Anton Reithinger worked for one of the most infamous global multinationals of his time, the chemical conglomerate I. G. Farben. Dispatched on a fact-finding mission to India in 1938, he reported on the strategic opportunity that the rise of Indian nationalism seemed to offer his German employer. While he had his doubts about Indian “political speculators,” he was not going to let this opportunity pass him by. Working for a company that was active all over the world, Reithinger knew that successful international business meant not just competing on economic terms but also capitalizing strategically on rising nationalist sentiments.

As Reithinger’s report suggests, globalization and nationalism have long been intertwined forces shaping how multinational enterprises compete internationally. It is thus puzzling to note how they capture our attention in very different ways. While the forces of globalization have been described as crucial drivers of firm internationalization,Footnote ² nationalism is usually perceived as globalization’s antagonist – a fundamental threat to cross-border integration. At best, nationalist sentiments might be “mitigated” by multinationals, but nationalism’s essence is assumed to be isolationist and fundamentally opposed to deepening global business exchange. Such a view fails to account for the kind of multinational strategy making reflected in Reithinger’s report, in which rising nationalism creates opportunities to forge new and deeper business relationships. What we are left with is a historiography moving at two speeds. Whereas our understanding of globalization and business has become increasingly more sophisticated over the past thirty years, research on the many ways in which nationalism plays into global business strategy remains comparatively underdeveloped.

One reason for this neglect may be that economic nationalism once appeared as an antiquated and declining phenomenon. Optimistic visions of a globally integrated world characterized by multiethnic, multicultural cosmopolitanism often treated nations and nationalism as reactionary and backward looking.Footnote ³ However, recent years should leave little doubt that we have in no way passed the age of nationalism and that it will continue to influence our societies, economies, and firms – maybe in new forms but certainly not with less penetrating power.

In fact, the very dynamics of globalization seem to have reinforced nationalist sentiments around the globe. At the exact same time that the costs of bridging geographical distances shrunk and new technologies projected sounds and images around the world, policy regimes increasingly turned against foreigners and foreign firms. Business historian Geoffrey Jones argues that “as technology facilitated human beings to travel and observe one another as never before, so they disliked what they saw. Nationalism and racism proliferated.”Footnote ⁴ In response, the need and ambition to manage governments and their national politics rose up corporate agendas.Footnote ⁵

A closer and more historically sensitive look may also consider nationalism’s outward-facing and relational aspects in addition to its inward-focused protectionism. Indeed, nationalism inherently entails an international and comparative dimension as nations form their identities and define their interests in relation to other nations that are perceived as allies or adversaries. As historian Manu Goswami argues, nationhood is forged through “an institutional intermediation between the global (the world economy and the interstate system) and the local (the internal lines of difference) in both a structural and discursive sense.”Footnote ⁶ “Indeed,” also argues economic historian Christof Dejung, “the immense importance of the nation can often be better understood, or at least grasped in a different manner, from a global or transnational perspective.”Footnote ⁷ Thus, rather than pulling in opposite directions, globalization and nationalism have historically evolved in tandem, mutually reinforcing one another. By necessity, multinational enterprises acted not just as drivers of globalization but also as sophisticated operators in a world of nations, with more diverse and more refined approaches to nationalism than the literature in business history or strategy has so far acknowledged.

Navigating Nationalism in Global Enterprise analyzes the historical role of nationalism in global business to shed light on how the forces of nationalism and globalization might be balanced in multinational strategy in our own time. It explores the evolving ways in which multinational enterprises engaged with nationalism, based on the salient example of German business in India. I opted for India because there are few countries in the world where the impact of economic nationalism was as obvious and as long-lasting as in India. The slowly unfolding process of Indian decolonization provides a context in which it is possible to study the emergence and consequences of businesses’ engagement with nationalism over many decades. It allows us to examine how managers and firms learned about economic nationalism and how strategies emerged to respond to and then capitalize on nationalistic thinking. For long stretches of the twentieth century, India was essentially a free-trade zone and thus an arena for competition between multinationals. It thus provides an especially good context in which to consider how multinationals competed and strategized in a world increasingly comprised of nations and nationalism.

In looking at international business in India from the perspective of German firms, the book diverges from existing scholarship and its primary interest in Indo-British relations. While the great interest in British business in India is understandable, shifting the focus to German firms brings to the fore the strategic opportunities created by nationalism and the shifting relationships between nations during the long history of decolonization. In this sense, it reflects the kind of political strategizing by several “catch-up countries” (including Germany but also the US, Japan, Switzerland, and others) which industrialized later than Great Britain and competed with it on world markets.Footnote ⁸ It also reframes some of the questions of Indo-British business history by rethinking India’s role not just in the economy of the British Empire but also in its relationship to the broader world, which held the potential for extra imperial alliances that have thus far garnered less scholarly attention.

