Decision making differs across cultures so it is important to understand what drives the process
Is it profit? Time? Relationships? Not only this, but it’s essential to know who makes the decisions, and what role others play. In autocratic cultures like those of Latin America, France or the Arab world, decisions tend to come from the top, while in countries with flatter management styles, like the Netherlands, Australia or Israel, consensus is important. On the other hand, some of the most apparently egalitarian cultures can have a surprisingly top-down style when it comes to making a decision. In other situations, the corporate culture may override any local cultural traits. There will always be variations on cultural stereotypes, but here are a few general examples of decision making style around the world.
- The USA is a culture of very flat management structures – until it comes to decision making. The culture is egalitarian in that individuals are free to challenge authority, but often surprisingly top-down in that the priority is usually speed and to get things moving along, a manager may make a snap decision. Once this has been made, it won’t be questioned. This obsession with speed can be the downfall of Americans doing business with other cultures, where decision making can take a long time and trying to rush the other side puts you in a position of weakness.
- German companies tend to have steeper hierarchies. In general, the boss in the workplace is deferred to and there is a degree of formality. Yet German managers usually include their co-workers and subordinates in the decision making process, where the input of technical experts is valued. Structure, process and productivity are all important drivers in German decision making. Because German culture is individualistic, managers are prepared to take responsibility for the choices they make.
- Scandinavian cultures are more likely to base decision making on social factors; what will benefit the group, as opposed to the individual. In Sweden, decisions are made by consensus and as such, may take a long time. Once a decision is made, it won’t change, generally because so much discussion has gone into making it in the first place. By the time a conclusion is reached, everybody is on board.
- Japan is not dissimilar in the end goal, although culturally, it differs greatly from Sweden. What the two have in common, though, is the desire to maintain harmony and the wellbeing of the group, which matters more than individual choice. The traditional way of reaching consensus in Japan is via ‘ringi-sho’, in which an individual presents a ringi, a written document stating their case, and circulates it to everybody involved in the process. Each person stamps the document with their hanko, or personal seal. Those who disagree will either not participate or place their hanko upside down, but either way, this lengthy process avoids open conflict at a meeting, which would cause people to lose face. In any one organisation, several ringi may be in circulation at once.
- China, like Japan, is a collectivist culture. Confucianism teaches that individuals should maintain their place in the hierarchy to avoid chaos. Decision making is slow and deliberate; rushing things is the sign of a fool. Chinese management culture tends to be risk-averse, with a desire to get things right, hence the slow process. Decisions are influenced by the social structure and the concept of the good of the group. Age is associated with wisdom and experience and decisions are therefore usually made by the most senior members of a company, who tend to hold the power.
- Arab cultures are also, generally speaking, risk averse and hierarchical. Decisions are made from the top, often following discussion with other stakeholders of equal seniority. Once a decision is made, is it not questioned. Honor, reputation and relationships are more important than speed or risk. Nepotism, or personal connections, play a strong role in decision making as Arabs tend to do business with friends and family, not strangers.
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