Research Paper on Foreign Investment
A century ago it was very common to have a business operate only in one district of the city. Only after some time had passed it became common for merchants to open up branches in different districts of the city, or, and those were very progressive merchants, to open branches in other cities of the same country. With some more time it became absolutely normal for big businesses to have its branches not only in many cities of one country but even go overseas. As we all understand, the process described above is called globalization – a concept we all are familiar with.
Our company is one of the biggest consulting companies on the market of the Great Britain. We have a long experience going back to the foundation of the company at the beginning of the twentieth century. As early as forty years ago our consulting company, situated in London, went international. However, being not ready to enter the markets where we were not familiar with the culture of people, we decided to spread to nearby countries such as France, Denmark, and Switzerland. Having been very successful in that walk of business with time, we opened up headquarters of our company in many other European countries.
Today, when we not only had risen onto our feet, but we are actually standing steadfast on them, we decided to make a next step. This step would be opening a subsidiary office of our consulting company in Delhi, the capital of India. There are many reasons for us to go to India. To begin with, today Indian economy is growing with a remarkable speed (Hardy, 2000). The capital market and the foreign exchange reserves are increasing. According to the analysts, India also has a strong and constantly increasing manufacturing base as well as investments pouring into the country (Grazian, 2008). These and some other factors make India one of the best investment destinations for the businesses that are long time past their break-even point.
Without a shadow of doubt we understood that opening a branch of our business in a city that is very different from European cities would be very different. We are also aware of the fact that when opening a branch we will have to face with many cultural differences that would make it rather complicated to cooperate with the natives. India is a very large country with a distinct religious culture. In our company, having a long experience of working internationally, we understand that in order to be successful in a foreign country much research has to be done. Lower you will be provided with the tips/rules we have discovered will be helpful for us when working in India. When conducting out research, we also took into consideration the difficulties and peculiarities of opening a branch in the capital city of the country (Buttler, 2008).
When it comes to working with Eastern European countries it is often common for native businessmen to adjust to desires and styles of the foreigners. However, it India the situation is completely different. It is a country with strong cultural and religious traditions that do not assimilate even today. To begin with, there are three very important basic concepts that influence the conduction of the business. Firstly, Hinduism is not only a religion but is a way of life and must be respected in order to maintain successful business relationships. The caste system that appears directly from Hinduism even though being eliminated still remains and influences the hierarchical structure of business practices in India today (Biljani, 1999). Secondly, Indians believe in fatalism, according to this concept some times of the days are considered holy, and thus are not applicable for making meetings. Finally, Indians have a strong sense of community and group defined orientation. The lack of privacy at the work place and at home is common interpersonal contacts tend to be more important than achieving success and breaking away (Steen, 2007).
In the few following passages we would like to talk about some other aspects of Indian culture and politics that we will have to take into consideration. First of all, even though India plays a big role in the world economy, the issue of corruption, in both the private and public sectors persists (Corruption in India, 2007). Of course, the process of corruption may have a negative effect on the development of our business. Under such circumstances our company will always have a chance of suffering from unfair executive and legislative decisions. It is said that the corruption level is expected to fall, thus out firm will hope for the better (Budelman, 20008).
When opening our branch in India we will have to remember that different states in India each have different official languages. Actually, there are more than fourteen major and three hundred minor languages spoken in India. Though, the official languages of the country are Hindi and English (Butler, 2008). Still, we will have to remember that some company documents have to be translated into the language of the district when dealing with it (Mathew, 2004).
Lower we would like to provide you with some cultural tips that we will have to remember about when working in India. We will start with the meeting and addressing etiquette. When doing business in India, meeting etiquette requires a handshake. On the other hand, “Indians themselves use the Namaste”. Namaste is the way of greeting in which one puts his/her palms together at chest level and makes a slight bow of the head. If we choose to greet with Namaste it will be welcomed and will show that we respect and understand their traditions. What is important to remember is that Indian men do not generally shake hands with women out of respect. Though, a man should wait for a female business colleague to initiate the greeting (Butler, 2008). Obtaining this information was very useful because in Europe a hand-shake is something accepted and unavoidable by everyone.
When doing business in India, business cards should be exchanged at the first meeting. It is a good idea to have it translated on one side into Hindi, more as a sign of respect as opposed to linguistic necessity (Payne, 2008). The titles are very important in India. Thus, it is very important to know in advance know what titles have your future businesses partners. When addressing somebody in person or writing, it is important to mention all the titles that go before and after the name.
When it comes to arranging a business meeting, it is common in India to arrange them well in advance. The arrangement should be done in writing and confirmed by phone, though it is not common to arrange meetings by emails. The weather in England is well known to be rather nasty all through the year, though the weather factor was never considered to play a role. However, in India, in order to be successful in business and be accepted the foreign company should schedule and meetings or negotiations between October and March in order to avoid the unbelievable heat. The business appointments should ideally be made for late morning or early afternoon also due to the climatic reasons (Mathew, 2004, Steen, 2007).