Finally, the resilience of German multinationals in India also serves as a compelling puzzle that cannot be solved without careful consideration of the strategic role of nationalism. From a conventional viewpoint, German companies should not have been competitive in the Indian market. The institutional environment offered them no advantages, and in fact many disadvantages compared with their British competitors. They had no political backing in the British Empire, spoke a different language, were unfamiliar with local customs and legal practices, and struggled to obtain necessary information – in short, they were more exposed than their British rivals to what international business scholars refer to as the “liabilities of foreignness.”Footnote ⁹ To understand their operations against these odds, it is necessary to look beyond the conventional strategic wisdom to consider the role of nationalism.

As this book will show, the forging of affinities between Germans and Indians against the perceived international domination of the British world fundamentally shaped business relationships, laying the foundations for the success of German multinationals in what in theory should have been an inhospitable foreign market. While German trade with India never surpassed that of their British rivals in the national aggregate, it showed impressive growth beginning in the last third of the nineteenth century and several German firms were fiercely competitive with their British counterparts in their sectors. Yet they strategized differently, not least based on their perception of Indian nationalism and its role in global business. Historically exploring this process on the firm level allows us to untangle the strategies businesspeople employed to compete with their rivals in a world of nations.

Business Strategy in a World of Nations

For companies that expanded globally in the wake of the Industrial Revolution, a world of nations provided the terrain on which their identities as global players were formed. Nationalism first became strategically relevant for global business on a larger scale in the mid-nineteenth century; a moment that global historians have marked as transformational. “The crucial watershed inaugurating twentieth-century world history consisted in a series of parallel, simultaneous crises in the organization of power, production, and culture – that is, in the autonomous reproduction – of virtually every region of the world.”Footnote ¹⁰ With remarkable synchronicity, nationhood became a rallying cry in a number of late developing industrializers (Germany, the US, Japan) as well as many colonial and semicolonial countries (India, China, Thailand). While each of these movements was idiosyncratic and shaped by local developments, their similar structure and competitive logic was also part of a larger transformation of the world. The very notion of companies and products having a nationality emerged not inside one country, where this question would not arise, but in the highly integrated world economy of the late nineteenth century, in which competitive nation-states exchanged goods, services, and ideas.Footnote ¹¹

The bourgeoning literature on the history of nationalism has not failed to capture this transformation and its many consequences.Footnote ¹² Nationalism scholars date the seeds of modern nationalism to the last quarter of the eighteenth century, focusing on the American and French Revolution, and then trace their spread to other parts of Europe and Latin America. The 1848 revolutions in Europe, leading most prominently to the unification of Germany and Italy, were the culmination of this first wave of nationalism. This was the time when many European nations were formed and developed their national identity. According to historian Eric Hobsbawm, these European nations were driven by their size, economic strength, and alleged cultural dominance to engage in a form of nationalism that was inherently expansionist. Henceforth, nationalism went together with the successes of Western industrialization and the relentless search for resources, territory, and markets abroad.Footnote ¹³

While nationalism during this first wave can be interpreted as a phenomenon of the modernizing West, it increasingly started to leave its mark on other countries of the world as well. Since the last third of the nineteenth century, the highly industrialized nation-states of Europe encountered a second wave of nationalism, which took place in Eastern and Northern Europe as well as in several places outside of Europe, including India.Footnote ¹⁴ Political scientist Benedict Anderson notes that “a ‘model’ of ‘the’ independent national state was available for pirating,” which established an ideal type of nationalist imaginings.Footnote ¹⁵ While this standard became enacted locally and in very different ways, it entailed several universal elements. It was imagined with a unified national interest (or in Anderson’s words “deep, horizontal comradeship”), a delimited national space, and the ideal of national self-determination.Footnote ¹⁶ These elements connected and mobilized different nationalizing states within a global grid of nations. The resulting nationalist movements, while deeply local, were also the outcome of a global historical process of imitation and competition between nations.Footnote ¹⁷ National identities were fundamentally forged in relation to other nations.

This relational nature of nation formation was clearly on display in the cultural, intellectual, and political entanglements between Germany and India. As Kris Manjapra elegantly argues about the Indo-German intellectual relations of the time, the two countries found themselves at a particular juncture in history, when their interests happened to align. Together they rebelled against what they perceived as an Anglocentric world order, reflected in the colonizing of Indian subjects, the “dictated peace” of the Versailles Treaty after World War I, and Britain’s push for hegemony in Europe and in the Empire. “The entanglement of Germans and Indians thus produced the strongest inflection of intellectual revolt against the nineteenth-century global status quo – a status quo constellated by discourses about Enlightenment, Europe, and Empire, and organized around the star of British world power.”Footnote ¹⁸

