ISSUES IN CROSS CULTURAL HR MANAGEMENT

I How to resolve cross-cultural misunderstandings before

they arise
With businesses becoming increasingly internationalized, and in-house and
extended teams increasingly multicultural, today’s managers are faced with a
conundrum that did not fall on their predecessors: how to communicate effectively
across cultures.
In order for businesses to remain effective and competitive, leaders need to engage
their employees rather than inform and instruct. There are challenges in doing this:
communication contexts differ across cultures. Managers who get it wrong are left
to resolve cross-cultural misunderstandings. Often, this can be damaging to the
organization’s internal and external reputation.
In the worst cases, the inability to resolve cross-cultural misunderstandings can
decimate promising businesses and mergers. Think DaimlerChrysler (a merger that
was called a ‘merger of equals’ when it was conceived, a fiasco a few years later)
or AOL and Time Warner (with the AOL-Time Warner share price down from $72
in 2000 to $15 in 2008), and you’ll realize the damage that cross-cultural
differences can cause if left unresolved.
In this post I study a five-step strategy to avoid the need to resolve cross-cultural
misunderstandings by preparing for them first.

1. Understand the communication style of different cultures

People from different cultures communicate differently.
Some, like the United States, Australia and the UK, are more direct.
Communication is precise and open, and more emotional. This is called ‘low-
context’ culture.
Others, especially Chinese, Japanese and Indian, are subtler. Meanings are often
not explicitly stated, but instead implied within information provided. This is
called ‘high-context’ culture.
Some cultures communicate calmly, basing discussion wholly on facts and acting
decisively (linear-active). Others are courteous, good listeners, and amiable
(reactive). A third type of culture is warm and emotional (multi-active).
By understanding these differences, you will be able to temper your
communication style accordingly and be more effective in cross-cultural teams.

2. Understand that there will be differences in cultural value

Every culture has different values. These may develop over time. For example, the
class-based society that was prevalent in the United Kingdom for many hundreds
of years has largely been expunged. In India, the caste system is still very much
alive despite being outlawed.
Geert Hofstede identifies five dimensions of cultural perspectives:

 Power Distance
 Individualism vs. Collectivism
 Masculinity vs. Femininity
 Uncertainty Avoidance
 Long-term vs. Short-term Orientation

As an example of the above, power distance is the dimension that describes India’s
caste culture – the acceptance of inequality between different people:

 Individualism vs. collectivism refers to the emphasis on individual or

collective success.
 Masculinity vs. femininity refers to the extent to which the culture
emphasizes masculine, work-related goals rather than humanist goals.
 Uncertainty avoidance refers to the need for rules and direction rather than
ambiguity.
 Long-term orientation vs. short-term orientation refers to the level of goal-
setting in a timeframe context.

By understanding how different cultures ‘operate’ within these five dimensions,

you will be able to bridge the gap that exists between your cultural dimension and
that of your employees or customers.

3. Develop effective communication style

When you understand these cultural differences, you can develop your
communication style to avoid the need to resolve cross-cultural misunderstandings.
This ability interlinks seamlessly with high-level emotional intelligence. You’ll
become more tolerant of ambiguity, be more flexible toward different cultures, and
less certain that your culture is right in all circumstances and situations.
Developing communication skills such as openness and agreeability will help to
build respect for you as a leader and engender effective communication. Request
and expect feedback to help develop your cross-cultural communication
capabilities. By appreciating cultural differences you’ll avoid cross-cultural
misunderstandings, which can ruin promising relationships.

4. Avoid becoming frustrated

It is natural to expect others to behave in line with our own cultural norms. Should
this not be the case, instinct is to reject it. Managers and leaders should not show
such frustration toward behavior dictated by different cultural values, though this is
incredibly difficult to do.
The way to combat this is to open up to cultural differences. Instead of acting with
prejudice, seek to learn more by asking about the values that dictate certain
behaviors. This should help you resolve differences in a more understanding and
cooperative environment.

5. Employ appropriate motivations

Motivational techniques and incentives are often dictated by organizational culture,
and this is often highly linked to where the organization was founded or is
currently headquartered. Companies often employ a single incentive scheme, with
recognition and reward uniform across all their geographical locations. These are
often made without regard for cultural differences within teams, also.
When expanding to other geographical locations, employing a cross-cultural team,
or seeking to benefit from talent via remote employment, it is possible that your
current incentive scheme and motivational techniques lead to a reduction in
productivity and effectiveness of your employees where cultural differences exist.
It should be noted that such cultural differences can exist happily within
communities of workers. For example, while one person may be motivated by
being offered more autonomy, another may reject the freedom as they expect their
supervisor or manager to be responsible for the task being done.

Understand how people react and interact, and how you do

Natural reactions are, in large part, attributable to cultural upbringing. By
understanding this, a leader is better able to employ the right person for individual
cultural diversity and customize the approach to policies and procedures.
However, this is not enough for a leader to supercharge his or her culturally diverse
team. It is also necessary to understand how you react and behave, and to what
extent these behaviors are dictated by your cultural background. By having such
understanding of self, you will be able to be more empathetic toward others in a
multicultural team by adapting your leadership style to integrate different cultures

II Managing a Cross-Cultural Team? Here Are

10 Strategies To Do It Effectively!

A team is the synergy of distinct mindsets and skill sets that collaborate to
work for a common purpose. It is anyway difficult to manage a team with
disparate personalities . What makes it even more challenging is managing a
cross-cultural team that transcends different cultures and geographies.
Ever since globalisation has taken over the storm, organisations have begun to
interact with clients, suppliers and colleagues around the world. Globalisation
at the workplace means dealing with people across several work ethics,
languages, traditions and cultures in a way that doesn’t create friction or
tension amidst a team.
What are the Cross-Cultural Teams?
Cross-cultural teams are global teams that include people who come from
different cultures and unique experiences. Companies fail to consider these
fundamental differences within a team, leading to conflicts and frustration
that can be easily thwarted once you gain a quick understanding of the
individuals in a team.
These differences can stem from communication styles and individual
frame of references. For example, members in some countries are willing to
work more than the stipulated hours of work, even working remotely from
home. On the other hand, workers in different countries may not consider
working beyond the said hours except in emergency situations, and their mobile
devices are switched off when they leave the office.
Another major difference of style in a cross-cultural team is the communicating
pattern of each team member . While some team members vociferously voice
their unfiltered opinions and ideas, those from hierarchical cultures tend to
think a lot before raising their voice. So, how can you make sure that in such a
team all the ideas of the members are heard equally and manage the team
effectively?
The Challenges of Managing a Cross-Cultural Team
Though teams are now an accepted norm in planning, strategising and operating
throughout several organisations, team management is still in an evolving
phase. On top of it, when you unleash an additional element of diversity, it
results in various challenges.
Here are the top barriers in managing a cross-cultural team:
1. Communication and Expression
The nuances of communicating in a way such that everybody is on the same
page are a key concern in cross-cultural teams. Everybody might be speaking
the same language and be well-versed in English, but certain forms of slang
or colloquialism can often be misinterpreted.
Teamwork is a collective onus and all members have to understand the
direction of the discussions clearly. Communication problems are often found
in virtual teams where there is no face to face interaction.
For instance, it could be an international virtual team or virtual teams
within the same country or city that have to collaborate and finish a
task. In either case, both teams have to make their email and telephonic
conversations as clear as possible to mitigate any misunderstanding.
They also have to develop a working style of responding promptly to
queries, for if this is not happening, it can get really confusing. Care has to
be taken with a cross-cultural mix of people with regards to the words used.
Even mildly sarcastic comments or jokes can be taken seriously by a team
member and result in a conflict.
For instance, your German counterparts may not appreciate your attempts at
small talk, as they usually prefer to get down to business immediately. Also,
making a Hitler joke might land you in serious trouble!
2. Information Gaps
Everybody should be on the same wavelength to stay on top of data and process
flows. There should be no manual effort to reconcile information from different
sources. Each and every team member needs to have access to the right
resources at the needed time to collaborate and complete their tasks.
This especially becomes a challenge with virtual cross-cultural teams. Having a
common software with access to a shared database and enabling the sharing of
files, online chats, scheduling and jointly tracking projects becomes very
important. Effective means to share resources and access resources in a timely
manner is a challenge.
3. Work Style
Every team member has a unique work style that is predominantly dictated by
their culture. Some work cultures value individual contribution and foster
individual opinions. Some cultures are more paternalistic, with the leaders
deciding on a course of action and employees following it to the T.
All fingers are not the same. This also applies to employees who are individuals
with distinct personalities. With unique styles, individualistic team members
tend to come out as aggressive while the not-so individualistic ones merge into
the team and may seem to contribute less. Despite the differences in the work
style, it is vital to filter and get the best out of every team member’s work style.
4. Influences
There can be chances that a section or group of the team has similar cultural
identity or homogeneity. They may attempt to dominate the process and try
to influence the entire team to swing their way. As a result, it can create
unnecessary tensions and a frustrating environment for other team members.
Team and group dynamics can be a major concern in a cross-cultural team. This
can lead to unnecessary group politics and conflicts within a team.

5. Motivation Factors
Normally, companies have a single-threaded motivation and rewards system
that is largely determined by the norms and values of the company. It does not
account for the distinct motivational factors of a cross-cultural team.

The motivators for employees can range from tangible benefits of

increments, bonus, incentives, career progression and intangible benefits
that include recognition, job satisfaction, encouragement, etc.

It is important to recognise what motivates each individual to excel in their role

so that you can drive them aptly towards performance. In the absence of a
proper catalyst, the team members may lack enthusiasm and be less engaged at
work.

III How to Manage a Cross-Cultural Team?

A prime concern in managing a cross-cultural team is to find a unified thread to
tie across all the distinct personalities. A one size fits all approach is not an
effective solution. Since there are different beliefs and styles of
communication at play, multicultural teams are prone to friction.
The good news is that there are simple ways to minimize this friction and
manage a cross-cultural team successfully.
According to statistics, culturally diverse teams outperform non-diverse
teams by 35%. If you have a cross-cultural team and steer it in the right
direction, it can lead to greater efficiency. Companies are afraid to implement
diversity with a fear that introducing people who may not agree with each other
will hamper productivity.
On the contrary, having different types of people on the same team can help
others look at problems prudently while also being more innovative, creative
and inclusive about their solutions.
Here are some tips to foster cross-cultural working relationships:
1. Get to Know Each Team Member
It is essential for the team leader to take the time and get to know each team
member. Learn about their story and journey. This will help you analyse
individual skills and leverage the knowledge to help the group. You might
uncover specialised skills that can be beneficial to everyone and also
understand the personality of the member at the same time.
2. Adopt Flexibility
According to a book named the Cultural Map, scheduling and decision
making are two key workplace values that greatly vary across
cultures. Assessing these values can go a long way to understand the priorities
of your team members. For example, different cultures prioritize either
flexibility or a linear time construct to finish a task.
3. Promote Open Communication
Give every team member a chance to voice their opinions. An open
communication line is essential for greater efficiency. Otherwise, team
members feel under-appreciated and dominated by either the management
or the dominant players in the group.
When attempting to reach a consensus through virtual meetings, plan ahead and
ensure to send the agenda well in advance to actively solicit each team
member’s opinions.
4. Encourage Team Building Activities
When a mix of cultures is trying to come together in a team, organisations
should make every effort to create opportunities for casual interactions. Happy
hours, team outings, lunch and learn, birthday parties, pantry banter, etc. help
employees to bond with each other despite their differences.
Encourage team members to interact during their downtime and through social
events.

5. Listen Actively
Don’t let faulty assumptions and biases to govern your decision making. For
instance, the Mumbai team is never responsive, the Singapore members don’t
take directions well or the Chennai team wastes many hours in the morning
waiting for the Dubai office to wake up.
These types of biases can eradicate trust and prevent collaboration. Instead,
a leader should pause and attempt to understand why certain locations or
members of a team operate differently. If you overlook the local cultures,
considerations, needs that impact each team member, it can lead to
unnecessary friction.
Ask questions, listen to your team members and develop the flexibility to
manage across different cultures. Listen and enquire more to learn different
ways to motivate and mobilise groups with different thought processes.
6. Create a Structure for Success
When you have a multicultural team, you are bound to have different work
styles. This doesn’t mean everybody should go haywire and work according to
their own methodology. It is up to the leader to establish clear norms and
help the members to adhere.
Rather than imposing a style, leaders should take the necessary steps to explain
the importance of certain norms and train the members to partake in these
efforts. When establishing the norms, try to implement practices from multiple
cultures to create uniformity.

