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Cross Cultural Management Between the USA and India

Paper Type: Free Essay Subject: Business
Wordcount: 4920 words Published: 27th Apr 2017

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Cross cultural management is a new type of management which deals with working with people of different culture with in the staff , which helps in improving the communication in the company and also in its international exchanges. This type of cross cultural management

influences on the artists work as well. Cross cultural management helps to know the detail

information about the development of the cultures in the field related and compare this

development across cross cultures. Usually this examines the culture by viewing the context of

the culture with in rather than from outside of the culture . This type of management not only

deals with comparing the differences between each culture but also relates the universal

characteristics among them.

Human races basically come from different background , one such major difference is the

difference in culture among the people. The way of doing things in different culture may vary. At

times the same activity among two different cultures may have two different meanings or two

different interpretations. This type of activity such as meeting ,interacting ,understanding, and

dealing with a person of different background is known as cross cultural management.There may

be different ways in understanding this kind of management. There are different ways how

people deal with a situation in different countries . For example , ” when we compare INDIA and

UNITED STATES , performance is the main criteria in USA, and like wise his or her

promotions or assignments may be assigned , where as this is not the case in India.., a persons

organizational compatibly is the factor that counts” .As India is a high context society the

employee ‘fit’ in to the organization that counts. Also it differs in terms of interpretation in a

Business. For example , doing business in USA means creating organizational wealth , were as

in India doing business means individual wealth. On recruitment, “In USA it is the process of

selection, In India it is the process of rejection”. So, increasing a organization’s or an individual’s

cultural intelligence is difficult task .As India and United States are two different countries with

world’s most diverse society , they differ demographically and also differ in their legal frame

works. India is a country where the work force is predominantly young , large number of people

are entering into the professional workforce in the expanding economy which provides increased

opportunities for the people who are well connected and well qualified . The average age of

workforce is older in united states when compared with India . Now a days the main task of the

America employees is not to find a diverse talent but to create and develop an environment that

supports social cohesion.

There might also be some cross cultural issues due to difference in the perspectives and mind

sets. One such example which can be coated is the Cross-cultural issues about practical matters

such as the following gaffe in advertising “Nordic vacuum manufacturer Electrolux used the

following in an American campaign: “Nothing sucks like an Electrolux” .Another example is “In

a team, Japanese members may not give their critical opinion as they want others to save face

while Australians or Finns might feel that not saying what is on your mind shows a lack of

Honesty”. There are many consultancies associated which offers training and couching required

for cross cultural management in different countries. As India being the second largest economy

in the world and continues to prosper many mangers across the world are undergoing the training

program to extend and develop their organization in India. Because of its economy system

India offers wide range of opportunities to companies in terms of consumer goods,

infrastructure, manufacturing, defense, biotechnology, financial services, insurance,

transportation, urban development, call centers, and also knowledge-based services. As India is a

diverse country undergoing cross cultural training is a must , depending upon the region where

one is planning to extend his or her business. Cultural differences may at times be confusing or

misinterpreting . One should respect the work of other’s and try to learn from them instead of

thinking that their own work is the best one and start criticizing others work. One should be

broadminded to appreciate the work done by the colleagues of the other culture and try to learn

from them . Celebrating holidays of the other culture for their festivals mostly helps to

understand more about their culture , and get to know them more personally. And also explain

the work format for the people who are newly employed at the company also helps to build up

relationship among each other. If you send employees overseas to meetings or conferences, they

should also know how to work in those cultures. We need to treat people as an individual

regardless of their culture. One should not jump into conclusion about a person based on their

culture and place they belong to. , it is important to get to know a person as an individual.

“Identifying gaps in ones knowledge helps to improve a situation such that a team can work

together more effectively”. . Now a days people work globally at various companies with

colleagues coming from different cultural background. There is a need to get aware of the

cultural differences as how they effect the team management , communication , and team

dynamics. Through this opportunity one gets experience and also self growth opportunities.