Incorporating the Nation in Multinational Strategy

While the cultural and political history of nationalism as interconnected movements is well understood, nationalism’s role in firm-level strategy remains rather obscure to date. Too often, “economic nationalism” is used synonymously with protectionism, despite widespread critiques of this simplification.Footnote ¹⁹ The unfortunate practice of limiting nationalism to a small set of isolationist policies is exacerbated by the ideological baggage that the term carries, focusing primarily on fascist and conservative versions of economic nationalism.Footnote ²⁰ Another common misconception about economic nationalism is that it describes economic activities that are subordinated to the interest of the state.Footnote ²¹ This view triggered a second important critique, namely that scholarship so far has described an economic nationalism “without nationalism” and needed ways for “bringing the nation back in.”Footnote ²² Nationalism is neither confined to official state policy nor adequately described as protectionism.

These critiques do not just occupy political scientists but also pose important questions for firm-level strategy, which have remained largely unanswered. Sociologist Sam Pryke points out that in economic nationalism research “there is very little coverage of the role of private capital. The assumption is that states continue to be the key economic actors and states promulgate national identity.”Footnote ²³ While economic policy is no doubt a worthy object of study, it is focused on state-to-state interactions and the intentions of political leaders but rarely incorporates firm-level analysis. Shifting attention from the state to business reveals a different set of insights and complements the macro-level discussion of economic policy with insights on firm-level strategic decisions and processes.

In recent years, strategy research has advanced a dynamic understanding of capabilities, described as a unique bundle of assets, routines, and processes that firms develop over time and that make them competitive.Footnote ²⁴ This perspective embraces earlier explanations for the existence of multinational firms, such as John Dunning’s “eclectic paradigm,” which argues that multinationals exploit their ownership advantages, benefit from location advantages in host economies, and make a choice for internalization, that is controlling activities through hierarchy rather than having them take place on markets.Footnote ²⁵ Yet, while internalization focuses primarily on explaining entry modes of multinationals, the idea of ownership advantages and its extension in the capabilities framework foreground competitive advantages and include processes of learning, entrepreneurship, and market creation. Such a heightened attention to firm capabilities, rather than transaction costs and relative factor prices, may open the door to how multinational firms learned to deal with and even shape nationalism in competing abroad.

Yet these firm capabilities are understood as internal to business organizations and are rarely connected to national identities, national histories, or the aspirations of nations. While the field of nonmarket strategy is devoted to understanding the relationship of multinationals to their specific home and host countries, it sees nations primarily as territories and less as aspirational communities.Footnote ²⁶ One exception is the recent scholarship on the role of legitimacy in strategy formation, which opened up the field to questions of long-term objectives;Footnote ²⁷ however, the role of nationalism in generating, challenging, or undermining business legitimacy remains largely unaccounted for. In sum, multinational strategy research typically depicts nations as territories or governments, but largely ignores the identities, aspirations, and histories that hold them together as “imagined communities.”Footnote ²⁸ The relative neglect of these ideational aspects of nationalism and nationhood limits our ability to grasp its role in business strategy.

The intertwined evolution of business and nationalism plays a bigger role in the business history literature, where scholars have extensively dealt with business responding to political and nationalist challenges at different points in time. Geoffrey Jones, Mira Wilkins, Robert Fitzgerald, and Takafumi Kurosawa and colleagues have established periodizations of global business, which are carefully embedded in the political economy, reflecting how economic nationalism waxes and wanes. Some of the turning points these historians have identified include the emergence of a sharp definition of the “nationality of the company” in World War I, the first efforts at systematic political risk management by global business, the Great Depression of 1929 as the end of laissez-faire economic systems and the rise of state-led protectionism, and a second wave of globalization since the 1970s that took the integration of global markets much deeper.Footnote ²⁹ Their research leaves no doubt that nationalism fundamentally shaped global business but also shows how its concrete relevance for business was heavily context-dependent, thus requiring more sophisticated approaches for exploring it.

Moreover, these accounts of long-run patterns of multinational strategizing see nationalism primarily as a political risk and highlight how companies cope with it as a threat. The portfolio of management strategies for political risks is one of the core areas of business history research.Footnote ³⁰ A few clusters of research emerged around expressions of political risk at specific moments in time, namely political risks triggered by the Nazi regime in Germany,Footnote ³¹ those related to decolonization,Footnote ³² war as a source of political risks,Footnote ³³ risks associated with consumer nationalism,Footnote ³⁴ and the risk of (excessive or discriminatory) taxation.Footnote ³⁵ This literature excels at shedding light on multinationals’ diverse and creative strategies to mitigate the challenges of nationalism, for example by actively localizing, by cloaking origins of people and capital, or by establishing decentralized organizational structures which provided greater flexibility in moments of crisis.Footnote ³⁶