7. Address Conflict Immediately

If a conflict ensues regardless of your efforts, make sure to address it promptly
before it is too late. Understand different cultural perspectives at play and
try to resolve the conflict by taking the middle path. A leader should serve
as a cultural bridge to connect different members of the team and bring unison.
8. Create a Cross-Cultural Awareness Program
You can teach your members how to interact with others in different regions
and countries effectively. Training and awareness can include sessions on
greetings, business etiquette and dining customs. This will help to dissolve the
tension and educate members on the prevalent cultural styles of other team
members.
This will also enable you to identify and embrace cultural differences rather
than ignoring them altogether. Organisations will be able to create resilient
global teams and better relationships with clients, customers across the globe.
9. Develop a Team Identity and Clearly Define Roles and Responsibility of
Members
In a team, it’s important that all members understand the common goal. Having
a shared goal and a common purpose will give your team an identity that can
bring them together. At the same time, clearly outline the expectations of
each team member and let everyone know that their contribution matters.
Break down the common goal into actionable steps that define each member’s
role and responsibilities. This way, everyone will collaborate and work together
without stepping on each other’s territory.
10. Build Great Rapport and Trust
Building work relations and trust cannot happen overnight. Take the steps to
slowly build an environment for collaboration. Respect individual differences
and understand them to build unity in a culturally diverse team.

In his book The Five Dysfunctions of a Team, Patrick Lencioni covers the
trust-building benefits of learning about team members’ lives outside of
the workplace. His ‘Personal Histories’ exercise involves participants
talking about where they grew up, their siblings, and their childhood. You
can use such interactions to build trust.

The proliferation of cross-cultural teams might bring challenges, but it can be

handled successfully with sensitivity and respect for other cultures. What you
need to do is to institute a framework that makes it easier to understand
individual differences and leverage those differences to bring out the best
capabilities in a team.
Most of the times a clear understanding and acceptance of cultural differences
is what it takes to successfully manage a cross-cultural team.
Having a cross-cultural team is the greatest opportunity to learn different
backgrounds, innovate new solutions and procreate success. It’s time to
consider cross-cultural teams as an asset and not a liability!

IV Culture & Decision Making

Introduction

The study of culture and decision making addresses variations in how and why
people from different cultures sometimes tend to decide differently. This review is
organized around what is intended to be a comprehensive analysis of the distinct
fundamental questions that people must answer in the process of making virtually
all real-life decisions. Our emphasis was on recent developments as well as
identifying important yet neglected topics (e.g., how decision episodes get started
—or not, and why some decisions are never implemented). Early as well as current
efforts have focused mainly on East Asian and North American Caucasian
cultures, with little treatment of other populations. In such studies, individualism
and collectivism have been the dominant explanatory factors although related but
distinct concepts such as “tightness” and “looseness” have been welcome additions
to recent discussions. Throughout, the review emphasizes practical concerns, such
as the challenges of intercultural learning and collaboration.

“They were a rather unusual couple, weren’t they? I wonder how they chose each
other – their opinions and personalities are so different.”

“I have the same impression. Do you think it has anything to do with the fact that
they are from ____, where many marriages are arranged, even if no longer
officially?”

A conversation like this illustrates the topic of this review—the roles of culture in
people’s decision-making behavior. The commenting couple observes the outcome
of what, in their own culture, would seem to be a surprising marriage decision by
another couple. They speculate, perhaps naively, that arranged marriage traditions,
common in some cultures but not others, had a significant impact on how the other
couple chose each other. This scenario illustrates just one of many questions that a
specialist in culture and decision making, or even a layperson, is likely to
encounter. One purpose of this review is to describe and interpret major themes in
evolving scholarship on culture and decision making. Another is to argue for
greater research attention to key unsettled or unaddressed questions.

“Culture” can mean many things. By “culture” we refer to the myriad ways of
living exhibited by a particular group of people, ways that are transmitted from
one generation to the next and which distinguish that group from others (cf. Smith,
1997). Researchers frequently use nationality as a proxy for culture, but other
factors such as religion and social class can divide people into distinctly
identifiable “cultures” as well (Cohen, 2009). People who rely on different modes
of subsistence can give rise to distinct cultures, too (Talhelm et al., 2014, Uskul et
al., 2008), as can people who carved out their migratory path on a frontier as
opposed to settling in a pre-developed area (Kitayama, Conway, Pietromonaco,
Park, & Plaut, 2010). While we embrace this broad definition of culture, much of
existing work on culture and decision making has focused on North American and
East Asian populations to the neglect of others.
As for the term “decision,” we will refer to a commitment to a course of action that
is intended to serve the interests and values of particular people (Yates &
Potorowski, 2012). In our experience, it is rare for people’s everyday
characterizations of decisions to conflict with the definition used here, although
people of different cultures may disagree on whether a given specific event
constitutes a decision (Savani, Markus, Naidu, Kumar, & Berlia, 2010).

Because our topic is so broad, it is impossible to be exhaustive in answering every

question related to it. Instead, we cover how key phases in the decision making
process are handled in various cultures. The “cardinal issue perspective” (CIP)
describes ten challenges, or “cardinal issues,” that are addressed deliberately or
unconsciously in nearly every decision (Yates & Potorowski, 2012). Ten issues is a
lot, but the benefit of starting with the CIP is that it provides a detailed and
comprehensive anatomy of a decision.

The list begins with what happens before decision deliberations begin: Does a
decision need to be made, or not? Who will make the decision, and how will they
go about their work? Will the decider invest many or few resources into the
decision-making process? The deciding party then addresses issues that comprise
the core of the decision process: What options are available or could be created?
What important possible outcomes are associated with each option? What is the
likelihood of each outcome occurring? How good or bad would each outcome be
for the decision maker (and/or other parties)? How should one manage tradeoffs
between options? Finally, the decision maker deals with issues in the aftermath:
What do other parties think of the decision? What can the decision maker do to
assure that the decision is implemented

An advantage of using this framework for the present review is that we not only
attend to what is “out there” in the literature, but we also consider important
aspects of decision making that somehow escaped researchers’ attention. For
example, while issues related to judgment and value have been well researched
across cultures, other key issues, such as whether a decision needs to be made,
have been relatively under studied. The CIP directs attention to such gaps. Our
readers may be interested in a broad variety of questions, most of which we expect
are covered by one of the ten cardinal issues. In each issue’s discussion we focus
on describing what decision-making differences have been observed between
cultures.
In sum, we organize the bulk of this paper according to the CIP issues for clarity
and for comprehensiveness. Not every phase of the decision-making process has
received substantial attention in cross-cultural research. Therefore we highlighted
topics that have received little attention or may be fruitful for further research. To
facilitate interpretation of the findings, we have written a preface describing major
constructs that have been used to explain cultural differences. Finally, we avoided
repeating discussions of work that has already been expertly reviewed previously,
particularly work on risk and judgment (e.g., by Choi et al., 2004, Savani et al.,
2015, Weber and Hsee, 2000, Weber and Morris, 2010).

Major constructs: What makes cultures different?

Broad social and cognitive differences have been proposed as drivers of more
specific cultural differences discussed in this review. One dimension of culture that
has received substantial attention is individualism-collectivism (or, similarly,
independence-interdependence, Hofstede, 1980, Markus and Kitayama,
1991, Oyserman et al., 2002, Triandis, 2004). These dimensions are associated
with different conceptualizations of the “self.” Individualistic cultures bestow
greater autonomy on the “self”; each person is understood to be a discrete entity,
independent of others, with relatively immutable characteristics and with free
agency. Individualistic cultures tend to value personal goal pursuit as opposed to
accommodation to others’ goals. Uniqueness and self-expression are also generally
valued in such cultures. Collectivistic cultures, by contrast, view the “self” as part
of a whole. Each person is expected to work with his or her in-group toward goals,
to vary one’s personal behavior according to social context, and to generally “fit
in” and pursue group harmony. As reviewed below, these differences have been
proposed to underlie much cross-cultural variation in decision-making, such as the
decision modes people use, their preferences, negotiation styles, creativity, and
more.

A related construct that has received relatively less attention is cultural norm
strength. “Tight” cultures have many norms that are strictly enforced socially,
whereas loose cultures have fewer norms which may be violated to some degree
without penalty (Gelfand et al., 2006, Gelfand et al., 2011). While most cultural
differences have been interpreted in light of the individualism/collectivism
framework, many differences could be explained by differences in
tightness/looseness instead. The two constructs are somewhat correlated, with
collectivistic cultures being tighter than individualistic cultures. This may explain
why, in decision-making, collectivists often weigh input from others more than
individualists; they may be concerned with adhering to norms.

Cognitive style has also been a popular framework with which to study cultural
decision-making differences (Choi et al., 2004). Holistic thinking is a cognitive
style frequently associated with East Asian cultures. It is characterized by attention
to context, an emphasis on relationships between entities, belief that the world is in
constant flux, and tolerance for apparent contradiction (Nisbett et al., 2001, Peng
and Nisbett, 1999). Analytic thinking is frequently associated with Western
cultures, and it is characterized by a focus on the main object, a category (vs.
relationship-based) view of objects, belief that the world is stable and predictable,
and adherence to rules of formal logic such as non-contradiction. Cognitive style
has been theoretically linked to social orientation, such that individualists are
relatively analytic, and collectivists are relatively holistic (Varnum, Grossmann,
Kitayama, & Nisbett, 2010). Cognitive style has been used to explain various
aspects of decision-making, such as what type of information people attend to and
how people think about the future.

It is worth noting that while the above frameworks are often invoked as plausible
explanations of cultural differences, many studies do not empirically test such links
across a broad range of cultures. (We return to similar issues in “Future
Directions.”) It is also worth noting that while simple cross-cultural comparisons
enlightened by these frameworks are abundant, culture has increasingly been
understood as a non-fixed, dynamic, and context-dependent phenomenon (Briley,
Wyer, & Li, 2014). Social context activates particular mindsets – say, an
independent mindset – and this mindset in turn can influence one’s judgments and
decisions temporarily (Oyserman, Sorensen, Reber, & Chen, 2009). In another
situation, an opposing mindset may be adopted such that the same person’s
judgments and decisions take on an altogether different pattern. This is not to say
that culture has no stable component – societies reinforce relatively constant
patterns of living and people internalize those ways of living to some degree.
Moreover, psychological tendencies associated with different cultures may be due
to powerful and relatively stable ecological forces such as climate, population
density, disease burden, history of migration, and modes of subsistence (Gelfand et
al., 2011, Kitayama et al., 2014, Talhelm et al., 2014, Uskul et al., 2008). Evidence
from neuroscience also supports the constancy of cultural mindsets to some degree;
repeated ways of thinking leave physical effects on the brain (Kitayama & Uskul,
2011). While it is beyond the scope of this paper to explore the antecedents of
every cultural difference in decision making, we propose that cultural differences
are both stable and context-dependent. We anticipate that exploration of the origins
and nature of cultural differences will continue.

Cardinal issues across cultures 3.

3.1. – Need: “Does a decision need to be made?”

Good decision making depends, in part, on the decision maker’s ability to

recognize whether and when a decision needs to be made. For example,
entrepreneurs must be particularly good at spotting opportunities before others see
them, and pilots must be able to detect threats before disaster befalls their aircraft.
Decision makers must also avoid acting upon perceived opportunities and threats
that are in fact non-existent. Ultimately, perceptions of one’s environment
determine whether the individual makes a decision at all, for better or for worse.

Little work has been done explicitly on this issue in both the general and the cross-
cultural judgment and decision making literatures. We review cultural differences
in processes that contribute to how people address the “need” issue, especially
focusing on how people perceive their environments. We are not aware of work
that explicitly links these perceptions to decision initiation. Thus this question is
ripe for further research: Do cultural differences in environment perception lead to
differences in when and how decisions are initiated?

3.1.1. Attention differences

Before the decision-making process even begins, people from different cultures are
attending to their environments in different ways. For example, focusing on
positive versus negative information can reflect whether someone is oriented to
approach opportunities or avoid threats (Higgins, 1997). Hamamura, Meijer,
Heine, Kamaya, and Hori (2009) found that Canadians and Americans recalled
more positive information than negative information after reading about
hypothetical life events (Study 1) or product reviews (Studies 2, 3). Americans
rated negative reviews to be less helpful (Study 3). Japanese participants showed
either the reverse tendency (Study 1) or equal memory for approach and avoidance
information (Studies 2 and 3). In related work, the reported personal goals of
Korean nationals, Asian Americans, and Russians were more likely to be focused
on avoiding threats than those of European Americans (Elliot, Chirkov, Kim, &
Sheldon, 2001).

Eye-tracking data across different tasks suggests that various East Asian groups
look more at photograph backgrounds than do North Americans (Chua et al.,
2005, Masuda et al., 2012), and they preferentially attend to different parts of the
face when judging emotions (Jack, Blais, Scheepers, Schyns, & Caldara, 2009).
These visual attention findings have been linked to judgment and memory
differences in other areas of psychological research (Masuda and Nisbett,
2001, Masuda et al., 2008), but we consider attention differences relevant to the
“need” issue; as people attend to different aspects of the world around them, they
will feel the need (or not) to make decisions to address different opportunities and
threats.

