an analysis of the buying behaviours in b2b and b2g strategy for the solar pv … · 2019-08-14 ·...

AN ANALYSIS OF THE BUYING BEHAVIOURS IN B2B AND

B2G STRATEGY FOR THE SOLAR PV INDUSTRY: A

COMPARISON STUDY BETWEEN INDIA AND GERMANY by

Kaushal Mandiwala

Matriculation number: 33422765 A Thesis Submitted to the

Faculty of Electrical Engineering and Computer Science University of Kassel, Germany

and

Faculty of Engineering

Cairo University, Egypt In partial fulfilment of the requirements for M.Sc. degree in

Renewable Energy and Energy Efficiency for the MENA Region

REMENA University of Kassel – Kassel, Germany

Cairo University – Giza, Egypt

May – 2019



COMPARISON STUDY BETWEEN INDIA AND GERMANY

by

Kaushal Mandiwala

Matriculation number: 33422765 A Thesis Submitted to the


and




REMENA

Under the Supervision of Prof. Dr. Ralf Wagner Prof. Dr. Hany Elghazaly

…………………………………… ……………………………………

SVI-Endowed Chair for International Direct Marketing Professor of Electrical Power Engineering

DMCC- Direct Marketing Competence Center Faculty of Engineering

University of Kassel, Germany Cairo University, Egypt University of Kassel – Kassel, Germany


May – 2019



COMPARISON STUDY BETWEEN INDIA AND GERMANY

by

Kaushal Mandiwala

Matriculation number: 33422765

A Thesis Submitted to the


and




REMENA

Approved by the examining committee

……………………………………

Prof. Dr. sc. techn. Dirk Dahlhaus, University of Kassel

……………………………………

Prof. Dr. Ralf Wagner, University of Kassel

……………………………………

Prof. Dr. Hany Elghazaly, Faculty of Engineering, Cairo University

……………………………………

Prof. Dr. Sayed Kaseb, Faculty of Engineering, Cairo University

University of Kassel – Kassel, Germany


May – 2019

Engineer's Name: Kaushal Mandiwala

Date of Birth: 17/10/1992

Nationality: Indian

Email: [email protected]

Phone: +49 159 01606487

Address: Maschstrasse 19, 32351 Levern

(Stemwede) Germany

Registration Date: 15/11/2018

Awarding Date: ……………………………………

Degree: Master of Science

Department: ……………………………………

Supervisors: Prof. Dr. Ralf Wagner

Prof. Dr. Hany Elghazaly

Examiners: Prof. Dr. sc. techn. Dirk Dahlhaus

Prof. Dr. Ralf Wagner

Prof. Dr. Hany Elghazaly

Prof. Dr. Sayed Kaseb Title of Thesis:

AN ANALYSIS OF THE BUYING BEHAVIOURS IN B2B AND B2G STRATEGY

FOR THE SOLAR PV INDUSTRY: A COMPARISON STUDY BETWEEN INDIA AND

GERMANY

Key Words:

GLOBE theory, Ethnography, Indian solar PV market, German Solar PV market, Project

development procedure, Company formation

Summary:

India has been secured the third position for new solar PV installation in 2017, but in the

Q4 2017, India’s solar PV market growth slowed due to lack of transmission infrastructure, flat power demand, rising panel cost domestically, uncertainty raised by the possibility of new

duties on imported panels, corruption and longer. Research has shown that several tenders were

postponed due to lack of interest among prospective bidders. Many project developers

commented that India has specific challenges, such as land acquisition delays, hydrology and

environmental impacts, a lack of skilled labour and high costs of grading. That is why, the

proposed thesis aims to examine the solar PV project development procedure in India, and it

compares with the developed country (Germany).

mailto:[email protected]

i

Acknowledgment

This thesis is for completion of my master study in Renewable Energy and Energy

Efficiency for the MENA Region (REMENA) at University of Kassel, Germany and Cairo

University, Egypt. I would like to express my most profound gratitude to the people who gave

their precious time and encouraged me throughout my entire study.

First and foremost, I offer my deepest gratitude to Prof. Dr. Hany Elghazaly (from the

Cairo University) and Prof. Dr. Ralf Wagner (from the University of Kassel) for providing

valuable support, stimulating discussion and constant supervision throughout this thesis. Thank

you for keeping your doors always open to guide me and let me work in my way.

Secondly, I want to sincerely thank Ms. Anke Aref and REMENA team members, who

gave me an opportunity to be a student of “REMENA”. Then after, I am also thankful to my

classmates (Pradhyuman, Jilesh, Bhavya, Bhagya, Ankit, Koen, Vikas, Hesham and Shaffaq)

for making our study time enjoyable and memorable.

Thank you, Mr. Christopher Hölscher (Managing Director of von Bartels GmbH), M.Sc.

Sandeep Banodiya (Sales Director at Krannich Solar India), Mr. Naman Pipara (Partner of

Pipara & Co LLP ) for your valuable time, attention and sharing your knowledge and insights

which have been of crucial importance to this research.

Last but not the least, my heartiest thanks go to my friends (Mihir, Samir, Harsh, Chirag),

and family for being supportive and motivating me whenever I was feeling down. I think this

accomplishment would not have been possible without your great support. Thank you.

ii

DECLARATION

To the best of my knowledge, I do hereby declare that this thesis is my own work. It has

not been submitted in any form of another degree or diploma to any other university or other

institution of education. Information derived from the published or unpublished work of others

has been acknowledged in the text and a list of references is given.

Kaushal Mandiwala 33422765

…………………………………… …………………………………... (Name, Surname) Matriculation number

Levern (Germany), 15/05/2019

…………………………………… ……………………………………

Place, Date Signature

iii

Table of Contents

ACKNOWLEDGEMENT ...................................................................................................... i

DECLARATION .................................................................................................................... ii

TABLE OF CONTENTS .................................................................................................. iii-iv

LIST OF TABLES ................................................................................................................. v

LIST OF FIGURES .............................................................................................................. vi

LIST OF ABBREVIATIONS ....................................................................................... vii-viii

ABSTRACT ........................................................................................................................... ix

CHAPTER 1 : INTRODUCTION ................................................................................. 01-05

1.1 Problem Background .................................................................................................... 01

1.2 Research Aim ............................................................................................................... 03

1.3 Research Methodology ................................................................................................. 04

1.3.1 Quantitative Method ............................................................................................. 04

1.3.2 Qualitative Method ............................................................................................... 04

1.4 Research Outline .......................................................................................................... 04

CHAPTER 2 : THEORY ................................................................................................ 06-21

2.1 Introduction of Buying Procedure in B2B and B2G .................................................... 06

2.2 GLOBE Theory ............................................................................................................ 08

2.3 Basic Principle of Ethnography .................................................................................... 15

2.3.1 Likert 5.0 Scale Questionnaire .............................................................................. 15

2.4 Hypothesis .................................................................................................................... 16

2.4.1 Corruption ............................................................................................................. 16

2.4.2 Solar PV Project Development Procedure ............................................................ 18

2.4.3 Conclusion ............................................................................................................ 21

CHAPTER 3 : DEVELOPMENT OF SOLAR PV PROJECT IN INDIA: AN

OVERVIEW OF B2B AND B2G STRATEGY .................................. 22-30

3.1 Solar PV Growth in India ............................................................................................. 22

3.2 Solar PV Project Development Procedure ................................................................... 24

3.3 GLOBE Theory for India ............................................................................................. 26

3.4 Ethnography for India .................................................................................................. 27

CHAPTER 4 : DEVELOPMENT OF SOLAR PV PROJECT IN GERMANY: AN

OVERVIEW OF B2B AND B2G STRATEGY .................................. 31-36

4.1 Solar PV Growth in Germany ...................................................................................... 31

4.2 Solar PV Project Development Procedure ................................................................... 32

4.3 GLOBE Theory for Germany ...................................................................................... 33

iv

4.4 Ethnography for Germany ............................................................................................ 33

CHAPTER 5 : DISCUSSION AND CONCLUSION ................................................... 37-42

5.1 Comparison between India and Germany (based on GLOBE theory) ......................... 37

5.2 Comparison between India and Germany (based on Ethnography) ............................. 41

5.3 Conclusion .................................................................................................................... 42

5.4 Directions for Future Research ..................................................................................... 42

REFERENCES ................................................................................................................ 43-44

APPENDIX A: OVERVIEW OF THE SURVEY ........................................................ 45-49

APPENDIX B: LIST OF INTERVIEWEES ..................................................................... 50

v

LIST OF TABLES

Table 1: Renewable Energy Development in 2017 ................................................................ 01 Table 2: Comparison between Buying Centre’s Role and Public Procurement Stakeholders ....

................................................................................................................................... 08

Table 3: Higher Performance Orientation Societies versus Lower Performance Orientation

Societies ................................................................................................................. 09

Table 4: Scale of Performance Orientation ............................................................................ 10

Table 5: Scale of Assertiveness .............................................................................................. 10

Table 6: Higher Future Orientation Societies versus Lower Future Orientation Societies .... 10

Table 7: Scale of Future Orientation ...................................................................................... 11

Table 8: Scale of Human Orientation ..................................................................................... 11

Table 9: Scale of Institutional Collectivism ........................................................................... 12

Table 10: Scale of In-Group Collectivism ............................................................................. 12

Table 11: Higher Gender Egalitarianism Societies versus Lower Gender Egalitarianism .... 12

Table 12: Scale of Gender Egalitarianism .............................................................................. 13

Table 13: Higher Power Distance Societies versus Lower Power Distance Societies ........... 13

Table 14: Scale of Power Distance ........................................................................................ 14

Table 15: Higher Uncertainty Avoidance Societies versus Lower Uncertainty Avoidance

Societies ................................................................................................................. 14

Table 16: Scale of Uncertainty Avoidance ............................................................................ 15

Table 17: Time Schedule for Solar PV Projects .................................................................... 18

Table 18: Result of GLOBE Theory for India ....................................................................... 26

Table 19: Result of the Survey for India ................................................................................ 27

Table 20: Approvals/registration/filings with competent authority for setting up projects ... 29

Table 21: Result of GLOBE Theory for Germany ................................................................. 33

Table 22: Result of a Survey for Germany ............................................................................ 34

vi

LIST OF FIGURES

Figure 1: Renewable Power Capacity, 2017 .......................................................................... 03 Figure 2: Outline of the Thesis ............................................................................................... 05

Figure 3: Corruption Perceptions Index, from 2010 to 2017 ................................................. 17

Figure 4: Administrative Process in India .............................................................................. 19

Figure 5: Solar PV Project Development Procedure in Germany .......................................... 20

Figure 6: Conceptual Research Framework ........................................................................... 21

Figure 7: Indian Solar PV Market .......................................................................................... 22

Figure 8: Commissioned Capacity as of March 2017 ............................................................ 23

Figure 9: Status of Solar Park ................................................................................................ 24

Figure 10: Project Development Phase .................................................................................. 26

Figure 11: Solar Power Capacity Addition in Germany, 2005-2018 ..................................... 31

Figure 12: Company Formation Procedure in Germany ........................................................ 35

Figure 13: Comparison of Society Practice Score for India, GermanyW, and GermanyE ...... 37

Figure 14: Comparison of Society Value Score for India, GermanyW, and GermanyE ......... 38