Engaging in a dialogue with strategy, historians have also shown how companies not just established but continuously maintained legitimacy in changing political environments.Footnote ³⁷ Because of a process of “obsolescing political legitimacy” in times of change, which Marcelo Bucheli and Erica Salvaj define as “the gradual loss of legitimacy before the local society, resulting from the identification of this firm with a previous social and/or political regime,” multinationals ought to continuously invest in their legitimacy.Footnote ³⁸ Yet research has also shown that this investment often paid off. Long-term presence in a market benefited multinationals’ political risk management and competitive positioning.Footnote ³⁹

Despite these significant achievements, the literature still leaves us with a truncated conceptualization of nationalism in business strategy. Most contributions focus on the risks of nationalism and ignore both business opportunities and the effects that nationalism can have on the competitive dynamics between multinationals.Footnote ⁴⁰ Moreover, both business historians, such as Mira Wilkins and Stephanie Decker, and international business scholars, such as Pankaj Ghemawat and Charles Stevens, have stressed that not the host country in isolation but the bilateral relationship between host and home country is decisive for the strategy and success of multinationals abroad.Footnote ⁴¹ However, studies rarely explore this relationship in depth or compare how multinationals from different home countries strategize differently. The impact of historical or aspirational relationships between nations (beyond the direct home–host country link) and in groups of nations, such as colonial nations or catch-up countries, has seldom figured at all.

Yet, if nationalistic goals mobilize and connect different nations, then scholarship must engage more fully with national aspirations and the alliances or conflicts they foster.Footnote ⁴² To understand competitive dynamics based on economic nationalism – between local and foreign companies but also between multinationals from different home countries – it is necessary to study the history and dynamics of such economic and political relationships. In fact, nationalist aspirations may help us better understand rivalries and alliances as well as conflicting and complementary interests between nation-states, which remain hidden in accounts that focus exclusively on material exchanges. To grapple with these relational and historical aspects of nationalism, it is insightful to revisit the thoughts of nineteenth-century political economist Friedrich List (1789–1846) who advanced a view of the world economy as composed of nations.

Productive Powers and Aspirational Communities

Friedrich List was one of the pioneers of a truly nationalist study of the economy.Footnote ⁴³ He made the nation and nationality the distinguishing feature of his school of thought and argued that a nation is much more than the aggregation of individuals. In sharp contrast to economic liberals, such as his nemesis Adam Smith, he claimed that liberals in their “boundless [bodenlosen] cosmopolitanism” only see individuals as producers and consumers, but not as citizens and members of nations. His choice of the term “bodenlos,” literally translated as “void of grounding” or “territory-less,” was not coincidental and accused British liberals of failing to account for the value of a national territory and a national economy, which List introduced as inseparable. Polemically, List quarreled that Smith’s book The Wealth of Nations in fact ignores the nation and instead assumes a society “not separated by nations, but united by a general law and by an equal culture of mind.”Footnote ⁴⁴ List conceded that in this “more perfect but entirely imaginary state of the human race, free trade would be beneficial to mankind”Footnote ⁴⁵; but he considered it far from being a realistic premise for studying economic and business relations. To complete and correct the scholarship advanced by Smith and his disciples, List set out to explore the principles of national economy, which to him arose historically with the idea of nations.

While nations are the result of political agreement, they are also fundamentally economic units because they are crucial to the development of what List called “productive powers.” The productive powers of a nation are defined not only by their access to resources and technologies, but also by “capital of the mind,” a category in which List included “skills, training, industry, enterprise, armies, naval power and government.”Footnote ⁴⁶ The cultivation of the capital of the mind is crucial for nations because it performs a higher-level coordinating role essential for the productivity of other resources and gives substantive meaning to the idea of national community. Writing up against Ricardo and Smith and their idea that expanding trade resulted in benefits for all parties, List stressed the inequalities in the development of productive powers. A nation, he argued, “may well sacrifice much ‘exchange value’ for the moment, if its new workshops produce expensive goods of poor quality. But it will greatly increase its productive powers of the future.”Footnote ⁴⁷

Countries with strong national identities, therefore, evaluate trading relationships not simply based on their short-term economic benefits and costs, but also based on notions of long-term national wellbeing. Nations learn “to sacrifice the advantages of the present moment to the hopes of a distant future.”Footnote ⁴⁸ A nation-state that is interested in expanding its productive powers goes through a process of reevaluating time. To develop new and higher-ranked productive powers in the future requires sacrifice in the present. In this sense, List’s concept of the nation was essentially that of an aspirational economic community, fundamentally geared toward the development of national capabilities. However, List was also a pragmatist and knew that the long-term interests of a nation were sometimes at odds with others. He thus emphasized not only the national community, but also the “other” – those who do not belong or may even oppose the project of the nation.

