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Global Business Culture Analysis—Republic of India

Hayley Stringfield

BUSI 604 International Business

Liberty University

Dr. Romanoski

March 8, 2013

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Global Business Culture Analysis—Republic of India

India has the World’s second largest population with many cultural differences that must

be used in performing business actions with them. Within its borders as Mark Twain stated that

is was “land of dreams and romance, of fabulous wealth and fabulous poverty, of splendor and

rags, … of tigers and elephants, the cobra and jungle, … of a thousand religions and two million

gods (Twain, 1999).” This country has such and interesting history that includes early trading,

various religions, various languages, extreme poverty, English as a subsidiary official language,

legal systems similar to the United States and Great Britain, and variety in its environmental

boundaries that both allow and inhibit ease of Global business (Central Intelligence Agency,

2013). With all these differences it is an ideal country to research for the requirements necessary

to a Global Business Manager, providing several examples of what one would need to achieve

for this position.

Major Elements and Dimensions of Culture of India

The reasons for choosing India are that the country has several diverse cultures and

statuses. India produces a lot of the United States imports and is a major source of the United

States outsourcing especially with call centers. India has many business related issues that in the

US are not ethical or accepted and companies from the United States still do business with them.

This causes concern about the differences in acceptance of doing business with them

internationally. Another factor is the long term history of multi-cultural trading and business that

the country had as foundations for where they are today.

Indian Communications Methods

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India has sixteen official languages, including Hindi, Bengali, Telugu, and English as a

primary language for communication in larger cities and businesses. In northern India Hindustani

is also spoken primarily but is not an official language. There are also over 800 other dialects

spoken as a result of the various cultures and mixed influences of previous trade relations. Of

these languages only about 41% of the population speak Hindi with other languages being

spoken in more cultural regions (CIA, 2013). With all these languages, the Indian people who

formally dealt with many English speaking people in early trade history as well as the British

rule of the country, English was highly taught as a second language for understanding with the

foreigners that were often in the country. English has also been found to be a very useful tool in

the global business world as it is easily translated to local languages due to the educational

expectations.

In the use of verbal communication, it is best to be very precise with what is said. As in a

guide for global businesses posted by Regional Language Network, speech must be slow and

concise, use simple sentences with no slang, jargon, or acronyms, and repeat several times in

various ways. Always ensure you understand the meaning of what was spoken by both parties

but especially Indian businesspeople. There are many different types of greetings for different

types of verbal communication. One common greeting is Namaste, a traditional Indian greeting

that is especially used in the beginning of business meetings with the formal action of placing

palms together and lowering them while stating Namaste.

Other types of communications, such as email and other written forms of verbal

communication, use various methods. According to Traci Wallace, in emails, the phrase “Dear”

is used prior to other polite greetings such as “I trust this email finds you well” (2011). Another

of the greetings she has listed is more of a process that changes as you become more familiar

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with each other. This begins with just using “regards,” then moving to “kind regards, warm

regards, and finally to warmest regards.” One moves up in levels with the increase in trust within

the relationships. She also mentions the use of “thanks” or “cheers” as being used by one who

corresponds more frequently with multinational corporations in more of a western business

fashion (Wallace, 2011).

Traci Wallace of Executive Travel mentions several useful business tips in the use of

wording by Indian businesspeople that are really different but focuses on a few that are more

ambiguous. One is the use of answering the telephone by saying, “tell me” in order to have you

get right to the point of the conversation instead of wasting precious time explaining. This is not

meant to be offensive, but just a standard method of eliminating the unnecessary. She also

mentions that when they are asked to attend an activity such as eating, the Indian will likely say

“I don’t mind” making one think that they are not very interested, but it really means “yes, I

would like to do that.” One other major confusion within her phrases misunderstood is “do the

needful” which means to “get it done” but there is no mention of what needs to be done. This

must be determined by earlier discussions or emails and may take several before one knows what

needs to be done (Wallace, 2011).

Indians are a very relationship oriented culture as the traditional progression through the

different level of using “regards” shows. They use extra caution when afraid they will offend

others. Many times the answer to business issues is a no or maybe that is possible, while they

have others ideas. Due to fear of offending someone, they are much hidden when there appears

to be a disagreement among people regardless of whether they are involved. When a problem is

brought up it is thought of as disrespectful and not a good business technique. There should

always be a tone of compromise and the willingness to observe the behaviors of Indian

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businesspeople while interacting as they will not speak what they think or feel directly if they

feel they will offend.

Other nonverbal issues are no public displays of affection, such as hugging or kissing

especially in a business atmosphere. They generally do not like touching other people but do not

allow their commutes on heavily crowded subways or trains to bother them as it is a necessary

evil in order to perform their work duties. Male friends will walk down streets holding hands or

arms but this is the only real exception. One is supposed to avoid all accidental contact with

others while walking beside or past each other. With female managers it is customary for the

woman to initiate contact first such as offering a hand in sign of friendship. It is considered for

the left hand to be unclean and not used for eating, gift giving, or handshakes (Culture Crossing).

There are also rules on removing shoes in places of worship, homes, and some

businesses. The best way to handle this is to observe the entrance and if there are several shoes at

the door or a place for them to be left, it is best to remove your shoes also. Another especially

critical piece of advice is not to stare. Eye contact with the one speaking is good, but continued

contact is rude and one should lower their eyes as if in thought about what is said occasionally so

as to not offend the person speaking at the time. Also along with this is eye contact unnecessarily

directed towards others that are not directly involved in the conversation. Grasping ones’ ears is

also a sign of sincerity or repentance as ears are thought of as sacred. Pulling or boxing of the

ears is thought of as an insult. As with American traditions any lewd behavior including

whistling or winking is also thought of as inappropriate (Culture Crossing).

Indians have an indirect form of communication, leaving much unsaid verbally thus

making it a high context society. According to Jean-Michel Dubebout, “Hofstede identified India

as a Collectivist nation with a clearly defined hierarchical structure. Indians are sensitive to rank,

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status, and the position of each individual within an organization” (Dubebout, 2011) There are

many things understood within this system. First of all in business the boss is the one in charge at

all times and will pass information and instructions as necessary down through the chain of

command. The instructions passed down must be specific enough to properly perform the job

correctly. The boss has full respect as a superior as does each lower level superior. Supervisory

positions are not to perform menial work but to ensure that what they are supposed to be in

charge of is completed as requested. Ultimate responsibility belongs to the boss in the highest

position, while each level would be responsible for their own actions and the actions of those

below them. There are no confrontations from lower workers even if they know or think that

something is being performed incorrect (RLN, 2004). This leads back to the hierarchical format

and the Hindu caste system where each person has a position and is to perform their duties

within this position.

India’s various religions

There are several religions but of these Hinduism, Muslim, and Christian are the primary

ones with Hinduism being the largest. There are also Sikh, Buddhist, and Jainism religions but

these are of minimal percentages. Hindus are the largest portion with over 80 percent. Muslim is

the next largest with over 11 percent, making it the fourth largest Muslim nation in the world.

The Christian and Sikh percentages are both just over 2 percent (CIA, 2013). The Christian

religion again came from the English and French influences bringing their Catholic beliefs to the

country through trade and British Raj (British rule).

Hinduism.

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Hinduism has no specific founder but merged into a religion from a combination of early

Aryan tribes and the early inhabitants known as the Harappans. This religion is based on the

Sanskrit Vedas and has evolved into a religion using a caste system based on occupational status

when born. They believe in reincarnation with the idea of performing good behaviors for higher

progression through the castes as well as all other life forms in the search of Nirvana (Edgar,

Jewsbury, Hackett, Molony, & Gordon, 2008). Nirvana is the peaceful place where you escape

from reincarnation again. They believe that if you perform bad acts that when you are

reincarnated you will move backwards even into animal forms thus having to start all over

through the system. Some remain at the same level as they have made no improvements yet had

no actions negatively affecting their status.