Figure 15: Comparison between India and Germany ............................................................. 41

vii

LIST OF ABBREVIATIONS

$ / USD US Dollar

Agentur für Arbeit Employment Agency

AoA Articles of Association

B2B Business to Business

B2C Business to Customer

B2G Business to Government

Berufsgeossenschaft Trade Association

BMVI Transport and Infrastructure Ministry

BSW German Solar Association

CBD Convention on Biological Diversity

CCA Common Consent Application

CEO Chief Executive Officer

CITES Convention on International Trade of Endangered Species

CMS Conservation of Migratory Species

Comm. Chamber Commercial Register (Handelsregister)

CRZ Coastal Regulation Zone

CTE Consent to Establish

CTO Consent to Operate

DIN Director Identification Number

DSC Digital Signature Certificate

EC Environment Clearance

EEG Erneuerbare Energien-Gesetz

EIA Environment Impact Assessment

EPC Engineering, Procurement, and Construction

EU European Union

F&E Forest and Environment

FCA Forest Conservation Act

Fiananzamt Tax Office

FIRC Foreign Inward Remittance Certificate

FIT Feed-in Tariffs

GDP Gross Domestic Product

GHG Greenhouse Gas

GLOBE theory Global Leadership and Organisational Behaviour Effectiveness Research Program

GoI Government of India

GST Goods and Services Tax

GW Gigawatt

GWth Gigawatt- thermal

HTL High Tide Line

HWK Chamber of Crafts

viii

IEA International Energy Agency

IGCC Indo German Chamber of Commerce

IHK Chamber of Industry and Commerce

IMF International Monetary Fund

INR/Rs. Indian Rupee

kWh Kilowatt hour

kWp Kilowatt peak

KYC Know Your Customer

LOI Letter of Intent

MCA Ministry of Corporate Affairs

MD Managing Director

MoEF Ministry of Environment and Forest

MW Megawatt

MWh Megawatt hour

NA Non-Agricultural

NOC No-objection Certificate

OECD The Organisation for Economic Co-operation and Development

PAN Permanent Account Number

PPP Purchasing Power Parity

PRIs Panchayati Raj Institutions

Q1 Quarter 1: January to March

Q2 Quarter 2: April to June

Q3 Quarter 3: July to September

Q4 Quarter 4: October to December

R&R Policy Resettlement and Rehabilitation Policy

RBI Reserve Bank of India

RfP Request for Proposal

ROC Registrar of Companies

SEAC State Expert Appraisal Committee

SEZ Special Economic Zone

SHA Shareholder Agreement

SIDC State Industrial Corporation of India

Solar PV Solar Photovoltaics

SPCB State Pollution Control Board

Trade Office Gewerbeamt

TWh Terawatt Hour(s)

UDA Urban Development Authority

UN United Nations

VAT Value Added Tax

W Watt

Wp Watt peak

WPA Wild Life Protection Act

ix

Abstract

India has been secured the third position for new solar PV installation in 2017, but in the

Q4 2017, India’s solar PV market growth slowed due to lack of transmission infrastructure, flat power demand, rising panel cost domestically, uncertainty raised by the possibility of new

duties on imported panels, corruption. Research has shown that several tenders were postponed

due to lack of interest among prospective bidders. Many project developers commented that

India has specific challenges, such as land acquisition delays, hydrology and environmental

impacts, a lack of skilled labour and high costs of grading. That is why, the proposed thesis

aims to examine the solar PV project development procedure in India, and it compares with the

developed country (Germany). To do so, the mixed method- qualitative as well as quantitative

research design applied. Here, the quantitative data served to deepen understanding of the

research concepts. However, the qualitative data analysed to test the research hypotheses.

The theoretical framework of GLOBE study (based on society practices score) concludes

that India scores high in Human Orientation, Institutional Collectivism, In-Group Collectivism

and Power Distance. However, Germany scores high in remaining dimensions- Assertiveness,

Future Orientation, Gender Egalitarianism and Uncertainty Avoidance. In addition, GLOBE

study (based on society values score) affirms that India scores high in Assertiveness; Future

Orientation; In-Group Collectivism; Power Distance; and Uncertainty Avoidance; while,

Germany scores high in Human Orientation; Institutional Collectivism; and Gender

Egalitarianism. Besides this, the Ethnography (online survey) proves that 69 to 81weeks

requires for solar PV project development in India; whereas 40 to 45 weeks requires for the

same activity in Germany. Here, company formation time frame is included. Moreover, 17

responses (out of 39) are aware of the recent corruption case in the Indian solar PV industry. In

contrast, few responses, 6 out of 39, are aware of the latest corruption case in the German solar

PV industry.

Furthermore, the current work is done based on GLOBE theory, but the future study may

be extended to introduce a Hofstede model and to compare with the present study. The scholar

may also replicate the research and get replies from different countries. In addition,

Ethnography conducted online (LinkedIn, Xing, Email), but it may be interesting to test these

hypotheses with non-online.

1

Chapter 1 : Introduction

Today’s businesses are thriving and competing in a more challenging and dynamic environment; this has made buying procedure volatile, uncertain, complex and ambiguous in

B2B, B2G and B2C. Considerable research has been performed in the field of buying behaviour

of solar PV industry from India and Germany. It is essential to understand because it is directly

impacting on the project development’s schedule. The systematic research would illustrate in

three main parts- Introduction; Literature Review and Data Collection; Data Analysis (Figure

2).

1.1. Problem Background

In the year 2017, several trends: a continued increase renewable power capacity (rising

total capacity by almost 9% over 2016), the dramatic price decline of several renewable

technologies, and significant increase attention of electrification for transport [1] were

recognized. The below table 1 highlights the renewable energy growth in worldwide, 2017.

Here, solar photovoltaic (PV) saw record addition (32.67%)- nearly three-fold than wind power

(10.67%) and thirty-fold than hydropower (1.73%) [1].

Table 1 Renewable Energy Development in 2017 [1]

2016 2017 Difference

(%)

Investment

NEW investment (annual) in renewable

power and fuels

billion

USD

274 279.6 2.04 ↑

Power

Renewable power capacity (total, not

including hydro)

GW 922 1,095 18.76 ↑

Renewable power capacity (total, including

hydro)

GW 2,017 2,195 8.82 ↑

Hydropower capacity GW 1,095 1,114 1.73 ↑

Bio-power capacity GW 114 122 7.01 ↑

Bio-power generation (annual) TWh 501 555 10.77 ↑

Geothermal power capacity GW 12.1 12.8 5.78 ↑

Solar-PV capacity GW 303 402 32.67 ↑

Concentrating solar thermal power (CSP)

capacity

GW 4.8 4.9 2.08 ↑

Wind power capacity GW 487 539 10.67 ↑

2

Ocean energy capacity GW 0.5 0.5 0

Heat

Solar hot water capacity GWth 456 472 3.50 ↑

Transport

Ethanol production (annual) billion

litters

103 106 2.91 ↑

FAME biodiesel production (annual) billion

litters

31 31 0

HVO production (annual) billion

litters

5.9 6.5 10.16 ↑

Policies

Countries with national/state/provincial

renewable energy targets

# 176 179 1.70 ↑

Countries with 100% renewable electricity

targets

# 57 57 0

Countries with 100% renewable heating and

cooling targets

# 1 1 0

Countries with 100% renewable transport

targets

# 1 1 0

Countries with 100% renewable energy in

primary or final energy targets

# 1 1 0

States/provinces/countries with heat

obligation/mandate

# 21 22 4.76 ↑

States/provinces/countries with biofuel

mandates

# 68 70 2.94 ↑

States/provinces/countries with feed-in

policies

# 110 113 2.72 ↑

States/provinces/countries with RPS/quota

policies

# 33 33 0

Countries with tendering (held in 2017) # 34 29 14.70 ↓

Countries with tendering (cumulative) # 73 84 15.06 ↑

Furthermore, table 1 indicates that the new tender opening was slowing down in 2017.

There are many reasons for slowing down. For instance, inflation rate, interest rate,

government’s policies/supports, feed-in tariff (FIT) rate, corruption and others. Thus, this thesis

studies the buying behaviours in B2B and B2G strategy for the solar PV industry of the

developing country (India) and the developed country (Germany). India and Germany are

selected based on mainly two reasons. The first is Gross Domestic Product (GDP) growth rate,

and the second is renewable development in 2017. In the year of 2017, the International

Monetary Fund (IMF) concluded that India is the sixth largest economy by the market exchange

3

rate, with a worth of $ 2.45 trillion, and the third largest by purchasing power parity (PPP), with

a value of $ 9.48 trillion. However, Germany is the fourth largest economy by the market

exchange rate ($ 3.68 trillion), and the fifth largest, $ 4.17 trillion, by purchasing power parity

(PPP). Besides this, the below figure 1 illustrates that China leads the world with installed

capacity over 334 GW, followed by the United States (161 GW), Germany (106 GW), India

(61 GW), Japan (57 GW), and United Kingdom (38 GW) in the year 2017.

Figure 1: Renewable Power Capacity, 2017 [1]

(*Not including hydropower)

1.2. Research Aim

India has been secured the third position for new solar PV installation in 2017. They added

9.1 GW, which is more than double the 4 GW installed in 2016 [1]. At present (by the end of

2017), India had 18.3 GW of total capacity and ranked sixth globally for cumulative capacity [1]. Moreover, solar power is India’s most abundant renewable energy source. Thus, the large-

scale solar project in India has been driven by rapidly falling prices and combined with strong

policy support in several states/at the national level since 2014. In 2017, ground-mounted

systems captured 88% of market shares, while remaining percent occupied by rooftop solar.

Furthermore, in the quarter-4 2017 (Q4 2017), India’s solar PV market growth slowed due

to lack of transmission infrastructure, flat power demand, rising panel cost domestically, and

uncertainty raised by the possibility of new duties on imported panels [1]. Several tenders were

postponed due to lack of interest among prospective bidders. Gopal Lal Somani, a former

director at the Jaipur-based Rajasthan Renewable Energy Corporation Ltd (RRECL), has told

to pv magazine that the rising cost of land and the time consumed in revenue land leasing are

impacting in project development [2]. Also, Jitendra Moranka from Nextracker said that India

has specific challenges, such as land acquisition delays, hydrology and environmental impacts,

a lack of skilled labour and high costs of grading [3]. That is why, the proposed thesis aims to

334

161

106

61 5738

0

50

100

150

200

250

300

350

400

China United States Germany India Japan United

Kindgom

Ren

ewab

le p

ow

er c

apac

ity,

GW

Name of the countries

4

examine the solar PV project development procedure in India, and it will compare with the

developed country, Germany.

1.3. Research Methodology

Crotty (1998) [4] claims that the methodology can define the strategy and procedure for

research. Many methods, for example, qualitative approach, quantitative way, can be

implemented. But the present study employed a mixed method- qualitative as well as

quantitative method.

1.3.1. Quantitative Method

Quantitative method is an objective, and systematic process in which pieces of numerical

data are using for obtaining information about the world and these are analysed by using

mathematical methods [5]. Burns & Grove (2003) [6] believe that quantitative research emerges

from a positivist paradigm, which operates on strict rules of logic, truth, laws and predictions.

Quantitative research is concerned with producing data in a quantitative. Furthermore,

quantitative analysis is used to test a theory by identifying the variables based on the previous

studies, examining the research relationship and obtaining the findings (Kothari, 2004) [7].

Johnson and Onwuegbuzie (2004) [8] raise that there are many reasons to account the use of

quantitative research, which include the following:

• The quantitative way can achieve greater objectivity and more accurate results. It

depends on a few variables, and it follows many tools to test the validity and reliability

of the data.

• A quantitative method enables researchers to compare findings statistically between

different groups.

• The research results are relatively researchers personal bias.

