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Indian culture and negotiation

NegotiatingNegotiating is the art of reaching an agreement by resolving differences through creativity

Flag & EmblemThe saffron stands for courage, sacrifice and the spirit of renunciationThe white is for purity and truthThe green is for faith and fertilityThe navy blue wheel denotes the continuity of the nation's progress which is deemed to be as boundless as the blue sky and as fathomless as the deep blue sea.

Truth Alone TriumphsQuick facts:

Area: 3,287,590 sq kmWorld 7th largest Population of India: 1,173,108,018 Religions: 80% Hindu, 13.5% Muslim, 2% Christian, 2% Sikh Worlds largest democracy Languages: Hindi (national language 41%); 14 official languages; over 100 languages spoken 28 states and 7 territories4Cultural ValuesCollectivistIdentifies self within a more important group(s)Group decision makingIndividual praise is uncomfortable even shamefulGroup welfare is goal

5PolychronicRelationships and spontaneity are drivers. Talking about your friends and family is an important part of establishing a relationship with those involved in the negotiating process. Many Indian companies are still family businesses.Relationships are based on mutual trust and respect, which can take a long time to establish. Business relationships in this country exist both at the individual and company level. Indians usually want to do business only with those they like and trust.

6Indirect Communication

What is said is not necessarily what one means One must infer meaning Saving face is valued Third party/liaison used to communicate information

High Uncertainty Avoidance

Risk averse Differences within or outside groups not easily toleratedConformity is comfortableProfile of an Indian NegotiatorLooks for and says the truthIs not afraid of speaking up and has no fearsExercises self-controlSeeks solutions that will please all the parties involvedRespects the other partyNeither uses violence nor insultsIs ready to change his or her mind and differ with himself or herself at the risk of being seen as inconsistent and unpredictable

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Profile of an Indian NegotiatorPuts things into perspective and switches easily from the small picture to the big oneIs humble and trusts the opponentIs able to withdraw, use silence, and learn from withinRelies on himself or herself, his or her own resources and strengthsAppeals to the other partys spiritual identityIs tenacious, patient, and persistentLearns from the opponent and avoids the use of secretsGoes beyond logical reasoning and trusts his or her instinct as well as faith10GreetingGreeting

When doing business in India, business etiquette requires a handshakeIndians among themselves use Namaste the palms are brought together ant chest level with slight bow of the headUsing Namaste is a sign of Indian Etiquette understanding

Business Cards

Business cards should be exchanged at the first meetingBe sure to receive and give with the right handMake sure the card is put away respectfully and not simply pushed into your shirt/trousers pocket

MeetingMeetingsMeetings should be arranged well in advance in writing and confirmed later on by phoneAvoid meetings near national holidays Independence Day, Diwali, etc.Punctuality is expected however being late usually will not have disastrous consequencesFlexibility is paramount Last minute cancellations are possible and not a sign for anything

Meetings FlowWhen entering a room always greet the most senior figure firstStart from commencing a a conversation latest business news, stock exchange and sports (mostly, cricket)

Avoid talking about:Personal mattersPoverty/beggarsPolitics, caste system & religion issuesWoman rights

Most ImportantIn India, Relationship Comes Before BusinessIndia Top 10 Business PrincipalsTime is measured by years, not weeksLong term approach will create significant impactPartnering and win-win is were it all startsIndia and its people are very diverseNeed to adjust to the right people/teamListening is much more appreciated than talkingNo is never saidGovernment/official relations are importantBusiness India is corruption freeIf you are asked, you are in the wrong placeRegulations are simple, but very strictly enforced

Negotiations - How to Start?Send a detailed product overview in advancePrepare your initial offer to allow bargaining later on Respect Indian Business HierarchyHospitality is part of the business culture accept any hospitality offers (tea/coffee/snacks)Presentations are generally accepted to start a discussionsDeclare long term, and mean itLearn first, talk laterTough issues:Learn firstRaise when discussed, resolve lastThe time between raising and resolving is reserved to relationship, internal contemplations and product/technology international presenceIndians tend to take larger risks with person they trust . Credibility and Trustworthiness are Critical