3.1.2. Information interpretation

Even when attending to the same information, cultures vary in how they interpret it
– is it a threat, an opportunity, or neither? Consider the severe acute respiratory
syndrome (SARS) epidemic of the early 2000s. When reflecting upon the same
outbreak, Chinese people were more likely than Canadians to identify several
positive features of the situation (e.g., having time for rest, appreciating
relationships more, Ji, Zhang, Usborne, & Guan, 2004). In a hypothetical stock
trading task, Canadians were more likely than Chinese to purchase rising stocks
(Ji, Zhang, & Guo, 2008), indicating that Canadians were more likely to see a
rising trend as an opportunity. Chinese participants were more likely than
Canadians to purchase falling stocks; thus Chinese were more likely to see falling
trends as opportunities. As for selling, Canadians were more willing than Chinese
to sell falling stocks, but Chinese were more willing than Canadians to sell rising
stocks. These findings have been attributed to cognitive style differences. Recall
that one feature of holistic thinking is the expectation of future change. East
Asians’ holistic tendencies may lead them to expect that trends are susceptible to
change.

3.1.3. Motivational differences

Cultures that value personal agency and independence – such as those of North
Americans generally and the U.S. American middle class in particular – appear to
view the very act of decision-making as desirable (Kitayama et al., 2004, Snibbe
and Markus, 2005). They presumably like making decisions because it is a means
of expressing individualism. Relative to cultures where individual agency is not so
prized, people in individualistic cultures may either address the “need” issue by
engaging in lots of decision making or, relatedly, simply construing more of their
actions as decisions. Americans, as compared to Indians, are more likely to label
mundane actions like opening a refrigerator as decisions (Savani et al., 2010).
Working class Americans report having fewer choices at work than people from
the upper middle class, and they are also more likely to perceive individual
decision-making as undesirable (Stephens, Fryberg, & Markus, 2011).

In sum, the above cultural differences plausibly may lead people to approach
decision-making differently from the very beginning. Cultures vary in whether
they focus on opportunities or threats, and they also vary in their interpretations of
the same information as a threat, an opportunity, or neither. Finally, people vary in
how much they feel the need to engage in decision-making (or to call particular
actions “decisions”).

3.2. Mode: “Who (what) decides, and how?”

The expression “decision mode” refers to who (or what) is involved in making a
given decision and how that decision is made (Alattar et al., 2016). We focus our
discussion on cultural variations in the “who” part of the challenge first, and then
on “how” decisions are made. Notably, work on this cardinal issue encompasses
various cultural groups and appeals to varied explanations for cultural differences.

3.2.1. “Who.”

Some cultures endorse individual decision making while other groups encourage
the involvement of multiple people, in some form or another. Research on this
difference has conceptualized culture nationally (e.g., Indian, Russian) as well as
by social class. Some work suggests that middle class Americans would rather
make decisions individually, whereas working-class Americans prefer the
involvement of others. In one set of studies, Americans of working-class
backgrounds were more likely than Americans from middle class backgrounds to
experience negative affect when making a decision by themselves (Stephens et al.,
2011). Unlike higher-SES Americans, they preferred that others make decisions on
their behalf and were less likely to devalue an item that was chosen for them by
somebody else (Snibbe & Markus, 2005). In studies of cross-national differences,
Americans were less likely than Russians to offer unsolicited advice (Chentsova-
Dutton & Vaughn, 2012), potentially reflecting a preference for independent,
individual decision-making. In the same set of studies, Russians were more likely
to ask for advice than Americans, and they were also more likely to offer advice,
even when it was not requested.

In another cross-national study, Indian participants were more likely than

Americans to comply with advice (Savani, Morris, Naidu, Kumar, & Berlia, 2011),
suggesting that they, like Russians, might customarily include other people in their
decision making. Moreover, Indians were more likely than Americans to
experience positive outcomes (e.g., closer relationships) when they included
others’ considerations into their decision processes (Studies 1, 2, and 3).

3.2.2. “How.”

Variations in how decisions are made tend to coincide with variations in who
makes the decision. Western researchers have largely assumed that people make
decisions by following their own preferences and values, but people in many
cultures discount personal preference and instead seek advice, at times deferring to
others’ preferences, especially when the perceived norm is to discount one’s own
desires (Savani et al., 2008, Savani et al., 2015). We return to this distinction in the
“value” section.

Cultures also vary in whether they prize more deliberative decision making or
more rapid, intuitive decision making. In one study, Koreans favored “intuitive”
decision making modes over “logical” modes, whereas Canadians favored both
equally (Buchtel & Norenzayan, 2008). The finding that Koreans particularly value
intuition is consistent with evidence suggesting that Chinese prefer simpler
decision modes than do Americans (e.g., lexicographic modes, Chu & Spires,
2008; recognition-based decision making, Weber, Ames, & Blais, 2004).
Altogether, it seems that among East Asians, Japanese prefer thorough, slower
decision modes whereas Koreans and Chinese prefer faster intuitive or rule-based
modes.

Some proposed explanations for differences in decision mode use appeal to

cultural norms associated with individualism or collectivism. In independent
cultural contexts, there is social approval for meeting goals that promote
independent values such as self-expression, uniqueness, and autonomy or self-
reliance (Snibbe & Markus, 2005). Making decisions individually represents a
means of self-expression and exercising independence. In more interdependent
contexts, by contrast, there is social approval for including others in the decision
process. Interdependent goals promote social harmony and accommodating to
others’ expectations. By including other people in the decision-making process, an
interdependent person can anticipate any disapproval that would result from
various options, ultimately arriving at a decision that is informed by others’
preferences and therefore likely to be socially accepted.

Alternative explanations for mode differences merit attention, too. Regarding the
Russian/American difference in advice giving, Chentsova-Dutton and Vaughn
(2012) argue that Russians value advice because they are accustomed to living in a
society where official means of information exchange and social aid are unreliable.
Thus, in their case, collaboration is not driven by a collectivistic desire to please
others but rather by a desire to disseminate helpful information. In contrast to the
Russian case, Savani et al. (2011) do not attribute advice giving and
accommodation in India to the lack of a reliable informational infrastructure.
Rather, they propose that high population density and limited social mobility lead
to strong reputational concerns for individuals. These concerns, the authors
contend, lead people to strive to be known as supportive and selfless in their advice
giving so that they are trusted and embraced in their social networks.

3.3. Investment: “What will it cost to make this decision?”

The “investment” issue concerns how much of a resource – mental energy, time,
money – someone will devote to the decision process. A decision made intuitively
requires little investment. A decision that is pondered at length reflects a greater
investment on the part of the decision maker.

Research on indecisiveness reveals interesting cultural differences in how the

“investment” issue is handled. A person who customarily takes an inordinately
long time to decide is said to be “indecisive,” although indecisiveness is measured
in a variety of ways (e.g., using a scale, measuring extremity of preferences, and
time required to make the decision). Many between-and within-region comparisons
have been made, and some results are inconsistent. Regarding East/West contrasts,
researchers found most East Asian groups – including participants from Japan,
Hong Kong, and Taiwan – to be more indecisive than Westerners of European
heritage (Li et al., 2014, Mann et al., 1998, Yates et al., 2010). Results for
mainland Chinese comparisons have been mixed, although leaning toward the side
of higher Chinese decisiveness; Tse, Lee, Vertinsky, and Wehrung (1988) found
mainland Chinese to be more decisive than Hong Kongers and Canadians,
but Patalano and Wengrovitz (2006) found no difference between mainland
Chinese and Americans. In Malaysia, ethnic Chinese were found to be more
decisive than ethnic Malays (Swami et al., 2008). A more recent study compared
East Asians, South Asians, and European Canadians (Ng & Hynie, 2014). The
investigators found that their East Asian participants (of unspecified national
heritage) were significantly more indecisive than their participants of South Asian
and European heritages.

How have researchers proposed to explain cross-cultural variations in decision

making investment? Tse et al. (1988) found strong decisiveness among their
Chinese participants, and they speculated that that was a reflection of Chinese
traditions of classifying the world into sharply defined categories—“black or
white” (p. 89). Mann et al. (1998) interpreted high indecisiveness for other (non-
Chinese) Asian groups as resulting from more collaborative decision-making
practices in collectivistic societies. Thus, when confronted with an unpleasant or
difficult personal decision problem, East Asian individuals would be accustomed
to calling on others for assistance rather than confronting the challenges alone.
This, in turn, can require more time and social energy to navigate the decision.

Indecisiveness in East Asian culture (besides that of mainland China) has been
attributed to naïve dialecticism (Ng and Hynie, 2014, Peng and Nisbett, 1999) and
need for cognition (NFC; Cacioppo & Petty, 1982). These factors, in Ng and
Hynie’s data, mediated the link between culture and indecisiveness. Naïve
dialecticism involves embracing conflicting beliefs about the world, such as
affirming both the positive and negative side of an issue. This cognitive approach
may require more energy and reflection to reach a decision, given its complexity.
High need for cognition, by definition, would also promote more cognitive
investment in the decision-making process. Yates et al. (2010) proposed that
relevant norms common in China and Japan might differ despite their shared
collectivism; Japanese might be especially indecisive because
they value indecisiveness, perhaps under a more flattering label such as
“thoroughness.” The Japanese participants of Yates et al. (2010) reported being
more indecisive than Chinese and Americans, and they were more likely than
Chinese and Americans to admire indecisive people, too. Moreover, in a “think
aloud” reasoning task, the Japanese participants chose to spend far more time on
their deliberations than did their Chinese and American counterparts, indicating a
preference for thoroughness.

Li et al. (2014) documented a moderating role for decision importance in

indecisiveness. They suggest that important decisions universally require the use of
similar, high-investment strategies, diluting cultural differences. In their study of
European Canadians and Hong Kong Chinese, both groups demonstrated equally
high indecisiveness for important decision problems (e.g., choosing a career).
Cultural differences were only observed for unimportant decisions (e.g., choosing
what to have for dinner). Note that this is another example in which cultural
differences depend on context – not all decision problems reveal the same pattern
of differences.

3.4. Options: “What are the alternatives?”

Earlier reviews of culture and decision making did not elaborate on the “options”
issue specifically (Weber and Hsee, 2000, Weber and Morris, 2010), but research
related to this topic has burgeoned recently. Here we focus on creativity, which is
important for decision makers because it helps them effectively produce good
choice sets that, ideally, contain the best possible option. A poor choice set does
not allow the decider to even contemplate the best possible option because it is not
contained in the set for consideration. Creativity is also critical in contexts such as
negotiations because meeting the needs and desires of all parties often requires re-
working existing options imaginatively.

Creativity and culture have been studied together from several different angles. A
few studies have focused on whether (and why) some cultures are more creative
than others. Westerners have at times been perceived as more creative than East
Asians (e.g., Niu & Sternberg, 2001), and more recently both research and
developmental programs have aimed to study and improve creativity in East Asia
(Wu & Albanese, 2010). The evidence for Western dominance in creativity is
debatable (Morris & Leung, 2010) as such cultural comparisons depend on the
social era in which creativity was measured and what measure of creativity was
used. Other research has investigated the degrees to which novelty and usefulness
are central to different cultures’ definitions of creativity. In a comparison among
China, Japan, and the U.S., the influence of perceived novelty on creativity ratings
of products did not vary by country, and usefulness was more related to creativity
for Americans and Japanese than for Chinese subjects (Paletz & Peng, 2008). Few
other studies have examined novelty and usefulness separately, but this distinction
will be important for future work in order to determine more precisely how
cultures define and evaluate creativity (Erez & Nouri, 2010).

A more well-supported contributor to cultural variation in creativity is variation in

social orientation. Researchers have suggested that individualistic cultures promote
deviance, uniqueness, and divergent thinking, whereas collectivistic cultures
promote conformity in thinking (Erez & Nouri, 2010). Goncalo and Staw
(2006) found that, when instructed to be creative, subjects experimentally primed
with individualism (vs. collectivism) generated more creative solutions to a
problem. They also found that whether groups were asked to list the most
creative or the most practical idea from their idea sets, ideas listed by
individualistic groups were judged to be more creative than those of collectivist
groups – regardless of whether they were instructed to be creative or practical
(Study 3). The authors suggest that individualistic groups both generated and chose
more creative ideas because of their inclination toward divergent thinking and, in a
group context, their desire to be unique and to stand out in discussions for idea
selection. Collectivistic groups, by contrast, were hesitant to share deviant ideas
and to suggest unique options for selection. These study results support the idea
that cultural differences in creativity may be due, at least in part, to how creative
processes are shaped by social orientation. They also demonstrate that creativity is
malleable via priming of social orientation.