The Hindu caste system consists of the Brahmins or priests, Kshatriyas or king-warrior,

Vaishyas or merchants, farmers, Sutras laborers, and craftspeople, and finally the Harijahns

(untouchables) who are the extremely lower levels (Edgar, Jewsbury, Hackett, Molony, &

Gordon, 2008). The untouchables are the lower class that you will usually find in the Shantytown

slums throughout the cities. They are the ones who perform the most menial tasks and receive

very little in money or respect for their duties. This level also creates the idea of the Indian

people and their concerns for not touching others as they may be touched by someone of this

class. It is a very discriminatory system with the untouchables at the lowest end.

This system was made illegal in India in 1948, yet the traditional values of these relations

remain. This is primarily seen in the hierarchical system within businesses, with a chain of

command moving in the downward direction only with more direct supervision of those of the

lower classes performing the work. With this also comes a specific set of laws that is detailed as

Hindu law and is considered one of the international laws.

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Hindus are very family oriented with several generations still living within one household

and the women generally in household positions. This closeness in relationships leads to the

methods in which they act in business, by placing relationships first. Most business meetings

utilize this concept unintentionally, but by tradition beginning with small talk about family and

home relationships prior to beginning any business talk. It is also more important for them to be

polite as part of their tradition than to offend someone leading to the unspoken meanings behind

many of the wording that they use. This religion is very different than the next largest one in the

country leading to more disputes.

Muslim.

The Muslim population entered the country in the early 1100 AD period pushing

southward from the Indus and Ganges Plains in the northwest. It was not until the Mughals

invaded in the 1500s leaving a period called the Mughal (Mogul) Dynasty extending their

Muslim beliefs to the rest of the region. During this period India had great growth in

architectural design and buildings such as the Taj Mahal was built. There were many of these

buildings from the 1600s that still remain today as landmarks of this time period (Edgar,

Jewsbury, Hackett, Molony, & Gordon, 2008).

Most Muslims are in the northwestern and northeastern portions of India around the

predominantly Muslim countries of Pakistan and Bangladesh who previously had won their

independence. This creates a lot of conflict on these borders which continue still today. There

were so many differences between the religious beliefs and practices between these two religions

that many Hindus in the area choose to locate further inward in the country and many Muslims

that were left on the India side of the border sought exile in these two countries (Edgar,

Jewsbury, Hackett, Molony, & Gordon, 2008). There are also still border issues and ongoing

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disputes over the area known as Kashmir with part of it belonging to Pakistan and the other part

India again leading to more political issues.

Muslims religious beliefs are based on teachings of the Qur’an (Koran) and the messages

learned from Muhammad. Muslims do not believe any teachings unless taught by very learned

Theologists who have learned from the earlier messengers teachings. There are five articles of

faith as the main doctrine of Islam. The first is that of one true Allah that created the universe.

Second that angels and humans exist in the same world and interact together. Third, that there are

only four inspired books; the Torah of Moses, the Psalms (Zabin) of David, the Gospel of Jesus

Christ (InJil), and the Qur’an. They believe that all have been corrupted by Christians except the

Qur’an. Forth is that God has used prophets such as Adam, Noah, Abraham, Moses, Jesus, and

Mohammad. Fifth is that there will be a day of final resurrection and judgment (BBC, 2013)

There are also five duties or pillars of Faith that each must perform. These are that one

must state that there is only one god Allah, and only one true prophet of God, Muhammad.

Another is that prayer must be performed five times a day by kneeling on a mat and facing

Mecca. Another is that Muslims are required to give one-fourth of their income to the needy.

Also during the holy month of Ramadan, they must fast between sunrise and sunset. Finally they

are expected to make the pilgrimage to Mecca at least once in their lifetime if capable and able

to. There is a sixth religious duty called Jihad or Holy War which is what many Muslims in Al-

Qaida are using as their defense for their actions against Christian nations (BBC, 2013). This is

their way of spreading their beliefs and defending their religion of Islam.

Sikhism, Jainism, and Buddhism.

The other primary religions in India are Sikhism, Jainism, and Buddhism. Sikh has

approximately two percent, while Jain and Buddhism have less than one percent each (CIA,

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2013). The Sikh religion was founded by Guru Nanak in the Punjab area and is the primary

location for most of the twenty million Sikhs in the world with the United Kingdom having as

many as 336,000 (BBC, 2013). This religion has similarities to both Muslim and Christian values

with reincarnation being one of the primary ones similar to Hinduism. The values held by these

people are designed to help them achieve liberation from reincarnation, by keeping God in the

mind and heart at all times (Nam japna), working hard and living honestly (Kirt Karna), treating

everyone as equals, being generous to others (Vand Chhakna), and serving others (BBC, 2013).

This is a monotheistic religion believing only in one God in which they concern themselves more

with living in tune with God than performing specific rituals.

Jainism is a very similar religion to the Sikhs in that they strive to reach a point of

liberation from reincarnation. They also have large numbers in United Kingdom of 25,000 (BBC,

2013). They live by five vows, Ahimsa (non-violence), Satya (truthfulness), Asteya (not

stealing), Aparigraha (non-acquisition), and Brahmacarya (chaste living). This religion has no

gods and believes all living things should be treated the same having great concern for all living

things causing them to be strict vegetarians. They believe in helping themselves and following

the “three jewels,” right belief, right knowledge, and right conduct. The man who gave Jainism

its present day form, Mahavria has given the people a set of texts to follow called the Agamas.

There are two separate major sects, the Digambara (“sky clad”) and the Svetambara (“white

clad”) (BBC, 2013). These two sects have several differences but are especially divided when it

comes to equality among women. There are no priests, only monks and nuns for knowledge. This

religion is a very tight community with any unanswered questions in Mahavria’s texts to be

answered by the community as a whole.

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The final religion is a strong religion with many global followers making it easier to

understand their beliefs. Buddhism is a religion developed by Siddhartha Gautama after his quest

for enlightenment (BBC, 2013). Born into a royal household, he went outside for the first time

and saw an old man, a sick man, and a corpse and decided to find the way to enlightenment.

After trying for a while he found his enlightenment under a Bodhi Tree (tree of awakening). This

religion is 2500 years old, has no gods, and has 150,000 members in United Kingdom as well as

360 million followers worldwide (BBC, 2013). The path to enlightenment is through practice

and development of morality, meditation, and uncertainty. They believe nothing is fixed or

permanent and life is endless while subject to impermanence, meditation, and wisdom. There are

two main sects located in countries bordering India, the Theravada and Mahayana.

Christian.

Christian beliefs are based on the Old and New Testaments of the Bible many of which

were specifically spoken by God to the writers of the scriptures. These beliefs were similar to

those of Islam especially from the books of the Old Testament and both religions believe in Jesus

as a prophet, but the Christians believe in Jesus as their savior. Christians believe in only one

true God who created the universe. They believe that every book of the Bible is inspired not just

a few and they have no Qur’an to follow. They all have similar prophets again as most came

from the Old Testament.

As the Muslims believe that Christians have corrupted three of their believed to be

inspired books of God, Christians have formed many lesser religions under Christianity, such as

Catholic, Methodist, Nazarene, Church of Christ, and Baptist among so many others. Each of

these religions has various beliefs and uses certain sections of the Bible to teach their own

religious ideas. The Christians in India are primarily Catholic due to the influences from Britain

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and France. This is a very formal religion with many differences from what many Americans

consider Christian. Many Christian religions do not accept Catholic as a Christian religion due to

its many formalities such as not being able to talk to God or Jesus themselves and must use the

chain of command in an upward movement, speaking to God through priests. They use rosaries

in their studies and take communion every Sunday. They sometimes even perform some of their

services in Latin. They have very strict rules including what must be done to become Catholic

and specific rules on confession, eating only fish on Fridays, and saying prayers to Mary. This

leaves the Indian Christians to primarily be Catholic and believe the Christian beliefs but have

some stricter religious practices similar to Judaism that must be followed.

Christianity’s influences on past and present day India.

The research on Christianity affecting the Indian cultures has been very interesting.