Decision CriteriaIt is all personalThe business reason is keyTechnology is being looked at from business perspectiveInnovation per se is a mixed bagRisk aversion - major issueIn Indian organizations, size mattersAs many employees, as goodAutomation is Necessary to deal with scaleTrust relationshipRelationship/Emotions

CEO RoleIn India:CEO, Managing Director, PromoterAll alternate names to same functionCEO - Potential Decision MakerThe most superior company executive -> RespectMust be addressed with appropriate title -> Mr.Exhibit positive traits -> Honor, TrustworthinessBeing most senior -> Must be greeted firstConcentrate efforts on building relationship with the CEO You should leave space for escalationsChairman, Large share holder etc.On the Discussion TableSilence is blessedLet the VP talk, CEO to closeListen to the musicDont pushDont insist on any commitment at the first meetingsDo not use strict expressionsNo is not being said, Yes is hardly usedIndians value flexibility during negotiationsExpress disagreement openly considered rudeDisturbances during the meetings doesnt show lack of interest or respectBe prepared for questions/enquiries that seem not related

Business HierarchyOne of the most significant influences on Indian Business Culture Mostly One decision maker in the companyManagers and executives still will wait for approval by CEO/owner Sometimes decisions are maid by people who are not present during negotiationsAttitudes and StylesIn India, the primary approach to negotiating is to employ distributive and contingency bargaining. While the buyer is in a superior position, both sides in a business deal own the responsibility to reach agreement. They expect long-term commitments from their business partners and will focus mostly on long-term benefits. Although the primary negotiation style is somewhat competitive, Indians nevertheless value long-term relationships and look for win-win solutions. They may occasionally appear to be pursuing a win-lose approach, in which case it pays to help them focus on mutual benefit.Sharing of InformationIndian negotiators will first spend some time gathering information and discussing various details before the bargaining stage of a negotiation can begin. People may share information quite openly in an effort to build trust. This does not mean that they will readily reveal everything you might want to know during your negotiation. However, negotiations can become very difficult if one side appears to be hiding information from the other, which may result in attempts to outsmart each other.Pace of NegotiationExpect negotiations to be slow and protracted. Delays are often inevitable, particularly when dealing with government bureaucracy. Be prepared to make several trips if necessary to achieve your objectives. Throughout the negotiation, be patient, control your emotions, and accept that delays occur. Indians view impatience or pushiness as rude.BargainingIndian business people are often shrewd negotiators who should not be underestimated. Most of them love bargaining and haggling, although they may not do it as extensively as other Asians. The bargaining stage of a negotiation can be extensive. Prices often move more than 40 percent between initial offers and fi nal agreement. However, technical assistance, training, and other costs may also be important bargaining factors and Indians remain flexible throughout most of the bargaining.Agreements and Contracts

Capturing and exchanging meeting summaries can be an effective way to verify understanding and commitments. Indians may signal consensus through enthusiastic statements that phrase the agreement in their own words. Interim agreements, even oral ones, are considered binding and usually kept. Nevertheless, it is best to consider only a final contract that has been signed by both parties a binding agreement. Written contracts should be clear and concise, without too many detailed terms and conditions. Signing the contract is important not only from a legal perspective, but also as a strong confirmation of your Indian partners commitment.Women in Business

While India is still a male-dominated society, there are many women in professional positions, some with significant authority and influence. At the same time, women are still struggling to attain positions of similar income and authority as men. Nevertheless, visiting business women should have few problems in the country as long as they act professionally in business and social situations.IndiaNegotiation strategy

Negotiations are Part of the Indian Culture - Bargaining is ingrained into the Indian way of doing business Language - English has become the standard business language used in India Bureaucracy - be ready to face delays. Be ready to face family family is integral part of an Indian .Responsibility lies on the top - When it comes to decisions and ultimate responsibility, the buck truly stops with management.Be flexible - As with other cultures, be prepared to be flexible at the negotiating tableBe ready with their words - many Indians will not flat out say, "no" during a negotiation or business transaction but they expect you to be very direct

26RecommendationsTo work in IndiaPossess good communication skills and able to comprehend non verbal behaviorBe patientPut margin in opening positionIf investing in capital ,plan to invest step by step in small chunksPut small milestones for performance check and uncertainty avoidanceCreate proper detailed documents