Decision Making and Culture Styles

Decision Making and Cultural styles
Decision - making a choice

from two or more
alternatives
Copyright
Copyright 2014 PearsonEducation,
2012 Pearson Education,
Inc. publishing as Prentice Hall 6-1
Inc. Publishing as Prentice Hall
Communication Differences in
High-and Low Context Cultures
Japan China Italy Germany
South Korea Saudi Arabia France Australia Canada USA
Vietnam New Zealand
High-Context Low-Context
Cultures Cultures
More and greater adjustments in messages Fewer and smaller adjustments in messages
Rank of receiver will probably affect message and medium Rank or receiver may or may not affect message or medium
Nonverbal communication cues may be very important Nonverbal communication cues not as important
Medium may be as important as message Message is more important than medium
Adapted from Exhibit 14.9: Communication Differences in High- and Low-Context Cultures
Exhibit 6-1
Decision-Making Process
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Decision-Making Styles
Linear Thinking Style - a persons tendency to use external

data/facts; the habit of processing information through rational,
logical thinking.
Nonlinear Thinking Style - a persons preference for internal
sources of information; a method of processing this information with
internal insights, feelings, and hunches.
Decision-making styles
U.S.: top-level individuals decide; implementation dependent on
affected employees
Arab/Nigerian: similar to U.S., authoritative control over rank-and-
file
Japan: group orientation, consensus-based decisions, emphasis on
social stability
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Leadership styles
U.S.: doing-oriented, reduced power distance, individual

achievement rewarded
Japan: hierarchical structure; achievements product of group
Korea and China: boss is king (autocratic, paternalistic)
Mexico: high power distance, order of inequality
Comparison of negotiation styles
U.S.: direct/confrontational, desire to win, emphasis on

short-term, max profit
Japan/China: emphasis on long-term, desire to establish
trust/build relationship
Mexico: non-confrontational, win-win
Russia: uncompromising, desire to win
Middle East: forceful/dynamic negotiator,
sincere/commitment to
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The Decision-Making Process (cont.)
Step 1: Identify a Problem

Problem - an obstacle that makes it difficult to
achieve a desired goal or purpose.
Every decision starts with a problem, a
discrepancy between an existing and a
desired condition
Example - Amanda is a sales manager
whose reps need new laptops
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Step 2: Identify Decision Criteria

Decision criteria are factors that are
important (relevant) to resolving the
problem
Example - Amanda decides that memory
and storage capabilities, display quality,
battery life, warranty, and carrying weight
are the relevant criteria in her decision.
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Step 3: Allocate Weights to the Criteria

If the relevant criteria arent equally
important, the decision maker must
weight the items in order to give them
the correct priority in the decision.
The weighted criteria for our example
are shown in Exhibit 6-2.
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Exhibit 6-2
Important Decision Criteria
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Step 4: Develop Alternatives

List viable alternatives that could resolve
the problem
Example - Amanda, identifies eight
laptops as possible choices. (See
Exhibit 6-3.)
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Exhibit 6-3
Possible Alternatives
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Step 5: Analyze Alternatives

Appraising each alternatives strengths
and weaknesses
An alternatives appraisal is based on its
ability to resolve the issues related to
the criteria and criteria weight.
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Step 6: Select an Alternative

Choosing the best alternative
The alternative with the highest total weight is
chosen.
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Exhibit 6-4
Evaluation of Alternatives
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Step 7: Implement the Alternative

Putting the chosen alternative into action
- Conveying the decision to and gaining
commitment from those who will carry out the
alternative
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Step 8: Evaluate Decision Effectiveness

The soundness of the decision is judged by its
outcomes.
How effectively was the problem resolved by
outcomes resulting from the chosen
alternatives?
If the problem was not resolved, what went
wrong?
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Decisions Managers May Make
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Decisions Managers May Make (cont.)
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Making Decisions: Rationality
Rational Decision-Making - describes choices

that are logical and consistent while maximizing
value.
Assumptions of Rationality
The decision maker would be fully objective and
logical
The problem faced would be clear and unambiguous
The decision maker would have a clear and specific
goal and know all possible alternatives and
consequences and consistently select the alternative
that maximizes achieving that goal
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Making Decisions: Bounded Rationality
Bounded Rationality - decision making thats

rational, but limited (bounded) by an individuals
ability to process information.
Satisfice - accepting solutions that are good
enough.
Escalation of commitment - an increased
commitment to a previous decision despite
evidence it may have been wrong
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Making Decisions: The Role of Intuition
Intuitive decision-
making
Making decisions on
the basis of
experience, feelings,
and accumulated
judgment.
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What Is Intuition?
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Structured Problems and Programmed
Decisions
Structured Problems - straightforward,

familiar, and easily defined problems.
Programmed decision a repetitive
decision that can be handled by a routine
approach
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Structured Problems and Programmed
Decisions (cont.)
Procedure - a series of sequential steps used to

respond to a well-structured problem
Rule - an explicit statement that tells managers
what can or cannot be done
Policy - a guideline for making decisions
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Unstructured Problems and
Nonprogrammed Decisions
Unstructured Problems - problems that
are new or unusual and for which
information is ambiguous or incomplete.
Nonprogrammed decisions - unique and
nonrecurring and involve custom made
solutions.
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Exhibit 6-7
Programmed Versus
Nonprogrammed Decisions
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Decision-Making Conditions
Certainty - a situation in which a manager can

make accurate decisions because all outcomes
are known
Risk - a situation in which the decision maker is
able to estimate the likelihood of certain
outcomes
Uncertainty - a situation in which a decision
maker has neither certainty nor reasonable
probability estimates available
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Guidelines for Making Effective Decisions:
Understand cultural differences

Create standards for good decision
making
Know when its time to call it quits
Use an effective decision making process
Build an organization that can spot the
unexpected and quickly adapt to the
changed environment
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Decision Making and Cultural styles

Decision - making a choice

South Korea Saudi Arabia France Australia Canada USA

Vietnam New Zealand

Linear Thinking Style - a persons tendency to use external

U.S.: doing-oriented, reduced power distance, individual

Comparison of negotiation styles

U.S.: direct/confrontational, desire to win, emphasis on

Step 1: Identify a Problem

Step 2: Identify Decision Criteria

Step 3: Allocate Weights to the Criteria

Step 4: Develop Alternatives

Step 5: Analyze Alternatives

Step 6: Select an Alternative

Step 7: Implement the Alternative

Step 8: Evaluate Decision Effectiveness

Rational Decision-Making - describes choices

Bounded Rationality - decision making thats

Structured Problems - straightforward,

Procedure - a series of sequential steps used to

Certainty - a situation in which a manager can

Understand cultural differences

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