As a historical scholar, List understood nations and their productive powers as evolutionary in that he saw nations as developing as they gained more advanced capabilities. This is the reason for his idea of protecting infant industry from free market forces, which made him popular with nationalist activists in many developing nations, including India. List himself did not intend this use of his work. Writing in the early- to mid-nineteenth century, he was shaped by the historical experience of imperialism and made a case for emulating the strength and structure of the British imperial economy, not abandoning it.Footnote ⁴⁹ Instead, he was fearful that Britain could become so powerful that rival Western nations would inevitably be reduced to dependent territories. “It would not require many centuries before people in this English world would think and speak of the Germans and French in the same tone as we speak at present of the Asiatic nations.”Footnote ⁵⁰ But to List this was a dystopia that could be avoided by developing productive powers.

Yet the very fact that List mobilized colonial rhetoric to make his case for resisting the powerful British economy allowed Indian nationalists to appropriate him for their struggle against colonialism. Among them were the first visionaries of an Indian national economy in the late nineteenth century, such as Mahadev Govind Ranade (1842–1901) and Gopal Krishna Gokhale (1866–1915), as well as the next generation of nationalists such as Benoy Kumar Sarkar (1887–1949) and Radhakamal Mukherjee (1889–1968).Footnote ⁵¹ Engaging with List, Ranade argued that it was his writings that clarified that the interest of the nation was not necessarily identical with the interest of the individual. National wellbeing, to Ranade, was “the full and many-sided development of all productive powers. The Nation’s Economic education is of far more importance than the present gain of its individual members, as represented by the quantity of wealth measured by its value in exchange.”Footnote ⁵² Similarly, Benoy Kumar Sarkar summarized List’s teachings in the words: “Wealth is according to him not so important as wealth-making power.”Footnote ⁵³ Based on this argument, Sarkar saw in List’s work “the Bible of a people seeking a rapid transformation of the country from the agricultural to the industrial stage.”Footnote ⁵⁴ Ranade, Sarkar, and other Indian nationalists used List to develop their own arguments for a national Indian economy, characterized by a bounded economic space and a strong state that could orchestrate the development of productive powers to achieve industrial prowess.Footnote ⁵⁵

List’s view of the nation, which so inspired Indian nationalists, has a number of implications for studying economic nationalism even today. First, it forces us to explore business strategies and business practices that involve not only calculations of short-term interests based on material gains to trade and investment, but also incorporate the long-term political and social aspirations of a nation. Business historians are uniquely placed to do this because they can study nationalist business strategy at one moment in time together with its long-term consequences at another. Second, it means broadening the analysis from government and state policy, which is the domain of political scientist, to a much larger and more diverse set of actors and actions that are best explored in empirically rich, historical analysis. Third, it highlights the importance of understanding a nation’s history and its aspirations to explore strategic business decisions over time. This means paying attention to the development of the capital of the mind as well as understanding the most significant “other,” the selected object of comparison, that is sometimes implicitly, sometimes explicitly inherent in an economic nationalist agenda.

Exploring the impact of nationalism on business strategy in a List’ian framework opens a research agenda that asks how businesspeople engage with and make sense of nations. It explores the impact of nationalist aspirations for competitive positioning, for example when nationalists seek out allies or boycott certain nations to foster a political agenda. It also poses the question how businesspeople make sense of the relationship between nations, how they perceive similarities and differences. Such a constructed cognitive landscape of nationalisms is important as a resource to identify similarities and differences between nations, stress common goals, or find points of complementarity. As this book shows through analysis of historical archival material, German businesspeople simplified the complexity of their experiences with nationalisms around the world in what I call mental maps of nationalism.

Mental Maps of Nationalism

Navigating Nationalism in Global Enterprise explores German business in India over the century spanning the 1880s to the 1980s. By showing how these firms engaged with and perceived Indian nationalism over time, I trace the learning processes in the Indian market and unearth the relevance and evolution of mental maps of nationalism. The concept of mental maps was used by geographers as early as the 1960s to distinguish so-called objective maps from maps focused on people’s perceptions of the world around them. Increasingly, though, there was a recognition that all maps are perceptual to some extent. Still, geographers stressed the difference between maps that emphasize physical features and those that focus more on connotations and relationships between elements.Footnote ⁵⁶

These relational maps have usually little in common with the colorful renderings of topography that we associate with historical maps and globes. People experience the world long before they know how to depict it. I follow Henrikson’s definition of mental maps as “an ordered but continually adapting structure of the mind … by reference to which a person acquires, codes, stores, recalls, reorganizes, and applies, in thought or action, information about his or her large-scale geographical environment.”Footnote ⁵⁷ Rather than being framed on the wall, the mental maps of nationalism I trace in this book become visible as underlying assumptions in speech and action by business professionals, as they set out to explore the strategic landscape that nationalism created. They illustrate and foreground the List’ian insight that national imaginings are both relational and historical. Yet, they only become perceptible in the long view because they are often implicit, become taken for granted, and change only gradually over time. Therefore, it is only in the long run that we can detect changes in these mental maps and explore how they shape business strategy.