Along with British influence, the Portuguese has had influence as well on more modern day

beliefs, but overall there is primarily a blending of Christianity as a religion with the Indian

culture. According to an article by Suma Varughese, “Anjali Aranha feels that she is only

expressing her conviction that she is a Hindu by culture and a Christian by belief. "I am taking

back what is mine. Being Hindu is not opposed to being Christian," says she,” there is a blending

of religion and culture occurring in India. More people are accepting the Christian faith and

beliefs while integrating them within their Indian culture formed primarily from the Hindu

religious beliefs in a process called inculturation” (Varughese, 2013).

According to Varughese, the Apostle Thomas came to India around 52 A.D., bringing the

introduction of Christian faith and the belief in Jesus Christ as our savior (Varughese, 2013).

This occurred in the town of Malankara in the south Indian state of Kerala. This began the

interactions with Christians. Prior to this there were only two religions in this area, Buddhism

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and Jainism, both of which were more nature centered and did not have one god who created the

universe. Early worship from these religions was in the form of the Dravidian in the Indus Valley

and the Vedic worship of the Aryans. As Sanskrit writing came into being the Hindu written

texts included the Bhagavad Gita, which led to two gods, Vishnu and Siva merging into one.

This led to further integration or inculturation of the Christian faith causing rituals to be replaced

with internal improvements on oneself. According to Romila Tharpar these verses could not have

been written by these early religions and must have had a Christian influence (MIT).

Ethics and Traditions across Cultures

Ethics is a belief in morality and proper standards of conduct. They are usually derived

from religious or cultural beliefs. There are different beliefs in what should or should not be done

as ethical. Take for example the two major Jain sects of Digambara and Svetambara believe in

equality among the people as well as all living creatures, but when it comes to women as being

equal they have different beliefs. The Digambara do not believe in women working outside the

home and that they have their place in the home. Svetambara believe that women have a right to

education and to work outside the home if necessary, but still that a woman should honor her

position in the home and perform those duties first and use education to further these activities

but yet still be able to provide for family as needed from outside the home (BBC, 2013).

There are several ethical ideals across the cultures as seen in the two major sects of

Jainism. With so many different languages and cultures there are several different traditions and

beliefs within India. One of the largest traditions comes from the places of people within society,

including women’s and other minority cultures, is that family and hierarchy are the basis for

living in India. Even with the Hindu caste system outlawed since 1948, there is still an ideal of

everything should be in its proper place at the proper time. The caste system has turned into more

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of a hierarchical system in which the boss is similar to the Brahmins. From their downward

leadership then follows a specific order with each performing their own duties to the exact

instruction of their supervisors and even if it is improper or unsafe the duty is to complete the job

as instructed and allow for the boss to ultimately answer for the mistake.

Most of the cultures and religions within India have great value in their beliefs and ideals

of self-improvement. Most similar is the respect for family and positions within the family,

which then leads to the positions within society. There are similar beliefs in work ethics such as

working hard and being honest in their actions and words. There are common beliefs in treating

the less fortunate fairly and offering them assistance and part of earnings. There is also a shared

belief in the protection and equality of all living things and that no living thing should be treated

badly. Many people of India are vegetarians due to these beliefs and their respect for animals as

deserving proper treatment.

As with other ethical issues, there are some major differences such as the Jains being very

strict vegetarians while Hindus do not eat beef and Muslims do not eat pork. There are other

differences such as the beliefs in duty above all else from the Muslims and the majority of the

other cultures allowing for some changes or exceptions within reason to duty. An example of this

would be Jihad, Holy War, of the Muslims as a duty compared to most of the other religions,

except Christianity, that believe more in non-violence than fighting for what you believe are God

given rights. They all take pride in their duties of their culture but the Muslims seem to be

stricter in their performance of duties with less equality in genders but more equality in social

status than Hindus. Most cultures do not believe in lying or stealing, chastity or no adultery, treat

nature properly, and for the most part others as equals.

Ethical Traditions from Religious Perspective

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Again, there are more similarities than differences between most ethical traditions from

the religious perspectives. There are some differences such as specific holidays of which there is

one which Hindu students take for the festival called Diwali during October or November lasting

about five days. There are differences and similarities in the birth processes and wedding

ceremonies, yet also have many similarities. When Muslim and Hindu babies are born both have

rituals that give the baby something sweet on its lips, while saying a prayer for the baby and both

shave the baby’s head seven days after birth, but do it for different reasons. Muslims do it as a

ritual and trade the shaved hair for silver, while the Hindus take the hair to the holy river Ganges

and scatter it in the water.

These are some of the personal religious ethical influences but within businesses there are

again more similarities than differences. Women should not have high places in business in most

Indian religions while in Muslim traditions when are not even allowed to show their face to men.

Most Hindus also have head and face covering rules but have relaxed them some in businesses.

Women managers are accepted by Hindus from foreign corporations and they must be respected

as any other person in boss positions as they must have earned it or been a reason for them in this

position. There are similar requirements for dress by both men and women, primarily to be

conservative in dress approaches. Both have understood rules for cleanliness and the use of the

right hand only, the respect for the boss as the only person in charge or capable of making

decisions, and both have rules to follow when entering a place of business or house that may

vary. Some businesses and all homes for Hindus have everyone take their shoes off at the door

before entering, while in Muslim homes or businesses if there is a woman that cannot show her

face to other males inside there will be some sign by the door. One must knock prior to entering

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so that the woman may be located in a place hidden from men entering. Once clear the person in

the house will let the other know it is ok to enter and not until then.

India Property Rights and Transparency in Businesses to Prevent Corruption

Property rights in India are similar to those of the United States with similar problems

occurring in the Constitutional designs. According to Vyshnavi Neelakantapillai, “There is a

scramble by industrialists and developers for land all over the country for establishment of

Special Economic Zones” (2011). This is new idea in the fight over property rights. The Indian

Constitution originally gave people the fundamental right to own property, primarily in the form

of estates. As more wealthy people wanted to take over land they fought to abolish this right. In

accomplishing the abolishment of the right to property as a fundamental right, it then became a

statutory right with the right to receive compensation for any property taken from the

government for public uses under article 300 (A). The present day rights are similar to ours as

people have the right to property and it can only be taken by the government and compensation

must be given. With this, the industrialists looking to develop land in Special Economic Zones, is

similar to our listing property for certain types of use, such as residential, commercial, or

industrial. This has not been established yet but the industrialists are fighting for it so that new

industries can be established to help domestic and global economies (Neelakantapillai, 2011).

As to transparency, India has its own chapter of Transparency International India (TII) as

part of the Asian Pacific Forum set up to provide “ Good governance, research, capacity

building, communication and advocacy, participatory monitoring, engaging with Government,

private sector and NGOs” (2008). These goals have been improved by the enactment of the Right

to Information Act of 2005, which is designed to give the people or consumers rights to

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transparency and to file grievances as well as to voice their opinions on what they may feel is

corruption. Two primary focuses of the group are governance and e-governance which are both

highly important to preventing corruption within the domestic and global business and political

world.

One specific incentive of the TII is called the Pahal: Shaasan Sudhaar Ki Ore which

focuses on four states or districts to measure bribes paid by those people below the poverty level

for the provision of eleven basic and need based services. These services are PDS, hospitals,

schools, education, electricity, and water supply under the basic services. Under the need

services are land records, housing, forest, NREGS, banking, and police. Under a previous study

done in 2007 it was found that the total amounts of bribes in India were Rupee 883 crore and an

average of Rupee 550 crore, without any determination of how much was spent in these states of

extreme poverty levels. This program has several activities and outcomes as goals, but have

already made progress by setting up Gram Panchayats (GPs) in three states and Village

Information Centres to help disperse information and services to these poorer states and how

they can find out and act on their own benefits, but one state has only received help in receiving

government aid filing assistance (TII, 2008).