1.3.2. Qualitative Method

Qualitative method is an interpretive naturalistic approach [5]. Qualitative research is

concerned with extracting and interpreting individuals’ attitudes, perception and beliefs of situations. It means the qualitative researcher is investigating a topic in their original contexts

(in order to interpret the phenomena based on the meanings of people who have more

experience of the subject). Thomas (2003) [9], defined that the qualitative research attempts to

make sense of personal stories to solve the research problem. Also, a qualitative method is

helping to understand the issue in a particular environment. It is not concerned only with

measuring the event through observation (Malhotra et al., 2012) [10].

1.4. Research Outline

Chapter 1 Introduction- The first chapter provides an overview of the study from a

conceptual perspective. It describes the research aim, research methodology and research

outline.

5

Chapter 2 Theory- The second chapter aims to introduce basic theories. It starts by

discussing the concept of B2B and B2G’s buying procedure. Then the definition of GLOB

theory, the basic principle of Ethnography and Hypothesis are provided in this chapter.

Chapter 3 Development of solar PV project in India: An Overview of B2B and B2G

strategy- The third chapter covers the Indian solar PV market, the project development

procedure, and the data collected from the literature review and the online survey.

Chapter 4 Development of solar projects in Germany: An Overview of B2B and B2G

strategy- The fourth chapter explains the German solar PV market, and project development

procedure. Also, the data collected from the literature survey as well as the online survey.

Chapter 5 Discussion and Conclusion- The fifth chapter illustrates the comparison

between Germany and India (based on GLOBE theory and Ethnography). Also, it presents the

conclusion and avenues for future research.

Figure 2: Outline of the Thesis

Chapter 1 Introduction

• Significance of the thesis

Literature Review

and

Data Collection

Chapter 2 Theory

• Introduction of B2B and

B2G’s buying procedure • Definition of GLOBE

theory

• Basic principle of

Ethnography

• Hypothesis

Chapter 3 Development of

solar PV projects in India:

An Overview of B2B and

B2G strategy

• Indian solar PV market

• Project development

procedure

• Data collection through

GLOBE theory and

Ethnography

Chapter 4 Development of

solar PV projects in

Germany: An Overview of

B2B and B2G strategy

• German solar PV market

• Project development

procedure

• GLOBE theory for

Germany

• Ethnography for Germany

Data Analysis

Chapter 5 Discussion and

Conclusion

• Comparison between India and

Germany (based on GLOBE

theory as well as Ethnography)

• Conclusion

• Directions for Future Research

6

Chapter 2 : Theory

This thesis is based on theoretical foundation. That will be discussed starting with the

ethical theories of B2B and B2G (section 2.1). The GLOBE theory is described in section 2.2,

which illustrates the nine dimensions- Power Distance, Uncertainty Avoidance, Human

Orientation, Collectivism I (Institutional Collectivism), Collectivism II (In-Group

Collectivism), Assertiveness, Gender Egalitarianism, Future Orientation and Performance

Orientation. Section 2.3 presents the basic principle of Ethnography. Subsection 2.3.1

highlights the Likert 5.0 scale questionnaire, and the final section 2.4 focuses on Hypothesis.

2.1. Introduction of Buying Procedure in B2B and B2G

There are three common types of marketing strategies: business to business (B2B),

business to consumer (B2C) and business to government (B2G). Among these three types of

strategies, the author will discuss a B2B and B2G’s buying procedure in the next few

paragraphs. Also, table 2 presents the comparison between buying centre’s roles and public procurement stakeholders.

B2B Buying Procedure

In B2B marketing, a business sells its product and services to any other businesses (Kotler

(2004) and Fill (2005)) [11] [12]. Besides, Robinson (1967) [15] present a conceptual framework

of the B2B buying process, and that is also adapted by Kotler (1997) [14].

• Phase 1: To anticipate or recognise a problem as well as awareness of the

possibility to solve a problem by purchasing,

• Phase 2: Determination of the characteristics and quantity of the needed item,

• Phase 3: Description of the characteristics and quantity of the needed item,

• Phase 4: Search for and qualification of potential sources regarding suppliers’ organisation, buying situation and so on,

• Phase 5: Acquisition and analysis of proposals,

• Phase 6: Evaluation of proposals and selection of suppliers as well as often

negotiations,

• Phase 7: Selection of an order routine,

• Phase 8: Performance feedback and evaluation of how the bought product or

service solved the initial problem.

7

B2G Buying Procedure

In B2G marketing, a business sells its product and services to government agencies [14].

The public sector buying procedure according to Lindskog, Brege & Brehmer (2010) [13] is

below:

• K0 - Anticipation of need for starting a public procurement process.

• K1 - Market investigation – suppliers: Public agencies can have contacts with

manufacturers, operators and organisations in the pre-study and market

investigation phase. It is important to make use of this possibility to avoid

unrealistic or costly requirements as well as to miss important future services,

solutions or functions ‘in the pipeline’. • K2 - Market investigation – users: To find information of what others already have

done in similar types of procurement. To meet other public agencies, private

companies and/or users’ associations in the own country or abroad and learn from

their experiences in procurement can be a very efficient way to develop RfPs and

to avoid repeating errors committed by others.

• K3 - Collection and analysis of needs: This is an internal activity to understand

what is needed in detail. Collection and analysis of needs often start with an

analysis of the current situation and sometimes with a formulation of a vision and

a strategy to realise this vision. The vision can concentrate on ‘core’ activities, improvement of the service level towards citizens and businesses, increased

efficiency and reduction of costs.

• K4 - Development of RfP: This is the central activity for public procurement. The

RfP cannot be changed after being published and it includes mandatory, and non-

mandatory requirements and evaluation criteria.

• K5 - Evaluation of tenders: Tenders that do not comply with mandatory

requirements are rejected, and most of the evaluation will be concentrated on non-

mandatory requirements and prices following the evaluation criteria. As a result,

one or several suppliers are chosen for decision taking.

• K6 - Decision taking and contract signing: Decision taken by the procuring

organisation is valid only after giving during the stipulated time the possibility for

the losing tenderers to make (a court) appeal if they consider themselves being

mistreated.

• K7 - Contract administration: This is a continuous activity throughout the contract

duration, including control of delivery, ordering, payments of bills, execution of

penalties for non-delivery or poor quality.

8

Table 2: Comparison between Buying Centre’s Role and Public Procurement Stakeholders [13]

Buying Centre’s Role B2B B2G

• End users: for whom

goods or services are

purchased

• Office staff • End users’ employees and sometimes agencies’ customers (school, hospitals, roads,

etcetera)

• Influencers: who try to

affect the decision

• Engineers, Researchers,

Product Managers

• Citizens, labour unions or

employees

• Deciders: who make

the final decision

• CEO • Often agency management,

sometimes politicians in case of

local government

• Buyers: who arrange

the transaction and are

responsible for the

contract

• Purchasing agent • Mostly employees from

procurement department, or

specially designated agencies

• Gatekeepers: anyone

who can control the

flow of information

• Administrative

Assistance

• Virtually non-existing because

of insights policy and

registration of all incoming

information

• Initiators: persons that

initiate the idea or

purchase

• Sales staff, Researchers • Procurement department’s employee in case of expiring

contracts,

• Politicians to realise their

visons,

• End-users in need of new

functions, equipment or service

• Customers/clients requesting

better service level toward them

2.2. GLOBE Theory

GLOBE (Global Leadership and Organisational Behaviour Effectiveness Research

Program) theory is a 10-year research program, which done by Robert House and his team. The

idea for GLOBE came to him in the summer of 1991. At that time many researches related to

charismatic leadership had been published, and that researches suggested that charismatic

leader behaviour may be universally accepted and effective. Thus, he began to think about

conducting a cross-cultural study. He also started reading the organisational culture literature

to prepare for such a study. After reading organisational culture literature, he concluded that he

was learning very little because the conceptualisation and research methodology of the

empirical work in that literature was not very rigorous.

Furthermore, he also recognised Hofstede’s (1980) book and few samples of the more

general cross-cultural literature. After studying some studies concerning organisational culture

and cross-culture research, he decided to proceed with the development of the GLOBE research

without doing an exhaustive literature review. In this theory, the GLOBE researchers used

Future Orientation, Gender Equality, Assertiveness, Humane Orientation, In-group

Collectivism, Institutional Collectivism, Performance Orientation, Power Distance, and

9

Uncertainty Avoidance. Below is a detail description of these dimensions (House, R.J.

(2011))[16].

Performance Orientation reflects the extent to which a community encourages and rewards

innovation, high standards, and performance improvement. Table 3 provides a summary of a

typical society that has a strong culture of performance orientation and a society with a weak

performance orientation. Also, table 4 is an overview of the scale of performance orientation.

Table 3: Higher Performance Orientation Societies versus Lower Performance

Orientation Societies [16]

Societies that score higher on performance

orientation, Tend to:

Societies that score lower on performance


• Value training and development • Value societal and family relationships

• Emphasize results more than people • Emphasize loyalty and belongingness

• Reward performance • Have high respect for quality of life

• Value assertiveness, competitiveness,

and materialism

• Emphasize seniority and experience

• Expect demanding targets • Value harmony with the environment

rather than control

• Believe that individuals are in control • Have performance appraisal systems that

emphasize integrity, loyalty, and

cooperative spirit

• Have a “can-do” attitude • View feedback and appraisal as

judgmental and discomforting

• Value and reward individual

achievement

• View assertiveness as socially

unacceptable

• Have performance appraisal systems that

emphasize achieving results

• Regard being motivated by money as

inappropriate

• View feedback as necessary for

improvement

• View merit pay as potentially destructive

to harmony

• Value taking initiative • Value “attending the right school” as an

important success criterion

• Value bonuses and financial rewards • Emphasize tradition

• Believe that anyone can succeed if he or

she tries hard enough

• Have high value for sympathy

• Believe that schooling and education are

critical for success

• Associate competition with defeat and

punishment

• Value what you do more than who you

are

• Value who you are more than what you

do

• Attach little importance to age in

promotional decisions

• Pay particular attention to age in

promotional decisions

• Value being direct, explicit, and to the

point in communications

• Value ambiguity and subtlety in language

and communications

• Have a monochronic approach to time • Have a polychronic approach to time

• Have a sense of urgency • Have a low sense of urgency

10

Table 4: Scale of Performance Orientation [16]

Variable Mean Minimum Maximum Valid N

Performance Orientation Practices 4.10 3.20 4.94 61

Performance Orientation Values 5.94 4.92 6.58 61

Assertiveness reflects whether people are or should be encouraged to be assertive,

aggressive, and tough, or non-assertive, non-aggressive, and tender in a social relationship. It

is also often seen as a “masculine” rather than “feminine” trait. The societies are scoring high

on Assertiveness tend to too much competition, dominance and aggression. It would create an

unsafe and untrusting environment, which could hinder people from achieving the required

level of cooperation to complete the task. On the other hand, too little Assertiveness may be a

threat to external adaptation and survival, which could be experienced as a weakness. The below

table 5 is a scale of assertiveness.

Table 5: Scale of Assertiveness [16]


Assertiveness Practices 4.14 3.38 4.89 61

Assertiveness Values 3.82 2.66 5.56 61

Future Orientation is the extent to which members of a society or an organisation believe

that the current actions will influence in their future, focus on investment for their future, and

planning for developing their future. Table 6 highlights a comparison of a typical strong versus

weak future orientation. Also, table 7 shows the grand means of GLOBE societal practices and

societal values for future orientation.