No discussion of mental maps in a colonial context can possibly ignore Edward Said’s pathbreaking work Orientalism. In it, Said engages with the idea of “imaginative geographies” as a perception of space created by discourse. He argues that Western and American imaginations of “the Orient” created an enduring link between knowledge and geography. Said introduces Orientalism as a powerful collection of knowledge – constructed in the West – with a specific history and an established imagery and vocabulary. In admirable clarity, Said shows how Orientalism became an “accepted grid for filtering through the Orient into Western consciousness,” while simultaneously confirming the Westerners’ position of power and not least providing a justification for their colonial rule.Footnote ⁵⁸

Yet, Said is also very clear that Orientalism is essentially a British and French phenomenon because “the French and the British – less so the Germans, Russians, Spanish, Portuguese, Italians, and Swiss – have had a long tradition of what I shall be calling Orientalism, a way of coming to terms with the Orient.” Said explains this with the fact that Orientalism “derives from a particular closeness experienced between Britain and France and the Orient.”Footnote ⁵⁹ This may at first seem counter-intuitive because Germany has unquestionably a long tradition of Oriental scholarship. Yet, according to Said, it lacked a “sustained national interest” and was therefore too removed from colonial practice to develop Orientalism of the same quality as the French and the British. “There was nothing in Germany to correspond to the Anglo-French presence in India.”Footnote ⁶⁰ While scholars critically debate this claim, it may be worthwhile thinking about the differences in the imaginative geographies of Britain/France and Germany. There is today little doubt that Germany’s colonial aspirations and practices are important to understanding German history and Germany’s role in the world economy. They ought to be incorporated more systematically in the historiography.Footnote ⁶¹

This book explores how German business engaged with economic nationalism and which role this played for business strategy in India. Like the patterns and processes described by Said, I explore how German businesspeople connected their limited and filtered knowledge about nations – constructed in the West – to the world around them, which during the twentieth century increasingly became perceived as a world of nations. I consciously opt for the term mental map of nationalism, rather than Said’s imaginative geographies, to highlight the different goal of this exploration. The literature on Said’s Orientalism has focused very specifically on defining “the other” and understanding how the knowledge system of Orientalism established and confirmed political power. It departs from the binary distinction of “us” versus “them.” Yet, the world of nations that List described created – in addition to this binary – a space for dynamically evolving alliances. Mental maps of nationalism foreground these changing perceptions of the relationship between different nations. Some relationships remained firmly embedded in an East–West binary and can best be explained in this way. But others were casted in new ways to highlight joint aspirations or complementary interests. “The other” may still be perceived as strange and there was a power differential shaping the relationship. Yet, there were also degrees of strangeness, with some nations being more likely allies or more likely enemies than others. Practical ambitions could bring out the advantage of alliances even with what many perceived as strange bedfellows.

Rather than limiting the view to a binary “us” versus “them,” I use the example of German business in India to explore the relationship between two nations that do not think of themselves as “us” by any means but for a variety of reasons experimented with temporary alignments and entanglement.Footnote ⁶² Mental maps of nationalism, I posit, were able to translate the mass of information about nations and nationalisms into a manageable guiding vision and provided a basic spatial patterning of the world. In global business, they evolved into powerful abstractions, which helped strategically cluster and categorize different nations within the world economy.

Yet, at the same time, mental maps of nationalism are also shortcuts with major flaws and undeniably ideological. They did not replicate the world of nations; they distilled and packaged the various experiences with nations into actionable principles. Depending on their purpose, mental maps varied in content, scale, and usability. And, as the longer historical view taken in this book will show, they changed over time as the world of nations evolved. While geographers have mostly used the concept of mental map to explore how people orient themselves within their environment and perceive the world; historians engage with them to show how context developments change mental maps.Footnote ⁶³ For the topic of nationalism in business strategy, understanding how mental maps evolved exposes in particular the fragilities of nationalist strategy. As Lewis and Wigen argue, “[i]t is no coincidence that sea changes in ideology are generally accompanied by a questioning of metageographical categories.”Footnote ⁶⁴ Over time, as actors perceived the world of nations in new ways, older mental maps were being amended, replaced, or given a new spin.