The initiatives for more transparency, especially with governance and international trade

was brought to the attention of Indians and the global community as Enron in a joint venture

with General Electric (GE), and Betchel worked secretly with the government of Maharashtra to

build a multi-million dollar power plant serving the areas around Bombay (Van Zile, 2012). This

was the largest Foreign Direct Investment (FDI) at the time and the Indian people protested as

they were receiving no benefits from it except the electricity. The BPJ party protested this project

calling it neo-colonial and a product of corruption in which the design and construction was to be

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done by Betchel, the equipment supplied by GE, and the primary ownership and operations

performed by Enron, thus leaving out the local community from any advantages such as

employment. The project was re-negotiated, but the locals still continued to protest due to human

rights abuses including the beating and arresting of peaceful protestors (Van Zile, 2012). The

problems associated with the deal ultimately led back to Enron which filed bankruptcy and the

project had to be bought by the state causing a grave concern for participating in international

dealings from both sides involved.

India’s Wage and Labor Practices

The wage and labor practices in India are very elaborate. They have laws enacted to

provide for minimum wages that are set up more like a union contract in that there are rules for

working hours of both children and adults, wages set for specific shifts such as night shift,

required day of rest and wages if work is necessary on this day, usually Sunday, and the

timeliness and amount of deductions allowed by law (Ministry of Labour and Employment,

2013). As issues have occurred there have been new adoptions such as raising the ceiling of

wage payment requirements from 1600 rupees to 6500 rupees as the increase in cost of living has

increased wages which are partially set on the price of commodities required to live. There are

also provisions for workers compensation, industrial disputes, payments of bonuses or gratuities,

and specific rules for industrial employment. It is a continuously changing system with the

changes in domestic and global standards and information can be found on the Embassy of India,

Washington, DC and the Ministry of Labour and Employment, Government of India websites.

These two websites have a wealth of information on doing business in India, especially the

Embassy of India, Washington DC containing information specifically to United States and India

business interactions.

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Ethics of Outsourcing and Female Infanticide

There are several occurrences in India that are major concerns for more industrialized

countries performing work in or with India. Two of these are the use of outsourcing work that

could be performed by out of work Americans sitting at home and the prevention of female

infanticide. Although India has been trying to gain population control through legitimate means

such as planned parenting, the use of contraceptives, and the provision of clinics, there are still

cases of female infanticide in India. As Justice P. Sathasivam states in an article in The Time

India, "Despite laws female infanticide continues to create imbalance in society. The widening

gender gap is alarming for the social structure of our country” (2011). There is still a problem

with female infanticide even though there are laws against it. Recently there have been heavy

crackdowns and arrests for this as well as village nurses put on alert to watch the female babies

closely, but it still is occurring.

There are many advantages and disadvantages to outsourcing. The greatest reason for

outsourcing is the lower costs of operations in offshore outsourcing, especially in the Information

Technology sector. Another large factor in outsourcing is the gain of employment and improving

the standard of living in the offshore nation. Other advantages are the increased flexibility to

respond to new technologies and unanticipated demands. There are also decreased process times

when there is more labor to perform the work. Another advantage is the quality of the work due

to there being fewer issues with superiors, due to more respectful natures. There are two types of

outsourcing which is also accounting for the growth in this method of business. The first is

Business Process Outsourcing (BPO) of which most of the outsourcing presently consists of and

has since 1979 in India with American Express accounts. This type of outsourcing provides for

office type work such as data processing, accounting, payment receiving, and customer support

GBCA-India 20

services. The second is Knowledge Process Outsourcing (KPO), which requires a greater skill

but still has the larger population and lower operating costs to perform such work as research and

development, engineering, pharmaceuticals, and biotechnologies (Aqrawal, Goswami, &

Chatterjee, 2010).

Disadvantages to outsourcing are hidden costs not recognized, loss of control over critical

functions, the lowering of morale in the country losing jobs, and failure to innovate. According

to a survey by PA Consulting Group, of the 1000 surveyed only 5% felt they had gained higher

benefits and only 39% mediocre results. This survey uncovered several issues such as cultural

differences, accents, language ability, contractual problems, and fear of reduced levels of service.

These managers are reacting to customers concerns primarily as can be seen heavily in India in

the accents and the step by step instructions they are to give without deviation. It becomes a

major hassle to understand them or get them to understand what is being requested by the

customers (Aqrawal, Goswami, & Chatterjee, 2010).

Corporate Responsibility

Corporate responsibility includes many things from being responsible to the

communities, public consumers, and the employees. There are many international initiatives to

concern themselves with responsibilities to these areas. One is the United Nation’s Global

Compact, which since 2000 has 5300 corporations and 130 countries signed in agreement (Van

Zile, 2012). Other organizations are also providing smaller initiatives such as the World Bank,

OECD, and the International Labor Organization. The idea of corporate responsibility is a newer

aspect of business that many corporations and organizations are just now realizing is necessary to

their business successes as they are trust building activities. According to Bill Gates, need not be

heartless; since the poor often cannot pay for innovation, though, governments and companies

GBCA-India 21

must work together to create the right mix of regulatory, economic, and reputational incentives to

make industry work for everyone, not simply the wealthy (Van Zile, 2012).

As Tom Tyler and Peter Degoey note, re-investing in communities can build reputational

legitimacy, trust, and reciprocity from which companies may ultimately benefit (Van Zile, 2012).

In order to accomplish this India legislators began creating a bill in 1993 that would provide

items to increase liberations for corporations, but also included a mandatory Corporate Social

Responsibilities clause that would make it mandatory for certain corporations to give a minimum

of 2% of profits from an average of three years prior. There have been other nations that have

included mandatory reporting of social contributions, but it appears none that would make

contributions as mandatory. Due to the extreme poverty of the nation which has the largest

population of poverty and there are 55 billionaires, the Ministry of Finance felt that this

provision needed to be added and the Ministry of Corporate Affairs agreed with. This Bill went

through many stalls, protests, and possible concessions as many Indian people were opposed to

as an inequality in freedoms. Many people argued that it was a corporation’s responsibility to

only maximize profits and this was not even legal as the boards are to decide whether any funds

will be given to community or social programs in care of the shareholders. There were attempts

to make provisions for corporations to voluntarily give the 2% of profits with little progress and

continuing distancing between poverty and wealth. In 2006, the money spent on social

responsibility programs was only $5 billion, .6% of India’s GDP as compared to the United

States at $3307.75 billion, approximately 2% of the GDP (Van Zile, 2012).

On December 18, 2012 the Bill now called the Companies Bill of 2012 was finally

passed, primarily in its original form by Lok Sabha. In Chapter IX, Accounts of Companies,

Section 135, the Corporate Social Responsibilities describes the provisions of this requirement.

GBCA-India 22

“Every company having net worth of rupees five hundred crore or more, or turnover of rupees

one thousand crore or more or a net profit of rupees five crore or more during any financial year

shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or

more directors, out of which at least one director shall be an independent director (India Ministry

of Corporate Affairs, 2012)” This Committee is to ensure the spending of 2% of the net profits

from the previous three years of operations on social responsibility programs. There are no set

rules on where to spend this money and can be used internally or externally as long as it is one

social improvements. There are two provisions to the spending in that there is a preference for

local areas and areas near the location of operations and that if the 2% is not spent there must be

a recorded reason as to why it was not spent (India Ministry of Corporate Affairs, 2012). This is

likely the first attempt at legally requiring large corporations to help with social issues of the

nation, both having advantages and disadvantages. One large advantage is helping with

community growth, stability, and education which not only builds trust but provides for future

employees that are well educated. The largest disadvantage is that of company’s not wanting to

locate their businesses there as they feel this requirement will inhibit and lessen shareholder

profits. Either way the legal experiment has started and seems based on good principles of social

responsibility of companies and not just governments.

Union Carbide Bhopal responsibilities.