Table 6: Higher Future Orientation Societies versus Lower Future Orientation

Societies [16]

Societies that score higher on future


Societies that score lower on future


• Achieve economic success • Have lower levels of economic success

• Have a propensity to save for the future • Have a propensity to spend now, rather

than to save for the future

• Have individuals who are

psychologically healthy and socially well

adjusted

• Have individuals who are

psychologically unhealthy and socially

maladjusted

• Have individuals who are more

intrinsically motivated

• Have individuals who are less

intrinsically motivated

• Have organizations with a longer

strategic orientation

• Have organizations with a shorter

strategic orientation

11

• Have flexible and adaptive organizations

and managers

• Have inflexible and maladaptive

organizations and managers

• View materialistic success and spiritual

fulfilment as an integrated whole

• See materialistic success and spiritual

fulfilment as dualities, requiring trade-

offs

• Value the deferment of gratification,

placing a higher priority on long-term

success

• Value instant gratification and place

higher priorities on immediate rewards

• Emphasize visionary leadership that is

capable of seeing patterns in the face of

chaos and uncertainty

• Emphasize leadership that focuses on

repetition of reproducible and routine

sequences

Table 7: Scale of Future Orientation [16]


Future Orientation Practices 3.85 2.88 5.07 61

Future Orientation Values 5.48 4.33 6.20 61

Humane Orientation is defined as the degree to which an organisation or society

encourages and rewards individuals for being fair, altruistic, friendly, generous, caring, and

kind to others [16]. The highly humane-oriented societies are based on shared values and norms,

practices reflect individualised consideration, and informal relationships provide development

opportunities to employees. However, the less humane-oriented societies are based on

bureaucratic practices, formal relationships and standardise consideration such as formalised

procedures are common. Thus, they are trusted less by their members, and mechanisms of

control are established by legislation, unionisation, and state interventions. While, the highly

humane-oriented societies or organisations are relatively autonomous in their employee

relations, and trade unions and the state have less influence on the business system. The below

table 8 illustrates the summary for societal humane orientation practices and values dimensions.

Table 8: Scale of Humane Orientation [16]


Humane Orientation Practices 4.09 3.18 5.23 61

Humane Orientation Values 5.42 4.49 6.09 61

Institutional Collectivism is focused on the degree to which institutional practices at the

societal level encourage and reward collective action. For instance, whether the group loyalty

is emphasised at the expense of individual goals; whether the economic system emphasises

individual or collective interests; whether being accepted by other group members is important;

and whether individualism or group cohesion is valued more in the society. Moreover, the

below table 9 presents the scale of institutional collectivism.

12

Table 9: Scale of Institutional Collectivism [16]


Institutional Collectivism Practices 4.25 3.25 5.22 61

Institutional Collectivism Values 4.72 3.83 5.65 61

In-Group Collectivism is focused on the degree to which individuals express pride, loyalty,

and interdependence in their families. For instance, whether children take pride in the individual

accomplishments of their parents and vice versa, whether ageing parents live at home with their

children; and whether children live at home with their parents until they get married. Besides

this, the table 10 highlights the scale of in-group collectivism.

Table 10: Scale of In-Group Collectivism [16]


In-Group Collectivism Practices 5.13 3.53 6.36 61

In-Group Collectivism Values 5.66 4.94 6.52 61

Gender Egalitarianism measures society’s belief about whether a member’s biological sex should determine the roles that they play in their homes, business, organisations, and

communities. Table 11 provides a comparison of a typical society that has a higher gender

egalitarianism and a society with a lower gender egalitarianism. Also, table 12 is an overview

of the scale of gender egalitarianism.

Table 11: Higher Gender Egalitarianism Societies versus Lower Gender

Egalitarianism Societies [16]

Societies that score higher on gender

egalitarianism, Tend to:

Societies that score lower on gender

egalitarianism, Tend to:

• Have more women in positions of

authority

• Have fewer women in positions of

authority

• Accord women a higher status in society • Accord women a lower status in society

• Afford women a greater role in

community decision making

• Afford women no or a smaller role in

community decision making

• Have a higher percentage of women

participating in the labour force

• Have a lower percentage of women

participating in the labour force

• Have less occupational sex segregation • Have more occupational sex segregation

• Have higher female literacy rates • Have lower female literacy rates

• Have similar levels of education of

females and males

• Have a lower level of education of

females relative to males

13

Table 12: Scale of Gender Egalitarianism [16]


Gender Egalitarianism Practices 3.37 2.50 4.08 61

Gender Egalitarianism Values 4.51 3.18 5.17 61

Power Distance is representing a degree to which the community maintains inequality

among its members by stratification of individuals and groups with respect to power, authority,

prestige, status, wealth, and material possessions. The below table 13 illustrates a summary of

a typical society that has a higher power distance and a society with a lower power distance.

Indeed, table 14 presents the grand mean for GLOBE’s society power distance practices and values scales.

Table 13: Higher Power Distance Societies versus Lower Power Distance

Societies[16]

Parameters Higher Power Distance Lower Power Distance

• Social inequities • Society differentiated into

classes on several criteria

• Society has large middle

class

• Power bases • Power bases are stable and

scarce (e.g., land

ownership)

• Power bases are transient

and sharable (e.g., skill,

knowledge)

• Role of power • Power is seen as providing

social order, relational

harmony, and role stability

• Power is seen as a source of

corruption, coercion, and

dominance

• Social mobility • Limited upward social

mobility

• High upward social

mobility

• Information control • Information is localized • Information is shared

• Governance • Different groups (e.g.,

women) have different

involvement, and

democracy does not ensure

equal opportunities

• All the groups enjoy equal

involvement, and

democracy ensures parity in

opportunities and

development for all

• Indigenous

orientation and

independence

• Strong non-native historical

influences and recent

independence of the society

• Strong native historical

influences and long-

standing independence of

the society

• Civil freedom • Civil liberties are weak and

public corruption high

• Civil liberties are strong and

public corruption low

• Resources and

capabilities

• Only a few people have

access to resources, skills,

and capabilities,

contributing to low human

development and life

expectancies

• Mass availability of tools,

resources, and capabilities

for independent and

entrepreneurial initiatives,

as reflected in wide

educational enrolment

14

• Consumption • High growth rates of

consumption and high need

for resource coordination

• Mature growth rates of

consumption and high per

capita purchasing power

• Technology • Mass use of technology,

which supports general

power distance reduction

• Need for specialized

technology, adapted to each

user

Table 14: Scale of Power Distance [16]


Power Distance Practices 5.17 3.89 5.80 61

Power Distance Values 2.75 2.04 3.65 61

Uncertainty Avoidance refers to the extent to which members of collectives seek

orderliness, consistency, structure, formalised procedures, and laws to cover situations in their

daily lives. Table 15 highlights a comparison of a typical strong versus weak uncertainty

avoidance orientation. Also, table 16 shows the grand means of GLOBE societal practices and

societal values scales for uncertainty avoidance.

Table 15: Higher Uncertainty Avoidance Societies versus Lower Uncertainty

Avoidance Societies [16]

Societies that score higher on uncertainty

avoidance, Tend to:

Societies that score lower on uncertainty

avoidance, Tend to:

• Have a tendency toward formalizing

their interactions with others

• Have a tendency to be more informal in

their interactions with others

• Document agreements in legal contracts • Rely on the word of others they trust

rather than contractual arrangements

• Be orderly, keeping meticulous records,

documenting conclusions drawn in

meetings

• Be less concerned with orderliness and

the maintenance of records, often do not

document the conclusions drawn in

meetings

• Rely on formalized policies and

procedures, establishing and following

rules, verifying communications in

writing

• Rely on informal interactions and

informal norms rather than formalized

policies, procedures and rules

• Take more moderate calculated risks • Be less calculating when taking risks

• Inhibit new product development but

facilitate the implementation stage

through risk aversion and tight controls

• Facilitate the new product development

especially in the initiation phase, through

higher risk taking and minimal planning

or controls

• Show stronger resistance to change • Show less resistance to change

• Show stronger desire to establish rules

allowing predictability of behaviour

• Show less desire to establish rules to

dictate behaviour

• Show less tolerance for breaking rules • Show more tolerance for breaking rules

15

Table 16: Scale of Power Distance [16]


Uncertainty Avoidance Practices 4.16 2.88 5.37 61

Uncertainty Avoidance Values 4.62 3.16 5.61 61

Besides this, the above nine dimensions were measured on a 7-point scale. All scales were

validated in all societies involved in the GLOBE project. When interpreting results involving

“As Is” and “Should Be” scales, here used the terms practices and values, respectively. To

emphasise that “As Is” reflects the current perception, whereas “Should Be” reflects an ideal

perception of society.

2.3. Basic principle of Ethnography

Ethnography does not have a standard, and well-defined meaning said by Atkinson, P. and

Hammersley, M. (2007) [17]. But it is one of many approaches that can be found within social

research today. It has been influenced by a range of theoretical ideas: anthropological and

sociological functionalism, philosophical pragmatism and symbolic interactionism, Marxism,

phenomenology, hermeneutics, structuralism, feminism, constructionism, post-structuralism

and postmodernism. Furthermore, it has been compared and contrasted not just with

experimental and survey research but also with interview-based studies, macro-historical

analysis, political economy, conversation and discourse analysis and psycho-social approaches.

Besides this, the ethnographer can focus people’s daily lives for an extended period of

time, watching what happens, listening to what is said, and asking questions through informal

and formal interviews, collecting documents and artefacts- gathering whatever data are

available to throw light on the issues. Here, the ethnographer can design questionnaire based

on Likert 5.0 scale, which is elaborated in below section.

2.3.1. Likert 5.0. Scale Questionnaire

In marketing research and commercial market research, rating scales are one of the most

widely used tools (Dawes, J (2007)) [18]. It requires the respondent to select their answer from

a range of verbal statements or numbers. Rating scale captures information on a variety of

phenomena. For example, in consumer research, respondents can ask about their attitudes,

perceptions or evaluations of products, brands or messages. While in other marketing research,

respondents such as managers or marketing personnel may request to rate their company’s performance, type of strategic focus, personnel, degree of marketing excellence, training

regimes.

Likert has been introduced the scale in 1932, which had the following form [19]:

Strongly

approve

Approve Undecided Disapprove Strongly

disapprove

16

However, there are many other forms of scale available before Likert, and they tended to be

based on 10-point or 100-point formats (Cummins, R.A. and Gullone, E. (2000)) [19]. For

instance, the ‘Decile scale’ comprises a number of statements corresponding to different levels

of construct ‘strength’ against numbers from 0 – 10. The next, ‘Graphic rating method’ founded

by Freyd in 1923, and it had in the following form [19]:

[item] Does the appear neat or slovenly in his dress?

Watson, 1930, [19] published a similar scale as follow:

But the Likert scale is so popular because it drastically reduces the number of effective choice-

points in two ways. First, the respondents are now required to mark the line only adjacent to

one of the labels, and second, the introduced scale has a bidimensional scale with a neutral mid-

point [19]. Besides this, Lissitz and Green (1975) [20] and Boote (1981) [21] concluded that a 5-

point scale was reliable, although few people feel that an increasing the number of scale points

increases scale sensitivity [19]. Thus, Diefenbach found a 7-point scale in 1993 [19].

2.4. Hypothesis

This study integrates the solar PV project development procedure in India and Germany as

well as the corruption. The hypothesised relationships are discussed below:

2.4.1. Corruption

Based on the corruption perceptions index 2017 [22], Germany is the 12th corrupt nation out

of 180 countries, while India is the 81. Here, rank 180 is a highly corrupt nation. In contrast,

rank 1 is a very clean (very less corrupt) nation. Moreover, this index illustrates the level of

corruption in the public sector. It is calculating with the help of experts and businesspeople.

