Cross-cultural Differences In Decision Making

Decision-making is a mental activity which is an integral part of planning and action taking in a variety of contexts and at a vast range of levels, including, but not limited to, budget planning, education planning, policy making, and climbing the career ladder. People all over the world engage in these activities. The underlying cross-cultural differences in decision-making'' can be a great contributing factor to efficiency in cross-cultural communications, negotiations, and conflict resolution.

Culture in decision-making

Over-generalization in research on decision-making

A considerable amount of literature in cognitive science has been devoted to the investigation of the nature of human decision-making. However, a large portion of it discusses the results obtained from a cultural subject pool, predominantly from a pool of American undergraduate students. Notwithstanding this limitation, the results are usually implicitly or explicitly generalized, which gives rise to the home-field disadvantage: when a particular cultural group is taken as a starting point, it becomes much harder for the researches to notice, or to 'mark', the peculiarities existing within the group. As a result, what is characteristic only of the group under study is taken for granted and ascribed to the general population. This tendency is further aggravated when the researcher belongs to the cultural group that they study. In this case, the researcher and the subjects are exposed to the same physical, social, and situational contexts on the daily basis. Much of every-day functioning is automatic, in other words it is driven by the current features of the environment we are in, that are processed without any conscious awareness. This leads to the building of implicit attitude, values, and beliefs, which are hard to spot. They become apparent when individuals or decision-making models from different cultural backgrounds as different culture backgrounds tend to form different mind processing into decision making. For example, westerners tend to form affective processing while easterners tend to form analytical processing. Moreover, Affective or feeling based decision- makings tend to be faster and done spontaneously whereas cognitive or reason-based decision making tends to be deliberate

Origin of cross-cultural differences

More scientists have recently become involved in conducting studies on decision-making across cultures. The results show that there are in fact cross-cultural differences in behavior in general and in decision-making strategies in particular and thus impel researches to explain their origin. There are a number of most popular and accepted explanations:

Co-Evolution of Genes with Culture Hypothesis. The planet Earth is rich in a variety of geographical zones, all of them differing from one another in climate and living conditions they allow for. Across generations, individuals populating a certain area learn to adopt and pass on to the next generations the cultural traits that promote survival and flourishing within the environment of their locality. As a result, the genes supporting the survival-relevant traits are passed on, while others fade away. In the long run, it becomes the case that it is for the surviving genes to set conditions for the cultural practices to be used and even to create the environment to which the members adapt. The process that changes the frequency of application of cultural traits is influenced by the same forces that determine the remolding of the combination of genetic variants. These forces are natural selection, mutation, drift, and migration. There is however one more force – 'a decision-making force' – in cultural evolution. Since cultural traits are transmitted in the context of interpersonal communication, the cultural variants its participants adopt are influenced by the behavioral choices the 'communicator' and the 'learner' make.

Cultural Heritage Hypothesis. Cultural groups all over the world have developed distinct unique worldviews reflected in their philosophies. The two most often compared are the Eastern philosophy which stems from the Confucian thought and the Western philosophy which is grounded in the Aristotelian thought. While the former sees a part/whole dichotomy relations between the items, with special focus on the relations between the elements of nature rather than on the elements themselves, the latter pays more attention to a one/many dichotomy, where each element is seen as more or less autonomous. These differences are deeply rooted in the collective unconscious and might be accountable for the diversity of individuals' everyday behavior.

Social Orientation Hypothesis. All currently existing cultures can be compared with one another against the Collectivism/Individualism scale. The societies that are usually described as individualistic have the independent social orientation. The differentiating characteristics of those groups are autonomy, self-expression, and the interpretation of happiness as a socially disengaging emotion. The collectivists' societies have interdependent social orientation. Their members endorse harmony, relatedness, and connection, don't view themselves as bounded or separated from others, and experience happiness as a sense of closeness to others. Typically interdependent societies are found among Eastern nations, and independent societies are found among Western nations. Subgroups within a nation can also be compared against Independency/Interdependency scale. For example, the working class in the U.S. tends to be more interdependent compared with the middle class. Numerous factors, such as geographical mobility, industrialization, and political systems, affect the social orientation.

Decision-making models

Depending on the stance the researcher assumes on the role the culture plays in decision-making, one of the following models is used to think of and predict decision-making behavioral patterns in a given culture:

* The Universal Model. The scientists who use this model usually assume there is only a little difference in how individuals from different cultures make their decisions. The results obtained from one group are attributed to people in general.
* The Dispositional Model. The adherents of the dispositional view acknowledge that there are cross-cultural differences in decision-making and support the cause of cross-cultural research. They assume that whatever differences found in the studies indicate the omnipresence of cultural inclinations in the minds of individuals and are bound to emerge under all circumstances and in all situational contexts.
* The Dynamic Model. The adherents of this view recognize cross-cultural differences as well. They view cultural knowledge not as a monolithic, continuously present construct, but as a set of discrete knowledge that becomes operative as a function of the situation. They also facilitate building and testing nuanced models that capture the dynamics through which culture affects decision makers.

