Indian Negotiation Styles - Essay Example

? Indian Negotiation Styles Ali Ghandour Indian Negotiation Styles Over the centuries, India has remained one of the most significant destinations for international commerce. A range of unique factors has contributed to India’s growing relevance in international trade. Processes of economic liberalization and globalization have contributed to the steady growth experienced in the country. India’s economic growth was estimated at 7.5 % in the year 2000. Some of the areas that have experienced significant growth include the Informational Communication and Technology (ICT) sector and import-export trade. A break from socialist policies to a capitalist oriented economic structure has been cited as one of the contributing factors to the country’s economic growth. Western countries have increased their levels of interest in the country for purposes of economic partnership. India’s high population estimated at over a billion has attracted foreign investors who seek market for their products or cheap labor. However engaging with India demands a deeper connection with the culture, attitudes, and philosophies underlying their business practices. The Problem Multinationals and other global business entities that have attempted to establish their businesses in India have been faced with unique challenges that demanded the understanding of the corporate climate. The levels of success or failure in Indian business are directly related to the manner in which international players adjust to the unique character of Indian culture. Studies have established a strong connection between culture and business in the Indian context. Past and recent analyses on Indian negotiating style show that the styles adopted in Indian business environment are largely consistent with their cultural believes, social values, and attitudes towards life in general (Stephen, 2010). Indians embrace family values and respect the aspect of honesty, respect, order, and hierarchy. Indian culture also features a strong element of interpersonal communications and relationships. The individual is never separate from the deal. They view the negotiation in human terms rather than strictly technical business processes. In essence, Indian negotiating styles combines the values of culture honesty and details in ways that focus largely on the results rather than the processes. It is therefore important for business theorists to establish ways of establishing ways through which the synergies of culture, attitudes, and values can be incorporated into business practice. The Problem Background In India, business is considered as a culture and not simply a means towards profits. Success and failure are assessed in terms of the character and ability of agents rather than logical outcomes of strategies and processes (Martin, & Chaney, 2009). In the context of international business, the negotiation process in India is considered, in many circles, as a process of balance of power and an adjustment of equilibriums between the presumed cultural greatness of the west and Indian culture. Cultural balance and cultural universalism acquire more prominence to challenge the negative assumptions resident in theories of cultural relativism as understood in business context. Indian negotiating styles significantly rely on the details (Zubko, & Sahay, 2010). Issues are broken down into their constituent parts and analyzed in accordance with the manner in which they relate to the bigger picture. In essence, the process entails the realization of a range of issues that connect with outcomes. Usually, the focus begins with the bigger picture before attention is given to the driving factors and the specifics of the deal. Clarity and order in the details of the deal becomes necessary for purposes of assessing the feasibility of the deal. Naturally, Indians prefer the guidance of clear data and mathematical procedure towards the attainment of a given goal. This trait is consistent with the cultural attachment to matters of mathematical and scientific importance. Studies have connected these traits to the flourishing IT and medicine culture in the country. Family and business comprise the uniform continuum that forms part of the Indian culture (Desai, 2012). Appreciating the family connections behind India’s corporate world remains a key starting point of developing insights into the working of the system. Usually, knowledge on the role and place of family in the business environment is an important advantage in developing better negotiation strategies in the Indian business environment. Businesses are usually hereditary. Such knowledge should also be accompanied by the awareness of the kind of hierarchies that run through families and kinships (Gesteland, & Gesteland, 2010). The process of negotiation is usually considered in terms of the transaction of power and respect between the negotiating parties. Acknowledgement of status is considered of ultimate importance in the general process of negotiation. This particular attribute is consistent with the caste nature of Indian society, which requires an appreciation of classes, divisions, and hierarchies. Language plays an important role in India’s communication style. Generally, Indian business negotiations are conducted in vocabularies of respect and honor (Zubko, & Sahay, 2010). Certain words and responses that are innocuous in the general western discourse are usually considered as offensive or rude within India’s cultural and business context. Denials, oppositions, and rejections have to be conducted in kind words that do not provide any hints of rudeness or lack of finesse in the communication process. However, emotional appeals and vigorous defense of facts is permissible as a way of building advantage on aspects of the deal. Such negotiations should, in most cases, be accompanied by workable details, examples, methods, and all relevant information that would provide both competitive advantage and influence in the part of the