The below chart highlights the rank of both countries (Germany and India) from 2010 to 2017.

Extremely neat

and clean.

Almost a dude

Appropriately

and neatly

dressed

Inconspicuous

in dress

Somewhat

careless in

his dress

Very Slovenly

and unkempt

Most miserable

of all

About three-fourths

of the population are

happier than you

The average

person of your

own age and sex

Happiest

of all

Happier, on the whole,

than three-fourth of the

population of similar

age and sex

17

Figure 3: Corruption Perceptions Index, from 2010 to 2017

Furthermore, Investment Climate Statement 2017 [23] concluded that there is a low risk of

corruption when dealing with Germany’s judiciary. However, there is a high risk of corruption when dealing with India’s judiciary. Over two-thirds of Germany based companies states that

the judiciary to be fairly good or very good, and the bribes/irregular payments are rare [24].

Another side in India, bribes and irregular payments are often exchanged for favourable court

decisions [24]. Moreover, when dealing with Germany’s police, there is a low risk of corruption, while the police sector in India is susceptible to corruption [24]. The public service sector in

Germany is transparent, and corruption risk is low. Although, Indian public service sector

carries high corruption risk for the business.

National Integrity System Assessment Germany 2012 [25] find out that there is moderate

corruption risk in the German land administration. Firms may face corruption risk when dealing

with construction sector [23]. In contrast, when dealing with India’s land administration,

businesses are exposed to a high risk of corruption. Almost one third of the companies are

expecting to pay bribes when obtaining a construction permit [26].

The tax system in Germany is complex, and it imposes a significant burden on businesses.

The Global Competitive Report 2017-2018 [24] states that the tax rates and regulations are the

biggest obstacles for doing business in Germany, but there is a low risk of corruption. In

opposition, corruption and bribery are present from low to moderate level for companies dealing

with India’s tax administration [24]. The Global Enabling Trade Report 2016 [27] highlights that

there is a moderate to low risk of corruption in Germany’s customs administration, while the corruption is a moderate to high risk when dealing with India’s customs authorities.

Public procurement in Germany is corrupted at a moderate level. Special Eurobarometer

470 Corruption Report (2017) [28] indicates that a close link between business and politics in

Germany lead to corruption. However, public procurement in India is highly corrupted.

Enterprise Survey- India (2014) [26] illustrates a four out of ten firms expect to give gifts for

securing a government contract.

15

14

13

12

12

10

10 12

87

95

94

94

85

76 79 81

2010 2011 2012 2013 2014 2015 2016 2017

Germany India

18

All-in-all above leads to formulate the following hypothesis:

H1: Corruption in the Indian solar PV industry is higher than the German solar PV industry.

2.4.2. Solar PV Development Procedure

India reformed their policies in 1991, with the objective was, to rapid and sustained

improvement in the employment, incomes and living standards. In that reformation, the major

steps were Fiscal Reforms, Monetary and Financial Sector Reform, Reforms in Capital Market,

Industrial Policy Reforms, Trade Policy Reforms, Promoting Foreign Investment, and

Rationalisation of Exchange Rate Policy. Because of these, the Indian business environment

has been allured the attention in today’s business world. But, the administrative barriers, for

example, tricky rules and long permission process during the project development, are still

present. The company have to keep in mind certain things, for instance- demographics; right

infrastructure; tax rules of the state; proximity to suppliers; human resource availability; SEZ;

price parity; exit options in case of dissolution; while choosing India to set up business.

Furthermore, British High Commission New Delhi and their stakeholder, PWC’s research (2015) [29] has revealed an ambiguous picture of the Administrative Processes in India. Figure

4 illustrates it but find detail explanation of the solar PV project development procedure in India

is in chapter 3. Moreover, Jawaharlal Nehru National Solar Mission [30] prepared a general time

schedule for Solar PV projects, which is in below table 17.

Table 17: Time Schedule for Solar PV Projects [30]

Sr. No Event Date

1 Notice for Request for Selection Zero date

2 Submission of Application with documents for

Registration

Zero date + 30 days

3 Short-listing of Projects based on RfS received and

decision on tariff discounting

Zero date + 75 days

4 Tariff discounting process and submission of proposal

by short-listed developers

Zero date + 90 days

5 Evaluation of Tariff discounting proposal Within 30 days from

submission of tariff

discounting proposals

(zero date + 120 days)

6 Issue of letter of intent Within 15 days from

evaluation of tariff

discounting proposal

(zero date +135 days)

7 PPA Signing Within 30 days from the

date of issue of letter of

intent (LOI date + 30

days)

8 Financial Closure of the Project 180 days from the date of

signing of PPA

9 Commissioning of the Project 12 months from the date

of signing of PPA

19

Figure 4: Administrative Process in India [29]

In contrast, a result book of the European project deSOLaSOL [31] states that the permit

requirements for ground-based plants – which are larger than 1 MWp – result in a total project

realisation time of 1-2 years in Germany. In addition to that, they have also been revealed a step

for solar PV project development in Germany. Figure 5 illustrates it but find the detail

explanation of solar PV project development in Germany is in chapter 4.

20

Figure 5: Solar PV Project Development Procedure in Germany

In a nutshell, the following hypothesis is posited:

H2: Project development procedure in India is more prolonged than in Germany.

General site evaluation

Land utilisation plan

Environmental impect assessment

Define and evaluate

compensatory measure

Site visit Design the area renting contract

Re-assess the design of the plant

Bidding procedure for the turn-key

Solar yield study

Formation of the required legal

society

Signing the financing contract with the creditor

Identify the equaity capital

Defining and signing other contracts with stakeholders

Starting construction of the

plant

Inaugration of the plant

21

2.4.3. Conclusion

As noted above, this study tests two hypotheses regarding corruption as well as the lengthy

project development procedure. The conceptual research framework is shown in the below

figure 6.

Figure 6: Conceptual Research Framework

H1: Corruption

H2:

Procedure

Project development

22

Chapter 3: Development of solar PV projects in India: An

overview of B2B and B2G strategy

Chapter 2 presented the theoretical aspects of B2B, B2G, and other theories. However, this

chapter aims to provide supportive evidence for the analysis (chapter 5). It starts by looking at

solar PV growth in India. Next, a detailed procedure of the solar PV project development is

provided. The third section of this chapter focuses on the data, which collected from GLOBE

theory as well as Ethnography.

3.1. Solar PV Growth in India

In the year 2016-17, the global economy maintains its low-level growth, while the Indian

economy continues on its high growth trajectory. The reason behind their growth in the power

sector. Their power sector is growing at a rapid pace. India has a 310 GW power generation

capacity, in which Thermal, Hydro, Renewable, and Nuclear contributing 69.4%, 13.9%,

14.8%, 1.9% respectively [32]. Here, renewable power has been secured the 2nd position after

Thermal, and it is still trying to spread its wings rapidly. Furthermore, the Government of India

decided the target of renewable power capacity, 175 GW by 2022, in which solar, wind, bio

and small-scale hydropower will be contributing 100 GW, 60 GW, 10 GW, 5 GW respectively [32]. In addition, the Ministry is implementing a wide range of schemes with fiscal and financial

support. Also, they have prepared conducive policies to achieve their target.

Moreover, solar power is India’s most abundant renewable energy source. The Indian solar

PV market has segmented as below:

Figure 7: Indian Solar PV Market

Solar PV Market

Rooftop solar market

Residential rooftop market

Commercial rooftop market

Industrial rooftop market

Government rooftop market

Ground mounted

solar market

23

Rooftop Solar Market

The rooftop solar market plays a vital role in the contribution of India’s renewable energy target. Rooftop solar has advantages and disadvantages, but it’s particular advantage makes it important: as an energy source for India.

Advantages Disadvantages

It avoids the need of additional land for

power generation.

It is not suitable for peak power

requirements.

It can produce power according to

consumption.

It has a higher unit cost as compared to

utility-scale solar.

It will help drive progress towards a smart

grid. (Smart grid has higher efficiency,

lower losses, higher quality, better real-time

power management.)

It can generate two-way flows in the

distribution grid. Therefore, the government

must change grid management and

infrastructure.

It creates significant numbers of jobs.

In November 2014, the Government of India had been announced their target for solar

installed capacity, 100 GW by 2022 [33]. In this 100 GW target, they included 40 GW from the

rooftop. Furthermore, India has been installed 1,247 MW by December 2016. Among this vast

instalment- Residential, Commercial, Industrial and Government contributed 28%, 26%, 34%

and 12% respectively [32]. Also, the Government of India has expected 11.9 GW of new capacity

addition from 2017 to 2021 [32].

Ground Mounted Solar Market

India has the most significant ground-mounted solar market. It shares 88% in the whole

Indian solar PV market. India has been installed 12.2 GW of utility-scale solar PV by March

2017 [32]. The below figure 8 illustrates that Andhra Pradesh, Rajasthan, and Tamil Nadu are

leading states in solar PV installation. Also, the Government of India is expected that the 60%

new capacity will come from three southern states: Telangana, Andhra Pradesh and Karnataka [32].

Figure 8: Commissioned Capacity as of March 2017 [32] (Source: BRIDGE TO INDIA research)

24

Moreover, India has targeted 40,000 MW of solar park infrastructure by the year 2020,

with financial support $ 1.2 billion [32]. At present, India has already been allocated 8,900 MW

in 8 solar parks, which is shown in figure 9 [32].

Figure 9: Status of Solar Park [32] (Source: BRIDGE TO INDIA research)

3.2. Solar PV Project Development Procedure

The solar energy space, among the other RE sources, is one such area which fetches the

interest of global companies and entices them to India. As figure 4 (chapter 2) illustrates the

typical framework for setting up or development of PV project in India. It starts with the

identification and selection of the land. The next, registration of the project with the appropriate

authority (ROC) is to be completed [29]. Once the authority grants the land clearance and

approval, then the developer has to seek other clearances for example water, electricity

construction, pollution [29]. The major clearances are below [29]. Also, figure 10 briefly

highlights the phases of project development.

(1) Consent Process:

• SPCBs grant consent to establish CTE and CTO to projects.

• CTE is issued to projects after evaluating the potential environmental impacts

and the design of pollution control installations and upon verification of

compliance with these conditions. A CTO is issued with emission and effluent

limit based on industrial specific standards.

25

• Some states like Gujarat issue consolidated consents for air and water pollution,

and hazardous wasted based on CCAs. Other states like Chhattisgarh issue water

and air consents as well as waste management authorisations separately.

(2) CRZ Clearance:

• CRZ Clearance regulates development in areas located along the Indian coast.

The coastal area is considered sensitive zones and classified by the MoEF as

CRZ I, II, III, and IV for regulating development activities in the coastal

stretches within 500 meters of HTL. Various activities are allowed in different

zones, and rapid EIA is used as a tool for CRZ clearance. The project proponent

has to ensure that CRZ clearance has been obtained and the project is not located

in environmentally sensitive zones as notified under the CRZ classification.

(3) Forest Clearance:

• Solar projects being set up on forested land have to obtain a two-stage approval

from the MoEF. This two-stage process involves approvals by the divisional

forest officer and subsequently the MoEF, or its regional office. In addition, as

per MoEF rules, developers have to identify land contiguous to forestland for

afforestation. This compensatory afforestation activity is also permitted in

private land.

(4) Environmental Assessment for Externally Funded Projects:

• Solar project funded by bilateral and multilateral agencies has to meet additional

environmental and social performance standards prescribed by the respective

funding agency.