The Argument in Brief

The historical narrative in this book unfolds chronologically, starting in the 1880s, when German nationalism first became a noticeable force in business, and ending in the 1980s, when the previous mental map populated by colonial and noncolonial nations eventually became replaced in the context of the Cold War and new understandings of development policy. The book builds on the existing scholarship on Indo-German relations in the context of global and transnational history. Historians have admirably explored the political and intellectual links between India and Germany.Footnote ⁶⁵ However, commercial and business relations have received comparatively little attention so far.Footnote ⁶⁶ Instead, the book takes inspiration from a set of otherwise diverse studies converging in the critique that Indian historiography has fixated too narrowly on the Indo-British relationship. Rather than focusing on Indo-British trade alone, this body of work reflects the interconnectedness of the Indian economy with other parts of the world. Historian Christof Dejung and others stress the need to “look beyond the formal empire.”Footnote ⁶⁷ Without doubting the importance of the imperial framework, these scholars criticize the exclusive focus on it, which isolates the British–Indian relationship from the larger global economy and either ignores other competitors or subsumes them into overgeneralized concepts, such as the category “Western” or “European.”

Instead, comparing different imperial and extraimperial experiences, their encounters and rivalries, allows for a more nuanced multipolar analysis of the Indian business context. The perspective of German competitors in India not only adds an untold story to the historiography but actually reframes it. Rather than understanding India as a secluded territory under British control, it is reinterpreted as a heavily contested market on a world stage – with frequent struggles over commercial control and various parallel sensemaking offers, heavily influenced by national imaginings. This makes it a particularly interesting context for exploring the impact of nationalism on business strategy.

Another factor explaining the choice for a German perspective on doing business in India is the availability of historical sources. To explore strategy formation on the firm-level, detailed and accessible archival collections are needed, which offer insights into general global strategy as well as the specific approach to India. Throughout the book, I take an empirical deep dive into the global business history of the electrical giant Siemens and the chemical juggernaut Bayer (which was part of the I. G. Farben conglomerate from 1925 to 1945) because they were two pioneers in the India business and the two largest German employers in India in the interwar period (see Table 5.2, page 142, for details). Both have outstanding historical archives which allow a detailed analysis of their emergent strategy. This strategy is not always focused on foreign direct investment, or FDI, per se. As previous scholarship has shown, Germany was a major source of FDI pre-World War I but after losing its foreign assets during the war focused more on exports and substitutes for FDI, such as business collaborations, cartels, and other tailored contractual arrangement for engaging in foreign markets, which I will detail in the book. A major continuity in German engagement abroad is its focus on exploiting ownership advantages in specific sectors, including the chemical and electrical industry, which I study in the two cases.Footnote ⁶⁸

In addition to these large multinationals, I explore two sectors of the bazaar business – cutlery and gramophones/records – which were heavily influenced by German exporters prior to World War I but then diminish in relevance over time. Business records on them come from the City Archive of Solingen, the regional center of the German cutlery industry, and from the archive of the British EMI, which acquired many of its competitors in the music industry. I complement the records of these companies with trade journals and government reports on these two industries. To counter the survival bias of business archives and multiply the perspectives on historical processes, I triangulate the material pertaining directly to these firms with archival sources from the Indian, German, British, and American Governments, from the archives of German (Krupp, Daimler-Benz) and British (Unilever, EMI) competitors, and from journalists and other observers of the Indian market (for details on the archival collections see the Bibliography.)Footnote ⁶⁹

The first part of the book, Nationalism and Competitive Dynamics, explores the Anglo-German competition in India from the 1880s to the 1920s. The first two chapters show the market entry and operations of German firms in the shadow of Britain’s dominance and frequently also by British mediation. Chapter 1 focuses on the multinationals Siemens and Bayer that built their India business on existing links to Great Britain, while Chapter 2 compares their experience with the small- and mid-sized German manufacturers active in the bazaar trade. The dominant understanding of nations in this period was derived from colonialisms and rooted in the claim that nations were an exclusive domain of Western, “civilized” people. This provided a justification of colonialism as a “civilizing mission” with an educational agenda,Footnote ⁷⁰ which also permeated Western views of foreign business operations in India. The dominant mental map of nationalism perceived nations through a colonial lens, clustering them by their history of political dependence and their role within existing colonial empires.

While this mental map persisted into the interwar period, and some may argue even beyond, German businesspeople in the decade leading up to World War I encountered first signs of a gradual introduction of a competing mental map. The new view of the world of nations highlighted historical and aspirational relationships between India and other nations in East and West. This mental map first emerged briefly in the bazaar business during a period of anticolonial unrest, which German firms experienced as an unexpected but welcome opportunity, as Chapter 2 shows. The idea of an alliance based on animosity to Great Britain became reinforced during World War I, which brought with it a much sharper definition of corporate nationality – distinguishing clearly between German and British endeavors – but also provided a space for experimentations with Indo-German alliances (Chapter 3). Both of these explorations sharpened the outlines of the new mental map and fed into an alignment of interests between India and Germany in the post-war period. After World War I, German business struggled to recuperate its foreign markets and its national pride, while Indian nationalists were looking for new options in their battle for independence, because the sacrifices they had made during the war failed to bring the expected political rewards. At this crucial historical juncture, explained in Chapter 4, German firms started to explore the merits of a still cautious but increasingly more explicit nationalist strategy in collaboration with their Indian partners. Their mental map of nationalism became reconfigured around the doctrine of national self-determination, which mobilized nations around the world.Footnote ⁷¹ It channeled German businesspeople’s attention to new opportunities derived from anti-colonial and nationalist thought, inaugurating an era of explorative jockeying between nations based on their histories (for example, as joint victims of British dominance after World War I and in the context of colonialism) and their aspirations (for political independence and economic strengths). It turned nationalism from an accidental input for strategy into an important lever of business competition.