There are many ways to improve multicultural relationship at the work place. Few of them are ,

asking questions about others culture. Many people hesitate to do so as they think asking

questions about one’s culture is being offensive or seen as a racist in some way. But this actually

prevents the team work , communication and at times friendship being happen .So knowing

about each other’s culture helps to built up relationship which is useful for an effective team


Current Business interests between USA and India

USA buys products such as Cotton yarn, fabrics, Gems and Jewellery ,

Drugs pharmaceuticals and chemicals , Petroleum crude and products , Machinery and

instruments , metals , Primary and semi-finished iron and steel products , Marine products ,

Manmade yarn fabrics, Transport equipments , Plastics and lenoleum products , Electronic

goods , Inorganic/organic chemical , Iron ore , Rice, nonbasmati etc from India . Where as

products such as Chemical fertilizers , Diamonds , Civilian aircraft , Telecommunications

equipment , Organic chemicals, Other petroleum products , Computer accessories ,

Jewellery , Medicinal equipment , Industrial machinery etc are imported from US to India .

Prospective Business interests between USA and China

According to the survey , there are prospects of increasing the ability and production related to agriculture, energy, education and infrastructure , with building up ties between USA and India in both the countries . Enhanced high technology cooperation is also expected through bilateral agreements in aviation, space, defence and biotechnology .


Set apart from the rest of Asia by the continental wall of the Himalayas, the Indian subcontinent touches Bay of Bengal on the east, the Indian Ocean at the south and the Arabian Sea to the west. India has the diverse landscapes with Himalayan peaks in the north to the vast Gang tic plains in north-central India to the coastal regions further south. Nonviolent resistance to British rule, led by Mohandas Gandhi and Jawaharlal Nehru, eventually brought about independence in 1947. Religion is principal to Indian culture and its aspect can be felt in all aspects of life in the country. Although India occupies only 2.4% of the world’s land area, it supports over 15% of the world’s population. More than 35% of India’s population is below 15 and more than 65% below the age of 65. . The population growth rate is 1.576% and it has started to decrease during the last decade or so. India has emerged as a second most populated country with 71% of them belonging to the rural areas.

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Ever one is brought up in life by their own cultures and the way we act and think are depends on our culture In spite of all the regional, social and lingual diversities of the country, there always has been a basic unity in Indian culture Hinduism is the prevalent faith of India, with 80 percent of the population. The culture tells us to spread happiness, cherish love and share sadness.

Indian still maintains the ethnic family culture in spite of the western countries influence. It has imbibed the right mix of western influence and yet maintaining the ethnic family tradition. Regionalism, religion, language and caste are all factors that need to be taken into account when doing business in India. The famous traditional classical and folk dances in India are thousands of years old. The colorful attire with dazzling ornaments add more color to the classical dance performance in India and these have traveled internationally and there are many academies of Indian dance forms abroad India due to the vast traditions and cultures Indian clothes vary in every religion and are admired worldwide. . The sari is the traditional dress of India which also modifies as per material and style with each region.

The most ancient Indian traditional treatment Ayurveda is now practiced all over the world which helps in curing various ailments and diseases. India has 26 different languages spoken at different regions and Hindi is considered as the official language and English the official working language. The concept of zero, the system of trigonometry, the healing power of Ayurveda and Yoga which have their origins in India have contributed in great measure to the world. An abundance of flora and fauna gives the opportunity for eco-tourism and the wilderness adventures. “One can experience all kinds of extreme temperatures in India and is known as the land of all seasons”.

For foreign investors it is important to know the business customs and culture of the country in order to maintain successful business relationship. Now, many Indian students feel a sense of optimism and this led to large number of information technology services and software worker India hasn’t experienced in decades. “IT is driving India’s boom and now it is in the hands of younger generation to move India ahead. It is observed that the Asian emerging economies are leading the world economy to recover from the crisis of 2007 and India’s GDP, growing at 6.7% (for 2008-09), makes it one of the fastest growing economies in the world. This year due to increase in industrial production and mining sector the GDP raised to 8.8%. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points this year. Agriculture is the predominant occupation in India, accounting for about 52% of employment.

