India is one of the fastest growing economies in the world, whose traditions can be traced back thousands of years. India has been naturally divided by geographical barriers, and by ethnic and linguistic differences into a number of fairly large states. These states were naturally divided and taken as political units and forms of government so devised as to make the political stability and interrelationship (Venkateswara 1932:279). The culture of India has been highly influenced by several factors, such as religion, colonialism, invasion, immigration and modernization etc. This has transformed India into what it is today a culturally pluralistic environment. Therefore, the cultural values, beliefs and conditions are contradictory from state to state and region to region (Sebastian, Parameswaran & Yahya 2006:1). Rather than thinking India as one single culture, it is wiser to think of it as an association of various regions and subcultures. To understand it simple, it is easier to look at it, based on the geographical divisions. The geographical division of India can be considered as zones, which include various states that are relatively similar in their culture and ethnicity, but still have different histories and background. The following table will give an overview of the geographical division and the ethnicity of India.
Table 2. Geographical divisions and ethnicity of India
From the above table, it is evident that the geographical diversity of India is significant with the above mentioned geographical divisions of region and state are totally different from others with respect to languages, traditions, costumes, food, customs and values. In addition to religion, the caste system has also influenced the attitude of behaviour of people within these states. Due to these geographical divisions and the different cultural environment, it has also resulted in a different psychological environment within India (Cartwright & Cooper 1993;
5). This different psychological environment, has influenced people to behave in certain ways in certain states. The behaviour, attitude, appearance, colour of people are variant from zone to zone, region to region and state to state.
Likewise, it is also evident from the table that each of the zones mentioned is dominated by culturally similar ethnic people. For instance, Dravidians are the people who predominantly live in the states of south India and Southern zone and Indo-Aryans are the people who belong to the states that are in the North Zone, Central Zone, Eastern Zone and Western Zone, whilst Mangoloids are the people who live in the states of the North Eastern Zone. In addition, to these major ethnic groups there are several ethnic groups coexisting across India, such as Australoid, Europoid, Caucasian and Negroid. At the micro level, ethnic groups are classified as Bengalis, Punjabis, Guajarati’s etc., which are based on the languages of the above mentioned states and zones. However, in spite of all
North Zone Central Zone North Eastern Zone Haryana
Eastern Zone Western Zone Southern Zone Bihar
these variations in ethnicity, the Indian people are generally categorized as Indo-Aryans, Dravidians and Mangoloids.
In all of the zones mentioned in the table above, the ancient traditions, customs, values and beliefs still have a strong influence. Astrology plays still a dominant role in deciding various factors of life of the people and as well as the important decisions in politics, and business. Even in these modern times, many Indian business elites believe in astrological predictions for choosing compatible business partners, choosing an auspicious time to start business, launching new products and laying the foundation for new business establishments.
Nevertheless, these traditions are not unified all over India, they differ to a greater extent from zone to zone and state to state. Besides, the Indian family system have a huge influence in the personal life of Indians including family owned firms. Due to the influence of family, many Indian family owned firms, employ their relatives in key position, as people outside the family are not to be trusted. The ancient traditions of Indian culture are strongly influenced by religion, as it is also the home to four major religions, including: Hinduism, Buddhism, Jainism and Sikhism. As per the Indian government portal (2015) and the 2001 census, out of the total population, Hindus constituted the majority with 80.5%, Muslims came second at 13.4%, followed by Christians, Sikhs, Buddhists, Jains, and others. These religions have very strong influence in Indian culture and this differs regionally. However, Hinduism and its beliefs still remain predominant all over India and has created several regional, local sub-cultures over the nation. Therefore, it is quite hard to group India as one single culture, as it contains numerous layers of embedded cultural factors within it. From ancient times, India has been divided by caste, religion, region, and ethnicity and also by various other forms. Despite these numerous differences, Indian people are united with a common cultural heritage and have consciousness of unity, described as “Unity in Diversity”. Though India has modernized in recent decades, one can still say these cultural differences do have significant influences in lives of people and their behaviour. The below mentioned table gives a short overview of the factors that influencing Indian cultural environment.
Table 3. Factors influencing Indian cultural pluralistic environment
All the factors in table above have significant influence in Indian culture and the way people live. These factors also differ from state to state and region to region.
In a sense, it can also be said that all these factors have strong influence in the Indian business environment as well. In the recent years India has been influenced by unique mix of both western and traditional culture, influencing both the society and in the business environment. However, Indians still value strong relationships in business. Indian organizational structure is biased towards relationship oriented systems where interpersonal links are focused more than processes and procedures (Arora 2005:30). For this reason, personal contacts and trust are very important in India in all circumstances. Often the term relationship or network is coined as personal contacts. The Indian business environment is based on relationships and business networks. For example, there are various stakeholders who are crucial in the Indian business environment for building relationships and networks. This is mentioned in the forthcoming table.
