Global Business Cultural Analysis of India

This paper explores the cultural dimensions, similarities, and differences between India and the USA in the context of global business. It focuses on the implications for US businesses looking to invest in India and includes a SWOT analysis. Find study material and solved assignments on Desklib.

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Global Business Cultural Analysis of India
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GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 2
Introduction
In the new economy of 21-century globalization has transformed the social, economic,
political and cultural landscape indelibly and profoundly. Globalization has reduced the national
borders allowing free trade among countries (Kadri & Saikhedkar, 2011). However, some of the
international trades between countries do not roll down sufficiently due to the difference in
economic, cultural and economic factors. The current paper aims at expiring global nosiness
trade between in India and US with a focus on the similarity and difference on the major
dimensions of cultural elements. Further, the paper focuses on identifying the implications of US
business that wishes to invest in India through carrying out SWOT analysis.
Culture is defined as a total of all learned behaviors that manifest and shared by members
of a particular society. While Geert Hosted defined culture as the collective programming of the
mind distinguishing particular members of the group from another group in a different context
such as customs, skills, language, religion, and arts among others(Samal, 2018). Culture
alongside other factors such as economic and political affect global business, thus before any
foreign investment it is imperative for international firms to understand the cultural profile of the
targets country fully. Culture, therefore, is transmitted genealogically resulting in great
differences; however, in some cases there are similarities. Cultural similarities and differences
among countries are achieved through Hofstadter’s analysis. Hofstede's analysis is a theoretical
framework designed by Geert Hofstede to aid in understanding and analysis and comparing the
cultural composition of countries and their impacts on the business settings and process (Yoo,
2014). Hofstede has five dimensions used to analyze the similarities and differences: power

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 3
distance, collectivism vs. individualism, avoidable uncertainty index, feminist vs. masculinity,
short term vs. long term orientation, and restraint vs. indulgence. Both India and USA have
different cultures and these cultures affect the business, thus before any USA investor goes into
the Indian market, should have extensive knowledge of the culture composition.
Cultural dimensions Similarities and differences between Indian and USA
Hofstede's
Factors
Definitions Similarities in India
and USA
Differences in India
and USA
Power Distance
Index
Refers to the extent to
which the less powerful
members of a society
expect and accept power
distribution unequally.
In both countries,
there are traces of
political dynasties that
resulted in numerous
tragedies. In India, the
political dynasty
begun with Motilal
Nehru to Nehru-
Gandhi, to Vijaylaxmi
Pandit to Indira
Gandhi and Rajiv
Gandhi while in the
USA it began with
Patrick Kennedy to
Joseph Kennedy, John
Kennedy, Robert
India and USA have
different power
distance index, with
India having a high
power distance index
of 77 while the USA
is having a low score
of 40 Chanida, 2015
). This means that
Indians appreciate
hierarchy from top to
down in society; thus
the subordinates
majorly depend on the
boss for every

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 4
Kennedy, and Edward
Kennedy(Zibenberg,
2017), (Srinivasan, &
Kalaivani, 2015).
decision (Lee, 2015).
Individualism
and collectivism
Refers to the degrees of
interdependence that exists
among the members of
society. While collectivism
societies people belong to
particular groups and take
care of one another
Both countries exhibit
individualism,
especially in religion.
Both Indians and
America believes in a
supernatural being.
Hinduism focuses on
the high being that is
quite different from
God. The religion in
both country religions
has a stronghold with
the population. As the
Indian population
celebrates Hinduism,
the Americans hold
strong on Christianity.
According to
Beisland, Mersland &
Indians are
collectivism country
especially as a
community and
family that take
precedence and
priority over other
aspects of life. Indians
families are more
oriented; thus the
leader of the family is
responsible for
providing food and
protection for the
whole family
members.
Relationship with one
another is

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 5
Randøy, (2014)
Hinduism is a religion
that focuses on
supernatural forces
such as spirits, deities,
and ghost. The
Hinduism religion is
more focused on the
reincarnation; a
philosophy denoting
that after death one is
transformed into a
new life more
specifically an animal.
emphasized. Decision
making is a collective
aspect unlike in the
USA that societies
and people exist in
individualism. In the
USA, everybody
makes his/her own
decisions.
USA score of
individualistic is 91
Beisland, Mersland &
Randøy, (2014).
USA religion is based
on Christianity that
believes in God as the
creator and believes
that there is life after
death.
In USA organizations
there is a structured,
rewarding system for
individualistic success