India has become a major exporter of information technology services and software workers and these services contribute more than half for the economic growth of the country. An industrial slowdown early in 2008, followed by the global financial crisis, led annual GDP growth to slow to 6.5% in 2009, still the second highest growth in the world among major economies The Finance Minister, Pranab Mukherjee, expressed confidence that Indian GDP growth would register the targeted figure of 9%.

Now is the time for U.S. companies to enter the rising Indian market and start doing business but requires to understand the multi-dimensional culture.

Doing business in a particular nation requires a focus on a multi-dimensional understanding of its culture and business practices. Corporate America no longer feels it can afford to ignore India.


Thomas Friedman, in his book The World is Flat, states and proves that the world is becoming a more globalized place, and the walls separating one country from another are slowly lowering. A main reason for this, according to Friedman is Outsourcing. It is not a secret that India in a major recipient in the outsourcing world. More jobs are being outsourced to India for a plethora of reasons, some of which include fast communication, time zone advantages, and the number of highly educated workers willing to overwork for underpay. The number of jobs going to India has been increasing over the years, and will only grow. Ergo, it is only logical to provide managers with training in India, as preventative measures, because Indian influence and presence in the workplace will only become more affluent.

It is utmost important for Americans to know the work culture and have the basic knowledge of how things work when they plan on working in India. Lack of knowledge of the Indian customs, traditions and current events might not have any impact on the professional life between the Americans and the Indian, but would surely result in a weak bond between them in all the other non work related stuff. Training of American managers in India would not only bridge the cultural gaps but also increase the interaction levels with Indian colleagues. With the increasing number of International leaders to set mark of their firm or to take over the market has pushed USA further to advance its business techniques to overcome the competition. Since most of the projects are outsourced to Asia (mostly India) for cost reduction purpose, it is very important to the managers to blend in with the Indian teams. Else it might lead to great loss of money through various reasons like: getting the project scrapped, misunderstanding, over doing of the task, not meeting the client’s dead line and worst of all is losing the name and fame of the firm. With growing competition in global market, the training for managers could increase the company’s negotiations and ties with American market. For the long term success of a company, and with increasing number of talented workers in India, creating a cross cultural environment in workplace is important. The training program also helps the people or the teams when they visit foreign country for interacting with clients. To have a strong relationship with overseas companies and reduce the misunderstanding with the employees the managers should be aware of values, beliefs of people. Each country has their own approach to various negotiation style. In most of the western countries business is considered personal and is done with people whom they trust and have faith upon. The training results in creating an amicable, companionable ambience and effectively administer multi cultural staff. In every country there are different approaches in people understanding, certain amenities when communicating hence training aims to develop awareness because it is not common cultural frame work. Curiosity is the key for learning and building awareness about new things since childhood, likewise to break down the barriers of cultural differences and to gain new perspectives one needs to encounter training.


There are three main steps involved in the cross cultural training of the expatriates; they are Documentary training, Cultural simulations, and Field simulations. These steps are mainly designed to enhance the efficiency of the managers who are assigned to work in a foreign country. For the purpose of this training, they evaluate the areas in which employees are needed. The organization should contact some consultancies for training the employees regarding the culture and customs of the target country.

Documentary Training:

This is the first step involved in the cross cultural training program, this step the expatriates are trained regarding the various cultures, languages, interpersonal relations of the target county with the aid of various documentary videos and audio visuals based on the country.

As there is an increasing number of global companies coming into sight, the professionals are accustomed to be acquainted with the culture of the target country, in order to develop that they began the training process right from the graduate level, for example University of Findlay provides the students with the India Study abroad program every year which helps the students to understand the culture and inter personal relationships of India as it is today’s one of the most potential and effective markets. This will also provide them an opportunity to meet the managers from United States who have already gained experience working with Indian organizations. This kind of training can also be put forth by placing proposals to the government that they sanction some funds such that the U.S managers are provided a free trip to India as a part of cross cultural training.

There can be four main models designed for the cross cultural training program, they are:

Ø Self awareness model.