Family Education History Modern Other
Joint family,
Geography Religion People Languages Traditions 28 states and 7
Table 4. List of stakeholders who are crucial in Indian business environment
In the above mentioned table the stakeholder network is crucial in Indian business environment. One would argue that it may not be essential to know the people in various levels as they have people to take care each of the functions. Of course, it is also understandable about the viability for any business leader to meet each of these people personally to build a network. Nevertheless, the relationship and trust with the stakeholders mentioned in the above table can be built by creating a positive image to achieve personal bonding with the stakeholders. For example, the leaders of the most successful Indian corporations do engage themselves with various social issues, preemptively investing in community services and infrastructure. These social and philanthropic activities have created a positive image and improved the reputation of Indian leaders and their organizations. Moreover, corporate social responsibility, national wellbeing, investment in social goals and human capital are essential for the competitiveness of companies in India (Cappelli et al. 2010). Therefore, the Indian business environment is based on relationships, and are considered as the foremost factor for a successful business.
Apart from the relationship factor of the Indian business environment, understanding the landscape of Indian organizations are also essential. Indian firms are mostly family-owned sole proprietorships, ranging from large Indian corporations to the small firms. The family remains paramount in importance within Indian business (Salyards 2000:331). Based on this, Indian organization can be categorized as traditional family owned firms, public companies, Indian SMEs and Indian subsidiaries of foreign firms. The corporate environment in
Management
(Stakeholders relation crucial for Leadership in India) External stakeholders
India is often viewed as being old fashioned, due to the existence of a large number of family owned businesses, often also culturally resistance in adopting modern management practices. Traditional values such as respect for seniority and work goals like job security, still dominate the consciousness of Indian corporate culture. Like most other Asian countries, India is a high power distance culture. In the workplaces this implies that the senior manager is a benevolent autocrat, the organization is hierarchically structured, lower level managers avoid decision making and are reluctant to take responsibility and follow closely the instructions of their superiors (Burns 1998:3). The hierarchical system in the Indian business environment has transferred the socio-religious hierarchical structures such as the caste system that has been dominating India for centuries (Sebastian, Parameswaran & Yahya 2006:23).
The corporate environment in India has wide range of differences across India in the way they function. For instance, large Indian companies are considered to be professional due to the influence of western organizational practices and with the success of Indian organizational practices. Medium-sized organizations are a hybrid mix of the traditional stereotype and a bid to catch up with the new ways of doing things. The small organizations run like a family, where the eldest member of the family runs and leads the business within a system of authority and all members have set roles and conforming to these rules is beneficial to all.
However, in the recent decades the growth of technological firms, have influenced Indian organizations, such as IT and ITES firms to operate primarily on western egalitarian pattern (Arora 2005:20). Moreover, due to the change in the global business landscape, Indian companies are also adapting global business standards to fit into the group of global business organizations. Though many of the firms in India are influenced by western management principles and global values, still cultural complexities have huge impact in the way how people behave, understand, communicate and perform in these organizations.
Therefore, the impact of culture on Indian business cannot be neglected as it is strongly tied within the everyday social life of people and reflected in business.
At a micro level the Indian business environment is also diverse and has different degrees of modernization in different states. For instance, the Indian states have different labor laws, property laws, and people of different cultural and educational backgrounds coexist across India. In spite of the rapid economic growth and modernization, strong cultures like India are not meant to change as it is so strongly embedded with various aspects of its past traditions and customs.
Though the Indian workforce is fluent in speaking English (predominantly in the cities) and influenced by western ideologies, the impact of Indian traditions and practices dominate their behavior in the business environment. Moreover, in the
recent years India has gained momentum among western multinationals and more business organizations across the globe are increasingly expanding their businesses in India. But there is a growing concern among the organizations with regards to managing their employees in India. The western or American leadership style are seeming to be alienating the western multinationals to integrate themselves with the Indian business environment. Leading businesses in India is a complex phenomenon not only for the western business leaders but can also be complex for Indian business leaders due to the pluralistic Indian cultural environment.
Leadership in India is quite different from that in the world. In India, the leaders in organizations are much more like a family and they take care of their employees much like a father does in the family. Moreover, the leaders are also considered as roles models and expected to inspire and motivate their employees to achieve the common goal of their organization. Indian leadership practices are very much influenced by their collectivistic culture. The various aspects of Indian culture such as organizational, national, religious, and regional cultures have strong influence in the day-to-day life of people and also the organizational environment. In a culturally pluralistic environment like India, business leaders from the western world face complex social coordination problems due to the lack of knowledge and understanding of Indian cultural pluralism. (Rockstuhl et al. 2010: 2). Moreover, leading business in India greatly differs from western leadership style such as in systems and control. The most important aspect of leading business in India, is in the personality and charisma of the leaders who closely follow the systems (Rangnekar 2004). This leadership style has evolved distinctively from the western style and it has helped to stimulate extraordinary business growth in spite of challenging business environment and conditions (Capelli et al. 2010:22). Therefore, it is important to understand the environment in order to adapt to the most appropriate leadership style desirable in an Indian organizational environment. In a nutshell, to function effectively in the culturally pluralistic Indian environment, understanding the nuances of cultural values, traditions etc., are not avoidable.
It is evident, India is a highly complex and pluralistic country with significant differences. However, in order to understand how Indian culture is different from Finland, it is imperative to compare Indian culture with Finnish culture through cultural dimensions. Therefore, the next part will analyze the difference between India and Finland through the cultural dimensions proposed by Hofstede and the GLOBE study.