The Union Carbide disaster at Bhopal occurred on December 3, 1984 at a plant storing

Methyl Iscocyanate (MIC) for use in pesticides used within India for aid in preventing infestation

of agricultural products needed for the survival of the Indian population’s food sources as well as

export opportunities. This plant was owned by Union Carbide Corporation (UCC) at 50.9% in

joint venture with Union Carbide India Limited (UCIL)holding the rest (B., 1993). This project

GBCA-India 23

was highly supported due to the social responsibilities it provided for local less expense

protections of food sources. The pesticides Sevin and Temik were produced at the plant, in

which by the time of the incident was completely ran by UCIL and Indian employees. A toxic

gas leak from one of the tanks holding MIC spread over nearby shantytowns with this area

having the most deaths, then to Bhopal. There are still conflicting numbers of actual deaths and

injuries, but approximately 3000-3500 people died and approximately 11,000-100,000 were

disabled from the disaster. At the time of the incident UCIL was celebrating its 50th anniversary

with 14 plants, 5 operating divisions, and 9000 employees. It was publically traded on the

Calcutta Stock Exchange having approximately 23,000 shareholders with approximately 24%

owned by government ran insurance companies (B., 1993).

After the incident as early as December 6th, 1984, Chairman, Warren Anderson arrived

with others to help with financial aid, medical support, an investigation team, and the manpower

to properly remove the remaining MIC. At first Anderson was arrested under house arrest, but

was later released. The UCC United States personal have stated that the Indian government was

not allowing them to become involved even with financial aid, most of which was given to the

Indian Red Cross for uses in assistance or health and clean-up (B., 1993). According to these

statements the Indian government and UCIL were ultimately responsible for the events occurring

afterwards.

On the Indian people side and Amnesty International, there are still several people whose

lawsuits have not even been heard and several more that were denied settlement payments.

Those who did receive these payments received very little. According to Amnesty International,

the Bhopal site has not been cleaned up and is still leaking toxic substances into the ground and

drinking water (Van Zile, 2012). This is similar to how archeologists believe that Harappan and

GBCA-India 24

Mohenjo-Daro cities were destroyed through contaminated water and ground causing diseases or

forcing relocation. “Despite the quarter-century long duration of the disaster, many of the

questions Bhopal raised about environmental responsibility and corporate accountability remain

unresolved” (Van Zile, 2012).

Social Structures

With the varying cultures and religions in India, there are varying social structures

depending on the location you are in. In the areas closest to Pakistan and Bangladesh, there are

more Muslim populations with Muslims and Sikhs, having social structures primarily based on

family order, military statuses, and traditional family structures with several generations living

within one household group within more community based settings. As to most of the population

being Hindu, there religious structure still simulates the old Caste system that has since been

outlawed but still exists informally.

Caste system.

The original caste system was set up with orders of people in different classes, ranging

from the Brahmin to the untouchables. According to Tom O’Neill, “To be born a Hindu in India

is to enter the caste system, one of the world's longest surviving forms of social stratification”

(2003). Each person was born into a group and remained within that group throughout that

specific lifetime. The only way to move up or down a system was through reincarnation. Still

today the lowest group the ‘untouchables’ or as Mohandas Gandhi like to call them the Harijans

meaning “children of God”. The untouchables are discriminated against in similar ways the

Black Americans were discriminated against in its history. One example is that of Girdharilal

Maurya, who faced discrimination to himself and his family as Tom O’Neill states “One night,

while Maurya was away in a nearby city, eight men from the higher Rajput caste came to his

GBCA-India 25

farm. They broke his fences, stole his tractor, beat his wife and daughter, and burned down his

house. The message was clear: Stay at the bottom where you belong” (O'Neill, 2003). Tom’s

story on National Geographic just shows that the untouchables are still treated the same as before

primarily as unclean and should not intermingle with upper classes.

Ashis Nandy lower class supporter describes necessary corruption.

In an interview by Niharka Mandhana, there are several statements by Ashis Nandy in

reply to his comments at a literature festival, “It is a fact that most of the corrupt come from the

Other Backward Classes and Scheduled Castes, and increasingly the Scheduled Tribes. And as

long as this is the case, the Indian republic will survive,” (Mandhana, 2013) was very

misunderstood. Nandy is a socialist who promotes causes and fights for the rights of the lower

classes, but this statement led to an arrest warrant for discriminatory comments against the lower

classes. In Mandhana’s interview with Nandy he explains the comments were understood and

that was not what he was trying to say. He was trying to say that these classes were forced into

the corruption due to the circumstances they had been left in with lack of basic needs and corrupt

methods were the only way to achieve these basic needs. It is similar to a “Robin Hood” idea

where the rich should give to the poor, but the corrupt rich can pay to get away with their actions

and the lower classes cannot. As Nandy defends his position he states, “I believe that their

corruption is less harmful than the corruption of the super rich. Corruption of the rich and

powerful is based on greed; corruption of the weaker section arises out of desperation”

(Mandhana, 2013). This is a problem that faces many nations with high poverty issues, even in

the United States you find that some people who would not ordinarily commit crimes, might be

doing more of it due to their lack of basic needs and the inability to obtain gainful employment.

Bollywood Muslim stars safety concerns.

GBCA-India 26

One of the largest issues in India is one that has continued since the earliest days of its

history. The Muslims and Hindus both in India have almost always been in a battle with each

other. The two religions and cultures each have their own cultures which for the most part are

separate with the Muslims primarily belonging to areas located close to Pakistan and

Bangladesh, whose primary religions are Muslim. This has created friction for a Bollywood’s

biggest Muslim movie star, Shahrukh Khan, “the war of words started after Shahrukh Khan

wrote a first-person account of what it means to be a Muslim post the 9/11 world” (PAKBNK,

2013). There were comments made by political groups and representatives on both sides about

Rehman Malik, Pakistani Interior Minister, request that India provide security for Khan after the

account with economic and political conquests. Khan himself in an article in the New York

Times’ Outlook Magazine, "the inadvertent object of political leaders who choose to make me a

symbol of all that they think is wrong and unpatriotic about Muslims in India. He further said

that he had occasionally been accused of having a soft spot for the neighboring Islamic country

Pakistan and had been urged by some Indian leaders to leave India and return to what they

referred to as his ‘original homeland’” (DEUEN, 2013). This kind of silly war over the safety of

a Muslim born Indian who has relations in Pakistan after the partition of the country, will be a

source of constant strife between the two countries as long as the two countries continue to use

any subject including movie stars as a source for their political and religious differences.

Organizations.

India is the world’s largest democracy with one of the world’s largest economies. The

Republic of India framed a constitution similar to that of the United States, establishing a three

elements government to ensure no one has complete power. Like the United States it has an

executive section of government with a President, Vice President, and the primary control

GBCA-India 27

mechanisms of Councils of Ministers headed by a Prime Minister. The judicial section is in place

to enforce and interpret the Indian Constitution and a set of Uniform civil and criminal codes.

The legislative section consists of a Parliament with two houses (Embassy of India, 2013). The

largest is the Raja Sabha or the Council of States and is the higher body of the Parliament. The

smaller is the Lok Sabha or the House of the People. The Constitution was made flexible and

amendable with fundamental rights including against discrimination similar to ours.

India has their own foreign policy programs and ideals as well as being members of

International Organizations. India’s foreign policy is one of refraining becoming involved in the

internal conflicts of other nations with a focus on human rights (Embassy of India, 2013) even

though there is still corruption within that allows the poorest to remain that way, but they are

improving this through their Transparency International India (TII). India also has statuses in the

World Trade Organization (WTO), United Nations (UN), and Organization for Economic

Cooperation and Development (OECD) as well as numerous Indian organizations internally and

other as partners, observers, or other statuses. India believes in full nuclear disarmament working

with a six nation program designed to eliminate all nuclear arms in a non-discriminatory fashion.

They have also signed an agreement against chemical warfare (Embassy of India, 2013).

India is a dialogue partner only of the trade Association of Southeast Asian Nations

(ASEAN) which works to provide for economic growth, social progress and cultural

development through joint partnerships with the other nations. ASEAN seeks to promote peace

and stability by using their principles of peaceful solutions to disputes, non-interference in the

internal affairs of other nations, and the mutual respect for each nation’s independence. It also

seeks collaboration and mutual assistance in training and research as well as working together to

achieve greater utilization of total resources both agricultural and industrial (ASEAN, 2012).

