Business in a Cultural Framework

I remember distinctly that on one sunday afternoon I found my dad really disturbed and tensed about something. It was about a joint venture he was planning with a few individuals from the United States. They were down in India and despite a round of discussions and negotiations nothing concrete seemed to have been decided upon yet. My dad, frustrated and upset wanted to call off the negotiations altogether. He had been looking forward to this project for five years and such a closure would have deeply impacted his professional and personal life.

Although both the parties were doing what they thought was morally and professionally correct, there was some hitch somewhere that prevented things from materializing. The investors from the US had shown immense faith in the Indian economy which has been on the rise lately. They were excited about the entire idea and appeared very optimistic about the outcome of the project. My dad was apprehensive about certain conditions of the contract and thought it would be advisable to consult the other members of his firm first. My dad spent hours with the investors analyzing the good and bad consequences. These discussions had rambled on without any concrete decisions being made. My dad wanted some more time before he was completely ready for the merger. However, the American investors tried to speed up matters and it appeared to my dad that they only wanted to finalize and implement the deal. They did not seem to be debating the finer aspects of the deal. Their informal way of addressing my dad and his colleagues also made him feel uncomfortable and disrespected. This raised his apprehensions even more that there could be potentially something wrong with the deal and the American investors did not possess the etiquettes of business. Precisely, my dad had lost his trust in this firm and the deal he had looked forward to.

Trust was something both parties seemed to be losing in each other.  My dad no more trusted their capabilities in business and sense of analyzing the finer aspects of it. On the other hand, the American investors were unsure about my dad’s capability to get the task done on time and as a potential business partner. Both the parties had many questions left unanswered and this resulted in the final collapse of what seemed to be a budding friendship and merger initially.

I will try and analyse this situation from what I thought was not so much of a business problem but more of a cultural difference. Only if  both the parties had followed the basics of intercultural communication, things would have worked out. Only if the American investors had realized that Indians view time differently, they could have been more relaxed in their interactions. On my dad's side he should have known about their background and not thought of them as pushy or arrogant, considering their practical way of thinking and approach to problem solving.  If both the parties had realized how culture was a major factor in shaping successful business deals, they would have been more comfortable and adjusted with each other. If any one of them would had made the effort to effectively communicate their feelings keeping the other’s intentions in mind, there would have been a sense of trust between them. 

An interplay of different cultures and beliefs led to the final collapse of the deal. I will list down a few of them here.

In the United States of America, efficiency, adhering to deadlines and a number of other habits are considered normal and expected. But when it comes to India, Indians view time differently and deadlines might not be adhered to in light of other important considerations. As a result, what might be reasonable and expected in America would not work in India and vice-versa. 

Aggressiveness and urgency can be viewed as a sign of arrogance and disrespect amongst Indians. This may lead to complete lack of communication and effort on their part. One needs to get to know the individual in order to have successful negotiations. While Americans generally wish to separate their personal and professional lives, Indians try to be good hosts and invite potential business partners home for dinner and chat. They value family over work and this is an integral part of their culture. 

Americans are generally open minded and assertive in nature. They say what they think is right and everyone has a equal chance of pitching their ideas in the workplace. Indians are used to a system of hierarchy, seniors are supposed to be obeyed and respected. Hence,  Americans who are pro-active and assertive will be considered rude and disrespectful in India. Criticism should also be made keeping ones position and feelings in mind. 

These difference will help us analyze this situation better. Clearly, the lack of trust and a host of similar misunderstandings led to final collapse of this friendship. The American investors wanted to sign the deal as soon as possible because they were happy with its general structure. They would have looked into the further details later. On the other hand, my dad and his colleagues wanted to look into the finer details and consider all possible problems and solutions before going ahead with it. They would have not signed the deal before these expectations were met even if that meant passing over the deadline. My dad and the American investors had already had many negotiations and meetings but still appeared dissatisfied about certain aspects and wanted to work on them. The American investors considered this kind of behavior of overlooking deadlines for no so important details rather weird and impractical. They began questioning themselves about my dad's capability to finish tasks on time and thus as a potential business partner since this was just the beginning, they had to work with his pace for quite long. Similarly, my dad thought of them as pushy who just wanted to sign the deal.

Another difference was in terms of behavior. American investors had a casual attitude during business meetings and everyone on their panel, without any inhibitions, expressed his/her ideas and thoughts freely. Criticism about the deal and certain areas of the project was made clear to my dad's colleagues without respecting the system of hierarchy. Though this was the general demeanor of the Americans and they did not mean to disrespect or dishonor anybody's feelings my dad and his colleagues found this as arrogant. They thought it would not be possible to work with people who do not respect elders.

These differences led to problems that were beyond resolution and thus came the end of an potential deal, which could have affected both the parties positively. Though this scenario helps us in analyzing differences between two cultures, this may not be applicable to all situations and people. The differences highlighted are also not generalized and vary over time and space. For example, Westernized Indians would not have found anything unusual about the American investors. Precisely the differences are very specific to this case should not be over-generalized. 

Updated: Oct 14, 2012