Danish Multinational Companies Operating in India: A Study on Cross-cultural Context for Innovation

Sonali Srivastava

Student thesis: Master thesis

Abstract

In today’s business environment, there is a greater global openness and national borders are becoming more transparent than before. Multinational corporations have seen the benefit of the developing countries, and in order to survive the fierce competition, they turn towards them. One good example is India, which has begun to run its onward march in the world market, and it is developing as an economic superpower. Many Danish companies turn towards India in order to benefit from the highly educated workforce and the low production costs that the country has to offer.
Due to globalization, many companies are now operating in more than one country. This crossing of geographical borders by the companies gives birth to the multinational corporations, where employees with different cultural backgrounds and nationalities are now working together. On the one hand, physical barriers are breaking down but on the other hand, the cultural issues are emerging as being the new set of barriers for businesses.
Scholars within the field of culture have put a great emphasis on cross-cultural differences and their consequences for collaboration; instead of how to utilize these differences. On the other hand scholars within innovation literature do demonstrate culture as being an important factor for final outcome of the innovation. Hence, the literature does not describe how innovation can suggest new ways of better understanding the differences in order to improve a cross-cultural collaboration. Therefore, this thesis seeks to explore the relation between innovation and culture for the benefit of the cross-cultural collaboration.
A qualitative case study approach is applied to collect data from both the Danish MNCs operating in India but also from the Indians working under the Danish companies. The main purpose is thus to create a product that is rich with their voices, in order to observe which problems Danes and Indians face within a cross-cultural collaboration. Therefore, by combining social constructivism and hermeneutics, this thesis will be able to explore how social processes in society focuses on the world and also how individuals interpret the world.
The empirical data showed Danes and Indians facing many cross-cultural issues. The Danish MNCs are coming into the Indian market without have some kind of knowledge of cultural differences. It was further observed from the empirical data that the Danish respondents had carried out a thorough market analysis, but had never considered making a cultural analysis, because they had not anticipated the importance of the cultural differences. This results in Danes coming into the Indian market using Danish management styles, which the Indians do not recognize. At the same time, the Indians are responding with their own cultural framework causing a clash between the two cultures, and hence culture is being a distracting feature within the collaboration. It is therefore observed within the empirical data that there is a potential need for cross-cultural training before the collaboration for both the Danes and the Indians.
The model, which is being developed, is a framework for both the Danes and the Indians to conduct before the actual collaboration. The Danish multinational companies should make a solid market and cultural research. The Danish multinational corporations should show sensitivity towards the Indian culture, while the Indians could familiarize themselves with Danish management culture as well. The idea is how do both the Danes and the Indians focus on the management and more on creating value based out of their core competencies. Through building a unique shared third culture, which consists of the best traits from both of the cultures. So culture does not become a distracting feature between two regions of the world and their companies. But it becomes a resource of understanding, bridge building and cooperation.
This thesis concludes that Danish MNCs who want to do business in India should learn how to apply culture as a resource in order to enhance bridge building, knowledge sharing and collaboration instead of seeing culture as a distracting feature.

EducationsCand.ling.merc Erhvervssprog og International Erhvervskommunikation (Multikulturel Kommunikation i Organisationer), (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages163
SupervisorsSudhanshu Rai