GBCA-India 28

India is a member of BRICS, an association between Brazil, Russia, India, and China as

four of the emerging international market leaders. It is a non-regional association of larger

developing countries that focus on global issues affecting their continued growth and

development. The third year of existence they invited South Africa to attend and become a

member as well. The focus of the conference in New Delhi 2012 was “to encompass topical

global challenges such as international terrorism, WMDs, climate change, food and energy

security, MDGs, international economic and financial situation, etc.” (BRICS India, 2012).

Education.

India offers free and compulsory education to its Primary education schemes to all

Indians from the ages of 6-14 in classes from I-VII. This is similar to our first through eighth

grade classes with improvements having been added and additional schemes to feed all the

children a hot meal for 200 days out of the year with specific calorie and protein requirements.

There is also the Mahila Smakhya which is designed to give initiatives and preferences for

including and encouraging girls to enter and complete their education. The Right of Children to

Free and Compulsory Education (RTE) Act of 2009 sets up several rules to help limit gender or

social discriminations, prevent states or territories from charging any fees for schools, ensure

there are schools in all neighborhoods through construction or additional classrooms. It prohibits

physical punishment or mental harassment (bullying), screening procedures, teacher

scholarships, or the running of schools without recognition from the Ministry of Human

Resources.

As India’s President, Shri Pranab Mukherjee, states “Education is the true alchemy that

can bring India its next golden age. Our motto is unambiguous: All for knowledge, and

knowledge for all” (Ministry of Human Resources Development, 2011). This is the ideal that

GBCA-India 29

India would like to have and have also included promotional schemes such as the Mid-Day Meal

Scheme feeding classes IV-VIII in the Educationally Backwards Blocks (EBBs) (Ministry of

Human Resources Development, 2011). Scholarships primarily for women and the poorer

students to attend secondary schools for classes IX-XII (high school in the United States) and

building more schools so that there are more secondary schools within reasonable distances of

any habitation. As to the vocational level, there are different degree levels as follows:

• Graduate and post-graduate level specialists (e.g. IITs, NITs, engineering

colleges) trained as engineers and technologists.

• Diploma-level graduates who are trained at Polytechnics as technicians and

supervisors.

• Certificate-level for higher secondary students in the vocational stream and

craft people trained in ITIs as well as through formal apprenticeships as

semi-skilled and skilled workers (Ministry of Human Resources

Development, 2011).

There are also many college-level and technical level schools in which those able to achieve

higher education to attend with local and international or joint scholarships available. There are

also agreements for students to study in India from the United States and Indians to study here

being promoted by Fulbright-Nehru scholarships (USIEF, 2011).

How are these Elements and Dimensions Integrated by Locals Conducting Business

in India?

The elements of culture and religion as listed above show both the uniqueness India has

within itself and the differences. As with many countries there are people of different parties,

GBCA-India 30

races, and sexes that will have differences with each other that can cause internal relations to be

either good or bad. Some of these internal differences and similarities will be focused around

exports and imports with concern of local laws and energy demands. Since there are two other

than normal recognized law systems, Hindu and Muslim, there will be a better description of the

differences in these and how they affect business in India.

Export and Import Regulations

Exports in India include several industries including chemical, home furnishings, Indian

Agriculture products, Apparel and Textile Industry, Indian Jewelry, Indian Leather, Indian gifts

and handicrafts, and finally Plastics (India Exports and Business Trade Zone). Of these the

historical ones such as agriculture, apparel, jewelry, leather, and handicrafts are increasing in

growth to nations such as United States, United Arab Emirates (UAE), and European nations as

more individuals in these countries are wanting to get away from the standard customary

furnishings and decorations. Indians have a well cultivated skill in these industries as most of

them include tasks they have been performing since 3000 BC. They have intricate design

patterns and raw natural resources from which to use, including some complete to end products

which make them very productive. Some problems in these industries are that they are primarily

government managed, some primarily hand-made with little use of new technologies, and are

imported in larger numbers with less value. With the economy in India as it is presently it can ill

afford to lose money on its exports, yet still having great potential for growth.

The largest commodity produced in India is agricultural products with food sources,

being primary products. Due to the increases in population and poverty levels, these food sources

are dropping in percentages of exports due to needs in domestic uses for its own people.

Agriculture in India has come a long way since the early histories of Harappa and Mohenjo-

GBCA-India 31

Daro, with improvements in irrigation, drainage, conservation, and sanitation as well as the use

of machinery to perform more work, more efficiently. India is the second largest producer of

milk and milk products in the world, while the country offers a very diverse number of products

to the world from agriculture including many of its own specialties such as Buffalo milk, spices

and bananas, mangoes, chickpeas and others. They are the fifth largest cultivator of biotech crops

ahead of China, but need to concentrate its research on advance technologies, areas best for

specific crops, genetic improvements in seeds and yields, gathering of data, and reducing the gap

between knowledge and skill based practices (India Exports and Business Trade Zone).

The two most important industries to concentrate on are chemicals and plastics. With

many years making plastics since the making of Polystyrene in 1957 (India Exports and Business

Trade Zone). Since many of the chemicals produced are made into plastics, and then into other

products, technology in developing both chemical and plastics industries is being influenced by

government incentives for location in India and subsidies where necessary to bring in Global

Businesses to utilize some of these products, thus enabling them to make more money from the

imports of finished products such as thermoplastic furniture, synthetic garments, or

pharmaceuticals. The chemical industry also makes chemicals as specialties to its agricultural

needs such as pesticides, as mentioned in the Union Carbide incident, and fertilizers. This is one

of the largest focuses of the Indian government in drawing to locate industries as it will stand to

gain in its global position as industries locate there. There is also the consequence of supply and

demand, as more Indians move above poverty levels; more demand will be needed when more

individual households are developed for the growing economy.

There is one large downside to these industries at the moment, having its ups and downs

throughout history, being the cost of oil and natural gas. India has very few oil and natural gas

GBCA-India 32

reserves and imports most of its oil and natural gas for use in chemical, petrochemical, and

plastics making, as well as use for energy to run the equipment at industries and manufactures. In

order to attempt to solve this problem India has begun looking at finding reserves that would be

expected since there was so much tectonic activity occurring around it throughout history.

“Marking its debut in India’s high-pressure, high-temperature drilling and production sector, GE

Oil & Gas (NYSE: GE) will supply HPHT technology to Cairn India for the further development

of the Ravva oil and gas field off the coast of Andhra Pradesh in eastern India” (ENPNEW,

2013). According to Dr. Sunil Bharati, head corporate affairs and spokesperson, Cairn India

Ltd., he sees this new technology from GE as the next great way to draw reserves from India’s

eastern borders along the Himalayas such as the Ravva oil and gas fields (ENPNEW, 2013). This

would greatly help out the country with its financial deficit which is growing due to oil prices

imported from primarily Saudi Arabia, then Iran.

The other large import that is used in the making of one of its most prosperous exports,

Indian jewelry, is that of gold and diamonds. “India's imports of gold, second only to oil in value,

contributed to a widening of the current account deficit to a record high 5.4 percent of gross

domestic product (GDP) in the July-Sept quarter of the current fiscal year to March 2013”

(Reuters, 2013). These imports are used along with imported diamonds, which they only cut and

polish, to make Indian Jewelry. This industry has huge financial support from Indian government

policies and Indian banks, as can be seen by India setting up a Special Economic Zone in

Mumbai, where 50% of the exports of jewelry leave from. “However, most of the diamond

processing is undertaken in the neighboring state of Gujarat, primarily in Surat, Bhavnagar,

Ahmadabad and Bhuj. But Mumbai does have a considerable number of modern semi-automatic

factories and laser-cutting units, majority of which are located in the special economic zone”

GBCA-India 33

(India Exports and Business Trade Zone). With this being one of the largest imports there is a

reliance on the gold import duties to remain steady and they only increased them from 4% to 6%,

less than expected by the global community (Reuters, 2013). The government of India needs to

take these kinds of risks to improve their economy by not allowing its export prices to exceed

what would be accepted by the specific countries.

