Question

How Does National Culture Affect Managers ‘Decision Making? Give some examples?

Answer 1

Today, International business/organisations are working in a globalised environment, where understanding of the cultural background of employees is important as it helps in avoiding organisational confrontation and issues. So the values and beliefs held by the manager coming from different national background influence their decision making.

Both the individual managers’ culture from a certain national background and the company/organisation culture affect the decision making. So, the factors affecting the mangers decision making can be compared through the various elements of culture. This includes beliefs, values, norms, language, roles and social collectives.

Indian are generally driven by religious beliefs and the shared values which they believe in. The key values that is prevalent in the Indian society are respecting the seniors/elders and a family hierarchy. So the decision making made by an Indian are done in a way so that they don’t blame others or get into situations which are shameful for themselves / family / friends.

Since rituals also play a role in Indian companies, managers sometime select specific auspicious dates for starting a new project or start the construction of a new building or opening of a store on a specific date and time which is lucky.

Chinese community are normally very pragmatic and cautious, so they consider financial security and prosperity as more valued. So they in general invest in properties and are careful with their savings. Likewise, Indian Invest in properties in India, by using the principles of Vatsu Shastra.

Certain culture allows people to interact freely and exchange ideas which are prevalent in democratic countries but in some countries where there is an Authoritarian regime like the Arab countries which might not allow free exchange of ideas.

People coming from societies/ countries like China, India etc. where they value savings, slow and steady growth, approach decision making on a long term view rather than a short term view. US and UK has a short term time orientation whereas East Asian countries has a long term orientation.

In the case of power distance, Austria has a low power distance when compared to a high power distance in Mexico.

In terms of uncertainty avoidance, managers from certain countries like Denmark, Sweden, Hong Kong etc. are more flexible and willing to take conscious risks and able to tolerate conflicts.

So looking at different aspects of the culture where the managers are coming from, affects the way the decisions are made.