It is crucial for international managers to understand the influence of culture on decision-making styles and processes. Culture affects decision making both through the broader context of the nation's institutional culture, which produces collective patterns of decision making, and through culturally based value systems that affect each individual decision maker's perception or interpretation of a situation.
The extent to which decision making is influenced by culture varies among countries. For example, Hitt, Tyler, and Park have found a more culturally homogenizing influence on the Korean executives' cognitive models than on those of U.S. executives, whose individualistic tendencies lead to different decision patterns. The ways that culture influences an executive's decisions can be studied by looking at the variables involved in each stage of the rational decision-making process. These stages are (1. defining the problem, (2. gathering and analyzing relevant data, (3. considering alternative solutions, (4. deciding on the best solution, and (5. implementing the decision.
One of the major cultural variables affecting decision making is whether a country assumes an objective approach or a subjective approach. Whereas the Western approach is based on rationality (managers interpret a situation and consider alternative solutions based on objective information), this approach is not common throughout the world. Latin Americans, among others, are more subjective, basing decisions on emotions.
Another cultural variable that greatly influences the decision-making process is the risk tolerance of those making the decision. Research shows that people from Belgium, Germany, and Austria have a considerably lower tolerance for risk than people from Japan or the Netherlands, whereas American managers have the highest tolerance for risk.
One importInt variable in the decision-making process is the manager's perception of the locus of control over outcomes-whether that locus is internal or external. Some managers feel that they can plan on certain outcomes because they are in control of events that will direct the future in the desired way. In contrast, other managers believe that such decisions are of no value because they have little control over the future, which lies in the hands of outside forces, such as fate, god, or nature. American managers believe strongly in self-determination and perceive problem situations as something they can control and that they should change. However, managers in many other countries, Indonesia and Malaysia among them, are resigned to problem situations and do not feel that they can change them. Obviously, these different value systems will result in a great difference in the stages of consideration of alternative actions and choice of solution, often because certain situations may or may not be viewed as problems in the first place.
Another variable that affects the consideration of alternative solutions is how managers feel about staying with familiar solutions or trying new ones. Many managers, particularly those in Europe, value decisions based on past experiences and tend to emphasize quality. Americans, on the other hand, are more future oriented and look toward new ideas to get them there.
The Influence of Culture on Decision Making : Economic article from Global Management Catagory The Influence of Culture on Decision Making
The Influence of Culture on Decision Making Economic article from Economic Global Management.Free learning from data about The Influence of Culture on Decision Making Economic Global Management Business Management,online business management,business management classes,online business management degrees