Newer research has investigated when and how cross-cultural experience – either
introduced in the lab or measured via individual histories – affects creativity for
individuals. First, exposure to other cultures influences creativity when the
exposure is “deep” and promotes a challenge to one’s customary ways of thinking
and behaving. Maddux and Galinsky (2009) found that the extent to which
individuals adapt to– not merely live in – a foreign culture predicts creativity.
Notably, some evidence suggests that cross-cultural exposure should be broad and
deep in “moderation.” Cross-cultural experience of fashion house directors has
been found to be beneficial for the perceived creativity of the house’s products
(Godart, Maddux, Shipilov, & Galinsky, 2015), but only when the breadth and
depth of the experience was not too extreme. The authors argued that too much
depth of cross-cultural adaptation could lead people to lose sight of what is
interesting and unique in the culture and they may become cognitively entrenched.
Too much breadth in cross-cultural experience (e.g., living in too many places)
could lead people to become cognitively overwhelmed by information and
therefore unable to use it well. Second, exposure to other cultures enhances
creativity when the exposure allows for mental juxtaposition of two or more
cultures. Leung and Chiu (2010) found that measured (Study 2) and
experimentally-induced (Study 1) multicultural experience predicted creativity, but
only when cultures were presented in tandem, either juxtaposed (e.g., a slide set on
Chinese culture and American culture) or blended (e.g., a slide set on East/West
cultural fusion).

Leung and Chiu (2010) suggest that these effects occur because people with
multicultural experience can sample ideas from non-overlapping cultures during
the creative process, and joint presentation (vs. only presenting a single culture)
also facilitates broader sampling. This in turn should lead to generating creative
ideas. Tadmor, Galinsky, and Maddux (2012) argue that mere access to more
cultural information does not lead to creativity, however. They instead suggest that
the manner in which the information is processed is key. Specifically, integrative
complexity – being able to understand and combine multiple perspectives – yields
high creativity. Tadmor et al.’s findings support this mechanism. They found that
only people who adopted an “integration” acculturation strategy – identifying with
both their host and heritage cultures – were more creative (Cheng, Sanchez-Burks,
& Lee, 2008, found similar results). Those who identified with neither culture or
with only one culture were less creative despite also having had multicultural
experience. Integrative complexity mediated the effect of acculturation strategy on
creativity, suggesting that integration acculturation boosted people’s ability to
simultaneously access and combine disparate information from different cultures.

3.5. Possibilities: “What could happen if that action were taken?”

Decisions often yield both intended outcomes and side effects. Although side
effects are unrelated to the decision maker’s original aims, they matter to decision
quality because they affect the people the decision was intended to serve, for better
or for worse. Exploring potential consequences of each option is usually in the best
interests of the decision maker. Despite its obvious after-the-fact importance for
how well or poorly decisions can turn out, there is no literature on how people
address the “possibilities” issue per se. Nevertheless, two related findings from
prior cross-cultural studies suggest a couple of compelling topics for future
investigation.

The first, mentioned earlier in this article, is the observation of variations in the
degree of individualism (vs. collectivism) across cultures. There are vertical and
horizontal varieties of these tendencies. Vertical forms of interpersonal
relationships entail acceptance of hierarchies of responsibilities, privileges, and
rights (Singelis, Triandis, Bhawuk, & Gelfand, 1995). In contrast, horizontal forms
emphasize equality among peers. It seems plausible to anticipate that especially
large numbers of people would normally participate in decision making in
horizontal collectivistic societies. To the extent that these arrangements are
managed well, we should expect that the resulting broader perspectives would also
imply good recognition of possibilities.

The second relevant finding is that some cultures emphasize broad, holistic
thinking rather than narrowly focused analytic thinking (Masuda & Nisbett, 2001).
Evidence suggests that Koreans make use of more information than Americans in
judgment tasks, and that the relationship between holistic thinking and preference
for large information sets is positive at the individual level within each culture
(Choi, Dalal, Kim-Prieto, & Park, 2003). Holistic thinking might promote more
thoroughness in detecting potential consequences of any option under
consideration.

3.6. Judgment: “What would happen if that action were pursued?”

Judgments are different from decisions. Whereas decisions are commitments to

particular courses of action, judgments are opinions as to what was, is, or will be
some decision-relevant state of the world (Yates & Potorowski, 2012). Decisions
rest at least partly on judgments, and highly accurate judgments support good
decision making. Because people engage in judgment at several points in the
decision process, much of the work on culture and judgment is covered in other
sections of this paper. Here, we review cultural differences in overconfidence and
attribution.

3.6.1. Probability judgments and overconfidence

Phillips and Wright (1977) sparked great interest in cultural variations in

judgments nearly 40 years ago. English and Chinese participants answered trivia
questions and indicated how confident they were in each of their answers. The
Chinese judgments were much more overconfident than English judgments.
Consider the items for which the participants said that they were 80% sure that
their chosen answers were correct. The English students were, in fact, correct on
about 67% of those occasions. The corresponding statistic for the Chinese students
was only 52%.

The basic finding of high Chinese overconfidence was extended to some other East
Asian groups in studies comparing participants from Britain, Hong Kong,
Malaysia, and Indonesia (e.g., Wright and Wisudha, 1982, Wright et al., 1978).
Other studies found similar patterns of overconfidence in mainland China, Taiwan,
and India (e.g., Lee et al., 1995, Yates et al., 1989). Japanese people seem to be a
notable exception in Asia, having displayed confidence more similar to that of
Americans (Yates, Lee, Shinotsuka, Patalano, & Sieck, 1998) and at times even
exhibiting under-confidence (Yates et al., 2010).

Apart from East Asia, a high degree of overconfidence has been found among
Mexicans relative to Americans (Lechuga & Wiebe, 2011). More broadly, Stankov
and Lee (2014) examined overconfidence in 33 countries. Overconfidence was
widespread but differed in degree according to region. The authors attributed
overconfidence differences to variations in ability rather than confidence
judgments per se, since confidence differed little from one country to the next
while ability varied substantially.

Why are the judgments of many Asian cultures—but notably, not Japanese culture
—so often highly overconfident? Asian overconfidence is all the more surprising
given that the need to self-enhance appears to be absent or attenuated in East Asian
cultures (Heine & Hamamura, 2007). In the Chinese case, research suggests that
they think less probabilistically than the English do. When asked in an open-ended
manner whether a certain event is going to occur, Chinese participants were more
likely than English participants to reply with words that do not acknowledge
degrees of uncertainty at all (e.g., “Yes” or No”) or with only a limited range of
different probability phrases (e.g., “probably”) (Lau & Ranyard, 2005).

Cultural differences in holistic thinking have also been proposed to explain

overconfidence differences. One feature of holistic thought is the belief that
everything in the world is somehow connected to everything else. This
presumption has been suggested as a contributor to the relatively strong tendency
for Koreans to exhibit the hindsight bias (Choi & Nisbett, 2000). In this view,
events that are observed to have occurred can easily be rationalized as having been
inevitable because of the chain of connections revealed after the fact. This, in turn,
could lead to overconfidence for groups that think holistically (vs.
analytically). Lechuga and Wiebe (2011) suggested that similar reasoning might be
extended as an account for extreme overconfidence, too. So far, however, data
have not supported this notion, and this account does not explain why Japanese
people are not overconfident.

Another plausible contributor to high overconfidence in some Asian cultures is that

those cultures do not have traditions that encourage individuals to seek out
arguments that might contradict the wisdom of their first impressions as to the
possible outcomes of an uncertain event (Yates et al., 2010). Japanese people may
be an exception to this rule given that they are especially thorough and deliberate
in their reasoning and this practice tends to reduce overconfidence generally (Sieck
& Yates, 2001).

3.6.2. Attribution

When people observe interesting events – say, a man kicks a dog on the street –
they tend to make causal judgments in an attempt to make sense of the situation.
The man might kick his dog because he is a cruel man (dispositional attribution) or
he might kick the dog because the street is known to be dangerous and the dog
startles him (situational attribution). Research with Westerners has documented
many routine “errors” in causal attribution; for example, they have been found to
overestimate the causal influence of people and underestimate the influence of
contextual factors in the situation (Ross, 1977).

Soon after the initial observations of attribution errors, however, cross-cultural

work with Indians and Americans found that although children in the two cultures
explain events similarly, differences emerge with age; American adults make more
reference to dispositional (vs. situational) factors when explaining someone’s
behavior, whereas Indian adults make more reference to situational (vs.
dispositional) factors (Miller, 1984). Research with several East Asian groups and
North Americans has found that the former group is more prone to attributing
causality to contextual factors. These judgment differences have been observed
consistently in cultural artifacts such as newspapers, as well as in survey and
experimental culture-priming studies (Lee et al., 1996, Morris and Peng,
1994, Peng and Knowles, 2003). This is not to say that East Asians do not assign
causality to people; they are more likely to do so, however, for collectives rather
than individuals (Menon, Morris, Chiu, & Hong, 1999, referring to Hong Kong and
Japanese Asians vs. Americans). When they do assign causality to an individual
leader, it has been found to be based on the actions of the leader’s group; thus
individuals are held responsible according to their group’s behavior (Zemba,
Young, & Morris, 2006).

These differences have been explained by appeals to cognitive style. Holistic

thinking, which is valued in East Asian contexts, involves attending to context and
the relationships among objects (Nisbett et al., 2001). Western thinking tends to be
more analytic, which involves focusing on objects independently and viewing them
as discrete. These tendencies may lead East Asians to attribute causality to context
and Westerners to attribute it more to internal dispositions. A Western exception
may be Latin Americans. Work with Mexicans has found them to be more holistic
than U.S. Americans in some aspects. However, results have been inconsistent
(Lechuga et al., 2011, Lechuga and Wiebe, 2011).

3.7. Value: “What will particular people like and dislike, and how much?”

The “value” issue pertains to the fact that people make different decisions in part
because they value or like different things. Addressing this issue in decision
making involves predicting to what extent the beneficiary of a decision will like or
dislike attributes or outcomes of the decision. Because cultures differ in what they
value, they will differ in their appraisals of how good or bad particular options are.
For example, residents of former frontier regions in the United States are more
likely to choose unique names for their babies, possibly because frontier
environments fostered an ethos of independence which in turn may have led people
to value uniqueness (Varnum & Kitayama, 2011). U.S. residents in regions with
higher pathogen prevalence tend to vote less for third-party candidates, possibly
because higher pathogen prevalence seems to encourage value for conformity
(Varnum, 2013). In this section we elaborate on several cultural value differences
as well as how cultures adjust their valuation of options over time.

3.7.1. Personal vs. social value impact

Cultures differ with respect to the influence of personal values on decisions. There
is evidence that Indians make choices that are less closely linked to their personal
preferences than do U.S. students (Savani et al., 2008). As previously discussed, in
Indian and several other collectivist cultures, people often use decision modes that
involve and take other people into account. Therefore, the values and expectations
of others – not just one’s own – become an important consideration in decision-
making. From this perspective, it makes sense that the decision maker’s own
values would have relatively less impact than in an individualistic culture, where
fewer concerns must be considered. People in collectivist cultures can even find
positive value in choosing options that adhere to norms rather than following
personal preference. In one study, both Brazilians and Americans indicated that
they were likely to follow norms when deciding on behavior. Further, the
Brazilians were far more likely than the Americans to also indicate that they would
be happy about following those norms (Bontempo, Lobel, & Triandis, 1990).
Similarly, Indians have not reported feeling constricted or burdened when
accommodating others in their decision making (Savani et al., 2011). Thus,
although personal value matters enormously in Westerners’ decision-making, they
appear to be less important in other cultures due to their collectivism and tightness.

3.7.2. Impact of the self

A conceptually related principle focuses on the significance of the self for the
decision maker. When reporting what courses they would be interested in taking,
for example, European Canadians’ choices were more strongly associated with
their ratings of expected enjoyment than were East Asians’ choices (Falk, Dunn, &
Norenzayan, 2010). In addition to expected enjoyment, evidence suggests that
North Americans highly value options that are associated with the self. Consider
the “endowment effect,” whereby prospective sellers value objects more than do
prospective buyers. This phenomenon was found to be stronger among Canadians
and Americans than among Asians of various backgrounds (Maddux et al., 2010).
The effect was even stronger for Canadians when subjects’ cognitive association
between self and object was experimentally strengthened.