deal. Proof and details are necessary factors for furnishing optimism in the deals. Feedback remains one of the key factors in effective business communication within the Indian context (Gesteland, & Gesteland, 2010). Generally, feedback implies a sense of respect and trust, which are the necessary characters of nurturing and sustaining long-term business relations within India’s corporate environment. Honesty, fidelity, and compromise are some of the factors that determine the level of success of negotiation in the Indian business environment. Presentation and character are some of the factors that guarantee success or failure in the Indian negotiating environment. Indians prefer and develop trust and respect in people who dress modestly and whose character displays a certain level of honor. Negotiation is considered as a process of socialization. Indian culture encourages socialization among equals. Therefore, it becomes important to adjust one’s demeanor and presentation in the course of negotiations. Strategy and honor are key factors in the development of reliable business deals within the Indian cultural context (Zubko, & Sahay, 2010). Business deals should focus on the aspects of long-terms benefits and the spirit of compromise. The balance in the give and take nature in India’s negotiations must be retained in order to increase the chances for positive outcomes in the negotiations. Arrogance and selfishness display deficiency in morals and business acumen. The appreciation of the communal values and the cultural centrality in processes remains an important factor in successful negotiations. Indians are generally suspicious of foreigners. There is the cultural notion that foreigners are not to be trusted and that they only seek to take advantage of the local people. An appreciation of Indian culture and a display of the characters of hospitality and humility are some of the counter-measures that could help in developing trust for the purpose of successful negotiations. Purpose of the Study This research on the international business negotiations in India, aims at understanding the business negotiating style of India, including the variety of ways through which they negotiate, why this is important in India, and the different factors that shape or influence international business negotiations in India. According to Ayoko (2007), the international business negotiations do not only involve communication in the economic context among countries. Cultures of the different participating countries also play a big role in the international negotiation process. During the process of negotiation, the ideas and behaviours of the different parties are shaped by their own national cultures. In India, culture is the core and basis of business, thereby, playing the greatest role in their negotiations (Lewis, 2005: Benoliel, 2009). The purpose of this study is therefore, to determine how different cultural components of the Indian culture influence their international business negotiations. Among the important cultural components in India, which this research will discuss, is the cultural factor of language. Benoliel (2009) notes that this is an influential aspect of Indian culture in their international negotiation process, as this generally influences their communication process during the negotiations. Normally, different countries exhibit varying values, thinking patterns, and group consciousness. During negotiations, these differences always come up. Therefore, the study will address these important aspects with regard to India, and their negotiation styles. Among the values that the Indians uphold are feedback, which is based on mutual trust, honesty, and understanding, use of respectful and kind language in communication, and ensuring that there is clarity in communication. All these Indian values influence their international business negotiation styles, therefore, are of interest to this study. This study mainly aims to establish why culture is a great player in the international business negotiations in India. Hollensen (2001) notes that, the cultures of the various parties in the negotiation process need to be understood, for a successful negotiation to be reached. This helps in gaining of balance between the cultures of the different parties in the negotiation, thus, this becomes a good strategy in negotiation processes among different countries. This study also has the purpose of determining how social organization in India influences their international business negotiation styles. This is with respect to the family unit, which plays a great role in the Indian business. Therefore, this study will seek to understand how the role of the family unit in Indian businesses is transferred to their international business negotiations, and how this role of the family unit will shape and influence the negotiation styles in India. Additionally, the researcher noted that Indians are known to be strategic people in their businesses, prioritizing the long-term business benefits. Therefore, this study will also determine how this aspect is applied to international business negotiations, and how it influences the Indian negotiation styles. Having a clear understanding of the negotiation styles of a country helps successful business and social interactions (Cohen, 1997).Therefore, this study is important, as it sheds light on the negotiation styles of India, and this will be beneficial to different countries interested in doing business in India. In addition, anyone involved in different levels of social interaction with Indians, or in any other activity that requires negotiation with Indians, will find this study useful too, as it gives details of the negotiation styles of India. This study focuses on the negotiation style of India in international business negotiations, with respect to their culture, which greatly shapes their negotiation styles. Research Question This study addresses the question: What are the elements that shape international business negotiating