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 6
such as solving a
particular problem,
unlike in India that the
whole group is
rewarded for the
success.
Doing business in
India is much based
on the relationship
that focuses on trust,
unlike in the USA that
business is based on
how best you can
outdo your competitor
and attract a customer.
Masculinity vs.
Feminist
Masculinity /feminism
refer to the values that are
exhibited in society
regarding male or female.
The masculine refers to the
preference in security for
achievement, assertiveness
and marital reward for
Both countries have
scored just above 50%
and are close. Indian
and the USA have as
the core of 56 and 62
5 respectively, an
indication that both
counties to be
The high score of the
masculine in the USA
of 62 indicates that
society is driven by
competition, success,
and achievements that
start from childhood
towards adulthood.

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 7
success while feminism
refers to the preference for
cooperation, caring, week,
quality of life and modesty.
masculine counties
(Mason, 2018). Male
roles are perceived to
be more dominant
than female’s roles.
In both countries,
women are subjected
to scriptures and
history. The Indian
history dictates that
women are supposed
to remain at home and
take care of the
household core. This
is affirmed by the
biblical scriptures
used by the USA that
says that women
should be submissive
to their husbands.
Additionally, in USA
masculinity is
evidential at an
While the low score
of 52 in India means
that society is more
feminism and cares
for one another for a
better quality of life
(Almassi, 2015). The
success of an
individual thus is
determined by the life
quality of the entire
society rather than
individualist as in the
USA.

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 8
individual level that
always makes men
desire to outperform
women in many
aspects of life such as
business, school, and
politics.
Uncertainty
Avoidance
Refers to the ability of an
individual or a society to
tolerate ambiguity.
Countries with high
uncertainty avoidance there
is little tolerance of
ambiguity while countries
with low uncertainty
avoidance, ambiguity is
highly tolerated since there
are little rules and
regulations.
The uncertainty
avoidance score for
both countries is
below the 50th
percentile, with India
and USA scoring 40
and 46% respectively.
This means that in
both countries there is
a fair degree for
acceptance of new
ideas, products and
services, and people
are willing to try
something new
(Maher& Parikh,
The uncertainty-
avoidance score in
both countries differs
with 6 points. India
has the lowest score
thus means that most
of the citizens live a
stress-free life since
they do not worry so
much of any
ambiguity, unlike the
USA people that tend
to worry a lot from
the technology to the
government.
Additionally, the USA

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 9
2011).
For example, the
United Sates is always
true to the constitution
and do not always
tried to create a new
law.
The low uncertainty
avoidance in India
and USA allows good
business operations
since there is less
probability of new
rules interfering with
the business
operations.
Additionally,
spirituality and
religion among the
two countries are
respected within the
workplace.
tends to take so much
risk in business than
their counterparts in
India.
Communication
between the two
countries tends to be
different. In India,
communication is
indirect unlike in the
USA that embraces
direct communication
(Belkhamza & Azizi,
2014). This means
that in case of any
work conflict, the
conflicting parties rely
upon the leaders,
family to find a
solution rather than
them trying to solve it
without the
intervention of the

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 10
third party just like in
the USA.
Long Term
orientation
Refresh to the ability of an
organization to have links
with the past while
addressing the current
problems and predicting
the future (Santana &
Santana, 2015). Those that
score low are referred to as
normative societies thus
observe most of the time-
honored traditions while
those societies with a high
score are referred to as
pragmatic. These societies
encourage thrift and efforts
in the current education to
shape the future.
In both countries,
businessperson has
long term orientations
characteristics. Both
countries’ business
persons provide a
well-structured
business plan that
shows the directions
to the future and even
work very hard for
long term benefits.
In both the country’s
workplace, motivation
is done by both
individual and group
achievements.
Some of the
organizational
structures in both
countries look the
India and USA have a
different score of 51
and 26%. This means
that India is a long-
term oriented country
while the USA is a
short time oriented
country. Most of the
Americans embrace
the importance of
arriving early or on
time as a sign of good
faith and business
etiquette which is
quite different in
India. The skewness
of Indians on time is
based on their religion
that teaches them
about reincarnation;
this one has all the

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 11
same; powers are
centralized.
time in the world
since they die and get
new life again. This
has made them have a
longtime notion that”
wasted time is not
gone forever” that has
made them be less
concern about time.
Americans rely on
flexibility for any
unforeseen
circumstance .