3.7.3. Dissonance and value change

“Spreading of alternatives” is a value-related phenomenon that can occur after

making a choice. Imagine having to choose only one of two items that you find
equally appealing – say, you only have enough money for one suit despite finding
two that you really want. After choosing one item in this type of situation, decision
makers often feel badly because they must forego the rejected item which they
nevertheless liked as much as the chosen item. Researchers have found that after
such a choice, people tend to change their values such that they rate the chosen
item more highly than the rejected item despite initially liking the two equally.
This presumably helps people feel better about their decisions since their values
become aligned with them, “justifying” those decisions.
Heine and Lehman (1997) found this “spreading of alternatives” effect in
Canadians, particularly for situations in which decision-relevant negative arousal
was induced, but Japanese participants did not exhibit spreading of alternatives in
any of their conditions. Another study found again that in a typical dissonance
experimental paradigm, Japanese did not exhibit spreading of alternatives
(Kitayama et al., 2004, but see Izuma et al., 2010). When primed to think about
others, however, Japanese participants did exhibit the effect. The authors suggested
that the interdependent values of their Japanese subjects meant that imagining the
presence of others activated anxiety about social approval, and thus it became
important to exhibit values consistent with their decisions.

Research comparing working versus middle-class Americans also suggests that

middle-class Americans, for whom choice may be an important aspect of the
“self,” exhibit this dissonance effect in a standard paradigm whereas working class
Americans do not (Snibbe & Markus, 2005). Thus, the change in value that follows
tradeoffs in decisions is not uniform across cultures and depends on culture-
specific activation of negative arousal.

3.7.4. Loss aversion

Imagine Gamble G: If a fair coin is tossed and it comes up heads, the player loses
$5, and if the coin comes up tails, the player is awarded $X. Suppose Jill and Luke
are each asked to indicate the smallest amount $X would have to be in order for
them to be willing to play. Jill responds, “$8,” and Luke responds, “$10.” Who
appears to hate losing money more? Most of us would say, “Luke,” because it
takes $2 more in order to persuade Luke to risk losing the same amount of money
($5). In the standard language of decision scholarship, we would say that Luke is
more “loss averse” and the difference of $2 indexes his additional, relative loss
aversion.

As this fictional example suggests, how a person feels about losses is an important
element of how that person decides. That is why loss aversion has become a more
popular focus of research, including across cultures, often using methods similar in
logic to the procedure illustrated. Wang, Rieger, and Hens (2016) studied people
from 53 countries around the globe to shed light on potential cross-cultural
variations in loss aversion. Eastern European groups represented in their study had
especially high loss aversion while African groups on average had the lowest loss
aversion. The authors measured various cultural variables in search of explanations
of country- and individual-level differences. Country-level individualism was
positively correlated with loss aversion. This relationship was also found at the
individual level while controlling for country-level effects, such that a person’s
deviation from her country’s mean individualism level was correlated with her loss
aversion levels. This finding is consistent with Weber and Hsee’s (2000) “cushion
hypothesis.” They proposed that collectivist cultures support risk taking because
one’s close social network members can offer financial support in the event of
setbacks. Thus, there is less reason to fear losses; they often can be alleviated. Also
of note is that other country-level factors such as religious composition were
related to loss aversion, although potential explanations remain to be explored.

3.7.5. Reference point adaptation

A key feature of Kahneman and Tversky’s (1979) prospect theory is that how a
person feels about a given decision outcome is not fixed. Instead, it depends on the
decision maker’s “reference point,” which varies from one moment to another. If,
at a given moment, Kevin has eaten zero cookies, the prospect of eating one
freshly-baked chocolate chip cookie sounds fabulous to him. If, at another given
moment, Kevin just finished eating two cookies, then the prospect of eating one
more cookie may sound nice but is likely not proportional to the excitement
generated by eating the first cookie. If he waits for three hours and “re-sets” his
reference point back to zero, eating that third cookie will be just as pleasurable as
eating the first cookie.

Arkes, Hirshleifer, Jiang, and Lim (2008) found that people “re-set” their reference
points more after gains than after losses, reflecting behavior that maximizes
hedonic pleasure. (This asymmetry makes subsequent gains especially satisfying
and subsequent losses less aversive.) The same authors (Arkes, Hirshleifer, Jiang,
& Lim, 2010) replicated this effect with both Americans and Asians (Chinese and
Korean nationals), suggesting that this “hedonic engineering” may be a general
human strategy. However, the Asian subjects adjusted their reference points more
than American subjects. This tendency may reflect lower loss aversion in Asians.
The authors also hypothesized that it may be related to East Asians’ preference for
accommodation to circumstances rather than altering circumstances to fit one’s
own preferences (Hsu, 1981).

3.8. Tradeoffs: “Every alternative has at least one flaw, so what now?”

Consider the following grossly simplified apartment search situation:

Apt Condition: ∗∗ Distance: ∗
∗ ∗
1:

∗∗ Distance: ∗∗
Apt 2: Condition: ∗

Open in a separate window

In this display, the stars represent degrees of goodness of a given apartment with
respect to the considerations described—the condition of the apartment and its
distance from the decision maker’s workplace. More stars indicate greater
goodness, in the decision maker’s eyes. Observe that the situation illustrates
“feature conflict.” One feature dimension favors Apt 1 while the other favors Apt
2; neither alternative would be described as “dominating” the other. Such a
situation is sometimes described as a challenging “tradeoff dilemma.” Apt 1 is
better by one star on Condition whereas the opposite is true for Distance. If the
searcher chooses Apt 1, it might be because she feels that, in picking Apt 1 over
Apt 2, she has traded a one-star advantage on Distance for a one-star advantage on
Condition, and that that is consistent with what her actual experiences would be if
she were to live in each apartment. The “tradeoffs” issue concerns how people
should and do, in fact, resolve tradeoff dilemmas. This is important because almost
all decision situations eventually are reduced to such dilemmas, in some form or
another.

Our primary concern here is whether and how cultures differ in how they resolve
tradeoff dilemmas. There has been very little research on the matter. However,
efforts by P.C. Chu and Eric Spires have been informative about cultural variations
involving the People’s Republic of China, Taiwan, Japan, and the U.S. (Chu and
Spires, 2008, Chu et al., 2005, Chu et al., 1999). One key finding has been that
Japanese decision makers are significantly more attracted to noncompensatory
schemes for addressing dilemmas and that Americans are among the most strongly
inclined toward compensatory schemes. A “compensatory” approach is one such
that weakness on one feature dimension can be offset or “compensated for” by
strength on another. This was implied in our apartment example, where the
decision maker chose Apt 1 because she felt that gaining an extra star’s worth of
condition more than made up for the sacrifice of suffering an extra star’s burden in
commuting each day. A “non-compensatory” scheme is one for which a deficiency
on one feature dimension cannot be offset by strength on another. Suppose that in
our apartment case, the searcher’s scheme is such that an apartment simply must
have three stars or more with respect to Condition. Thus, no matter how good Apt
2 was on Distance, it would never be chosen. This is just one form of non-
compensation we see.

Why would Japanese decision makers be attracted to non-compensatory schemes?

The data necessary to answer this question have not been reported. However, Chu
et al. have suggested three contributors.

 The first is Japanese aversion to confrontation.

 Another is the relative comfort of Chinese culture (in the PRC and Taiwan)
with compromise as implicit in the Chinese “Doctrine of the Mean.”
 A third is tied to the fact that non-compensatory schemes are comparatively
easy to apply. This is just one among several research directions for the
future in this domain.

3.9. Acceptability: “How can we get others to agree with our decision?”

How other people feel about our decisions can spell the difference between
decision success and failure. Some years ago, a major insurance company
announced its decision to deny insurance policies to women involved in
relationships with men who abused them. In response, many in the public and the
government were outraged and threatened boycotts. The company reversed its
decision. The “acceptability” issue is about how to avoid situations in which other
parties undermine one’s decision because of their opposition to the decision or to
how it was reached. There is good evidence that cultures often differ substantially
in how they address the acceptability issue. We focus in particular on decisions in
negotiations.

3.9.1. Strategy differences in intra-cultural negotiations

Several cultural differences in negotiation practices have been observed. In some

studies, relative to their counterparts of another culture, Americans have been
found to prefer direct communication (Adair, Brett, & Okumura, 2001) and take a
more competitive approach (Pearson & Stephan, 1998). In contrast to Americans,
Japanese negotiators have been seen as more likely to use indirect communication
and influence (e.g., sympathy, reference to status) while Brazilians more strongly
favor collaboration, accommodation, and avoidance, especially for negotiations
with in-group members. Other work has examined cultural effects in a more
nuanced way. Gelfand et al. (2013) studied negotiating groups vs. individuals in
Japanese and American cultures. They expected that groups would show greater
cultural differences because social monitoring, which occurs in groups but not
individual settings, would amplify concerns for adhering to social norms. Thus, a
group (vs. solo) negotiation would strengthen already-present norms of
competitiveness for Americans, whereas group negotiation would strengthen
already-present norms for harmony with their Taiwanese participants. The
researchers also expected that groups would outperform individuals in U.S.
contexts, because people in groups would be more competitive than individuals. In
the East Asian context, groups would perform worse than individuals, because
people in groups would be more concerned with harmony, which is detrimental to
achieving optimal negotiation outcomes. The study found partial support for this
idea; American teams did not outperform solo negotiators, but Taiwanese groups
performed worse than solo negotiators. Taiwanese groups also performed more
poorly than American groups. The latter effect was mediated by harmony
differences; Taiwanese groups performed more poorly due to their concerns with
maintaining harmony.

3.9.2. Strategies and joint outcomes

Are any particular strategies for negotiation universally beneficial for joint
outcomes? Brett et al. (1998) examined negotiating dyads from France, Russia,
Japan, Hong Kong, Brazil, and the United States engaged in intra-cultural
negotiation. Japanese and American dyads had the highest joint gains, followed by
ones from Brazil and France. Hong Kong and Russian dyads had the lowest
outcomes. The authors found that cultural characteristics such as individualism and
hierarchy did not seem related to joint outcomes. Instead, other factors were more
important for achieving good joint outcomes, including values for information
sharing, the ability to deal with several issues simultaneously, and motivation to
continually improve on current options.

Graham, Mintu, and Rodgers (1994) studied the “problem-solving approach”

(PSA) to negotiation across 11 cultures. This approach emphasizes the use of
information exchange to understand the other party’s needs and concerns,
ultimately with the goal of achieving mutually beneficial outcomes. The authors
did not test the effect of its use on joint outcomes, but found it to be beneficial to
the opposing party’s profit in 5 cultures. It was detrimental to the user’s profit in
only one culture – Mexican – and the use of PSA was likely to be reciprocated in 8
of the cultures. They did find that bargainers from more individualistic cultures had
lower PSA scores (that is, they bargained with more individualistic strategies) and
achieved higher profits. Future work should further test whether and how
negotiation practices can be successfully transplanted from one cultural context to
another.

3.9.3. Negotiation between cultures

Negotiating cross-culturally (vs. intra-culturally) has been associated with certain

negative outcomes (Brett & Okumura, 1998) which may be partly due to variation
in how cultures negotiate. There is evidence that negotiation results in higher joint
gains the more that parties use tactics that are typical of their own cultures (Adair
et al., 2001). Specifically, single-culture dyads (American and American, Japanese
and Japanese) had higher joint profit outcomes than inter-cultural dyads (American
and Japanese). American (vs. intercultural) dyads were more likely to use direct
communication, whereas Japanese (vs. intercultural) dyads were more likely to use
indirect communication and influence tactics.

Adair and colleagues’ findings also suggest that one culture adapting negotiation
styles to match the other culture’s style is not enough to increase joint profit. In
their study, Japanese, but not American, negotiators adjusted their styles during
inter-cultural negotiations. Despite this adjustment, intercultural dyad outcomes
were inferior to intra-cultural dyad outcomes.

While that study did not find one party’s adaptation of specific strategies to be
sufficient, other research has suggested that “cultural intelligence” (CQ) plays an
instrumental role in achieving mutually beneficial outcomes. CQ is the ability to
effectively adapt to culturally diverse situations (Earley & Ang, 2003). It includes
preparing for, adapting to, and learning from cross-cultural interactions as well as
engaging in perspective-taking (Mor, Morris, & Joh, 2013). In one study,
negotiating dyads that had higher overall CQ were shown to be more likely than
lower CQ dyads to employ mutually-beneficial bargaining strategies (integrative
information behavior), which led to more joint profit (Imai & Gelfand, 2010, Study
2). Importantly, the dyads were only as effective as their lowest-CQ members.
Other factors such as international experience, emotional intelligence, and
extraversion failed to predict integrative information behaviors (Imai & Gelfand,
2010). CQ has also been found to be positively related to cultural perspective
taking which, in turn, boosts intercultural cooperation (Mor et al., 2013). A cultural
perspective-taking intervention designed by Mor et al. successfully increased
negotiators’ cooperation, particularly for negotiators who were low in CQ. Thus,
there is good reason to expect that CQ can be manipulated and improved.