(5) International Acts and Treaties:

• Projects should not violate any regional/multilateral treaty. Solar proponents and

regulators have to ensure that environmental conservation and biodiversity

preservation is not compromised due to project activities. These treaties include

the UN’s CBD, CITES, and Convention on Conservation of Migratory Species (CMS).

(6) Social Governance Clearance:

• The project has to comply with acts addressing social concerns such as the 73rd

Constitutional Amendment Act 1992, Tribal Rights Act 2006, India’s Resettlement and Rehabilitation (R&R) Policy 2007 and Land Acquisition Act

1894. Furthermore, these projects should be compliant with local laws and get

approvals from the local bodies/institutions.

(7) Local Governments:

• Projects are subject to local laws and have to obtain approvals from local bodies.

• As per the 73rd Constitutional amendment, rural local bodies or Panchayati Raj

institutions (PRIs) are to decide on clearing development projects by providing

them legal status.

• Under the Panchayat Act, the PRIs or gram sabha at the village level has to be

consulted by the project proponent before establishing a project in areas falling

under its jurisdiction. This gives villagers/locals the right to raise their project

development concerns.

(8) Land Acquisition:

• Solar projects are established on private, revenue or forestland, for which

different states have different policies for land purchase/allotment. Apart from

26

the other clearances, other clearances such as a NOC from the energy department

and a NOC from the district collectors are also required.

Figure 10: Project Development Phase

3.3. GLOBE Theory for India

A detailed description of the GLOBE’s nine dimensions are available in chapter 2. To

avoid repetition, only the results of those dimensions are discussed here (Table 18). Also, in the

below table, rank 1 is considered highest; however, 61 is the lowest.

Table 18: Result of GLOBE Theory for India [16]

Practices

(As Is)

Values

(Should Be)

Rank in

Practices

(Out of 61)

Rank in

Values

(Out of 61)

Performance Orientation 4.25 6.05 23 26

Assertiveness 3.73 4.76 53 07

Future Orientation 4.19 5.60 15 29

Human Orientation 4.57 5.28 10 45

Institutional Collectivism 4.38 4.71 26 32

In-Group Collectivism 5.92 5.32 04 50

Construction

Operation

De-Commissioning

Permitting, Licensing, Siting

Tech Design

Insurance

Due Diligence

Structuring

Project Development

Project Execution

27

Gender Egalitarianism 2.90 4.51 55 35

Power Distance 5.47 2.64 16 38

Uncertainty Avoidance 4.15 4.73 29 29

3.4. Ethnography for India

As discussed in chapter 2, ethnography means a crowdsourcing study. The summary of a

survey is included in appendix A. The survey is carried out on online (LinkedIn and Xing)

because compared to the interview approach, administrating a survey not only is less costly but

also allows greater coverage geographically in reaching target respondents. From 08 April 2019

to 30 April 2019, the author received 39 response. Among them, 14 response for Germany, 17

for India, 2 for Bangladesh, 3 for Pakistan, and 1 for Sri Lanka; Ukraine; and the Netherlands.

All responses are active in solar PV industry as a Project Manager; Legal EPC

Adviser/Expert/Consultant; CEO/Director; Sales Manager, and the majority people believe that

the 48 weeks to 51 weeks are required for the solar PV project development in India. The below

table 19 highlights the result of a survey for India.

Table 19: Result of the Survey for India

Sr.

No

Question Response (out of 39)

1 If you have experience

in solar PV project

development, then what

is your position at your

esteem organisation?

Project

Manager

Legal EPC

Adviser /

Expert /

Consultant

CEO / Director Sales

Manager

Other

8 9 0 0 0

2 Would you rather work

in a group or work

alone?

In a Group Alone Other

17 0 0

3 In which country have

you completed your

previous project?

India Germany Other

17 14 8

4 During your last

project, how many

weeks did you spend

for the site selection?

3 weeks 6 weeks 9 weeks 12 weeks Other

15 0 1 1 0

5 How much time did

you allocate for the

environmental and

cultural assessment in

your earlier project?


5 11 0 0 1

6 How much duration

consumed in local/state

permits and approvals

for your previous

project?


1 14 0 2 0

28

7 In your last project,

how many weeks you

used for finding and

obtaining the financial

options/sources of

capital (for instance,

Grants, Incentives,

Debt/loans) from the

Bank/Government?


0 16 1 0 0

8 For land acquisition,

how many weeks you

allocated in your past

project?


0 1 16 0 0

9 In your previous

project, how many

weeks you consumed

for equipment

procurement?


0 7 9 1 0

10 How much time did

you use for the

construction/installation

of your earlier project?


1 0 2 14 0

11 Are you aware of any

recent cases of

corruption in the solar

PV project

development? Are these

relating to any of the

following issues:

Informal

payment for

certification

and approval

(A)

Bribes in land

acquisition

and

construction

(B)

Misrepresentation

for obtaining

financial help from

bank/government

(C)

0 4 2

12 To what extent do you

feel the B2B (Business

to Business) buying

behaviour in your

previous project?

Ver Fast Some-what

Fast

Neutral Some-

what

Slow

Very

Slow

0 13 3 1 0

13 Do you agree with the

statement that a B2G

(Business to

Government) buying

procedure were slow in

your past project

compared to the current

project?

Strongly

Agree

Agree Neutral Disagree Strongly

Disagree

10 6 1 0 0

14 Do you still have any

further comments or

remarks, which we did

not discuss in this

interview?

A+B B+C A+C

3 6 2

29

Moreover, the above table illustrates the informal payments/bribes/mis-representation for

obtaining financial help from bank or government is common in India. Also, the B2G buying

procedure is slow while B2B buying behaviour is some-what fast.

Besides this, the author of this thesis has been conducted a telephonic as well as email

conversation with the lawyers/consultants, who are advising to project developers/EPC

contractors. Here, the author asked to them, which are the permissions required for developing

a project and how much time needed for obtaining it? They answered the same as British High

Commission New Delhi and PWC published in their research, but they briefly explained the

beginning procedures/steps (after the location identification, Figure 2).

First and foremost, Mr. Naman Pipara, Partner of Pipara & Co.LLP, demonstrated the steps

and its timeline, which mentioned below:

Table 20: Approvals/registration/filings with competent authority for setting up

projects

Sr. No. Event Timeline

1 Issuing DSC 42 days (T)

2 Application for DIN T+3

3 Application for Name of Indian Entity T+5

4 Name approval letter T+10

5 Submission of Charter Documents T+11

6 Resolving of queries, if any T+20

7 Issuance of Certificate of Incorporation (from MCA) T+27

8 Application for PAN (Income Tax Department, India) T+28

9 Issuance of PAN T+33

10 Opening of Bank Account T+36

Secondly, Ms. Mira Dalvi, Head of Inbound Department- Indo German Chamber of

Commerce given the below procedure and time frame.

Company formation formality

Week 1

Acceptance

of

assignment

by the

client

IGCC prepares

exhaustive checklist for

client’s signatures, notarisation, local court

& India Consulate/

Embassy attestation

Week 2 to 7

Completion of name

approval and

incorporation

documents from client

in country origin

Receipt of

documents

from client

Timeline is estimated & subject to completion of

formalities at Notary, Local Court & Indian

Embassy/Consulate

30

Furthermore, Mr. Rohit Kapur, Managing Director of Dezan Shira & Associates; Mr.

Ganesh Prasad, Partner of the Khaitan & Co; Mr. Manik Abbott, Director of SKP Group; replied

same and the timeframe also co-equal (21 weeks to 30 weeks).

Week 8

Apply for DSC. DIN of all

Directors & PAN of any one

Director (if required)

Week 9 to 12

Submission of documents

with Registration of

companies

Approval of company

Incorporation

Time line for the Company Incorporation is subject to the quires raised by the State Registration of

Companies (ROC) as well as the total number of applications. Approval is based on First in First out (FIFO)

method)

Week 15 to 17

1. Apply for income

tax license – PAN &

TAN

2. Prepare Bank

account opening

docs & submit

application to

banker

Signing of leave and

license/lease agreement

in the name of Indian

company with the

landlord for the use of

registered office address

Week 18

1. Transfer Share capital to

Indian Bank Account

within 60 days of

Incorporation

2. Procure KYC details from

remitting banker and from

all shareholders

Prepare co. stamp & seal

Week 19 to 20

Procure Foreign inward remittance

certificate (FIRC) from local

banker

Week 21

1. Notify RBI of equity received towards capital

2. Allot shares to capital received within 60

days of incorporation

3. Preparation of share certificates and booklets

• Apply for GST Number

• Apply for Professional Tax Number

• Apply for Import-Export Code

31

Chapter 4: Development of solar PV projects in Germany:

An overview of B2B and B2G strategy

After collecting the data for India (chapter 3), this chapter presents the quantitative as well

as qualitative statistics of solar PV project development in Germany. It starts with information

about solar PV growth in Germany, section 4.1. Then after, the solar PV project development

procedure is described in section 4.2. Finally, it ends with GLOBE theory and Ethnography

(section 4.3 & 4.4).

4.1. Solar PV Growth in Germany

Germany is one of the largest solar power producers across the globe, and it has become a

surprising global leader in solar power. They lead by energy enthusiasts, early adopters drove

not just the installation of panels, but the manufacture as well. Germany started in 1991, and

their installed capacity of over 43 GW in 2017 [34]. In addition to that Agora Energiewende

estimate the installed solar power capacity has to grow at least 98 GW until 2030 [34].

Besides this, according to the International Energy Agency (IEA), the country ranked 4th

in the world after leading the charge for several years [34]. The below chart highlights the solar

power capacity addition in Germany, from 2005 to 2018.

Figure 11: Solar Power Capacity Addition in Germany, 2005-2018 (Source: AGEE, BMWi, Bundesnetzagentur │*January-October)

10.8

1.3

2

4.5

7.4

7.97.6

3.7

1.2 1.31.5

1.7

2.4

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Sola

r P

V c

apac

ity a

ddit

ion i

n G

W

Year

32

German solar industry also faced a rapid decline after 2012 (see in figure 11). The

competitors from abroad, especially from China, offered solar panels at a much cheaper rate

than German manufacturers [34]. However, support rates remained stable regardless of the

panel’s country of origin. Hence, many investors swapped domestic for foreign suppliers to maximise their returns and left the freshly expanded German industry (bereft of customers).

Solar expansion fell by 80% between 2013 to 2015 (figure 11), while it doubled globally during

the same period [34].

Furthermore, after years of consolidation and market downturns, the signs are finally

pointing to grow again- said by Carsten Körnig, CEO of the German Solar Association (BSW) [35]. Fraunhofer ISE, research institute, says that if Germany wants to cover one-day power

demand with renewables, then the solar capacity will have to grow up to 150-200 GW [34].

Indeed, the transport and infrastructure ministry (BMVI) concluded that the total area without

restriction for solar power installation in Germany would allow for an additional 143 GW on

open spaces and 150 GW on buildings [34]. In 2017, roughly 67,200 new PV installation with a

total output of 1.75 GW were registered [35]. It is about 15% more than the previous year 2016.

Aurélie Beauvais, Policy Director of SolarPower Europe, commented [36]: “the EU has done its

homework- by removing the trade measures on solar panels and ensuring a highly positive

framework for solar through the Clean Energy Package legislation, the stage is set for

significant solar growth. Now it is important that EU members states enforce the right national

climate and energy plans to sustain this solar boom.”

4.2. Solar PV Project Development Procedure

The driving force for Germany’s success story is Erneuerbare Energien-Gesetz (EEG).

They aim to develop all projects similarly and to receive the payments according to the EEG.

