People often ask me “what are the main cultural differences between India and the west?” That is, the differences that lead to misunderstanding and failure to do long term business.
For me, there are two major causes leading to a breakdown in trade and business discussions.
The first is what the researchers call Universalism vs Particularism. Universalism exists in the west – people believe you can discover what is true and good and can apply it as a general rule. Particularism is the culture of India – relationships are more important and unique situations more important, so each situation is considered on its merits.
This difference is sometimes referred to as the “absolutism” of the west (things are absolutely good or bad, right or wrong etc) compared to the “relativism” of India (things are never wholly good or bad, it depends, relationship is more central).
Universalism is the culture of USA, England, Australia and Particularism is the culture of India, China and Thailand.
When it comes to agreements and contracts you can see this difference cause divisions – the west believes what is written down is permanent, fixed, never to be changed, while India and China realise that life is constantly changing, and variations might be needed.
The second major cause of breakdown is that India is a “collective” culture, while the west is increasingly individual.
You will find in most Indian companies that decision making is a collective operation, even at Director level. Whereas in the west, a Director or Manager of a division has their yearly budget and puts a program to the board, and then gets on with it largely uninterrupted, your Indian counterpart involves the collective in almost every decision – even where the yearly budget and program are already set.
This also shows up in work styles – a western manager will set the task and assist, then largely stay out of things – whereas both sides in India will want moment by moment contact. For companies involved in the west and east, the western managers find this demand for constant feedback and contact very challenging.
Individualism is the culture in the USA, Canada and Australia while Collectivism is the culture of India, Japan and China.
I am not suggesting that one culture is “better” than the other – they are simply different, and it is important we know the difference. That way, we can adapt our behavior and succeed across cultures. Given that India has around 600 million people below the age of 25 (what a market!) we will all be better off if we can adapt and succeed together.