3.9.4. Sacred values

During negotiations, values can clash, sometimes intractably. In ordinary

decisions, the negative aspects of an option can be compensated for by adding
something appealing, like money (recall “compensatory strategies” for making
tradeoffs). However, “sacred values,” sometimes referred to as “protected values,”
appear to be immune to material tradeoffs (Jassin, Sheikh, Obeid, Argo, & Ginges,
2013). For example, someone who does not “sacredly” value gun ownership might
support legislation that offers cash for handing in firearms in an attempt to reduce
gun violence. If gun ownership is a sacred value for that person, however, virtually
any option involving handing in his or her weapons would be unacceptable.
Moreover, attempts to “sweeten” options that violate sacred values with money can
actually backfire – such options become even less appealing because they evoke
moral outrage (Ginges & Atran, 2014). Research suggests that better ways of
handling sacred values in cross-cultural decisions include adding a culturally
meaningful, symbolic gesture (such as an apology) to increase the value of an
option (Atran & Axelrod, 2008).

3.10. Implementation: “How can we implement this decision?”

It seems that nearly everyone has made New Year’s resolutions that were forgotten
within a few weeks. Such instances illustrate the “implementation” issue, which
concerns the actions people take in their attempts to assure that their decisions do
not suffer the fate of so many resolutions. It is easy to appreciate the significance
of the “implementation” issue in personal and organizational life. Nevertheless, the
decision implementation literature is recent and remains small but can be expected
to grow rapidly. Representative papers include those by Gollwitzer,
1999, Dholakia and Bagozzi, 2002, Nickerson and Rogers, 2010. The line of work
represented by these articles is specifically about the benefits of using
“implementation intentions” – concrete, actionable plans to carry out a decision.
The strategies people employ to ensure that their decisions “stick” might vary
between cultures, and the effectiveness of such strategies may vary as well. We
imagine that adhering to precise plans might make someone a stick-in-the-mud in
some cultures, but an admirable colleague in others.
Future directions 4.

This review reveals several areas of progress in the study of cross-cultural decision
making. Since initial reviews of this discipline, which focused on probability
judgments, risk, and decision making modes (Weber & Hsee, 2000), many other
topics have received attention. Overall, the following cardinal decision issues have
enjoyed the most attention: “mode,” “investment” (indecisiveness), “options,”
“judgment”, “value,” and “acceptability.” Certain features of the “need” issue –
such as attention – have been studied, but it would be illuminating for scholars to
directly study how cultures vary (or not) in the way they begin the decision making
process itself. The “possibilities,” “tradeoffs,” and “implementation” issues appear
to have received relatively little attention, but they are clearly relevant to the
quality of the decision outcome and the effectiveness of the decision being acted
upon, respectively. Therefore we recommend that scholars give attention to and
ask questions regarding these less studied issues.

What have studies in cross-cultural decision making contributed besides describing

differences in decision making in particular cultures? Such studies have yielded
evidence that many presumed “basic” processes are not universal (Henrich, Heine,
& Norenzayan, 2010). Such work has also attempted to explain cultural
differences, attributing them to psychological forces such as individualism or to
more distal forces that shape human psychology (e.g., modes of subsistence or
migration history).

Many important and generative lines of research have examined only two or three
cultural groups, often of East Asian and Western origin. While that body of work
has been richly informative, we note three resulting limitations. One, obviously, is
that the generalizability of those findings to other cultural groups might be limited.
Someone who hopes to learn about Mexican decision making would be ill-advised
to only read the literature largely about East Asians and conclude, “Since Mexicans
are fairly collectivistic, like East Asians, their decision making practices must be
similar.” Thus we propose that investigators focus their efforts on a more diverse
set of national cultures as well as differences within regional boundaries. A second,
related limitation is that individualism and collectivism are frequently used to
explain cultural differences to the neglect of other factors. When considering only
a single East Asian and Western cultural group, this construct may very well
account for differences. However, other collectivistic cultures likely make
decisions very differently than, say, Japanese people, so other factors will need to
be developed and examined as explanations of those differences. A third limitation
 is that early cultural work in psychology seldom differentiated between individual
and group-level effects. That differentiation is crucial to properly understanding
the relationships between variables of cultural interest. Hypothetically, a researcher
might find a positive relationship between individualism and preference for unique
products across 30 cultures at the group level. However, if the investigator were to
look at individuals within a given culture, the relationship might be virtually null,
reversed, or variable between groups (Na et al., 2010). Some researchers have
indeed demonstrated this type of effect (Leung & Cohen, 2011).

In closing, we raise a final question for scholars to explore: How can this research
help people make better decisions? Can individuals from one culture import
another culture’s decision making strategies in order to improve decision making
effectiveness? Effectiveness is subjective; it depends on the extent to which the
intended outcome is achieved for the decision’s beneficiary. Nevertheless, decision
making practices of one culture may have inherent benefits or pitfalls affecting any
culture that uses them. For example, Toyota’s American offices seem to have
imported very thorough Japanese decision making strategies (Liker, 2004).
Thoroughness might almost universally reduce people’s likelihood of being
blindsided by unexpected consequences, but it may also render decision making
slow and cumbersome. Researchers may also explore what factors lead to
successful (vs. disastrous) transfer of decision making practices. Must features of a
particular strategy “match” the culture in order to be effective? Or might a clash
between a foreign decision strategy and local habits push people to decide better?

V The Relationship between Business

Ethics and Culture
Learning Objectives

By the end of this section, you will be able to:

 Describe the processes of acculturation and enculturation

 Explain the interaction of business and culture from an ethical perspective
 Analyze how consumerism and the global marketplace might challenge the belief
system of an organization
It has been said that English is the language of money and, for that reason, has
become the language of business, finance, trade, communication, and travel. As
such, English carries with it the values and assumptions of its native speakers
around the world. But not all cultures share these assumptions, at least not
implicitly. The sick leave or vacation policies of a British investment bank, for
instance, may vary greatly from those of a shoe manufacturer in Laos. Because
business and capitalism as conducted today have evolved primarily from European
origins and profits are measured against Western standards like the U.S. dollar, the
ethics that emerges from them is also beholden primarily (but not exclusively) to
Western conceptions of behavior. The challenge for business leaders everywhere is
to draw out the values of local cultures and integrate the best of those into their
management models. The opportunities for doing so are enormous given the
growing impact of China, India, Russia, and Brazil in global commerce. The
cultures of these countries will affect the dominant business model, possibly even
defining new ethical standards.

Business Encounters Culture

To understand the influence of culture on business ethics, it is essential to

understand the concepts of enculturation and acculturation. In its most basic
anthropological sense, enculturation refers to the process by which humans learn
the rules, customs, skills, and values to participate in a society. In other words, no
one is born with culture; all humans, regardless of their origin, have to learn what
is considered appropriate behavior in their surrounding cultures. Whereas
enculturation is the acquisition of any society’s norms and
values, acculturation refers specifically to the cultural transmission and
socialization process that stems from cultural exchange. The effects of this
blending of cultures appear in both the native (original) culture and the host
(adopted) culture. Historically, acculturation has often been the result of military or
political conquest. Today, it also comes about through economic development and
the worldwide reach of the media.

One of the earliest real estate deals in the New World exemplifies the complexity
that results when different cultures, experiences, and ethical codes come into
contact. No deed of sale remains, so it is difficult to tell exactly what happened in
May 1626 in what is now Manhattan, but historians agree that some kind of
transaction took place between the Dutch West India Company, represented by
Pieter Minuit, the newly appointed director-general of the New Netherland colony,
and the Lenape, a Native American tribe ((Figure)). Which exact Lenape tribe is
unknown; its members may have been simply passing through Manhattan and
could have been the Canarsee, who lived in what is today southern Brooklyn.

Legend has it that the Dutch bought Manhattan island for $24 worth of beads and
trinkets, but some historians believe the natives granted the Dutch only fishing and
hunting rights and not outright ownership. Furthermore, the price, acknowledged
as “sixty guilders” (about $1000 today), could actually represent the value of items
such as farming tools, muskets, gun powder, kettles, axes, knives, and clothing
offered by the Dutch. Clearly, the reality was more nuanced than the legend.

The 1626 purchase of Manhattan as depicted by Alfred Fredericks in The Popular

Science Monthly of 1909. (credit: “The Purchase of Manhattan Island” by
“Ineuw”/Wikimedia Commons, Public Domain)

The “purchase” of Manhattan is an excellent case study of an encounter between

two vastly different cultures, worldviews, histories, and experiences of reality, all
within a single geographic area. Although it is a misconception that the native
peoples of what would become the United States did not own property or value
individual possession, it is nevertheless true that their approach to property was
more fluid than that of the Dutch and of later settlers like the English, who
regarded property as a fixed commodity that could be owned and transferred to
others. These differences, as well as enforced taxation, eventually led to war
between the Dutch and several Native American tribes.

European colonization only exacerbated hostilities and misunderstandings, not

merely about how to conduct business but also about how to live together in
harmony.
For more information, read this article about the Manhattan purchase and the
encounter between European and Native American cultures and also this article
about Peter Minuit and his involvement. What unexamined assumptions by both
parties led to problems between them?

Two major conditions affect the relationship between business and culture. The
first is that business is not culturally neutral. Today, it typically displays a mindset
that is Western and primarily English-speaking and is reinforced by the
enculturation process of Western nations, which tends to emphasize individualism
and competition. In this tradition, business is defined as the exchange of goods and
services in a dedicated market for the purpose of commerce and creating value for
its owners and investors. Thus, business is not open ended but rather directed
toward a specific goal and supported by beliefs about labor, ownership, property,
and rights.

In the West, we typically think of these beliefs in Western terms. This worldview
explains the misunderstanding between Minuit, who assumed he was buying
Manhattan, and the tribal leaders, who may have had in mind nothing of the sort
but instead believed they were granting some use rights. The point is that a
particular understanding of and approach to business are already givens in any
particular culture. Businesspeople who work across cultures in effect have entered
the theater in the middle of the movie, and often they must perform the translation
work of business to put their understanding and approach into local cultural
idioms. One example of this is the fact that you might find sambal chili sauce in an
Indonesian McDonald’s in place of Heinz ketchup, but the restaurant, nevertheless,
is a McDonald’s.

The second condition that affects the relationship between business and culture is
more complex because it reflects an evolving view of business in which the
purpose is not solely generating wealth but also balancing profitability and
responsibility to the public interest and the planet. In this view, which has
developed as a result of political change and economic globalization, organizations
comply with legal and economic regulations but then go beyond them to effect
social change and sometimes even social justice.

The dominant manufacture-production-marketing-consumption model is changing

to meet the demands of an increasing global population and finite resources. No
longer can an organization maintain a purely bottom-line mentality; now it must
consider ethics, and, therefore, social responsibility and sustainability, throughout
its entire operation. As a result, local cultures are assuming a more aggressive role
in defining their relationship with business prevalent in their regions.

Had this change taken place four centuries ago, that transaction in Manhattan
might have gone a little differently. However, working across cultures can also
create challenging ethical dilemmas, especially in regions where corruption is
commonplace. A number of companies have experienced this problem, and
globalization will likely only increase its incidence.
Petrobras

If you were to do a top-ten list of the world’s greatest corruption scandals, the
problems of Petrobras (Petróleo Brasileiro) in Brazil surely would make the list.
The majority state-owned petroleum conglomerate was a party to a multibillion-
dollar scandal in which company executives received bribes and kickbacks from
contractors in exchange for lucrative construction and drilling contracts. The
contractors paid Petrobras executives upward of five percent of the contract
amount, which was funneled back into slush funds. The slush funds, in turn, paid
for the election campaigns of certain members of the ruling political party, Partido
dos Trabalhadores, or Workers Party, as well as for luxury items like race cars,
jewelry, Rolex watches, yachts, wine, and art.

The original investigation, known as Operation Car Wash (Lava Jato), began in
2014 at a gas station and car wash in Brasília, where money was being laundered.
It has since expanded to include scrutiny of senators, government officials, and the
former president of the republic, Luiz Inácio Lula da Silva. The probe also
contributed to the impeachment and removal of Lula’s successor, Dilma Rousseff.
Lula and Rousseff are members of the Workers Party. The case is complex,
revealing Chinese suppliers, Swiss bank accounts where money was hidden from
Brazilian authorities, and wire transfers that went through New York City and
caught the eye of the U.S. Department of Justice. In early 2017, the Brazilian
Supreme Court justice in charge of the investigation and prosecution was
mysteriously killed in a plane crash.