It was mentioned before that the hierarchical caste system is very strong in he country. Thus, according to this system, senior colleagues and especially elders are obeyed and respected. It is common that a business discussion is lead by the oldest person present in the room. Moreover, a final decisions rest with the highest-ranking business executives, therefore it is important to maintain strong relationships with senior figures in Indian business. If in Europe it is very common for a rather young person to set a high position, in India this does not usually happen, because it is considered that strength and ability to make right decisions comes only with age (Butler, 2008, Business Culture in India).
The next few tips were very interesting for us to find out, because they are unusual for England and other European countries. As we found out, Indians do not base their business decisions exclusively on statistics, experimental data and moving PowerPoint presentations. Even when it comes to business Indians base their decisions mostly on their intuition, and faith in a good potential. Thus, it is very important that the negotiators from our size express positive energy, exercise patience and never show signs of aggravation or anger (Business Etiquette in India).
It is interesting to know that the head in Hinduism is considered to be the holiest part of the body, because is it “the seat of the soul”. Someone else’s head should never be touched and even a child should never be patted on his/her head. Feet in Hinduism are considered to be unclean, thus it is a strict religious law not to face one’s feet to the person because this is considered to be an act of strong disrespect (Butler, 2008).
When it comes to receiving or presenting gifts there are also some cultural laws. It is common not to take large or expensive gifts because it causes embarrassment and may hint on hidden selfish ends. When accepting a gift, it is vital to take it with both hands, this rule also applies when presenting a gift. When the gift is received it is a very bad tone to open it in front of the giver, the gift should be set aside and opened in solitude. Though, when it comes to being offered food or drink it is absolutely forbidden to refuse it, this shows ignorance and disrespect. For us, it is very important to remember the eating peculiarities of Indians, meaning that traditionally, Indians are vegetarians and do not drink alcohol. When arranging business meals, it is good to know that business lunches in India are preferred to dinners (Butler, 2008). The last here, but not least, rule as for dining is that “thank you” should not be said at the end of the meal because it is seen as a form of payment, thus it is insulting.
Now, having described the most important cultural differences that we could face in India, it is time to move on to talking about peculiarities of working in Delhi – the capital of the country. In the last six decades Indian capital has experienced many changes. Today this city is a gigantic melting pot where people of different nations and cultures are mixed together. There is even a saying that “no one belongs to Delhi but Delhi does belong to everybody”. Opening a branch of our consulting company in Delhi offers many opportunities, though it also puts a lot of difficulties in front of us.
To begin with Delhi, as almost every capital city, is the centre of business, commerce, transport and investment. Thus, opening a branch in this heart of wealth and success may also be very successful. The city has a lot to offer when it comes to hiring employees, promoting the company and presenting it at public events. Though, expending the business in a capital city puts many obstacles on the way of the mother company. At the outset, the prices are much higher in the capital, thus the costs of opening a branch would be very high. Another factor that has to be remembered is that the competition in a capital is very strong, while it is not in smaller cities. Actually, already today more than one hundred companies are doing business or investing in India. According to Grazian, an Indian reporter, “list is growing by the day” (Grazian 2008). Under these circumstances our company must win the inclination of the people and show that we are different in a better way.
Delhi is a diverse city not only when it comes to the population but also when it comes to income level. The districts in this gigantic city range from affluent palatial residence to the little chats where people live in subnormal conditions (Kohler, 2000). We will make sure that the neighbourhood where we open up a branch of our business will be safe and prestigious. Surely, the property prices there will be much higher, though these are the costs businessmen should pay for safety when working in a capital (Dalrymple, 2000).
It is considered that the traffic in India is the most exciting experience for the European visitor. It is very interesting that when one is both in the old and new parts of the city he/she have to share the road with camel carts, hand pulled and donkey-pulled fruit carts, hundreds of rickshaws. It is even more interesting that sometimes an expensive car drives right next to pigs, cows, dogs, horses and sheep. This makes travelling around the city a long and painful process (Dalrymple, 2003).
According to the strategy of our company, when coming to a new place we not only hire the native employees but also bring our own. Without a shadow of doubt we will try to accommodate our employees rather close to the office in order to make their encounter with the morning traffic as little as possible. It is significant to remember that the employees we bring along are used to drive their own vehicles. Though, Delhi is known for having complicated roads and many people, even natives, know the roads only in their neighborhoods (Hardy, 2000). Thus, the company will have to provide the employees with a driver or with continuous cab fare.
Our company was eager to start working on the India project. Though, it is very good that we took our time and researched on the important cultural tips as well as on living in Delhi. Without doubt, now that we know already know something things to be expected other obstacles on our way will be removed easily.
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