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Decision making in different countries

When you’re working in a startup, you’re likely used to working with colleagues from all over the world. Different cultural backgrounds in a team can be very beneficial for a startup. An environment like this stimulates creativity and improves the quality of problem-solving as everyone has a different point of view. Yet, working in an intercultural team can also be challenging. Especially when it comes to decision making, which is a fundamental element of the organization.

There are different approaches to decision making, based on people’s communication preferences. Often times these preferences can be explained by our cultural backgrounds. This post explains the underlying dimensions that together make up a culture.

 

How culture affects the decision making process

In countries that have a hierarchical culture, the decision is made by the person who is highest in hierarchy. When negotiating with someone from a hierarchical culture, it’s important your organization matches the negotiator’s hierarchy levels if you want to be taken seriously. This means, for example, that the CEO should talk to the CEO of the other company, from the hierarchical culture, instead of an associate. Hierarchical countries are mainly found in Asia, Africa, South America, and some Southern European countries. Non-hierarchical countries are mainly located in Europe, Oceania, and North America.    

When a country is individualistic, it is likely that arguments and decisions are expressed explicitly, so it’s clear to everyone what the final decision is. On the other hand, in collectivistic cultures the decision is less outspoken, as communication is more implicit in general. This means people from a collectivistic background can make a decision, while individualists may have missed the whole process since it wasn’t stated as clearly or expressly as they are used to.

A decision can be taken in a collectivistic culture, while people from an individualistic culture may have missed the whole process. Often, collectivistic cultures are hierarchical in nature. This makes the decision-making process doubly challenging for Westerners.

Adding another twist to the process

Decisions can be made in several ways. One way is to include everyone in the decision-making process, while the other way is to make a decision based on majority vote. For example, in the Netherlands and in Scandinavia, decisions are frequently based on everybody’s contribution and interaction—and they can be adjusted afterwards, based on growing insight.

In many other cultures, decisions are based on a list of arguments, often by majority vote—that is, if it’s a non-hierarchical culture. These decisions are executed as agreed. Adjusting them, based on growing insights, has to be confirmed formally.

When you’d like to make decisions with a business that comes from a hierarchical, collectivistic culture, it is important to first establish a relationship. For example in China, business may flow out of friendship, whereas in the West, friendship may flow out of business. Once the relationship and trust is established, any negotiation is likely to succeed. Business doesn’t have to be discussed in much detail since both parties agree to work together to make it a success. In such cases, a handshake is often more important than a signature. On the contrary, in non-hierarchical, individualistic cultures, an agreement has to be spelled out explicitly and in detail before business will be sealed.

After working in the Netherlands for four months, I had to prepare a decision-making meeting. I did that by gathering all the pros and cons of the possible options and presenting these to the stakeholders. In Germany, for example, the stakeholders would then make a decision based on the arguments and the strategic direction; however, in the Netherlands, I had to consult any other person that could have an opinion on the subject, and take their input into account towards the decision. Only when this was done did the stakeholders feel comfortable enough to finalize a decision—in the fourth decision-making meeting.

Coming from Germany, I found the decision-making process in the Netherlands very frustrating and time-consuming. But the benefit is that it ensures that every angle has been covered.  

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Brigitte Opel has been trainer for cross-cultural management since 2013. She has lived and worked in Germany, the Netherlands, Japan, USA, Australia and Russia and visited many more. After her studies at Thunderbird School of International Management and a career as international project manager at IBM, she decided to use her experience in combination with the Hofstede model on National Cultures to consult multinational teams to improve their communication and results.


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