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 12
Figure 1 shows Hofstede’s cultural analysis of Indian and USA
SWOT Analysis
Elements Factors Implications
Strengths Demographic
advantage
India is one of the three largest Asian economies in terms of
purchasing power. Acceding to the United Nations, the working
age of India’s is between 15-64 years. More importantly, India
has the second largest population after chine in the whole world.
This large population provides a large pool of labor to any
international business organization. Thus the USA based
industry will not have to take their employee not India as well
as the company will have cheap labor in producing any desired
products.

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 13
The large population and the purchasing power places India to
have one of the largest market size desired by any investors in
the world. India is the eleventh largest economy in the world by
nominal GDP (Chaudhary, Rangnekar, Tanlamai, Rajkulchai &
Asawasakulsor, 2017). Consequently, it is the fourth by
Purchasing power; thus this provides a better market for the
USA based companies to supply products. According to the
economist, India will be among the leading economies in the
world by 2020 since it has varied sectors such as agriculture that
accounts for 52% and service industry accounts for 62%.
Unlike other developed economies that have stagnant growth
rate, India has significant growth rate pace thus leading to
promising purchasing power in the future.
Presence of
diverse cultural
and religious
heritage
India is commonly known as a diverse cultural and religious
heritage (Llewellyn, 2015). The dominant religion is Hinduism.
However, it has varied religion such as Muslim, Christianity.
Consequently, India has different 20 indigenous tribes such as
Gonds, Bhils, Santhals, and Khasi among many others. The
varied cultural and religious heritage with unique architecture
and traditions attract vast tourism across the world thus offering
the country good opportunity to collect revenue as well as
creates good business environment since the purchasing power
is increased.

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 14
Mixed
Economy
India has a mixed economy with all elements of tradition
strongly working in the present market. Indian economy is
characterized by extensive regulation, public ownership and
protectionism thus leading to high rate of corruption thus tends
to make any foreign investor such as in the USA to shy away
from investing in the country.
Large English
speaking
population
There are a large number of English speaking people in India.
Studies indicate that about 10% of the entire population speaks
English, thus perceived as the second largest English-speaking
country after the USA. This provides a good working
environment since there will be no language barriers among the
USA employers and Indians employees.
However, it is worth to note that there are some different cues
and nonverbal gestures that need to be considered among the
two countries since they mean different things. While in Indian
conversation culture one can consistently move their heads in a
circular motion or from side-to-side, as an indication of
attentiveness, in the USA, the movement of the head is an
indication of disapproval or disagreement. Thus it is imperative
for the USA based company's manager to fully understand the
difference and similarities of the non-verbal signs for effective
communication.
Collective Apart from having rapid growth of purchasing parity, Indian has

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 15
purchasing
behavior
collective purchasing behavior. India is a collective country.
Thus most of the purchasing behaviors and decisions are
influenced by the family (Islam, 2017). Having a strong
relationship with a family or a society thus translates to
increased sales. Thus the USA company should not focus on
fulfilling the interest of individual rather should focus on the
community satisfaction to capture the market.
Subjective
employee
India’s high power distance scores make the employees
subjective to the employers, thus follow old and complete tasks
without questioning, unlike in the USA that employees tend to
question some orders (Jain, Natarajan & Ghosh, 2016). The
subjective nature of the employee thus makes the management
of the workforce quite easy.
Strong moral
values
Indian population tends to have a strong moral value that is
cultivated by the collectivism and the power distance index
(Levin, 2016). The normal values play a good foundation for
any business venture since it is capable of conducting his/her
business without fear of intimidation or discrimination, unlike
individualistic countries that each person poses different moral
value.
Weakness Less conducive
social-political
envelopment
Indian ha high power distance index, thus making it have a less
conducive socio-political environment for any business venture
especially from those countries with low power distance
countries such as the USA. In the USA, the employee is allowed

