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General Management

and Organizational Behavior

Cultural Diversity of India

Table of Contents




Brief History of India








Business Strengths of India






Natural Resources


Cultural Uniqueness


High Context/ Low Context


Impact of culture on Business/ Organizational Behavior


Key Points to Remember




As Associates


As Partners in a business Venture


Summary/ Recommendations to the class




This is a research on the cultural norms and characteristics of India and its people to help in understanding the importance of Cultural Diversity and its impact on both General Management and Organizational Behavior.

The paper will cover the brief history of India and its political, social and economic characteristics; its business strengths derived from its people, technology and natural resources; its cultural uniqueness; and the impact of India’s culture on the business environment and organizational behavior.

A. Brief History of India

India’s history can be traced back to around 3000 BC, to one of the world’s oldest civilization known as the Indus. Even then, they were already a highly sophisticated nation with a written language. Buddhism began to spread in India in the 4th century BCE. In the 8th century, Islam first came to be known in India and became firmly established by the 11th century (Lal, 2007).

During the 16th century, the first Europeans came to India and fought the Mughal Empire for India. The British crown already has control of the country by 1858 but Benjamin Disraeli worked for the proclamation of Queen Victoria as Empress of India in 1877 (The Open University, n.d.).

The nationalist movement emerged in the early part of the 20th century, with Mathatma Gandhi as its leader by 1919-1920. By 1947 the British was driven out of India, but the Muslim state of Pakistan was carved out of the country ( Why is this valuable to political / culture situation?)

1. Political

Pandit Jawaharlal Nehru, the first prime minister of India served from 1947 to 1964. India was declared a Republic in 1950 and its first general elections held in 1952. An internal emergency caused the suspension of constitutional liberties by Prime Minister Indira Gandhi from 1975-1977 but since then, India’s political system has always been a parliamentary democracy.

India is composed of 28 states and there are 7 Union Territories. There is a uniform citizenship under the Indian constitution where every citizen is conferred the right to vote upon reaching 18 years of age (universal adult franchise). Every citizen of India has fundamental rights and freedom of speech, belief, expression, migration, assembly and association, and choice of trade or occupation. Every citizen is also protected from discrimination due to race, creed, sex and religion.

India’s parliamentary system is bi-cameral, composed of the Council of States (Rajya Sabha) and House of the People (Lok Sabha). According to the Indian constitution, the country is a “sovereign, socialist, secular democratic republic.” The duties of the President are largely ceremonial, with real executive power exercised by the Council of Ministers led by the prime minister. The prime minister is appointed by the president, and then the prime minister advises the president in appointing the subordinate ministers.

2. Social

India is a country with an astounding diversity in many aspects of its social life. There is variety in the ethnicity of its people, language, regions, religion, class, and castes. There is also an immense difference in the urban and rural ways of life and distinctions in gender. There is a vast difference between systems of marriage, kinship and way of life in North India and South India. The country is a union of many states with distinctive characteristics that maybe compared to members of the European Union or the United Kingdom.

Societal hierarchy exists in all of India, and this is evident in caste groups. Castes in India are generally associated with the Hindus, but the system is also found among other religious communities. Behavior is constantly influenced by the relative rank of castes in towns or villages. Ranking is also evident in association with wealth and power. Men outrank women in rank, “big men” outrank “little men,” seniors by age or by standing outrank juniors (Asia Society, n.d.).

3. Economic

During colonial times India was more centered on agriculture and production of food crops but over time and as the economy grew stronger, people began to focus more on trade and business. They also began to change their taxation and agricultural policies.

Today, India is a recognized global economic player. According to the Government of India website (2013), India’s economy is the world’s fourth largest based on Purchasing Power Parity. According to an article that appeared in Financial (Eghbal, 2013), India will be the top 3rd largest economy in 2020 as it overtook Japan’s position in 2011. According to CNN Money (2013), India is the 10th largest economy in 2012 in terms of GDP.

B. Business Strengths of India

The federal system of Indian Government features a clear demarcation of powers between the State Governments and the Central Government. The country provides a friendly business climate that is attractive to investments because of its liberal and transparent policies with regards to foreign direct investments.

1. People

India’s growth performance has been consistent in the last few decades. There is an abundance of highly-skilled manpower in the country with more than 1.2 billion people (World Bank, 2013), making up 17% of the world’s total population. There is a large middle class in the country and a generally young population with fifty five percent below 25 years old. ( why is it important to have 55% below 25 y/o)

The census conducted in 2011 showed that literacy rate in India grew from 65% to 74% from the previous census (BBC News, 2011). However, India continues to lag in major indicators such as infrastructure development and educational attainment (Eghbal, 2013). ( WHY IS THIS IMPORTANT OR WHY DOES THIS EFFECT BUSINESS STRENTHS)

2. Technology

There are many India companies leading the global economy, and many of them are technology-related or due to advanced technological knowledge. For instance, Polaris Software Lab Ltd is one of India’s leading software companies. It is the world’s first CMMi (Capability Maturity Model Integrated) Level 5 Certified Company.