Figure 5 (chapter 2) illustrates a framework for the solar PV project development in Germany.

It starts with the general site evaluation, which includes the Map, orientation, scale, photos, 1st

assessment of the size and annual production. Then after, to check the land utilisation plan. The

uses are usually restricted on conversation areas (from earlier military use), landfill, agriculture

or – less – forestry areas. In step 3, project developers have to do environmental impact

assessment regarding restrictions such as integral nature reserve, landscape conservation area,

negative impact on natural scenery, priority area for agriculture, leisure or flooding protection

areas. To be continued in the procedure, the developer has to define and evaluate compensatory

measures. The next is a site visit. In this step, the developer evaluates a data, which received by

visual evaluation; shading approval by trees, neighbouring building; possible infrastructure

restricting for installation of the plants according to a checklist. Step 6 is designing the area-

renting contract, which contains the contract index; duration; renting fee; subleasing/renting;

charge of land use; change of landowner; end of use; liability; responsibilities of the owner;

responsibilities of renter; closing remarks.

Furthermore, the 7th step is re-assessing the design of the plant. The next step is a bidding

procedure for the turn-key installer, which includes the PV-module specifications; mounting

structure; inverter; wiring; lightning protection; documentation; visualisation kit; grid-

connection. The step 9th covers the solar yield study through external expert. Indeed, step 10th

is a formation of the required legal society. In this phase, the developer has to register the

company in the commercial registry.

33

Moreover, step 11th and 12th relate to sign the financing contract with the creditor and to

identify the equity capital. While step 13th for defining and signing other agreements with

stakeholders, such as Feed-in permit and operation contract with the grid-operator; purchase

contract with a turnkey installer; assurance contracts; contract for monitoring the plant; contract

for operation and maintenance; contract for tax consultant; contract for technical and

administrative management. After that, the developer can start the construction.

4.3. GLOBE Theory for Germany

A detailed description of the GLOBE’s nine dimensions are explained in chapter 2. To

avoid repetition, only the results of those dimensions are presented in Table 21. Indeed, in the

below table, rank 1 is considered highest; however, 61 is the lowest. Also, Germany is analysed

in two parts: GermanyW (West Part; former FRG) and GermanyE (East Part; former GDR).

Table 21: Result of GLOBE Theory for Germany

GermanyW (West Part; former FRG) GermanyE (East Part; former GDR)

Practices Values Rank in

Practices

(Out of

61)

Rank in

Values

(Out of

61)

Practices Values Rank in

Practices

(Out of

61)

Rank in

Values

(Out of

61)

Performance

Orientation

4.25 6.01 22 29 4.09 6.09 33 22

Assertiveness 4.55 3.09 10 55 4.73 3.23 04 53

Future

Orientation

4.27 4.85 13 57 3.95 5.23 25 42

Humane

Orientation

3.18 5.46 61 30 3.40 5.44 56 33

Institutional

Collectivism

3.79 4.82 54 28 3.56 4.68 59 34

In-Group

Collectivism

4.02 4.18 55 55 4.52 4.22 47 53

Gender

Egalitarianism

3.10 4.89 44 15 3.06 4.90 47 14

Power

Distance

5.25 2.54 29 44 5.54 2.69 13 34

Uncertainty

Avoidance

5.22 3.32 05 59 5.16 3.94 07 52

4.4. Ethnography for Germany

As mentioned in chapter 3, ethnography means the crowdsourcing study. The survey is

carried on online (LinkedIn and Xing) from 08 April 2019 to 30 April 2019. Fourteen responses

for Germany believes that the 36 to 39 weeks requires for the solar PV project development in

Germany. Also, some of them (6 out of 14) agree on the misrepresentation for obtaining

34

financial help from bank/government is common in Germany. However, the eight people did

not reply to that context. The below table 22 shows the result of a survey for Germany.

Table 22: Result of a Survey for Germany

Sr.

No

Question Response (out of 39)

1 If you have experience

in solar PV project

development, then what

is your position at your

esteem organisation?

Project

Manager

Legal EPC

Adviser /

Expert /

Consultant

CEO / Director Sales

Manager

Other

7 6 0 1 0

2 Would you rather work

in a group or work

alone?

In a Group Alone Other

14 0 0

3 In which country have

you completed your

previous project?

India Germany Other

17 14 8

4 During your last

project, how many

weeks did you spend

for the site selection?


8 6 0 0 0

5 How much time did

you allocate for the

environmental and

cultural assessment in

your earlier project?


14 0 0 0 0

6 How much duration

consumed in local/state

permits and approvals

for your previous

project?


0 1 13 0 0

7 In your last project,

how many weeks you

used for finding and

obtaining the financial

options/sources of

capital (for instance,

Grants, Incentives,

Debt/loans) from the

Bank/Government?


12 2 0 0 0

8 For land acquisition,

how many weeks you

allocated in your past

project?


0 13 1 0 0

9 In your previous

project, how many

weeks you consumed


0 13 1 0 0

35

for equipment

procurement?

10 How much time did

you use for the

construction/installation

of your earlier project?


0 13 1 0 0

11 Are you aware of any

recent cases of

corruption in the solar

PV project

development? Are these

relating to any of the

following issues:

Informal

payment for

certification

and approval

(A)

Bribes in land

acquisition

and

construction

(B)

Misrepresentation

for obtaining

financial help from

bank/government

(C)

Other

(No reply)

0 0 6 8

12 To what extent do you

feel the B2B (Business

to Business) buying

behaviour in your

previous project?

Ver Fast Some-what

Fast

Neutral Some-

what

Slow

Very

Slow

0 0 14 0 0

13 Do you agree with the

statement that a B2G

(Business to

Government) buying

procedure were slow in

your past project

compared to the current

project?

Strongly

Agree

Agree Neutral Disagree Strongly

Disagree

1 13 0 0 0

14 Do you still have any

further comments or

remarks, which we did

not discuss in this

interview?

Besides this, the author of this thesis conducted an email conversation with GTAI

(Germany Trade and Invest), firma.de Firmaenbaukasten AG, Legal Strasse. They are assisting

foreign companies as well as national companies in setting up a branch office or subsidiary in

Germany. Here, the author asked them which steps requires for the company formation?; and

how much time need for it? They replied, the company formation procedure needs 4-6 weeks

(approximately), and the steps are in below figure 12.

Figure 12: Company formation procedure in Germany

Step 1

Idea & Team

•Business Plan

•Find co-founders

•Prepare founding contacts

Step 2

Notary

Step 3

Bank

Step 4

Commercial registration

•Only pay register & notary

•Entry into public registration

Step 5

Administration

•Trade registration

•Finanzamt (VAT)

•Comm.chamber

•DRV: MD status check

• Notarise AoA &

SHA

• Sign MD contract

• Open bank account

• Put firm on mailbox

• Pay share capital

• Notify notary

36

Indeed, the author has been arranged a face to face interview with Mr. Christopher

Hölscher, Managing Director of von Bartels GmbH, and asked the same questions. He replies

the same answer, like to come up with the business plan and find co-founders if needed. Then

after to draft the AoA (Articles of Association), which illustrates share capital, shareholder, and

respective shares held, business name, registered office, and company purpose. The AoA

drafting and notarization usually are performed in one session by a German notary. Next, the

founding shareholder adopts its article of association and appoint one or more managing

director in a notarial deed. Once the AoA have been notarized, a company account should be

opened, and the share capital deposited. In step 4, the share capital will verify, and the managing

director can apply for the registration in the commercial register (Handelsregister). Here, the

application is electronically filed by a notary. When the commercial register considers all

formation requirement, then the company is registered and starts to exist as a legal entity at

www.unternehmensregister.de. In the last step to notify about the planned activity to the trade

office (Gewerbe-/Ordnungsamt) of the particular municipality in which the business is located.

Parallel, to make sure to have a company’s Tax Id from the tax office (Finanzamt) and get the right insurance for the company.

The purpose of the face to face interview or email conversation with lawyers is, the solar

PV project developer has to register the company in the commercial registry. That is why it is

essential to understand the company formation steps in Germany.

37

Chapter 5: Discussion and Conclusion

This chapter highlights the result of the analysis conducted to test the research hypotheses.

These discussions relate to the main empirical findings which are contained in the previous

chapters. In the first section of this chapter, a comparison between India and Germany (based

on GLOBE theory and Ethnography) is provided. The second part presents the conclusion as

well as the direction of future research.

5.1. Comparison between India and Germany (based on GLOBE

Theory)

The GLOBE study is the most recent study. Its nine dimensions measure cultural practices

and values at the organisational as well as social level. The following figure 13 and 14 are the

comparison of society practices and values scores for India and Germany (GermanyW and

GermanyE). The scores have been defined in chapter 3 and 4.

Figure 13: Comparison of society practice score for India, GermanyW, and GermanyE

Performance Orientation: According to chapter 2, the societies that score higher on

performance orientation emphasise results more than people. These societies value

assertiveness, competitiveness, and materialism. Whereas, the societies that score lower on

performance orientation emphasises loyalty and belongingness. Besides, these societies also

Performa

nce

Orientatio

n

Assertive

ness

Future

Orientatio

n

Human

Orientatio

n

Institution

al

Collectivi

sm

In-Group

Collectivi

sm

Gender

Egalitaria

nism

Power

Distance

Uncertain

ty

Avoidanc

e

India 4.25 3.73 4.19 4.57 4.38 5.92 2.9 5.47 4.15

GermanyW 4.25 4.55 4.27 3.18 3.79 4.02 3.1 5.25 5.22

GermanyE 4.09 4.73 3.95 3.4 3.56 4.52 3.06 5.54 5.16

0

1

2

3

4

5

6

7

Pra

ctic

e S

core

38

value harmony with environment rather than control. In this dimension, the score of society

practices of India is 4.25, while GermanyW and GermanyE score 4.25 and 4.09 respectively. In

this aspect, India and GermanyW’s scores are the same. Whereas, GermanyE’s score is lower

than India and GermanyW. Another hand, in the aspect of society values, India scores 6.05, in

contrast, GermanyW and GermanyE score 6.01 and 6.09. The social value scores of India,

GermanyW, and GermanyE are closer to each other mean both the countries societal values are

based on performance orientation.

Figure 14: Comparison of society value score for India, GermanyW, and GermanyE

Assertiveness: The societies that score higher on assertiveness value assertive, dominant,

and tough behaviour for everybody in society. These societies value competition which values

success and progress. On the other hand, the societies that score lower on assertiveness tend to

view assertiveness as socially unacceptable and value modesty and tenderness. Moreover, these

societies appreciate cooperation which has value for people and relationship. According to the

above data (figure 13 and 14), the society practice reflects that India score 3.73, GermanyW

score 4.55, and GermanyE score 4.75. In the social values, India score 4.76, GermanyW score

3.09, and GermanyE score 3.23. The social values of GLOBE show that India is high on

assertiveness which values competition, success and progress. However, GermanyW and

GermanyE score low on assertiveness which values cooperation, warm and relationships.

