Question

1. Explain the role and relative importance of relationship-building in different countries. 2. What are some of the differences in risk tolerance around the world? (Give examples of specific countries, companies, or people.) What is the role of risk propensity in the decision-making process?

Answer 1

Explain the role and relative importance of relationship-building in different countries

The role of relationship building is very important because everyone depends on each other as a result of limited resources. Being from a third world country, people have a tendency to cling to each other. On the other hand, I have a more individualistic approach. My values often conflict with the ideals of my family and ethnic group. Relationship building is important but the problem appears when there is a dependency from those who expect help, whether it's financiallyor with tangible items, from the party who is better off. I notice an attitude among poor and lesser developed people. In general, they feel as though those with more resources owe them something. I believe it is a good principle to share but I don't support dependent behavior. We should make the best with what we have and strive to be greater as mentioned by Deresky on

What are some of the differences in risk tolerance around the world? (Give examples of specific countries, companies, or people.) What is the role of risk propensity in the decision-making process?

Risk tolerance varies across different cultures, and affects the way people make decisions across the world. For example, it has been shown through research that Belgians, Germans and Austrians have a low tolerance for risk (Deresky, 2014). People from Japan and Netherlands have higher tolerance for risk while people from America have the highest tolerance for risk. This means that people from Belgium Germany and Austria make decisions that are mostly likely to be less risky while people from America make riskier decisions.

Risk propensity plays a significant role in decision making process because it determines whether the decision to be made should be risky or not. Risk propensity varies in different among individuals due to personality differences and cultural differences. Risk propensity determines the tendency of a decision maker to take or avoid risks. Since decision making usually occurs under risky conditions and outcomes are usually probabilistic, risk propensity helps in determining the eventual outcomes of decisions. Risk propensity also predicts the decisions made in experimental scenarios. This is important in planning and forecasting decisions. Risk propensity is also used in product development decisions so that people with high risk tolerance will choose the development of risky products while those with higher low tolerance choose products with low risks.