Energy Demands

India’s supply and demand for energy specifically, electricity, has been increasing at a

rate as large as its economic growth. This supply includes 69.9% fossil fuels, 20.9% hydro, 7%

renewable, and 2.2% nuclear (Central Intelligence Agency, 2013). This structure is similar to

what the United States was and is now in the process of changing due to the environmental

affects fossil fuels have. The United States is third in the world for carbon emissions from energy

consumption while India is fourth (Central Intelligence Agency, 2013). Energy demands will

increase along with economic growth, but can be changed to become more environmental

friendly as “global warming” affects continue. According to the India Energy Portal, “India is

well-endowed with both exhaustible and renewable energy resources. Coal, oil, and natural gas

are the three primary commercial energy sources. India’s energy policy, till the end of the 1980s,

was mainly based on availability of indigenous resources. Coal was by far the largest source of

energy. However, India’s primary energy mix has been changing over a period of time” (India

Energy Portal).

In the fight to increase energy sources, primarily electricity of some form rather than oil

or natural gas, although electricity is also made by these fossil fuels, there are trends toward

Nuclear and Renewable sources. In India, there are ongoing plans to increase more

environmentally friendly sources, such as Nuclear. One example that has already been put into

GBCA-India 34

service is one unit of the Kudankulam Nuclear Power Plant in southern India. “The first energy

unit of the long-due power station has been finished with the help of Russian experts. The Indo-

Russian joint venture was set up on Nov. 20, 1988, with an additional agreement signed on June

21, 1998” (The Voice of Russia, 2013). The second unit was set to go operational in July 2013,

but since it was postponed with no explanation, there have been rumors of the first unit leaking

and a probe sought by 50 eminent citizens in the rumors of deaths and injuries to the workers

(Speical Correspondent, 2013). There are grave concerns about nuclear power after events at

nuclear plants, especially Fukushima Daiichi after the earthquake caused explosion at one

reactor.

In order to combat this, two professors, at the India Institute of Science in Bangalore,

have worked to study the needs of India’s future energy consumption as to availability of enough

solar power. Hiremath Mitavachan and Jayaraman Srinivasan, have determined that using new

solar technologies only 4.1% of India’s uncultivated and waste lands could be used to provide

enough solar energy to generate 3,400 Terawatt (1 Terawatt equals 114 Megawatts) hours by

2070. In discussions over the use of land being too much, they include that coal and nuclear both

take up not only plant operational space, but mining resources, while hydro displaces too many

people to be a feasible solution. They have also looked at these solar technologies that could be

used as rooftop services, taking up less land, and meet half the 2070 numbers by a much shorter

time. With the agreement of several an Australian study on available solar energy and an institute

engineer in agreement, there may be a solution to the energy needs that not only helps the

environment but also the budget deficit in India (The Hindu, 2012).

How do both of the Above Items Compare with US Culture and Business?

GBCA-India 35

First of all there are many similarities with India resembling a young United States, but

there are some differences. For the most part the multiple religions and cultures are similar to the

United States, yet the United States has more variance and more denominations of Christianity.

The two primary religions in India are Hindu and Muslim, each having their own personal laws

along with the Christians. The business laws are very similar to the United States even including

rights for labor and wages that are similar with exceptions such as the ages of workers. The

government systems are similar with many of the laws based on British and American common

laws. One of the largest problems found is that India still uses rupees as the national currency

which has been devalued since the dollar has been devalued as the basis for all currency values.

The new exchange rates are having a lot to do with the deficit in India. The exports are bringing

more income as they are primarily sent to countries using the dollar as currency, but the raw

materials necessary to make many of their products including the use of energy cost more to be

imported thus making the end products cost more. To add to the confusion of doing business

with India is the numbering system which in this article primarily uses crore/ 1,00,00,000/ 7/ Ten

million rupee which then has to convert to dollars or vice versa. There are calculators today that

will perform this function with little ease.

India’s Commonalities with the United States

According to the Central Intelligence Agency, India has a “common law system based on

the English model; separate personal law codes apply to Muslims, Christians, and Hindus;

judicial review of legislative acts” (2013). The common law system makes it very accessible

along with the use of English as a secondary official language to United States businesses. The

use of taxation has recently been simplified and well laid out for ease of understanding and

payment, making corporate business dealings easier. The employment, corporate business,

GBCA-India 36

human resources (education), labour laws, and more legal issues and information at each specific

ministry from India’s websites as well as the personnel and information to contact for further

questions. There are also links from the Embassy of India in Washington, D.C, to each of these

ministries and other useful sites. There is such a wealth of information on these two government

sites that it is very simple to find legal business information.

According to the U.S. State Department, “Our relationship is rooted in common values,

including the rule of law, respect for diversity, and democratic government. We have a shared

interest in promoting global security, stability, and economic prosperity through trade,

investment, and connectivity. The United States and India have a common interest in the free

flow of global trade and commerce, including through the vital sea lanes of the Indian Ocean”

(2013). The common goals of these two countries are similar in most aspects but there are

cultural differences and problems associated in both countries that are still being worked on such

as equal treatment of females and minorities and human-trafficking, as well as other human

rights. Both are fighting the good fight but there are and will likely always be people who do not

support the government’s initiatives such as in an article by Joseph Manu, as he describes the

Jaipur Literature Festival as a comical source of offense. He describes the ways people in India

act when they are offended by someone’s words or actions as India being a paradise for all those

offended to obtain deprival for their offenses (2013). These same statements have been said

within the United States but instead of being called a paradise, it was called “the land of the

offended. This article uses the statements and actions of Ashis Nandy that were misinterpreted

by listeners and the offense taken to an arrest and criminal charges over his words that appeared

to be discriminatory against minorities. Another writer that was there, Salman Rushdie, “whose

novel ‘‘The Satanic Verses’’ was met with protests and death threats from those who said it

GBCA-India 37

insulted the Prophet Muhammad, was forced to cancel his appearance at the Jaipur Literature

Festival after some Muslim groups said they would be offended by his presence and the

government of Rajasthan, the state whose capital is Jaipur, said it could not guarantee his safety”

(Manu, 2013).These actions are so typical of people that believe they are righteous and any

wrongdoings of others should be punished without explanation. Ironically, “among the first was

Mayawati, the first female Dalit to serve as a chief minister in India, who is currently facing

serious corruption charges. If there were canned laughter in real life, this country would resound

with deafening guffaws” (Manu, 2013). This is similar to injustices by some of our politicians

who have brought charges against others only to be found accused of some legal, ethical, or

moral form of corruption. Corruption is a common problem within both the United States and

India as well as the world.

Protections and violations of females against violent actions

One of the legal, ethical, and moral issues facing India and the United States is the

discrimination and mistreatment of women in society and privately. Accordingly the

“Department of State has launched multiple and wide-ranging global initiatives to promote

women’s social and economic development, integrate women into peace and security building,

address and prevent gender-based violence, and ensure women’s full participation in civic and

political life” (2013). At this time there are several violent events in India occurring against

women that are against this belief. On December 16, 2012 a 23-year old female was gang raped.

“Police allege the 17-year-old and five men raped and severely beat the victim on a bus in New

Delhi before dumping her and a male friend in the road. They also penetrated her repeatedly with

a metal bar, injuring her so badly that she died of massive organ failure in a Singapore hospital

two weeks later. (THAINS, 2013)” Within a few days there were protests and action called for to

GBCA-India 38

increase a woman’s protections under the law. “India's current laws prohibit acts against a

woman intended to "outrage her modesty," but don't define specific behavior that is off limits”

(Guha, 2013). The measures a panel established on December 23, 2012 was set up to act on these

issues. There were proposals to add criminal penalties for minor sexual infractions such as

harassment and stalking to attempt to stop the acts from happening before they do. The

government including Prime Minister, Manmohan Singh, agreed to change the laws but did not

say exactly when or how much, but five of the men’s trials with the exception of the sixth being

tried as a juvenile, held opening statements on January 24, 2013 in a special fast-track court

(Guha, 2013).

