Associate Professor of International Business Strategy
University of Nottingham
Mindsets play an important role in how members of a social group perceive a situation, respond to it, and manage their interaction with group members and those outside of their immediate circle. The members of a cultural group are often not consciously aware of the mindset that is influencing their decision making and shaping their behavioral interaction. A mindset reflects the underlying assumptions about the nature of reality that are dominant in a cultural group. The mindset that becomes dominant in a particular cultural group reflects the group’s history, its underlying philosophical presumptions, and/or external influences that may have affected the group’s development.
India‘s economy is booming and the country has made remarkable strides especially since the onset of economic reforms that were first initiated in 1991 and have continued ever since. Yet, the country also has a rich cultural history and it has been profoundly influenced by Hinduism, as well as by external influences stemming both from Muslim influence, and the legacy of British colonialism. The legacy of these influences still persists and their influence is often felt in the mindset that characterizes Indian thinking. The Indian mind set has affected their attitude towards foreign investors, their negotiating style, their attitude towards problem solving, and their organizational decision making processes. The liberalization that began in 1991 may have slowly begun to change this mindset, but as with basic cultural assumptions or value, they are often slow and resistant to change. I will begin by outlining the nature of the Indian mind set, and then discuss its implications.
The Indian mindset is rooted in the principles of Brahmanical idealism. This, in turn, is derived from Hindu philosophy Hinduism posits that there is an ultimate reality called Brahman and that the ultimate aim of individuals should be to “…. unite their inner self with the ultimate reality” (Kumar & Sethi, 2005). A focus on attaining a unity between one’s inner self and the ultimate reality has a number of implications. It suggests that Indians often strive to attain the ideal or the most optimal outcome. A key implication of this is that Indians often have high aspiration levels i.e their expectations are high. The high aspiration levels could be geared either to maximizing positive outcomes o´r minimizing negative outcomes. It also suggests that they scrutinize all of the information very carefully and critically. This tendency may also reinforced by the colonial experience which has made Indians suspicious of foreigners.
They are also less sensitive to time pressures as attaining the ideal outcome takes greater precedence. An idealistic mindset also makes compromise more difficult as a compromise might signal a betrayal of ideals. On the positive side, an idealistic mind set signals a willingness to adhere to ideals and by having high aspiration levels they may well obtain a good outcome. The idealistic mindset is often also associated with the belief among Indians that each of them individually has the perfect or the ideal solution.
The coupling of the two (i.e an idealistic mind set and each individual’s belief that they have the perfect solution) makes it difficult for Indians to work well as a team as each individual thinks that they have the perfect solution. The difficulties and the delays experienced by India in finalizing the nuclear deal with the United States is a perfect illustration of this. Although the negotiations had begun in 2005 they were not finalized until last year. The ruling Congress party was dependent on the Communists for support and they were reluctant to support the deal. There was extended debate and discussion in India about the merits of this deal.
The difficulties experienced by India in attracting investment in the infrastructure sector are also reflective of similar difficulties. When India first opened the infrastructure sector to foreign investors after liberalization in 1991, many projects got bogged down as they sought governmental and state clearance.
How can the foreign investors cope with the Indian mindset? The first point is to be aware of this mindset. If the foreign investor is unaware of it he/she may get unnecessarily frustrated and/or may draw erroneous inferences about his/her counterpart. Awareness is no doubt essential but it is by no means sufficient. The foreign investor may also need to reframe the situation in a manner that may become acceptable to his/her counterpart. If the situation is construed in a different light, perhaps the India negotiators may come to a different conclusion as to his feasibility/realism of their opening positions.
If the foreign investor is able to reassure his/her Indian counterpart about his/her intentions, that may also go someway in alleviating his/her concerns. Finally, the foreign investor needs to refrain from overly aggressive behavior. This may enhance the suspicions of his/her Indian counterpart. This is not to say that persuasive influence tactics should not be used; it is only to suggest that these tactics should be well calibrated and be subtle.
For a fuller exposition about India you my want to take a look at R. Kumar & A. Sethi (2005) Doing business in India: Palgrave-Macmillan.New York.