Doing Business In India

Doing Business in India This page intentionally left blank Doing Business in India A Guide for Western Managers Rajesh Kumar and Anand Kumar Sethi DOING BUSINESS IN INDIA © Rajesh Kumar and Anand Kumar Sethi, 2005. All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. First published in 2005 by PALGRAVE MACMILLAN™ 175 Fifth Avenue, New York, N.Y. 10010 and Houndmills, Basingstoke, Hampshire, England RG21 6XS Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 1–4039–6752–0 Library of Congress Cataloging-in-Publication Data Kumar, Rajesh, 1954– Doing business in India : a guide for western managers / Rajesh Kumar and Anand Sethi. p. cm. Includes index. ISBN 1–4039–6752–0 1. Business etiquette—India. 2. Corporate culture—India. 3. Negotiation in business—India. 4. Industrial management—Social aspects—India. 5. Intercultural communication—India. 6. National characteristics, East Indian. 7. India—Commerce. I. Sethi, Anand. II. Title. HF5389.3.I4K86 2005 395.5⬘2⬘0954—dc22 2005043432 A catalogue record for this book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: October 2005 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America. C on t e n t s Preface viii 1. India: A Commercial History Perspective 2. The Rise of India: India and the West—Institutional Contrasts 27 3. A Brief History of the Indian Software Industry 43 4. Cultural Portrait: Impact of Hinduism on Indian Managerial Behavior 55 5. Understanding India 73 6. Strategizing Success in India 84 7. Communicating with Indians 103 8. Managing Relationships with the Indian Government: The Critical Challenges for Multinational Firms 115 Negotiating and Resolving Conflicts in India 130 9. 1 Appendices 140 Notes 142 Index 157 This page intentionally left blank Dedicated to the bright and dynamic youth of India who stand to inherit a new economic superpower Preface The Indian Tourism Board has a series of promotional advertisements with beautiful photographs of places, tigers, elephants, and various aspects of life in India, all with a highlighted expression of “INDIAAHH!.” This sigh pretty much sums up India. An incredible country that can delight, thrill, fascinate, and yet drive people to exasperation. The expression represents the complete bandwidth of the sights, the sounds, the smells, and the colors that typify India, some great and yet some not so pleasant! The British Broadcasting Corporation recently carried a televis