The second part of the book, Emergent Strategy in a World of Nations, shows the evolving nature of this nationalist strategy, and the continuous adjustments to it that were triggered by severe political turmoil. Because the perceptions of the relationship between nations are dynamic in nature, strategy must be too. Both global events and Indian nationalist developments reshaped the way the Indo-German business relationship fit – or was made to fit – into nationalist objectives. Chapters 5 and 6 show German business operations in India during the Great Depression and World War II, foregrounding the need for proactive maintenance of a brittle political positioning while simultaneously engaging forward-looking “imagined futures.”Footnote ⁷² Importantly, many of the activities of German businesspeople developed as an “emergent strategy” as intentions conflicted with a changing reality, and businesspeople were pressured to engage in continuous creative adjustments.Footnote ⁷³ In an inconsistent and unpredictable environment, strategic planning was an ambition that oftentimes did not translate into reality.

By the time of World War II, leading managers of German multinationals synthesized their patterns of past decision-making into a deliberate strategy rooted in a clear mental map of nationalism, which stressed the similarities between what was then labeled “countries with strong nationalist movements,” as Chapter 6 explores. Strategies and capabilities developed in India were henceforth applied to other people striving for independence, and insights from nations with similar aspirations shaped the India strategy. German businesspeople learned from their concrete experiences with doing business in India about the needs and sensibilities of nations striving for independence; a thought that survived World War II and Indian Independence in 1947.

Chapters 7 and 8 explore the application of these insights in the post-war and post-Independence period. Chapter 7 shows that business relations between India and West Germany in the immediate post-war period were characterized by remarkable continuities, rather than the historic change one may expect from the transition to Independence.Footnote ⁷⁴ Continuities characterized the business practices and social relationships as well as the perceptions of the relationship between nations. It was not until the 1960s that the sprawling ideology of the Cold War eventually led to a fundamental reconfiguration of the world of nations. Politicians and businesspeople took inspiration from newly available global abstractions (Rostow’s stage model, national income accounts) to make sense of a changing world. Grappling with the relationship between nations became less a matter of interpreting nationalist ideas derived from politics, history, and ideology and instead more an exercise of mastering seemingly objective development economics.

Ironically though, as Chapter 8 shows, while top-level strategy turned towards abstract and universal models of the world, strategy on the ground in India was shaped not by repeatable patterns or ideologies of development but by highly specific one-off negotiations with Indian officials, heavily shaped by nationalistic thinking. India’s policy of continuously radicalizing enforcement of its licensing regime both disciplined and restricted multinationals. More importantly though, it led to covert haggling between individual firms and Indian officials, raising the unpredictability of doing business in India.

As the specific Cold War interpretation of developing countries found acceptance, politicians and businesspeople alike interpreted development as the statistically measurable economic strength of a nation relative to others. However, they did so at the cost of other characteristics, which had previously been meaningful, such as a nation’s history, its concrete relationship to other nations, or qualitative national aspirations. For better or worse, the past of what were now called developing economies was reinterpreted as a stage on the route to prosperity. German companies that managed to make a claim for assisting India on this path bargained for advantages. Yet, the concrete bilateral relationship between India and Germany, which had shaped German business strategy in India for decades, became sidelined. Even the German rhetoric of allegedly being an outsider of colonialism, which German businesspeople in India had celebrated and actively fueled since the turn of the twentieth century, no longer fit the new mental map of nationalism, and eventually dissipated.

Over the course of the entire century, from the 1880s to the 1980s, German multinationals engaged in various and diverse negotiations with Indian officials and stakeholders, as strategy research would predict. However, strategy scholars often claim that governments and multinational companies bargain with each other based on rational and realist self-interest. Even if we accept the rationality focus of this literature, the historical analysis of German multinationals in India shows that the terms on which they bargained were constructed and reconstructed based on underlying assumptions about the relationship between nations, in short: based on mental maps of nationalism. These mental maps govern the epistemology and ideology that determines “what counts” in a negotiation. What the history of German multinationals in India reveals is that business strategy is never void of politics and nationalism; but it leans on underlying mental maps that determine the lens by which we see it.