1. Describe the culture of Canada and compare it with India. What are some of the main similarities and differences? Where do you think people from India culture would have problems integrating into Canadian culture? (Use cultural dimensions discussed in class as the basis for your comparison)
Canada is a relatively young country, having been discovered by Europeans in the 15th century but only becoming a confederate in 1914. Throughout its history, Canada has been invaded and populated by the French and the British, and has retained very liberal immigration policies, encouraging a mix of European (Dutch, Spanish, Polish, Ukrainian, Swedish, and German) with Asian, Africans and Caribbeans nationals to live and work in Canada. Canada has two official languages, English and French, although only about 17% of the total population speak both languages. English is the main legal language, with English language statures serving as final arbiters in case of legal disputes.
Canada also fosters immigrant-friendly policies on bi-nationalism and cultural diversity. If in America, an immigrant must be assimilated to act, think and be “American”, in Canada, cultural diversity and recognition of a secondary national identity is accepted.
Canada is endowed with a lot of natural resources except two of the most important, highly arable land and people to make productive use of it. Canada maximizes the use of these resources efficiently, having one of the largest economies in the world and having a rank of 14 in terms of the largest Gross Domestic Product (GDP) in the world. The income distribution comparison between the richest 10% of the population and the poorest 10% of the population is 9.5 while the income distribution comparison between the richest 20% of the population and the poorest 20% of the population is 5.5.
Canada’s socio-economic classes are not very distinct and hard to decipher. Unlike in some countries where appearance and accent indicate social classes, Canada’s working and upper class enjoy the same privileges as the other. Large mansions, flashy automobiles, and other excesses are very rare in Canada, where the bi-nationality and cultural diversity has produced a culture of modesty and humility.
Contrary to Canada, India is a very old country, having been called the “Oldest Civilization in the World” with the earliest recorded Indian civilization dating back to 8,000 BC! India is also the birthplace of some of the world’s most prolific religions such as Hinduism and Buddhism, having a combined 2 billion followers worldwide. India has preserved its culture despite being colonized by the United Kingdom.
India’s many languages are derivatives of the Sanskrit language, one of the earliest complete languages ever discovered. Most people from India speak Hindi, a directly Sanskrit-ized version of a local dialect.
India’s culture is highly complex. Traditional Indian culture follows a very strict and systematic social class, where the roles and responsibilities of each class is enforced. Religion plays a major role, even within different social classes and remains a central part of Indian life.
India is experiencing social change, like any other nation in the world. There is an emergence of the importance of women, especially in terms of working outside the home, pursuing advanced education, a corporate career, and important positions in both business and politics.
India is the third largest economy in terms of Gross Domestic Product in the world according to the International Monetary Fund (IMF). The income distribution comparison between the richest 10% of the population and the poorest 10% of the population is 8.6 while the income distribution comparison between the richest 20% of the population and the poorest 20% of the population is 5.6.
2. Describe 3-4 key issues you have identified that might be cause for concern when doing business in India. What would be a good risk mitigation strategy for use when doing business in India?
In doing business oversees, risks are always general and not unique to any particular country. The general risks as they relate to India are:
Cultural Difference - India has a very strong, very distinct cultural identity. The business etiquette in India is very different from Canada’s and thus requires some familiarization. As a matter of fact, doing business in India requires understanding their culture in a multi-dimensional approach. There are several highly documented cases of business relationships ending in a sour note in India because foreign firms look past the cultural standards of Indian businessmen.
In western civilizations, aggressiveness in the work place is common but in India, because of the highly hierarchical culture, it is seen as a sign of disrespect. Senior officials are revered, often leading discussions with junior officials falling silent and thoughtful in the background. Criticism is done very respectively in India so as not to damage self-esteem and workplace balance. Humor is also an alien concept in Indian business settings.
The effects of not familiarizing and adapting to the cultural difference in India will result in losing out on opportunities to access and profit from the third largest economy of the world. To mitigate the risk of cultural differences, it is important to research and learn from the mistakes of others and to set realistic guidelines for working with Indian firms. One practical way of quickly getting a feel for the cultural difference is to hire a “local” agent to guide you through the cross cultural complexities of India.
Corruption in the Government -India, like any other country in the world, has some degree of government corruption. In the compilation of the relative ease of doing business in all countries of the world, India ranks as number 132 or 183 countries. This means that the cost and ease of getting the necessary permits, protection of foreign investors, enforcement of contracts and arbitrage is relatively low in India and is a sign of non-transparency in government dealings.