Future Orientation: It refers to the degree of which individuals engage in future-oriented

behaviours such as delaying gratification, planning, and investing in the future. The societies

that are high on future orientation tend to achieve economic success whereas, the societies lower

on future orientation tend to have lower economic success. Increases in the level of economic

development improve the fiscal positions of society that can be used to resource these societies

to improve their functionary obligations and their capacity to detect and deter corruption. Based

on society practices, India score 4.19, GermanyW score 4.27, and GermanyE scores 3.95. The

Performa

nce

Orientati

on

Assertive

ness

Future

Orientati

on

Human

Orientati

on

Institutio

nal

Collectiv

ism

In-Group

Collectiv

ism

Gender

Egalitaria

nism

Power

Distance

Uncertai

nty

Avoidanc

e

India 6.05 4.76 5.6 5.28 4.71 5.32 4.51 2.64 4.73

GermanyW 6.01 3.09 4.85 5.46 4.82 4.18 4.89 2.54 3.32

GermanyE 6.09 3.23 5.23 5.44 4.68 4.22 4.9 2.69 3.94

0

1

2

3

4

5

6

7

Val

ue

Sco

re

39

score of society values shows that India score 5.60, GermanyW score 4.85, and GermanyE score

5.23.

Human Orientation: The GLOBE study (chapter 2) states that the societies that are with

high humane orientation values altruism, benevolence, kindness, love and generosity. Whereas,

the societies that have low humane orientation values of pleasure, comfort, and self-enjoyment.

According to this dimension, higher scores indicate greater humane orientation. In this

dimension, particularly in the society practices India score 4.57, GermanyW score 3.18, and

GermanyE scores 3.40. The social values scores indicate that India score 5.28, GermanyW score

5.46, and GermanyE scores 5.44. Historically Indian culture is deeply rooted with humane

orientation as the most striking feature of ancient Indian civilisation is its humanity. Moreover,

Indian culture also believes in “Karma” which is the major belief in Hinduism which means the

action of an individual whether it is good or bad it comes back to the individual in the future.

Therefore, it is obvious India is a highly humane oriented society which is also supported by

the GLOBE scores which shows that the social practices of India score higher on humane

orientation than GermanyW and GermanyE.

Institutional Collectivism: This dimension emphasises the individual encouragement by

society to be integrated into broader entities with harmony and cooperation as paramount

principles at the expense of autonomy and individual freedom. The societies that are high on

institutional collectivism tend to have members that assume that they are highly interdependent

with the organisation and believe it is important to make personal sacrifices to full their

organisational obligations. On the other hand, the societies those scores high on individualism

tend to have members that assume that they are independent of the organisation and believe it

is important to bring their unique skills and abilities to the organisation. According to this

dimension, higher scores indicate greater collectivism. In this dimension the societal practice

shows that India score 4.38, GermanyW score 3.79, and GermanyE scores 3.56. At the same

time, the score of social values India score 4.71, GermanyW score 4.82, and GermanyE scores

4.68.

In-Group Collectivism: It refers to the degree which individuals express pride, loyalty and

cohesiveness in their organisations or family. The societies that are high on in-group

collectivism have individuals who are integrated into strong cohesive groups, and the societies

that are low in this dimension has the individuals who look after themselves or their immediate

families. According to this dimension, higher scores indicate greater collectivism. In this

dimension, particularly in the societal practices, India scores 5.92, GermanyW score 4.02, and

GermanyE scores 4.52. On the other hand, in the social values India scores 5.32, GermanyW

score 4.18, and GermanyE scores 4.22. When comparing both the countries the score of societal

practices reveals that India scores very high on this dimension when compared with Germany

(GermanyW and GermanyE); while through the social values predicts that Indian society is more

in-group collectivistic than Germany (GermanyW and GermanyE). Moreover, the collectivistic

nature of Indians also embedded with the caste system as people are very much associated with

their caste. It is also seen in the workplace people work as teams where the people work for the

common goal of the team. The roots of collectivism in India stem in part from the emphasis on

family, caste system, sense of kinship, and community. The family is an integral part of the

collectivistic culture in India. For instance, in India quite often the families take decision on

major issues of the individuals such as marriage (the family members choose the bride for their

sons or daughters), education (family members advice what to study), job (family members

advice on taking a job offer with a particular company) etcetera. It is also very common that

people work in the team hang out together even after their work. On the other hand, in

40

individualistic culture like Germany the role of the family in individual’s life is minimal, and

individuals are responsible for decision making in important events happen in their life.

Gender Egalitarianism: In this dimension based on the society practices India scores 2.9,

GermanyW score 3.10, and GermanyE scores 3.06. However, in the society values India scores

4.51, GermanyW score 4.89, and GermanyE scores 4.90. According to the data of social practice,

Germany has more egalitarianism than India. India has greater male domination. As per the

discussion in chapter 2, the societies that score high on gender egalitarianism have more women

in the positions of authority as well as high status in the society. Whereas, the societies that

score lower on gender egalitarianism tend to have a fewer position of authority and will have

women in lower status in society. When comparing the societal practices between both the

countries, India scores low as it is a more male-dominated society where men tend to be

dominant. Germany scores higher on this dimension where the women have equal values so as

a man in the organisations. Though scores on the social values reflect that Germany scores high

on this dimension when compared with India; it is assumable the role of women in the society

have gained importance over a period of time.

Power Distance: According to GLOBE study (chapter 2) in the high-power distance

culture, power is seen as providing social order, relational harmony and role stability; whereas

the low power distance cultures consider power as a source of corruption, coercion, and

dominance. In this dimension based on society practices, India score 5.47, GermanyW score

5.25, and GermanyE scores 5.54. The score of social values India score 2.64, GermanyW score

2.54, and GermanyE scores 2.69. From this score, it is evident- India is high power distance

culture when compared with Germany. German organisations are less hierarchical where the

individual employees are encouraged to take independent decisions. Moreover, German

managers do not underestimate their employee’s capabilities to make decisions. On the other hand, Indian culture is hierarchical where the decision making is most often taken by the

managers or the senior most people. Moreover, the employees or subordinates in a team are

obliged to agree with their managers, and they may not have an opportunity to disagree.

Besides, the subordinates expect the superior to be benevolent toward them, and if this

benevolence is reciprocated, the subordinate is also likely to respond by remaining loyal.

Uncertainty Avoidance: This dimension emphasis people’s attitude in seeking orderliness, consistency and structure. The societies that score high on uncertainty avoidance rely on

formalised policies and procedure, establishing and following rules, verifying communications

in writing; and the societies that score low rely on informal interactions and informal norms

rather than formalised policies, procedures and rules. According to this dimension, higher

scores indicate greater uncertainty avoidance. In this dimension society practices show India

score 4.15, GermanyW score 5.22, and GermanyE scores 5.16. The social values India score

4.73, GermanyW score 3.32, and GermanyE scores 3.94. The societal practices of this dimension

reveal that German society tends to avoid uncertainty when compared with Indian society. The

German culture seems to be less comfortable in handling uncertainty, and the Indian culture is

more relaxed in dealing with ambiguity.

41

5.2. Comparison between India and Germany (based on

Ethnography)

Figure 15: Comparison between India and Germany (solar PV project development)

The above figure 15 illustrates, the three weeks requires for site selection in India and

Germany. But, some respondent also agrees with the statement: 6 weeks needed for site

selection in Germany. The next, environmental and cultural assessment requires six weeks

when the project develops in India; while in Germany- 3 weeks. Furthermore, six weeks needed

for obtaining the local/state permits and approvals in India; whereas the nine weeks require in

Germany for the same task. For finding and obtaining the financial option/sources, six weeks

requires in India; however, three weeks needed in Germany. Moreover, nine weeks requires for

land acquisition and equipment procurement (each activity), when the project develops in India.

In contrast, the project develops in Germany, six weeks needed for each activity (land

acquisition and equipment procurement). Here, some respondents (from India) agree with the

statement: 6 weeks require for equipment procurement. Lastly, construction/installation phase

needed 12 weeks, when the project develops in India; while six weeks requires when the project

develop in Germany.

Besides this, 17 responses (for India) are aware of the recent corruption case in the Indian

solar PV industry. They believe that major corruption occurs during the land acquisition and

construction phase. Also, the informal payment for certification and approvals as well as

misrepresentation for obtaining the financial help from bank/government are common in India.

Whereas, for Germany, few respondents (6 out of 39) replied on the corruption context. They

belives that the misrepresentation for obtaining the financial help from bank/government is

casual in Germany.

Site

Selection

Environme

ntal and

Cultural

Assessment

Local/State

Permits

and

Approvals

Finding

and

Obtaining

the

Financial

Options/So

urces

Land

Acquisition

Equipment

Procureme

nt

Constructio

n/Installati

on

India 3 6 6 6 9 9 12

Germany 3 3 9 3 6 6 6

0

2

4

6

8

10

12

14

Wee

k

42

Furthermore, Indian respondents concluded that the B2B buying behaviours were some-

what fast in their previous project, while B2G buying procedure was slow as compared to their

current project. In contrast, German respondents affirm that the B2B buying behaviours were

neutral in their previous project. However, they agree with the B2G buying procedure were

slow as compared to their current project.

Moreover, regarding the company formation in India- it takes 21 to 30 weeks, and the

procedure is lengthy. Other hands, in Germany- it takes 4 to 6 weeks, and the process is easy.

5.3. Conclusion

Within a frame of the current thesis work the following conclusion can be derived:

(1) From quantitative study- GLOBE theory (based on society practices score) conclude that

India scores high in Human Orientation, Institutional Collectivism, In-Group Collectivism

and Power Distance. However, Germany scores high in remaining dimensions-

Assertiveness, Future Orientation, Gender Egalitarianism and Uncertainty Avoidance. It

proves that the Indian organisation has greater centralisation and enforced hierarchy.

Organisation emphasis the responsibility of group membership and group decision making.

The strong collectivism countries value conflict avoidance, and social harmony can

manifest a destructive culture if senior leaders engage or are perceived to engage in corrupt

behaviour, leading to dysfunction. Furthermore, GLOBE study (based on society values

score) affirms that India scores high in Assertiveness; Future Orientation; In-Group

Collectivism; Power Distance; and Uncertainty Avoidance; while, Germany scores high in

Human Orientation; Institutional Collectivism; and Gender Egalitarianism. Hence proves

that the hypothesis 1 and 2 are coreect.

(2) According to Ethnography (qualitative research), 69 to 81weeks requires for solar PV

project development in India; whereas 40 to 45 weeks requires for the same activity in

Germany. Here, company formation time frame is included. Moreover, 17 responses (out

of 39) are aware of the recent corruption case in the Indian solar PV industry. In contrast,

few responses, 6 out of 39, are aware of the latest corruption case in the German solar PV

industry. These supports hypothesis 1 and 2.

5.4. Directions for Future Research

The previous work can provide future research with guidance in respect of both

methodology and theory. For instance, the current work is done based on GLOBE theory, but

the future study may be extended to introduce a Hofstede model and to compare with the present

study. The scholar may also replicate the research and get replies from different countries.

Moreover, Ethnography conducted online (LinkedIn, Xing, Email), but it may be interesting to

test these hypotheses with non-online.

43

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Appendix A: Overview of the Survey


46


47


48


49

50

Appendix B: List of Interviewees

Sr.

No

Name of the

Company

Contact

Person

Email id Occupation

1 Pipara & Co.LLP Mr. Naman

Pipara

[email protected] Lawyer/Consultant/Adviser

2 Indo German

Chamber of

Commerce

Ms. Mira

Dalvi


3 Dezan Shira &

Associates

Mr. Rohit

Kapur


4 Khaitan & Co Mr. Ganesh

Prasad


5 SKP Group Mr. Manik

Abbott


6 Germany Trade and

Invest

Mr.

Alexander

Walter


7 firma.de

Firmaenbaukasten

AG

Tak Ho Wai [email protected] Lawyer/Consultant/Adviser

8 LegalStrasse Mr. Daniel

Streiff


9 von Bartels GmbH Mr.

Christopher

Hölscher

[email protected] Managing Director