styles in India, how is the process conducted, and how can this process be made effective? References Ayoko, O.B. (2007). “Communication openness, conflict events and reactions to conflict in culturally diverse workgroups.” Cross Cultural Management: An International Journal, 14(2), pp. 105-124. Benoliel, M. (2009). Negotiating Successfully in Asia. Lee Kong Chian School of Business, Singapore Management University. Retrieved 1 February 2013 http://www.centerfornegotiation.com/assets/Negotiating_successfully_in_Asia.pdf Cohen, R. (1997). Negotiating Across Cultures: International Communication in an Interdependent World. New Jersey: US Institute of Peace Press. Desai, R. (2012). Indian Business Culture. London: Routledge. Gesteland, R. R., & Gesteland, M. C. (2010). India: Cross-cultural business behavior: for business people, expatriates and scholars. Frederiksberg: Copenhagen Business School Press. Hollensen, S. (2001). Global Marketing. A Market-responsive Approach. London: Pearson Education Limited Lewis, R. (2005). When Cultures Collide: Leading Across Cultures: A Major New Edition of the Global Guide. New York: Nicholas Brealey Publishing. Martin, J. S., & Chaney, L. H. (2009). Passport to success: The essential guide to business culture and customs in America's largest trading partners. Westport, Conn: Praeger. Stephen, B. (2010). India. London, Great Britain: Kuperard. Zubko, K. C., & Sahay, R. R. (2010). Inside the Indian business mind: A tactical guide for managers. Santa Barbara, Calif: Praeger. Annotated Bibliography Ayoko, O.B. (2007). “Communication openness, conflict events, and reactions to conflict in culturally diverse workgroups.” Cross Cultural Management: An International Journal, 14(2), pp. 105-124. This research paper focuses on importance of open communication in conflict resolution between different cultural groups. It highlights the benefits and harms of diversity in multicultural interactions, and how, open communication can enhance these interactions. Literature review has been used to build on the social identity theory and to develop hypothesis involving relationships between the variables. Multiple regression has been used to test these relationships. Results showed that groups with low levels of communication openness exhibit destructive reactions during conflicts, compared to those with high levels of communication openness. This source fits in this research as this research addresses negotiations between different countries with different cultures. Applying open communication in these negotiations will be beneficial, as this source recommends. Benoliel, M. (2009). Negotiating Successfully in Asia. Lee Kong Chian School of Business, Singapore Management University. http://www.centerfornegotiation.com/assets/Negotiating_successfully_in_Asia.pdf The main argument is that Asian countries, specifically India and China, would soon become economic giants. This will necessitate the Western countries to make business deals with them, mainly through negotiations. However, the different cultures of the West and East will become a challenge for most Western companies. The author therefore, traces the cultural roots of India, Japan, and China, and identifies differences between Western and Eastern cultures. The factors that influence negotiation processes of these countries are also highlighted. Finally, the author offers his recommendations of how the Western countries can ensure successful negotiations with India and other Asian countries. Cohen, R. (1997). “Negotiating Across Cultures: International Communication in an Interdependent World.” New Jersey: US Institute of Peace Press. The main argument is that, although different countries can relate well and agree on various issues, when they are faced with matters involving their different national cultures, it becomes a challenge for most nations. Cohen identifies the differentiating cultural aspects as modes of communication and styles of negotiation in different countries. He uses examples of the effects of cultural factors on the United States’ relationship with India, China, and Egypt. Cohen also identifies two types of negotiation styles, namely the high context and low context. He associates the low context negotiation style to individualistic countries such as the USA, and the high context style to the more conservative nations like India. The book concludes with ten recommendations, for successful negotiations between countries with different cultures. Hollensen, S. (2001). “Global Marketing. A Market-responsive Approach.” London: Pearson education limited. This book focuses on the internationalization of companies. It offers guidance on which markets to enter and how to gain entrance, and factors to consider before making the decision to internationalize. The core is global marketing programme, and the challenges facing companies trying to gain entry into a new business culture. The use of visual tools such as charts, maps, graphs, and diagrams, help the reader to understand the addressed concepts. This source fits in this research as it provides hints of making successful negotiation to gain entrance into a new market. Lewis, R. (2005). “When Cultures Collide: Leading Across Cultures: a Major New Edition of the Global Guide.” New York: Nicholas Brealey Publishing. This book offers detailed information on the cultures of different world regions, including 83 nations. Lewis provides the belief systems, values, and prejudices of each culture, giving an insight on how to communicate effectively with people from those cultures, how to interpret their terminology, behaviorism, and how to achieve long-lasting relationships with them. Scientific diagrams and culture models have been used to explain how a company can function successfully in a new business culture. This book is beneficial to companies and individuals working in a multi-cultural business environment. This is also useful in this research due to its inclination toward multi-cultural interactions. Read More