Doing business in India

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India is the world's largest democracy and a multilingual federal state. From the late 1980s, India began to open up to the outside world, encouraging economic reform and foreign investment. It is now courted by the world's leading economic and political powers.

There are many challenges that India has yet to fully address. These issues are wide-ranging such as poverty, corruption, violence and discrimination against women and girls, inefficient power and infrastructure, ineffective enforcement of intellectual property rights and accommodating rural-to-urban migration.

India is the world’s second most populous country, with a population of 1.4 billion people. Of the world’s 44 megacities (that is, cities with 10 million inhabitants or more), India has six – Delhi, Mumbai, Kolkata, Bangalore, Chennai and Hyderabad. Delhi is projected to overtake Tokyo as the world’s largest city by 2030. Provision of water remains a major problem with many households not having a regular supply.

The precise number of languages spoken in India is probably over 1,000 but it is often hard to define where one language begins and another ends. The big six languages – Hindi, Bengali, Telugu, Marathi, Tamil and Urdu – are each spoken by more than 50 million people. India doesn't have a national language but Hindi and English are both official languages.

Business culture in India

There is a huge demand for labour in sectors like infrastructure, banking, insurance, real estate and construction. India regularly tops the world charts for workforce attrition, and organisations in India are working hard to place more effort in skills development programmes, how they communicate, their employees’ work/life balance and management styles.

So, is there a specific Indian management style? Unlike many other countries, India has numerous family-owned and run companies with Indian entrepreneurs staying with their business until the end. It’s also a norm for the owner’s children to take over, which is less common in western countries. Legacy issues are much stronger in India. This does lead to decisions still being made at the very top of the leadership chain. Status, age, position and rank still continue to be important in terms of authority and respect seen in the workplace. At the same time, the family conglomerates recognise the need for professional managers who can work alongside them seamlessly – this is clearly visible in Tata Group, Aditya Birla, ArcelorMittal, etc.

Indian business is characterised by its dexterity, greater employee engagement, and ability to improvise and creatively deliver value to customers. It's not that Indian managers are inherently more creative than their counterparts elsewhere, but they work in a complex, unpredictable environment with much bureaucracy. They therefore have to be able to move with a constantly changing and evolving policy framework, low quality of infrastructure, corruption and bureaucratic procedures.

Indian managers are used to finding ways around obstacles, including a lack of resources. It's a mindset captured by the Hindi term "jugaad" which means an innovative fix or simply bending the rules to find a creative solution. But there is also a downside to jugaad – it often leads to less sustainable or lower quality solutions which do not create lasting improvements.

Approximately 80% of all Indians have Hinduism as their core belief. As a result, many Indians still operate today with their age-old traditions. Whilst the system may have less of an influence than it did in the past, its impact is still evident in the hierarchy found in India today.

This translates in a number of observable behaviour patterns: tight control at the top, limited delegation, managers that value status and power, staff awaiting and expecting directions, personal instructions, ability to cope with uncertainty and a fertile ground for creativity. Workers are often told what to do and how it is to be done. This is one of the key criticisms of westerners doing business in India.

Also significant is leadership style. In contrast to many western cultures that have adopted a participative or empowering leadership, which stresses active participation, initiative, idea generation and a greater delegation of responsibility throughout the organisation, Indian leadership style tends to be more directive. This is common to India and much of Asia. Directive leadership stresses the direction given by senior managers to those junior to them. It looks to the boss for instructions, knowledge, wisdom and strategy, and does not encourage much initiative or feedback.