Ø Intellectual model.

Ø Area simulations model.

Ø Cultural awareness model.

An effective training can be given by the merge of multiple methods that shifts the training process from a simple to a more complex one.

Cross cultural simulations:

This is the second step involved in the cross cultural training program; in this the managers are trained regarding various insights related to the target country such as behavior of the local people, and their relations. In this training the managers are allowed to celebrate holidays of the local people and they should interact and share their experience with the people. The managers should be trained to look at things from the local peoples point view and think accordingly, they should know about the lifestyle, expectations and customs of the target country. This can be done by providing them with material which contains information about the culture mentioned in the holy books.

After the training exercise the managers should be posed to some of the following questions:

· What did you learn from the training?

· Is there any difference in the way of facing a situation after the training program?

· How did he feel about the culture and customs of the target country?

· How do you apply this in your work environment?

· Do you think whether this training seems effective to you in your professional life?

Field simulations:

This is the final step involved in the cross cultural training program, in this the managers are

trained regarding various aspects of the target country such as:

v Cultural intelligence.

v Cultural Competence.

v Linguistic lessons.

v Self assessment exercises.

v Socialization.


Under Documentation Training , various business factors will be trained , which goes for about 2 weeks. Personal and cultural understanding will be trained under cultural simulations , which will take a couple of weeks. Field simulation will be undertaken for about a week.



Ø Self awareness model. 2 Days

Ø Intellectual model. 4 Days

Ø Area simulations model. 5 Days

Ø Cultural awareness model. 3 Days




Global outsourcing has transformed the way U.S. companies do business and global consulting. There is a phenomenal increase in the business sector in India which makes companies eager to flourish in Indian market. The luring factor for global outsourcing is primarily the resultant cost savings that happen due to it. However there are additional soft costs that the company has to be aware of. Vendor selection, process transition, training and monitoring operations in offshore locations, and in overcoming the challenges of working in a foreign country including communication challenges, low-skilled workforce, unfamiliar laws and regulations, and infrastructure constraints fall under soft costs. This has an impact of the total cost of the project. The final budget of the project might fluctuate from the estimated cost because of the uncertainty in the dollar rate, unexpected price hike in the cost of raw material, variability in the tax rates which is seen in India and other unpredicted reasons.

Cost of Vendor Evaluation & Selection

The goals and functions to be carried out by the managers are to be discussed in order to set clear mind set for them to work towards the goal. The next step is to asses and picks the vendors who would fit into the standards of business the company has been looking for in terms of experience, skills to carry out the assigned work, affordability, etc. Next step would be to analyze the list of vendors and to choose the appropriate vendor for the business. This cost is estimated to be around 0.9%-3% which might cost up to $50000 of the Direct Contract Cost because of the following reasons:

* Accessing the in house functions.

* Documenting the skill

* Choosing potential vendors.

* Negotiations are carried out with the vendor.

* Travel expenses of the team

Transition & Training costs:

This is a time consuming step and involves the introduction of managers into the new work environment and making them acclimatized to the conditions prevailing in their new work asylum. It would take them a few months to a year to get accustomed to the new work place. It is supposed to be the most vital and at the same time expensive stage in off shoring process. The cost of travel, relocation of project team etc. fall under this group. An estimated amount of $100000-$200000 would be required for this.

Lower productivity of the offshore workers:

After the project begins it is evident that the outsource lot lag in their work due to varied reasons. Some of them are they fail to grasp the work culture, they fail to understand the business of the company fully, they may be still adjusting to the new work environment, language barrier, lesser work experience and many more. Ultimately, even though the offshore work is being paid less than the in house worker, the productivity is also low.

Efficient management of the ongoing project:

Managing a project plays a vital role in the production cost of the product. The management team should take set a goal for themselves and work in that path to complete the production of the good at an expected price. In some cases the cost of production creeps up and in such cases the offshore client is supposed to bear the additional cost. This additional cost could be anything between $10000-$50000.