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 16
to participate in the decision making process thus enhance job
satisfaction and productivity, while in India, the employee is
expected to take orders from the employer. Additionally, the
USA based company might view the leadership in the Indian as
autocratic and directive thus might affect their nature of
management, which requires orders to horizontally, vertically
distribute.
Feeble intrusive Even after six decades of independence, Indians infrastructure is
still unreliable on various aspects such as telecom and power
(Singh & Kumar, 2014). This implicates high cost on various
businesses that wants to venture into the Indian market as they
have to provide alternative sources of power and
communication to avoid business failure due to power failure.
Strong religious
bond
Indian has a strong bond to Hinduism. Thus all people tend to
observe all the requirements and doctrines. Thus include having
work breaks to go and pray, an aspect that is not popular with
Christianity. Thus a USA company having a large pool of
indicates labor force will be affected during the work time has
the employee will always breaking for prayers.
No interrelation
with another
kind of culture
Indians culture is unique and has no close relation with other
culture especially from the West; this makes the integration
between the USA and India business environment to be
challenging and difficult.

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 17
Consequently, Indian tend to observe festival occasion thus
makes many business organization to hire extra human
resources during such festivals to ensure that the production
process is not disrupted(Singh,2018).
Opportuni
ties
Developing
technological
infrastructure
India has proven to the general world of its supremacy on the
IT. Indian has a large number of IT companies that are
providing solutions to numerous problems thus creating new
opportunities to other international business organizations.
Increased
awareness of
Indians on
different
cultural
difference
The globalization has enabled most of the people to travel into
India and most of the Indians to travel out of the country. The
intercultural mixture tends to create awareness of cultural
diversity, thus eroding the strict cultural rules and practices that
affect business operations. More importantly, most Indian-USA
based is taking opportunities in teaching and training their
counterparts on the benefits of intercultural association.
Increased ne
new entrants
Indian is currently attracting numerous international companies
thus offering a wide range of competition to any USA based
company that is wishing to conduct business in the same
market. The stiff competition reduces revenue collection thus
might lead to the collapse of the business if not properly
managed.
Threats Anti-
outsourcing bill
Over the past decade, there has been growing debate on the
anti-outsourcing bill in the USA to address USA grappling

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 18
employment rate. This actually will affect the recruitment
nature of the Indians workforce and USA expatriates.
India’s FDI Analysis
Foreign Direct Investment refers to an investment directly into products and services by a
company from another country into a different country. Over the past decade, India had followed
selective system in addressing foreign capital until 1991 when the FDI policy was transformed to
encourage direct investment from other countries through technical collaboration (Diouf & Hai,
2017). Since then, India’s economy has transformed tremendously. Some of the policies include:
a) Adoption and implementation of duel route of approval of FDI: Government and
automatic approval routes.
b) Automatic permission for technological agreements with high priority industries
c) Adoption of multilateral investment policies (Beerannavar, 2013).
Since the implementation of the policies, the economic growth of India has grown over the
year. Economic survey prediction indicates that the Indian economy is growing at a rate of 6.5
%, and the inflation rate is about 4 %( Deepti & Rawat, 2017). This provides a good business
environment, has the purchasing power of consumers increase, with a decrease in raw material
prices. The national exchange rate is quite stable as the Current Account Deficit of the Balance
of Payments is below 1% of the Gross Product along with the dollar-rupee exchange rates. The
Indian forest reserve has grown to $430 by the end of 2018, a level that is more than the standard
reserve adequacy normal (Chand, Tiwari & Phuyal, 2018). Considering all these, the Indian

GLOBAL BUSINESS CULTURAL ANALYSIS OF INDIA 19
economy has a potential growth rate between 8-10 percent of GDP thus making real returns on
investment to be attractive to international investors such as USA based companies.
Conclusion
Globalization has reduced the national borders allowing free trade among countries.
However, some of the international trades between countries do not roll down sufficiently due to
the difference in economic, cultural and economic factors. Both India and USA have different
cultures and this culture affect the business, thus before any USA investor goes into the Indian
market, should have extensive knowledge of the culture composition. The Indian economy has
registered tremendous growth over the past decade, thus promising a good business environment
for international investors. However, governments still need to work on some policies that will
ensure a better working environment for international investors along with the national
workforces.
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