Cultural Differences in Decision Making

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

The rational model makes no acknowledgment of cultural differences. But Asians, for instance, don’t necessarily make decisions the same way that Americans do. Therefore, we need to recognize that the cultural background of the decision maker can have significant influence on his or her selection of problems, depth of analysis, the importance placed on logic or whether organizational decisions should be made autocratically by an individual manager or collectively in groups.

Cultures, for example, differ in terms of time orientation, the importance of rationality, their belief in the ability of people to solve problems, and their preference for collective decision making. Differences in time orientation help us understand why managers in Egypt will make decisions at a much slower and more deliberate pace than their American counterparts. Although rationality is valued in North America, that is not true everywhere in the world. A North American manager might make an important decision intuitively, but he or she knows that it is important to appear to proceed in a rational fashion. This is because rationality is highly valued in the West. In countries such as Iran, where rationality is not defied, efforts to appear rational are not necessary.

According to http://books.google.ru “Some cultures emphasize solving problems, while others focus on accepting situations as they are. The United States falls in to the former category; Thailand and Indonesia are examples of cultures that fall into the latter category. Because problem-solving managers believe they can and should change situations to their benefit, America managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such”.

 

 

Decision making difference between Mongolian and Australian culture

The culture of Australia and Mongolia is different and cannot be ignored; therefore, the way of making decision is different. The sets of values, beliefs and rules help by Mongolians is essentially different from Australians, therefore, it is important to understand what are the cultural norms and values that are prevalent in Mongolian society in order to avoid miscommunication and enable a prosperous business future between Australian and Mongolia business firms. Mongolians are proud, self-confident, and independent in disposition therefore they do not appreciate groupthink. The condescending attitude or belief that one's ethnic group or culture is more superior to another is against the belief of Mongolians when business is done whereby they prefer friendliness, relationship building and respect for each other's cultures when carrying out business deals.

Australians prefer a consultative style of decision making that includes the opinion of every person and encourages debate and ideas compared to an authoritarian style. It would not be uncommon nor is it disrespectful to see a low-level manager challenging the ideas of a top-level manager if the ideas of one helps the organization and is done in a professional manner. Pragmatism is therefore seen as a key attribute in the Australian style of management whereby getting the job done quickly is more important than the niceties of protocol and hierarchy. In Mongolian society however, the hierarchical system is employed and this is evident in the organizational structure and processes whereby a top-down approach to management is preferred. Therefore, it is important to identify the decision maker when negotiations for business projects are being done as decisions made by lower-level managers in Australia may often be made by top executives in Mongolian.

 

 

 

Decision making style in Japan and America

Decision making by Japanese managers is much more group-oriented than in the United States. The Japanese value conformity and cooperation. So before Japanese CEOs make an important decision, they collect a large amount of information, which is then used in consensus-forming group decisions.Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process, like western countries. Group orientation and teamwork are a way of life for the Japanese. According to http://www.worldbusinessculture.com/Japanese-Management-Style.html “The higher a Japanese manager rises within an organization, the more important it is for him to appear humble and not ambitious. The key task for a Japanese manager is to provide an environment in which the whole group can flourish”.  Punctuality is extremely important. However due to the consensus nature of decision making, it often takes a long time to reach decisions. Meetings usually start with long, non-business conversation. Since the Japanese culture has a huge emphasis on harmony and no conflict, it takes a long time to come to decisions. No one individual will speak their opinion because they fear this might create some kind of confrontation. Therefore, patience is essential. Also, not many foreigners speak good Japanese. Therefore many things that English speaking businessmen say in cross national meetings is simply not understood.

In US business, every company is an entity and exists independently of its employees. The CEO of the company holds the most power. Also, accountability within the company tends to be vertical and easily identifiable. The American management style is described as individualistic with managers held accountable for the decisions made within their areas of responsibility. Important decisions are made in an open forum but ultimately the boss is responsible for the consequences of the decision. Therefore, American managers are more likely to disregard the opinions of subordinates than consider their opinions. Americans are considered to be more aggressive and confrontational in meetings compared to the Japanese. Open and direct debating of all relevant issues is encouraged even if it is at the expense of personal relationships. Americans feel a lot more time pressured and therefore do not have time for verbosity, vagueness, diplomacy and lack of focus. Meetings usually include formal presentations by one or more people and these are considered opportunities to impress.

 

According to http://www.idjrb.com/articlepdf/malaysiamanagers.pdf “The study discovered that United States managers were less rational in their managerial decision making than Malaysian managers. These findings can be quite significant to global business managers intending to shift more of their activities to Asia in the near future”. Multinational corporations would have to provide more data for their Malaysian managers in order to make them more comfortable with their decision making tasks as they tend to rely more on data based decision-making techniques.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusion

People with different cultural backgrounds have different expectations, norms and values, which in turn have the potential to influence their judgments and decisions as well as their subsequent behavior. European Americans, for example, are generally influenced by the positive consequences of a decision, whereas Asians appear to be more influenced by the negative consequences that may occur due to a decision or line of action. Asians are therefore more "prevention" focused, manifesting a greater tendency to compromise, seek moderation or to postpone decisions if it is possible.

The research identified several factors that influence how cultural norms are applied – these include the language spoken as well as the perception of the criteria to be applied in a given situation. It was also found that while cultural norms are more likely to play a role if the decision makers are asked to think carefully about the decisions they are called upon to make, both groups become more "prevention" focused when their cultural identity is impressed upon them.

 

 

 

 

 

 

 

 

 

 

 

References

1. http://www.helium.com/items/657179-the-importance-of-understanding-cultural-differences-in-business
2. http://www.worldbusinessculture.com/
3. http://www.rljae.org/article.asp?issn=20138393;year=2011;volume=1;issue=2;spage=89;epage=120;aulast=Choi;type=0