It is hard to imagine a more tragic example of systemic breakdown and individual

vice. The loss of trust in government and the economy still affects ordinary
Brazilians. Meanwhile, the investigation continues.
 Critical Thinking

 Is there any aspect of the case where you think preventive measures could have
been taken either by management or government? How would they have worked?
 Do you think this case represents an example of a culture with different business
ethics than those practiced in the United States? Why or why not? How might
corporations with international locations adjust for this type of issue?

Read this article about the Petrobras case to learn more.

Balancing Beliefs

What about the ethical dimensions of a business in a developed country engaging

in commerce in an environment where corruption might be more rampant than at
home? How can an organization remain true to its mission and what it believes
about itself while honoring local customs and ethical standards? The question is
significant because it goes to the heart of the organization’s values, its operations,
and its internal culture. What must a business do to engage with local culture while
still fulfilling its purpose, whether managers see that purpose as profitability, social
responsibility, or a balance between the two?

Most business organizations hold three kinds of beliefs about themselves. The first
identifies the purpose of business itself. In recent years, this purpose has come to
be the creation not just of shareholder wealth but also of economic or personal
value for workers, communities, and investors.

The second belief defines the organization’s mission, which encapsulates its
purpose. Most organizations maintain some form of mission statement. For
instance, although IBM did away with its formal mission statement in 2003, its
underlying beliefs about itself have remained intact since its founding in 1911.
These are (1) dedication to client success, (2) innovation that matters (for IBM and
the world), and (3) trust and personal responsibility in all relationships.
President and chief executive officer (CEO) Ginni Rometty stated the company
“remain[s] dedicated to leading the world into a more prosperous and progressive
future; to creating a world that is fairer, more diverse, more tolerant, more just.”

Johnson & Johnson was one of the first companies to write a formal mission
statement, and it is one that continues to earn praise. This statement has been
embraced by several succeeding CEOs at the company, illustrating that a firm’s
mission statement can have a value that extends beyond its authors to serve many
generations of managers and workers. Read Johnson & Johnson’s mission
statement to learn more.

Finally, businesses also go through the process of enculturation; as a result, they

have certain beliefs about themselves, drawn from the customs, language, history,
religion, and ethics of the culture in which they are formed. One example of a
company whose ethics and ethical practices are deeply embedded in its culture is
Merck & Co., one of the world’s largest pharmaceutical companies and known for
its strong ethical values and leadership. As its founder George W. Merck (1894–
1957) once stated, “We try to remember that medicine is for the patient. We try
never to forget that medicine is for the people. It is not for the profits. The profits
follow, and if we have remembered that, they have never failed to appear. The
better we have remembered it, the larger they have been.”

Culture is deeply rooted, but businesses may make their own interpretations of its
accepted norms.
Merck & Co. is justly lauded for its involvement in the fight to control the spread
of river blindness in Africa. For more information, watch this World Bank video
about Merck & Co.’s efforts to treat river blindness and its partnership with
international organizations and African governments.

Our beliefs are also challenged when a clash occurs between a legal framework
and cultural norms, such as when a company feels compelled to engage in dubious
and even illegal activities to generate business. For example, the German
technology company Siemens has paid billions of dollars in fines and judgments
for bribing government officials in several countries. Although some local officials
may have expected to receive bribes to grant government contracts, Siemens was
still bound by national and international regulations forbidding the practice, as well
as by its own code of ethics. How can a company remain true to its mission and
code of ethics in a highly competitive international environment ((Figure))?
Ethical decision-making in a global context requires a broad perspective. Business
leaders need to know themselves, their organization’s mission, and the impact of
their decisions on local communities. They also must be open to varying degrees of
risk. (credit: “accomplishment action adventure atmosphere” by unknown/Pixabay,
CC0)

Business performance is a reflection of what an organization believes about itself,

as in the IBM and Merck examples.

Those beliefs, in turn, spring from what the individuals in the organization believe
about it and themselves, based on their communities, families, personal
biographies, religious beliefs, and educational backgrounds. Unless key leaders
have a vision for the organization and themselves, and a path to achieving it, there
can be no balance of beliefs about profitability and responsibility, or integration of
business with culture. The Manhattan purchase was successful to the degree that
Minuit and the tribal leaders were willing to engage in an exchange of mutual
benefit. Yet this revealed a transaction between two very different commercial
cultures. Did each group truly understand the other’s perception of an exchange of
goods and services? Furthermore, did the parties balance personal and collective
beliefs for the greater good? Given the distinctions between these two cultures,
would that even have been possible?

Consumerism and the Global Marketplace

To paraphrase the ancient Greek philosopher Heraclitus (c. 535–475 BCE), the one
constant in life is change. Traditional norms and customs have changed as the
world’s population has grown more diverse and urbanized, and as the Internet has
made news and other resources readily available. The growing emphasis
on consumerism—a lifestyle characterized by the acquisition of goods and services
—has meant that people have become defined as “consumers” as opposed to
citizens or human beings. Unfortunately, this emphasis eventually leads to the
problem of diminishing marginal utility, with the consumer having to buy an ever-
increasing amount to reach the same level of satisfaction.

At the same time, markets have become more diverse and interconnected. For
example, South Korean companies like LG and Samsung employ 52,000 workers
in the United States,

and many U.S. companies now manufacture their products abroad.

Such globalization of their domestic markets has allowed U.S. consumers to enjoy
products from around the world, but it also presents ethical challenges. The
individual consumer, for instance, may benefit from lower prices and a greater
selection of goods, but only by supporting a company that might be engaged in
unethical practices in its overseas supply or distribution chains. Producers’ choices
about wages, working conditions, environmental impact, child labor, taxation, and
plant safety feature in the creation of each product brought to market. Becoming
aware of these factors requires consumers to engage in an investigation of the
business practices of those parties they will patronize and exercise a certain
amount of cultural and ethical sensitivity.
Overseas Manufacturing

How can the purchase of a pair of sneakers be seen as an ethical act? Throughout
the 1990s, the U.S. shoe and sportswear manufacturer Nike was widely criticized
for subcontracting with factories in China and Southeast Asia that were little more
than sweatshops with deplorable working conditions. After responding to the
criticisms and demanding that its suppliers improve their workplaces, the company
began to redeem itself in the eyes of many and has become a model of business
ethics and sustainability. However, questions remain about the relationship
between business and government.

For instance, should a company advocate for labor rights, a minimum wage, and
unionization in developing countries where it has operations? What responsibility
does it have for the welfare of a contractor’s workers in a culture with differing
customs? What right does any Western company have to insist that its foreign
contractors observe in their factories the protocols required in the West? What, for
example, is sacred about an eight-hour workday? When Nike demands that foreign
 manufacturers observe Western laws and customs about the workplace, arguably
this is capitalist imperialism. Not only that, but Western firms will be charged
more for concessions regarding factory conditions. Perhaps this is as it should be,
but Western consumers must then be prepared to pay more for material goods than
in the past.

Some argue that demanding that companies accept these responsibilities imposes
cultural standards on another culture through economic pressure. Others insist
there should be universal standards of humane employee treatment, and that they
must be met regardless of where they come from or who imposes them. But should
the market dictate such standards, or should the government?

The rise of artificial intelligence and robotics will complicate this challenge
because, in time, they may make offshoring the manufacture and distribution of
goods unnecessary. It may be cheaper and more efficient to bring these operations
back to developed countries and use robotic systems instead. What would that
mean for local cultures and their economies? In Nike’s case, automation is already
a concern, particularly as competition from its German rival, Adidas, heats up
again.

Critical Thinking

 What ethical responsibilities do individual consumers have when dealing with

companies that rely on overseas labor?
 Should businesses adopt universal workplace standards about working conditions
and employee protections? Why or why not?
 What would be required for consumers to have the necessary knowledge about a
product and how it was made so that they could make an informed and ethical
decision? The media? Commercial watchdog groups? Social-issues campaigns?
Something else?

Read this report, “A Race to the Bottom: Trans-Pacific Partnership and Nike in
Vietnam,” to learn more about this issue.

In considering the ethical challenges presented by the outsourcing of production to

lower costs and increase profits, let us return to the example of IBM. IBM has a
responsibility to provide technology products of high quality at affordable prices in
line with its beliefs about client success, innovation, and trust. If it achieved these
ends in a fraudulent or otherwise illegal way, it would be acting irresponsibly and
in violation of both U.S. and host country laws and as well as the company’s own
code of ethics. These constraints appear to leave little room for unethical behavior,
yet in a globalized world of intense competition, the temptation to do anything
possible to carve out an advantage can be overpowering. This choice between ends
and means is reminiscent of the philosophers Aristotle and Kant, both of whom
believed it impossible to achieve just ends through unjust means.

But what about consumer responsibility and the impact on the global community?
Western consumers tend to perceive globalization as a phenomenon intended to
benefit them specifically. In general, they have few compunctions about Western
businesses offshoring their manufacturing operations as long as it ultimately
benefits them as consumers. However, even in business, ethics is not about
consumption but rather about human morality, a greater end. Considering an
expansion of domestic markets, what feature of this process enables us to become
more humane rather than simply pickier consumers or wasteful spenders? It is the
opportunity to encounter other cultures and people, increasing our ethical
awareness and sensitivity. Seen in this way, globalization affects the human
condition. It raises no less a question than what kind of world we want to leave to
our children and grandchildren.

Summary

Culture has a tremendous influence on ethics and its application in a business

setting. In fact, we can argue that culture and ethics cannot be separated, because
ethical norms have been established over time by and make sense to people who
share the same background, language, and customs. For its part, business operates
within at least two cultures: its organizational culture and the wider culture in
which it was founded. When a business attempts to establish itself in a new
environment, a third culture comes into play. With increasingly diverse domestic
and global markets and the spread of consumerism, companies must consider the
ethical implications of outsourcing production and resist the temptation to look the
other way when their values are challenged by the reality of overseas supply or
distribution chains.

Assessment Questions

The fact that a McDonald’s in Indonesia might provide sambal chili sauce to its
customers rather than ketchup is as an example of ________.
A. acculturation
B. consumerism
C. enculturation
D. globalization

A
What is the major difference between enculturation and acculturation?
Enculturation is the process by which humans learn the characteristics, values, and
rules to participate in a society more generally, whereas acculturation is the
introduction of the values, worldview, philosophy, or practice of one culture into
another.
How might consumerism be at odds with the growing concern for business ethics?
As an extreme preoccupation with buying and owning, consumerism runs counter
to the new sensitivity to ethics and human flourishing in business, because it
defines people not by their humanity but by their purchasing power.
True or False? Globalization is evidence that business is culturally neutral.
False. Cultures often adapt to business rather than the other way around. As an
example, U.S.-style jeans and baseball caps can now be found globally.

VI The Role of Organizational Culture in

Social Responsibility

Social responsibility is very important in our increasingly globalized world. This

lesson will explore why organizational culture is so important to reaching social
responsibility goals.

What is Social Responsibility?

You have worked for a leading technology company, EdgeTech, for the last five
years.

When you got the job you were extremely excited about their famous culture, or
the values and goals shared by everyone working with the company. Company
culture was your top priority; you know that the culture of a company affects
everything they do, especially when it comes to maintaining social responsibility.
You were also drawn to EdgeTech's model of social responsibility; they seemed
to be working toward having a positive influence on the societies that they operate
in. Your research indicated that they were working to increase the environmental
friendliness of their products, regularly participating in community service or
philanthropic activities, and were recognized for fair and ethical labor practices.

Management and Company Culture

Sadly, you quickly found out that the well-known company culture was just a very
successful lie. After just a few months you realized that there were no shared
values and managers were not ethical.

You often caught the executive management team contradicting themselves. For
example, they would tell staff (and the media) that they were investing in
environmentally friendly products, but the employees all knew that the essential
metals used in their products were mined by elementary aged children.

Does the CEO realize how important managers are to fostering a company culture?
That company culture is essential to socially responsible practices? After all,
managers are the ones who lead their teams, encourage and inspire them to be
ethical, and pursue the company values.

Socially Responsible Company Examples

You know there are companies out there demonstrating good social responsibility.
Why can't your company be more like these?

Google

Google's 'Google Green' effort includes recycling, conserving energy (like turning
off lights), and supporting renewable energy. Because of their efforts, they've been
carbon neutral since 2007, their data centers use 50% less energy than typical data
centers, and they purchase more renewable energy than any other corporation in
the world.

Xerox

Xerox promotes social responsibility directly through their employees. In 2013

they set aside over a million dollars to put into their 'Community Involvement
Program', which allowed thousands of employees to join in community projects.
This increased not only their overall community recognition, but their employee
morale.

Starbucks

Starbucks Coffee Company continually increases the amount of stores with LEED
certification in multiple countries, as well as having 99% of their coffee ethically
sourced. They buy renewable energy and promote recycling and reuse by installing
bins in their stores and offering a discount to those who bring their own reusable
cup.