What are the implications for US Businesses that Wish to Conduct Business in India?

There are several implications both good and bad for the US businesses to conduct

business in India. The good ones are that there is expected future growth in all of the exports and

imports of India, especially as a study by Goldman Sachs has shown to be of 5% or more each

year until 2050 (US Department of State, 2012). India has seen a smaller growth or loss in the

last few years, due to the global recession, but as the world comes out of it relying on the United

States dollar, India will grow with it. All of the most recent presidents, dating back to President

Bill Clinton, have stated that India is the key to growth and stability in south and eastern Asia as

interactions with them also can help with those of other nations as well. The outlook of Neil

Kuschel is similar to the United States Presidents although he is presenting the pros and cons of

doing business in India for the United Kingdom; it applies to the US as well. Kuschel points out

the large customer base of one sixth of the world’s population, the now easier trading with India

due to economic reforms in most industries and financial sections, and the trade opportunities

available which are growing almost every year as the country matures. Kuschel also points out

GBCA-India 39

some challenges as well such as poor infrastructure, culture, odd customs and bans on importing

certain goods (Kuschel, 2013). With all these pros and cons, India would be a good country to do

business with, but there are some real considerations not mentioned in all the cons that might

make one think twice or at least more cautiously about it.

Benefits and Risks of Outsourcing

There are many advantages and disadvantages to outsourcing. The greatest reason for

outsourcing is the lower costs of operations in offshore outsourcing, especially in the Information

Technology sector. Another large factor in outsourcing is the gain of employment and improving

the standard of living in the offshore nation. Other advantages are the increased flexibility to

respond to new technologies and unanticipated demands. There are also decreased process times

when there is more labor to perform the work. Another advantage is the quality of the work due

to there being fewer issues with superiors, due to more respectful natures. There are two types of

outsourcing which is also accounting for the growth in this method of business. The first is

Business Process Outsourcing (BPO) of which most of the outsourcing presently consists of and

has since 1979 in India with American Express accounts. This type of outsourcing provides for

office type work such as data processing, accounting, payment receiving, and customer support

services. The second is Knowledge Process Outsourcing (KPO), which requires a greater skill

but still has the larger population and lower operating costs to perform such work as research and

development, engineering, pharmaceuticals, and biotechnologies.

Disadvantages to outsourcing are hidden costs not recognized, loss of control over critical

functions, the lowering of morale in the country losing jobs, and failure to innovate. According

to a survey by PA Consulting Group, of the 1000 surveyed only 5% felt they had gained higher

benefits and only 39% mediocre results (Aqrawal, Goswami, & Chatterjee, 2010). This survey

GBCA-India 40

uncovered several issues such as cultural differences, accents, language ability, contractual

problems, and fear of reduced levels of service. These managers are reacting to customers

concerns primarily as can be seen heavily in India in the accents and the step by step instructions

they are to give without deviation. It becomes a major hassle to understand them or get them to

understand what is being requested by the customers.

India is the largest nation in Southeast Asia for outsourcing with China second. There are

two major reasons why India is in this position being population and the use of English as an

official language which is taught in the urban schools. “From the earliest times the Indians have

borne a strong moral responsibility of promoting international amity and goodwill. In modern

times, distinguished Indians such as Mahatma Gandhi (1869-1948), Rabindranath Tagore (1861-

1941), and Pandit Jawaharlal Nehru (1889-1964) have much emphasized this particular

affirmative and attractive feature of India and her peoples” (Avari, 2007). There has been proof

found of contracts between Harappan Civilization and Mesopotamia and the Persian Gulf. This

among other historical evidences found that the people of India are very adaptable to change and

persevere against both political enemies and environmental factors when it comes to

international trade as well as having set up trade guilds in the early history that began fully

formed business type relationships. There has also been progression through the years by their

own efforts and the knowledge brought by other cultures that led them to develop and use early

scientific methods. This expertise in innovation has continued into today and would be more

greatly used in research and development, engineering, business analyst, biotechnologies and

other highly skilled industries.

Legal Methods Used in the Bhopal Disaster.

GBCA-India 41

Union Carbide won the legal battle in a United State District court for another time, but

this time the plaintiffs were the injured who felt like they were not properly cared for as an after

result of ground and water pollution in the area. According to the article in Bloomberg, the plant

had transferred ownership several times since then. It was now owned by Eveready Industries

India, Ltd and was no longer making pesticides anymore but flashlights, batteries and packet tea

among their products (Van Voris & Hurtado, 2012). The case was finally after years of litigation,

“The court decision not only dismisses plaintiffs’ claims against UCC, but also clarifies that

UCC has no liability related to the plant site and further acknowledges the matter of site

ownership and liability as being the responsibility of the state government of Madhya Pradesh,”

the company said (Van Voris & Hurtado, 2012). The original case In Re Union Carbide Corp.

Gas Plant Disaster v. Union Carbide Corp. as decided by the district appeals court was

dismissed and affirmed after the evidence showed that the company was primarily ran by Union

Carbide India Limited (UCIL) and had been for the last two years. All of the documentation of

the project which was taken over by the Indian company and its engineers, all the employee

records and people that would be involved in the testifying were in India, the US courts

dismissed it on the basis that the venue should be in the India courts of which decided that a

$470 million dollar settlement be paid and was. The international standards are that the business

location is usually the place for court to be held for this reason (Kubasek, pg 241-242 2012).

India and Pakistan Continuing Disputes; Thar Coal Project

With both India and Pakistan projecting electricity needs much higher than at present and

neither having the proper resources but each having half the puzzle, the Thar coal project in

Pakistan has become an issue between the nations as they attempt to set some trade agreements

that would leave India with “most honored country status”. According to the article by Sajjad

GBCA-India 42

Shaukat, there were talks and meetings discussing so called Confidence Building Measures

(CBMs) that would promote peace between India and Pakistan including lessening visa

restrictions and solving other issues such as “terrorism, Siachen, Sir Creek, Wullar Barrage and

water including main dispute of Kashmir” (2013). But due to India’s great need of coal as it

provides over half of the electricity in India and there already are black-outs six hours long

occurring, there is suspect that the Thar Coal Project and cheaper coal imports from Pakistan

were the goal of the Indian government as a way to provide a new reliable coal source that they

are not able to provide at the present due to lack of private coal mines being held up from mining

(Chaturvedit & Bhattacharya, 2013).

As Sajjad stated, “It has been learnt that Indian Embassy Economic and Commercial

Counsellor, Mr. Arvind Saxena (Raw Station Chief) at Islamabad is facilitating Indian-based

companies for striking deal between SECMC and TATA & DEHL….Rumors abound that USA-

India backed corrupt political-cum-business mafia is involved in this multi-billion dollars scam,

and key players allegedly include co-chairman of a political party, Syeda Nafisa Shah (MNA-

PPP), Dr Mahesh Malani (MNA-PPP)” (2013). It was also learned that other nations such as

Germany and Australia both wanted to invest in the project in some fashion, but it is believed

that this project should be used to supply the Pakistani people and help them to become self-

sufficient. An Indian company has already lost its battle in the international law system of a

contract with the Tethyan Copper Company Pvt Limited (TCC).

Conclusion

The study of India from a Global Business Culture Analysis has so many details that need

to be looked at. First the culture and the government structures need to be analyzed to determine

any issues that the business would need to be aware of. Then it would be recommended to look

GBCA-India 43

into which businesses are growing or expected to continue to grow and then make a

determination as to what type of business would be feasible. If a specific business was already in

mind, there would need to be deeper studies into the actual industry issues, laws, methods, and

availability of land or resources in India or nearby countries. The idea of moving or setting up a

global business in India is a good one by most of the research but there may be some areas such

as around Pakistan or Bhopal that might not be good for various reasons. The final item is that

some forms of corruption exists in India and other nations including the US and can be hidden by

governments, so it might be a good idea to look into its past history and recent new stories,

maybe even suspicions sometimes.

GBCA-India 44

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