The effect of culture on decision making

Cross cultural variances developed as a result of differences in values, beliefs, and philosophies

Occidental philosophies are known for the extensive use of analytical thinking – a methodical approach to solving complex problems by breaking them into their constituent parts, and identifying the cause and effect patterns of the constituent parts, while Oriental philosophies are well known for their emphasis on holism – the idea that the properties of a given system cannot be determined or explained by its components' parts alone, but the system as a whole determines how the parts behave. This discrepancy brings about further differences in values and beliefs that can be practically displayed in how different cultures manage their public institutions. For example, culturally determined attitudes towards age, gender roles, and the end result are well reflected in the way these cultures build and run their health-care systems. Oriental cultures hold that age is a proxy to experience and hence to wisdom, that the individual should mind their duty without focusing on the final results of the activity, and that women are best suited to play certain roles. On the other hand, Occidental cultures hold that age is not correlated to wisdom, the individual should focus on the end and drive to achieve it, and women are equal to men in all respects. These differences become obvious when health-care systems of an Oriental and Occidental cultures are compared. In Indian health-care setting customers are much less likely to sue their physicians, – who is usually a representative of an older generation – even when having enough evidence of malpractice, due to the fact that their age is treated as a proxy to experience and knowledge. Hence, the decision to sue a physician for deficiencies doesn't occur as a choice or option to most Indian patients, who are representatives of the Oriental culture. In the Indian setting physicians are, however, normally accountable for the care given, even though rarely blamed for unfavorable results, which can be explained by the fact they hold in high regard the means of an action, and not the end. Another distinguishing feature of Indian hospitals is that women are mostly employed as receptionists, billing clerks, and admission assistants. This trend in hiring policy can be explained against gender and role expectation dimension, and by the inculcated in Oriental cultures belief that each element has a predefined place in the system.

Individuals who come from the Oriental cultures with philosophies promoting holistic thinking are found to be better than their Occidental counterparts at noticing the changes in backgrounds, whereas individuals from Occidental cultures who use analytic reasoning tend to be better at recognizing changes in focal objects The differences in perception might be the result of different standpoints in the corresponding philosophies. It can be taken into consideration when explaining profound divergences in how willing the Westerners and the Easterners are to compromise when they make consumer choices. Just as much as the low-context Westerners are more likely to notice the changes in the salient objects, they are more likely to believe in a single right answer and pursue even the slightest indication that one option is better than all others, whereas the high-context Easterners begin the decision-making process already favoring the compromise option.

The individuals from high- and low-context cultures also differ in their communication styles. The former prefer the less direct style, and thereby they are less explicit in stating their feelings, desires, and intentions when communicating verbally. The latter, on the contrary, are less likely to camouflage their message and conceal their intentions. The culturally normative communication style also enhances people's responsiveness to the transmitted message and influences the perception of the communicator. It influences hiring decisions. HR agents in low-context cultures are more likely to hire direct, assertive, and somewhat aggressive candidates, whereas the reverse pattern is observed in high-context cultures.

Cross-cultural variances developed as a result of differences in social orientation

Individuals from different cultures tend to have different views of the self, which affects individuals' cognition, goals in social interactions, and consequently influences their behavior and goals in decision making. Individuals from individualist's cultures tend to have independent self-construal and thus experience happiness as a socially disengaging emotion (e.g., pride), and those from collectivist's cultures tend to have interdependent self-construal and experience happiness as a socially engaging emotion (e.g., peace and harmony). The former are more likely to make decisions to fulfill personal accomplishment, whereas the latter are more likely to make decisions that promote social connectedness. This is reflected in their differences in the teamwork styles. A group composed of members with low independent self-construal prefer the cooperative strategy to the competitive one, whereas a group composed of members with high independent self construal preferred the competitive strategy to the cooperative one.

Individuals from cultures with interdependent social orientation believe that public good overrides individual benefit, whereas individuals from cultures with independent social orientation believe that every individual should strive to achieve their best. Thereby, when engaging in the decision-making process the former are more likely to take into consideration the injunctive norms, guarding stability within the society, while the former are more likely to follow their introjected goals. For instance, Indians are found to accommodate to authority figures and significant others and respond to others' expectations when choosing what clothes to wear for a party, and what advanced training courses to take. In each corresponding case, Americans were more likely to act in accordance with their own beliefs of what will be beneficial to them and didn't demonstrate the 'deference syndrome'. In Western cultures (Independent), strength and integrity are demonstrated by being true to one's own opinions and tastes and not being swayed by social pressure to conform. As opposed to seeing individual freedom as a prerequisite to an authentic life, interdependent cultures evaluate freedom in terms of its costs and benefits to the group.
1411.

In addition to that, individualist societies with dominant with independent self-construal which is typical for western society are more likely to rely on feelings and consequently more impulsive in their decision making compared to people with an interdependent self-construal which more typical for eastern society.

There is a difference in the decision making patterns between cultures with independent and interdependent social orientations in the situations when risk-taking is involved, namely the members of cultural groups with high independency show more risk-aversive behavior. This pattern is observed only when risk is material in its nature, and not observed when risk is of the social nature. The cushion hypothesis attempts to explain this difference. It suggests that members of a collectivist society are more prone to risk-taking in the financial domain, because they know they will more likely receive help from their friends or extended family when they "fall", as collectivism endorses social relatedness and interdependence. Social networks in such societies can serve as potent material-risk insurance and correspond to the notion "social capital". Decision-making in the corporate world of group-oriented societies, however, can be much different. Using the Japanese culture as an example, people in large corporations exhibit a high degree of risk aversion, for fear that a decision with negative consequences will reflect badly on the entire corporation. This is one of the reasons for consensus decision making. Another reason is to keep a surface level harmony by involving as many people as possible.

Risk-aversion tendency among members of individualist societies are observed even in the contexts that involve financial risks only indirectly, for instance in decision-making contexts that involve estimating the risk of revealing private information to gain access to mobile banking.