such as IT, where technology has made for a flatter structure, and also in areas such as very large banks, where multinationals are dominant,” says Porwal.
In this climate, the designation you carry is important, says Murali Sundaram, national head of enterprise relations at CIMA India.
“Where you are in the hierarchy matters. Because career advancement is considered important, multiple layers are often created to retain people, while status in the form of education plays a significant part in business life, so multiple qualifications can appear on business cards.”
Mark Bevan, FCMA, CGMA, assistant vice president of finance at JCB India, says the management information provided in India tends to be “data” rather than “information”.
“Analysis and interpretation are often left for the receiver to make,” he says.
“Performance management is not strongly practised.
Management styles are more directional, not discursive, and this is accepted.
“More organisations are progressing towards a matrix structure, meaning more people are involved in decision-making and running the business. This gives rise to more transparency and sharing of information, which in turn brings efficiencies in the system and makes room for continuous development. Even big organisations are changing their management style to ‘transparency type’, which allows middle-level managers to take part in the decision-making process and keeps them in line with the organisational changes and outlook. Managers also feel responsible and connected with this style.”
Ramanuj Kankani, head of finance and company secretary at chemical group Solvay Specialities India, says: “Cost-consciousness is one thing that can be felt in almost all the functions of a business organisation in India. People do appreciate the importance of being cost-efficient. The flip side would be that management has to be very assertive and alert to ensure that safety and quality never get compromised in the process.
“The variety of cultural norms, languages, religions and beliefs makes it absolutely necessary to customise the product for different segments and different consumers, ensuring at the same time to keep it affordable for the masses in order to reach millions of consumers.”
Business tips for India
The mechanics of doing business in India have been determined, to some extent, by the condition of the country’s infrastructure, says Arati Porwal, chief representative of CIMA’s India Liaison Office.
“As a result, things are quite slow,” she says. “Meetings do not always start or finish on time. You also have to be prepared for the agenda to be changed at the last minute, while respect for deadlines is not as high as it is in the UK and the US.”
However, Ramanuj Kankani, head of finance and company secretary at chemical group Solvay Specialities India, says when it comes to meeting deadlines, Indian workers can “manage”, even if it means working extra hours.
“In fact, some people only demonstrate their real worth and skills during a crisis,” he suggests.
“As a manager, you need to continuously push the team to be as systematic and organised as possible, and at times you may be required to keep track of important items remaining in ‘to do’ lists in the team; otherwise, there is every chance that some of these points will go missing.”
Ravindran Balakrishnan, ACMA, CGMA, chief financial officer of medical supplies giant International SOS, India, says personal contact is regarded as the standard way of doing business.
“More often than not, it is easier to do business through good contacts,” he says.
“This is because at a high level people are connected through networking, business demands, associations and the like. At the middle level, contacts are also important in getting routine work done without difficulty.”
Balakrishnan advises developing strong contacts in associations, financial institutions and government organisations, which eases the way in which business is conducted.
“This is not to construe the prevalence of bribery or corruption, but is more about the contacts business people make in their professional life.”
Kankani says being too transaction-oriented may not be the right way for India. “You need to be relationship-based to be successful in business in India as it is important to find the right partners.”
In some respects, there is a blurring of personal and private life, especially when it comes to issues such as the marriage season (which runs from September to January), says Porwal.
“Workers like to be recognised for accomplishments – much more so than in other countries – and expect their managers to understand that. There is also a strong respect for hierarchy and bosses are often called ‘sir’, while junior members of staff are not expected to speak freely. Lastly, there is a natural instinct in Indian workers to say ‘yes’ rather than ‘no’, which is considered very rude, even if appropriate.”
India’s trade deficit for April 2012 to February 2012 was estimated at $182bn, which was higher than the deficit of $170bn during April 2011 to February 2012.
Source: Government of India: Ministry of Commerce and Industry
India has the world’s third largest road network, covering more than 4.3 million km and carrying 60 per cent of freight and 87 per cent of passenger traffic.
Indian Railways is the fourth largest rail network in the world, with a track length of 114,500km. India has 13 major ports, handling a cargo volume of 850 million tonnes in 2010.
Sources: CIA, Indian Ministry of Road Transport and Highways, The World Ban
Service industry 57.2%
Contact: Arati Porwal, chief representative, India liaison office, CIMA
The insider view: India
India by numbers
GDP for India in 2012: $1.94trn
India is the world's 4th largest economy
India's growth rate in 2012: 5.3%
CPI Inflation in 2012: 10.56%
Population: 1.24 billion
- Business ethics 
- Career talk 
- Corporate finance 
- Law and regulation 
- Management accounting 
- Networking and social 
- Professional development 
- Reporting and Governance 
- Risk management 
- Strategic management-economics 
- Studying CIMA 
- Sustainability 
- Technology 
- Studying Exam E1 
- Studying Exam E2 
- Studying Exam E3 
- Studying Exam F1 
- Studying Exam F2 
- Studying Exam F3 
- Studying Exam P1 
- Studying Exam P2 
- Studying Exam P3 
- Studying Exam T4 
- Studying Exam C02 
- Studying Exam C03