The Three Principles

You wonder... Does your company do anything good within the three pillars of
social responsibility?

1. Environment - taking steps to improve the environment.

Your company has changed their packaging to be from recycled materials, and
they hold contests between departments to promote sustainable commuting like
bicycling to work or participating in carpools.

2. Philanthropy - participating in community events or promoting/participating in

community-based programs

Well, now that you think about it, EdgeTech does engage in running 5k's for
various groups in need, they collect food for the local shelter, and they have helped
to open a school in the village near their mine in Africa.

3. Labor Practices - ensuring fair wages, equal hiring opportunities, and

promoting good working conditions

EdgeTech has made themselves famous by saying that they provide equal benefits
regardless of race, gender, and sexuality. However, you have watched your
manager, Mark, throw out applications based solely on name. And knowing their
materials support child labor can't be a good sign of labor practice ethics.

Ethics Ombudsman
It is good to remember that EdgeTech is still doing some good. But that's hard to
keep in mind when the management or other company leaders have such poor
values in other areas.

Now, after five years, you are frustrated at the corrupt practices of EdgeTech. In
fact, you often wonder what things might be like if they had ever hired an ethics
ombudsman. Someone who advocates for the company ethics, investigates ethics
complaints, and acts as a neutral third party.

You can imagine that mediation, a neutral third party intervention (sometimes led
by the ethics ombudsman) may have helped you to deal with Mark and the
company's behavior and ethics that defy the principles of social responsibility.

Lesson Summary

Company culture means that values and goals are shared by everyone working
within a company. The culture of a company affects everything they do, especially
when it comes to maintaining social responsibility, or having a positive influence
on the societies and environment that they operate in.

Managers must be leaders of company culture and make sure their company
overall is following the three principles of social responsibility: environment,
philanthropy, and labor practices. Companies should be willing to hold
themselves accountable by hiring an ethics ombudsmen, who advocates for the
company ethics, investigates ethics complaints, and acts as a neutral third party.

VII Talking About Ethics Across Cultures

A few years ago, I was teaching a two-day program about ethics in India for
entrepreneurs and business faculty who taught entrepreneurship. It was a program
that I had spent years honing, building upon research that suggests rehearsing —
pre-scripting, practicing voice, and peer coaching — is an effective way to build
the moral muscle memory, competence, confidence, and habit to act ethically.
Rather than simply preaching and pretending, we wanted to address the day-to-day
realities that create pressure to act unethically even when employees know and
want to do better.

The program in Delhi started as many of these programs do: A group of cordial but
skeptical participants sat with arms crossed and gentle smirks, leaning back in their
chairs. When I finally was able to coax one of them to express what they were
thinking, he said: “Madam, we are very happy to have you here and we are happy
to listen to what you have to say about ethics and values in the workplace. But this
is India, and we are entrepreneurs — we can’t even get a driver’s license without
paying a bribe.”

He was raising an issue I had struggled with when developing the program, which
is called Giving Voice to Values. My aim was to take a new approach to values-
driven leadership development, one that was a stark departure from the way
companies and educators had been teaching business ethics. For years, training in
this area was based on the assumption that the way to build an ethical workplace
was to educate employees on laws, ethical norms, and company values so that they
could decide what the “right” thing to do was in any particular situation. I became
increasingly convinced, however, that many folks already knew what was right —
and many of them even wanted to do it — but they felt pressured to do otherwise
by the competitive environment, by their colleagues and managers, by their
customers, and often, as the participant in my Delhi program pointed out, by the
cultural context in which they were operating.

I’ve learned by sharing the Giving Voice to Values approach with audiences
around the world — in India, Nigeria, South Africa, Ghana, China, the Philippines,
the U.A.E., Cairo, Moscow, Costa Rica, Argentina, Uruguay, Australia, and all
over Europe — that there are key ways to building ethical workplaces across
cultures.

First, it’s critical to acknowledge the reality of the context. My Indian

entrepreneurs needed me to demonstrate that I understood the pressures they
confronted on a daily basis. And my audiences in other regions — notably in parts
of Asia — need recognition of the strong emphasis placed on respect for authority.
Without this acknowledgment, any discussion of values in the workplace seems
irrelevant at best and hypocritical at worst. However, just as we acknowledge those
realities, we also recognize that this does not mean that individuals in a particular
region are necessarily happy to pay the bribe, for example, or content to mute their
own concerns, for another.

Second, rather than starting with, “Here are the values that you should have,” begin
with, “I know you have values already and I want to help you enact them.” In other
words, start from a place of respect and appeal to their own felt aspirations. Those
entrepreneurs I worked with in Delhi were not pleased about the pressures they
faced but by enabling them to acknowledge the reality they faced and what they
wanted to do, gave them room to think of other ways to act.
Third, give people emotional distance from the issues. Don’t ask employees,
“What would you do?” Instead, share a culture-specific case and ask them, “What
if you were the protagonist in this story who has already decided what she thinks is
“right” and wants to do it? How might you get it done?” This frees from the need
to rationalize or defend their reluctance to act. Once they have crafted a viable and
realistic script or action plan for the imagined case protagonist, they will feel more
empowered to think about what they themselves would do.

Fourth, use real-life examples of people who’ve acted ethically in the culture
where the conversation occurs. They need to believe that it’s possible here so they
can begin to feel a sense of pride about it. In my program with Indian
entrepreneurs and faculty, this example also triggered a healthy sense of
competition: “If he can do it, so can we!”

Finally, it’s important to clarify what taking action looks like. It might mean asking
a question, writing a memo, doing some research, and adding some additional
information to the discussion. Or it might mean trying to figure out who the key
decision-maker truly listens to and trying to reach that person as a way to influence
the ultimate arbiter of an issue.

It can be helpful to help employees craft arguments and reframe problems in ways
where the truly respectful thing to do would be to make sure their supervisor is
fully supplied with all the relevant information and arguments, rather than leaving
them unprepared. In other words, acting ethically does not have to be defying one’s
boss.

Voicing and enacting values — especially across cultures — typically does not
mean stamping our feet and shaking our fists. More often it’s about finding
creative ways to reframe issues, while recognizing and respecting the real and
often admirable qualities of the culture where one is operating. You also have to be
patient, understanding that systemic changes are often required but that the need
for systemic change does not justify abdicating the potential, the responsibility, and
the power of the individual.

As with all ethical situations — in any location — it’s time to move away from the
idea that moral courage is all that’s required and recognize that, just as in any
other business challenge, it’s competence — in this case, moral competence — that
is the critical success factor.
VIII Five Ways to Build Cultural
Intelligence and Competence
Five Ways to Build Cultural Intelligence and Raise Your Cultural IQ

In the 1990s and beyond, people who made culturally offensive

comments were often sent to “sensitivity training,” in hope that they
would show remorse. It was viewed as a punishment and met with
resistance.

While some organizations and institutions are still providing sensitivity

training to employees who have made statements deemed offensive, there
is growing understanding that by providing “culturally intelligent”
education, people are better able to communicate across differences, and
develop peer relationships.

Cultural Intelligence is the capacity to work effectively with groups of

people from any culture. In other words, someone with a high cultural IQ
can be dropped into a culture they know nothing about, and will be able
to observe, empathize, and develop relationships with people, despite not
speaking a word of their language.

This helps break down biases, prevent incorrect assumptions, and

motivate individuals to become comfortable in new situations with
people from different cultural groups

Everyone in your organization needs to raise their “cultural IQ” in order

to work better together and become leaders in the global business
environment.
When people in organizations or institutions develop a high level of
cultural intelligence, they have the skills to ask the right questions, give
the right answers, and work with people from any culture or cultural mix.
(This cultural mix can include ethnicity, age, religion, economic
background, sexual orientation, or industry.)

I’ve found ten key ways to raise your Cultural IQ. Here are the first five.

1. Be curious and interested in learning about other cultures.

Are you willing to take a risk, observe other people’s behaviors, and ask
questions in appropriate ways? If you’re not interested or willing to view
situations from another perspective, it won’t matter how many countries
you visit or diversity potlucks you attend.

2. Develop an awareness of self in relation to others.

Identify specific ways in which your own cultural background and
experiences have influenced your perspective, and how other people’s
behaviors are determined by their culture and experience. Look for
differences and similarities. Be mindful of the fact that not every person
from a particular culture thinks the same, and that there are differences
based on generations, economics, etc.

3. Make your mind a clean slate.

When you are observing other cultures, use an objective mindset. If you
find yourself being judgmental, do a “thought-intervention.” Reframe
your inner conversation by thinking, “That’s interesting…I want to know
more.” This also means being extra conscious of your own biases and the
need to make people who do things differently wrong.
4. Develop an awareness of your biases towards other cultures and
traditions.

Learn and practice ways to break away from those biases. Awareness
without practice keeps people culturally ignorant

5. Put yourself in situations with people from different cultures

and practice the other four tools.

IX Why You Need Cultural

Intelligence (And How To Develop It)
IQ, EQ now CQ? As globalization has rendered the business environment
more complex, dynamic, and competitive, the ability to function effectively in
different cultural contexts, called Cultural Intelligence (CQ), has never been
more important for organizations.

Employees who possess a high level of cultural intelligence play an important role
in bridging divides and knowledge gaps in an organization: educating their peers
about different cultures; transferring knowledge between otherwise disparate
groups; helping to build interpersonal connections and smooth the interpersonal
processes in a multicultural workforce. Culturally intelligent employees also
posses the potential to drive up innovation and creativity, due to their ability to
integrate diverse resources and help the business make best use of the multiple
perspectives that a multicultural workforce brings to the workplace.

Such abilities go beyond simply being intelligent, emotionally mature, and/or

having good general social skills. CQ is a system consisting of three interactive
components - cultural knowledge, cross-cultural skills and cultural metacognition.
While these three components of CQ can be developed in different ways (see
below), it´s important to note that they do not operate in isolation from each other.

Cultural Knowledge is composed of content (what) and process (how) knowledge

of other cultures, such as how and when people express disagreements with each
other, and how to give feedback to subordinates.

How To Develop It: You can gain cultural knowledge through multiple channels,
such as newspapers, movies, books, traveling to another country, or working with
or being friends with people from a different culture. This learning experience will
be optimized if you are mindful during the process, such as through carefully
identifying what is unique about one culture, analyzing why it is unique, and
forecasting when and how you could utilize this knowledge in the future.

Cross-Cultural Skills consist of a broad set of skills instrumental for intercultural

effectiveness, specifically:

1. relational skills; whether you enjoy talking and interacting with

people from other cultures
2. tolerance of uncertainty; whether you are able to tolerate uncertainties,
ambiguities and unexpected changes in an intercultural interaction
3. adaptability; whether you can change your behavior according to the
cultural demands
4. empathy; whether you can put yourself in a culturally different person
´s shoes and imagine the situation from his or her perspective
5. perceptual acuity; whether you understand other people´s feelings and
subtle meanings during intercultural interactions
How To Develop it: Cross-cultural skills are best developed through experiential
learning, e.g. through studying or working in a foreign culture where you can
practice these skills through trail-and-error.

The development of these skills is accelerated when one is equipped with the
appropriate cultural knowledge that was developed earlier. For example, if you
know that in cultures such as Spain meeting someone 10 minutes after your
arranged time is not considered late, you will feel more at ease when a Spanish
colleague does not turn up exactly on time for a meeting. Similarly, being adaptive
in a new cultural context requires the knowledge of how to behave appropriately in
that culture. Again, this learning experience will be optimized if you are mindful
during intercultural interactions and analyze your own behavior as well as your
counterpart´s reactions.

Cultural Metacognition (sometimes called Cultural Mindfulness) is the

knowledge of and control over one´s thinking and learning activities in the specific
domain of cultural experiences and strategies. Being culturally mindful means one
is aware of the cultural context, consciously analyzes the interactive situation, and
plans courses of actions for different cultural contexts.

How To Develop It: In order to improve cultural metacognition, you need to

practice mental exercises where you are observing others´ behaviors, analyzing
situations and reflecting on your own behavior.

 Pay attention to how the other party acts and reacts to you in a number
of situations – this serves as the foundation for evaluating whether
your behavior has achieved your desired goal. Based on this analysis,
you can then decide what action you wish to take next.
  Reflect on successful as well as unsuccessful intercultural interactions
and write down what knowledge and skills you have used during
those interactions. Are there any clues you missed or misread? Was
there any word or behavior you did not know how to interpret? What
would you do differently in a similar context?

 Again, this learning experience will be optimized if you already have

some cultural knowledge and cross-cultural skills. For example, if you
can relate to your counterpart and are able to put yourself in his or her
shoes, it will be easier for you to interpret his or her behavior and plan
for your next move.

Developing your CQ in these ways will go a long way to ensure that you and your
organization are able to nimbly navigate across cultural boundaries.