Investment in infrastructure:

Infrastructure needs to be upgraded at regular intervals to maintain a smooth flow of work. Failure to do so would result in problem in continuity of the work. This would ultimately bring losses to the firm. Thus the company should not hesitate to invest on infrastructure at any point of time. Therefore a company would require to invest a sum of around $200000-$400000 solely on infrastructure.

Misconception on cost savings:

Hiring Indian employee costs 45% lesser for the management of the company. Some companies misunderstand it, because they find outsourcing expensive. As a matter of fact outsourcing is cheaper on long term basis. It is estimated that the cost saving is 20-35% for the companies in the first year and it goes up to 40-45% in by the third year. This shows the rise in the outcome of the company. Therefore there is a step wise rise, say the company earns $100000 profit in the first year, it would go up to $150000-$200000 by the end of third year.

Poor Expectation Management

An expectation gap may arise when you are in doubt about the vendor’s capability of doing things and hesitant to offshore anything beyond a specific task, while the service provider expects greater quality or higher value work and might feel unchallenged by dealing only with standard, unchallenging tasks. If this expectation gap continues, the vendor over a period of time may accord low importance to your project or may even want cancel the deal as soon as a higher value-add work comes their way.

Improvement in communication:

Communication is an important aspect in every business. Companies should finance for the travel of their managers. But because most companies find it expensive they switch to conferences on phone of live meeting online, voice communication, video conferencing, e-mail and chat sessions. But this might fail to convey the exact message sometimes and it is less encouraging to other workers. Sometimes there may be delay and technical problems in times of need which would be devastating for the company and has better results in long run. A sum of $15000-$50000 would be required for this.

Lack of customer’s satisfaction:

Cost saving is the basic concept behind outsourcing. In this run for cutting down cost, the quality of the product is compromised in some cases. This ultimately worsens the situation as the product might need rework. This probably shoots up the price of manufacturing and as a result the sole idea of outsourcing is not fulfilled. The cost of the production of the product, which was originally say $1000 would go up to $1500 or may even double. To avoid this mishap the company must be clear on the quality of the product and the quality of the product must be inspected every now and then. This would help the company improve its sales because it would win the confidence of the customer for its quality at an affordable price.


Global outsourcing is spreading fast and could be considered as the latest trend in business and has widespread usage. This is beneficial for companies because it a merger of ideas, culture, people with different insight on the situation, etc. The backdrop of this is that the outcome of it is not immediate. The advantages can only be seen in the long run, this is probably because of the gargantuan sums that the company invests to establish its business or endorse its managers in an alien land. Even after taking calculated step many companies fail to make a point and stand apart from their competitors and in such cases the results are devastating in terms of sum and the self-confidence of the firm. Since there is huge sum which goes in as initial investment on things like infrastructure and facilities of the firm, the company is at huge loss with failure of such projects. Also sometimes there may be variations in the estimated budgets which the company needs to keep an eye on. There could be unexpected ups and down in the budget due unexpected situation which may arise.

Expected Results

U.S is aiming to enhance its relations with India to expand its business dealing. U.S is expecting business of one trillion dollars every year and it is expected to increase every year. Since the opportunities are widespread, investors do not hesitate to invest in India. It is expected of the United states managers that they work towards the goal expected of them. They should work effectively and efficiently over the project keeping in view the huge sum invested in the project. Managers should have better control over resources. Managers should be accountable for the outcome of the results. American managers get an insight on working in Indian conditions and get to explore Indian markets. The above mentioned cross cultural training can give insight above the work culture of India and psychology of Indian employee. Training regarding the language barriers helps them to communicate with the people around. Cultural simulations also play a predominant role in their performance. Classroom training and field simulation helps them to know better of the work environment in the foreign nation. In class room training the trainee is taught about the history and the cultural, political, geographical and climatic conditions of the target country. And in field simulation the trainee is exposed to the similar kind of cultural and work environment which the trainee is expected to face in the target country. In this way the cross cultural training helps an employee belonging to a developed country like united states to work in a developing country like India where the working conditions are totally different and influenced by various other factors like cultural and political factors.


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