Mohan Murti

The cultural aspects of doing business in Europe are often subtle, but they are reflected in business contracts between European and Indian enterprises. Since both cultures are deeply rooted in tradition, neither can be changed easily.

AS CII counsellor to Indian and to European companies for over two decades, it has been my experience that, although business has become international, cultural characteristics still influence the ways of thought and actions. But, this is not surprising if one considered that the cultures in Europe and India developed over thousands of years, have become subject to global change only recently.

What then are the cultural aspects of doing business in Europe and their effect on the law in action, especially negotiations and contracts?

In my experience, mutual distrust caused by lack of appreciation of cultural differences can be affect cross-border co-operation between enterprises, often leading to their failure.There are some who emphasise the "universality" and "uniqueness" of the human way of thinking. But the ground reality is more complex.

There are cultural differences even within Europe — between the Germans, the French, the English, the Italians and other Europeans.

What, then, are the features in the history of thought in European culture? First, it is `decision based on logic'. Socrates, who lived from 470 BC to 399 BC, is a symbol of the Western way of thinking. In a well-known passage of the dialogue Criton, he says: "One must not do what one would like to do. Neither must one do what people say. One must do that which upon reasonable examination of oneself proves to be the logos."

In the thought of ancient Greece, the word "logos" or logic, played a central role. The Greek philosophers developed the art of speech, rhetoric, the art of argumentation, dialectics, discourse and, the art of logically consistent conversation. These techniques in the use of language were taught in Western universities, and, today, they are still a part of European culture. Second, is `individual autonomy'. The fundamental Greek idea of the autonomy of the individual put its stamp on the legal concept and laws of ancient Rome and is till today an essential element of European culture. The third aspect is `rational thought'.The one-sided high esteem of rationalism and the capability to criticise in European culture has, however, had a negative effect on the appreciation of feelings and emotionality. Since everything should be judged rationally and dispassionately, feelings are suppressed or at least not revealed.

The fourth is `legal and moral relationships'. Roman law conceived the relations between men to be individualistic legal relationships. In Europe, where Roman law was adopted, law is not only regarded as the basis of government and society, but often as the primary regulatory system for human relations as well. Law provides clarity and security, and individuals can form clear and secure relationships by entering into a contract.

The fifth feature is the `culture of dispute'. Also called "Streitkultur", it emphasises that opinion must be diverse and fought out in objective, orderly and open proceedings. According to the German sociologist Ralf Dahrendorf, dispute is a basic element of freedom, and he defines "free society" as "open, creative conflict".

Next, is `egalitarianism'. The inner freedom of the autonomous individual was supplemented by the outer freedom of equal rights. This idea found clear expression in the slogan of the French Revolution, Liberté, Egalité, Fraternité. And finally, there is `self-determination'. The ancient Greek belief that man is capable of self-determination encouraged his autonomous development, nurtured his creativity. This attitude formed the basis for the countless creations of science, technology and art, which European culture has brought forth. But, it has also resulted in a conceited self-esteem.

Now let us take a look at the cultural differences in doing business in Europe.

Power of the "Word": Europeans not only love to talk through negotiations, they also draw up long minutes of meetings and letters of confirmation. European business letters tend to be detailed and precise. In Europe, contracts are minutely drafted and provide for all conceivable problems of the contractual relationship, in advance. Verbal and written communication is taken very seriously. So, it's important to say what you mean and mean what you say!

Indian businessmen often will not answer letters at all when receiving written inquiries, or when difficulties arise in existing business relationships. Indians take various circumstances into consideration and prefer an indirect, elliptical and nuanced form of expression, which is not understood by Europeans. Such behaviour seems strange to Europeans, who prefer straight-forward communication.

Relationships: In business relations in India, people try to establish personal relationships through generous hospitality and gifts. Though such practices are not unknown in Europe, Europeans generally tend to restrict business relations to matters of business.

Consumer behaviour: If you want to sell something in Europe, you will usually do better with rational arguments than by addressing emotions. Consumers in Europe are basically critical and tend to first focus on the possible disadvantages of new products.

Employer-employee relations: Unlike in India, management methods that tend to involve the emotions of employees are rejected by Europeans. The tradition of personal autonomy in human relationships also effects employer-employee relations in Europe. They are seen rationally and dispassionately.

A European employee quite often has his own strong will, which he tries to enforce. If one does not succeed in convincing him with arguments of the appropriateness of the intended measure, one can only order him to obey, against his will. The Indian employee, on the other hand, is more willing to compromise.

Attitude to government: European enterprises, which always ask for the legal basis of an administrative act, find an administrative guidance that is not clearly supported by law to be unacceptable.

Personal autonomy: In Europeans, the awareness of personal autonomy and subjective rights combines with a firm conviction of equality. Because of this the services sector in Europe is in a terrible state. Usually, the customer is not king, much less God, as successful Indian companies like to say. On the contrary, the inner belief is that seller and buyer, even the waiter and customer in a restaurant, are basically equal. "The customer is king, but monarchy has been abolished." is a saying among German shopkeepers. It is, therefore, often wearisome in Europe to be a customer. One has personally experienced this, in the local bakery or restaurants, and in shopping malls in Europe. Europeans on the other hand, enjoy the obliging and extremely customer-friendly service in India!

The cultural aspects of doing business in Europe are often subtle, but they are reflected in everyday business activities and may also affect negotiations and contracts between European and Indian enterprises. Since they are deeply rooted in tradition, they are not changed easily.

Different cultures and their phenomena cannot simply be judged as being "good" or "bad". It is not possible to do justice to an attitude that characterisesone culture by measuring it with the yardstick of another culture. It is, therefore, necessary to adapt to the way of thinking and acting in a different culture, if you want to do business there. The old saying "When in Rome do as the Romans do", still applies.

(The author is former Europe Director, CII, and lives in Cologne, Germany. Feedback may be sent to mohan.murti@t-online.de)

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