The country is part of knowledge flows globally. There are bilateral agreements for R & D India signed with leading countries of the world such as the US for clean energy research, the EU for energy and water technologies, the UK for next generation telecommunication and Australia for strategic research, showing the high regard of these countries for technology India can provide to the rest of the world (OECD, 2012).

3. Natural Resources

India has a total cultivable area of more than 1 million sq. km. out of its total land area of 3,287,263 sq. km of which 2.9 million sq. km is land and only 314,070 km. water (CIA, 2013). An estimated 3.7 million acres of forest disappear each year due to the demands for paper pulp, timber and firewood. ( WHY/ HOW DOES THIS EFFECT/ IS THIS IMPORTANT?)

India’s main natural resources are iron ore, copper ore and bauxite. There are also precious metals such as gold, silver and gemstones such as diamonds. Energy is mostly generated using coal with reserves of coal around 120 billion tons. Petroleum reserves have been discovered off the coast of Gujarat and Maharashtra (Murthy, 1999).

C. Cultural Uniqueness

1. High Context/ Low Context

India is a high context culture because it has a very strong caste system. High context refers to societies or groups where people have close connections over a long period of time, so things left unsaid are still understood by the in-group. In a lower context culture, there is a need to be more explicit; explanation is needed to be understood. ( ELABORATE A LITTLE)

D. Impact of culture on Business/ Organizational Behavior


The economic freedom score of India is 55.2, its economy ranks 119th in the 2013 Index, with a continuing decline in freedom from corruption. According to The Heritage Foundation (2013), the absence of a well-functioning legal and regulatory framework results in corruption and prevents the emergence of a more dynamic private sector.

Hindus comprise 80% of the population of India, but because of its large population base, Muslims in India remains one of the largest in the world. The size of India makes it a significant country in world trade, but its economy is still operating below its potential.

India has vast potential but it continues to outperform, according to the US Department of State (2013). Major areas of concern in India include rampant corruption, antiquated labor and land acquisition laws, complex and lengthy investment and business approval processes, and poor enforcement of contracts. According to the World Bank, India ranked 132 in 2012 among 183 word economies in the ease of doing business survey.

E. Key Points to Remember

1. Hiring ( What do companies look for when hiring )

India has been an English colony for a long time, so they are familiar with Western ways, particularly that of the English. There is a large English-speaking population in India. However, they still value their culture and religion, whatever it is: Hinduism, Jainism, Sikhism or Buddhism generally reflects on their major decisions and way of dealing with people.

2. As Associates

Men are generally expected to wear a suit and tie for business meetings and at work and women are expected to wear conservative clothes or pantsuits. The use of leather products may be considered offensive as they come from cows that are sacred and protected by Hindus. Whistling is regarded as impolite and winking is offensive and it might be thought of as a sexual proposition. In addition, never point your feet at a person. Feet are considered unclean in India. If your shoes or feet touched another person’s, remember to apologize (Kwintessential, n.d.).

Remember that when you receive gifts from associates, they are not opened in the presence of the giver. If you receive a wrapped gift, set it aside until the giver leaves.

3. As Partners in a business Venture

Companies have found ways to succeed amidst the difficulties in the Indian market. Indian conglomerates and high technology companies are by many measures equal in sophistication and prominence to their international counterparts. Certain industrial sectors, such as information technology, telecommunications, and engineering are globally recognized for their innovation and competitiveness. Foreign companies operating in India highlight that success requires a long-term planning horizon and a state-by-state strategy to adapt to the complexity and diversity of India’s markets (US Department of State, 2013).

Power is decentralized in India; so is decision making. Investors therefore should be prepared for business and economic conditions that will be different in the 28 states and 7 union territories of India.

F. Summary/ Recommendations to the class

India has a different culture from other countries in the Western world, but it is a mixed culture due to the vastness of the country. The world has changed a lot since India gained independence. Now everything is more transparent, and people learn not only through books but reading from internet sources. Many Indian people are well educated, not only studying in their local colleges but in international universities worldwide.

Many young Indians have already been influenced by foreign culture through television, movies and other media and now have very open minds. It is only the old ones that adhere strictly to age-old traditions. The government welcomes and even seeks domestic and foreign investments. Investing and working in India will not be a big problem for foreign nationals, as long as there is respect for local laws, culture and traditions. The thing to do is to read about their culture, study it thoroughly and ask someone who is familiar with it for guidance.


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