7 differences between European & Indian business culture

Co-operation between businesses in India and the rest of the world has increased dramatically in recent years, and much has been learned. Many differences still exist however, and these can be disorienting for Indian entrepreneurs looking to expand a business to European shores. Here are a few differences between the two business cultures, and some tips on how to negotiate them.

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1. Business structure

Indian businesses tend to be quite hierarchical. Instructions are delegated down the chain of command, with few opportunities to relay ideas or criticisms up the chain by lower-ranking employees. In Europe – and particularly in startups who value creative freedom – it’s much more common to find a flat company structure.

2. Directness

In startups like these, there are few to no management positions between a company’s executives and its employees. In theory, this allows businesses to be more reactive, requires less supervision of employees, and involves them more in the operation of the business. An Indian entrepreneur certainly won’t be required to run a company like this, but particularly in the tech sector, some employees may expect a European degree of autonomy and involvement.

Another difference in the broader culture is that Indian businesses tend to accentuate the positives. This leads to a polite and pleasant environment, but can sometimes lead to over politeness, and a reluctance to say things as they really are. European business culture tends to be more blunt, which could come across as rude or even accusatory. Less value is also placed on seniority, and it is not uncommon to see capable employees rise through the ranks faster than more long-standing ones.

Combined with structural differences, this can be extremely disarming for bosses who are more used to a more Indian-style set-up. There is a good balance to be found where employers can be respected for their authority but also open to their employees’ feedback.

3. Haggling

In India it’s a common part of business practice to negotiate deals at length, haggling down everything from supplies, to partnerships to business services. But due to the direct and straightforward nature of European business, haggling can be considered rude and off-putting in these countries.

Building lasting relationships is crucial to starting out in Europe, and increasing the chances of long term success. While there is room for negotiation, haggling too much can jeopardise these nascent bonds with other businesses. It’s acceptable to ask for a discount or “best price” but going in too hard won’t make the best of first impressions.

4. Pragmatism

In India, when a business deal has been negotiated, it’s common to consider and scrutinise it for a long period of time. While Europeans are not as anxious about these waits as Americans, who like to get to the point very quickly, delays can still cause consternation.

Nobody minds a short delay for reasons of research and comparison, but holdiNg off unnecessarily can be seen as a criticism of the business’ trustworthiness. By taking too long and scrutinising too much, any deals are at risk of being jeopardised.

5. Punctuality

The realities of living in a densely populated country like India can mean that punctuality is a luxury, rather than a necessity. The complex and overworked bureaucracy also means that paperwork takes an age to file, and places take an age to get to. But in Europe these concerns are minimal, and good time-keeping is seen as a show of professionalism and respect.

The European system has its benefits though: with the bureaucratic elements of business being much more efficient, it is far quicker and easier to register a business and pay taxes in most of Europe. There is also less corruption which is an endemic (though improving) concern in India, as many foreign businesses would testify.

6. Etiquette

While the precise formalities differ between countries, there are generally fewer of them in Europe than in India. Greetings will often involve forenames rather than titles or other honorifics, while a strict formal dress code may not apply for every interaction. Handshaking with both male and female business associates is also the norm.

On the hospitality side, vegetarianism is also less common in Europe than it is in India, as it is tied to lifestyle more than beliefs. (The UK is an exception to that rule as almost all menus in restaurants now offer vegetarian options). Making business hosts aware of any food or drink preferences allows a lunch or dinner meeting to go smoothly without embarrassment.

7. Employee perks

Europe has enacted many laws that seek to protect employees, as well as improve their quality of life. Countries like France guard these particularly closely. The result may be higher businesses expenses, but these perks can also improve productivity, and are much valued by employees.

Employees working beyond their usual hours will expect to receive overtime pay, earning as much as double their usual hourly salary. There is also an increasing expectation of flexible hours and working arrangements, particularly among young people.

Working from home for at least part of the week is a common practice, although it’s much rarer for countries to provide ‘casual leave’, where employees have an allowance of days where they do not have to show up to work.

If you are an Indian entrepreneur looking to expand into Europe or want to find out more about how to open a European company, please get in touch using our contact page, or click on our articles about how to open a company in the UK, or how to set up a business in France.