Corruption affects profitability and long-term business sustainability. India has, over the last couple of decades, tried to improve on its competitiveness and ease in doing business such that this year alone, it has jumped by 7 places from its 2011 ranking.
Like cultural risks, corruption can be curbed by research and by acquiring a local agent to act in your firms behalf. Such individual or group should be knowledgeable about business transactions, has significant experience in compliance and implementation, and have had experience dealing with foreign firms themselves.
High Degree of Competition Leading to Poaching of Employees - Because of the massive rate of development of India, the level of competition is intense. A lot of foreign firms have found themselves looking at situations wherein their employees are poached by competitors. While this is clearly a management issue, it helps to know that sound management practices are universal. A sympathetic, reasonable and encouraging management framework is all that is needed to ensure operational stability.
3. Why do we resist change? Discuss two or three current and relevant change theories or strategies? Which one(s) are most appropriate to the culture of India?
The reason why we resist change is because of cognitive dissonance. Cognitive dissonance is experienced by individuals or societies when they are faced with two competing cognitive principles such as ideas, beliefs, traditions, or cultural practices. Cognitive dissonance is that feeling of discomfit one has when his routines are changed.
Two relevant change theories that may be applicable to India is the Lewin’s three-step change model and the Social Cognitive Change Theory. In Lewin’s change model, there are two opposing forces in action, one that pushes people or employees into a new direction and the force of tradition that moves an employee in an opposite direction. To solve this problem, the situation must be unfrozen, meaning the status quo must be changed, then proper directives are introduced and when in place, the whole system is “frozen” again to effect the change. It is a rational and goal oriented approach.
The Social Cognitive theory says that change is driven by environmental and personal factors, taking into account the internal and external conditions of an individual or organization.
These two change frameworks have been proven empirically but in India’s development case, Lewin’s three-step change model is more applicable. Culturally, India is very hierarchical, with decisions made from the top most classes and are cascaded down. This makes unfreezing and freezing a system relatively easier since goals and objectives of top management or classes become the primary drivers of change. This change model was followed by India to revolutionize their agricultural sector. The change proved successful, with India becoming self sufficient in the production of a majority of its raw material requirements.
4. Does culture (and integration across cultures) help or hinder change processes? How or why? Use your country of choice(India) to answer the question fully.
Cultural integration is the transfer of another culture’s beliefs, systems and traditions to another culture. It is an assimilation of two distinct identities into one. In the business world, cultural integration is a risk that must be managed, especially for doing business in another country. Cultural integration is implemented are varying pace, with planned and unplanned resistance being commonplace.
In India, cultural integration is a major component of management strategy, with India having a very different personal and business culture with respect to the rest of the western civilizations. It is never easy to assimilate cultures. Some of the reasons why it hinders the change process is:
- There is historical prejudice. Many western countries view India as a third-world country which is untrue given the fact that India is the third largest economy in the world.
- Corporate culture is reflective of its country-of-origin culture. American firms for example, follow American culture. Bringing that culture to foreign soil produces often negative effects.
- Business metrics are often affected by cultural integration. For example, simply meeting deadlines or self-assessment may not be a normal metric for performance in countries that follow hierarchal systems such as India.
- Lack of knowledge and failure to do proper research and due diligence.
Failure to do such or succumb to these tendencies may lead to cultural integration being more difficult that it truly is. But identifying cultural integration as a real risk faced by foreign firms working in India is the first step in managing this risk and integral in gaining optimum benefits.
References
International Journal Of Scholarly Academic Intellectual Diversity, 2004. Comparison of Change Theories. Retrieved from http://nationalforum.com/Electronic%20Journal%20Volumes/Kritsonis,%20Alicia%20Comparison%20of%20Change%20Theories.pdf, Accessed on 16 April 2012
Kotolli, A. 2007. Thoughts on Marketing, Leadership and Innovation. Retrieved from http://arunkottolli.blogspot.com/2007/11/cultural-integration-post-m.html, Accessed on 16 April 2012
The World Bank Group, 2012. Ease of Doing Business in India. Retrieved from http://www.doingbusiness.org/rankings, Accessed 16 April 2012
Wikipedia: Cognitive dissonance, Retrieved from http://en.wikipedia.org/wiki/Cognitive_dissonance, Accessed on 16 April 2012
Wikipedia: List of countries by GDP, Retrieved from http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP), Accessed on 16 April 2012
Wikipedia: List of countries by income equality, Retrieved from http://en.wikipedia.org/wiki/List_of_countries_by_income_equality, Accessed on 16 April 2012
