Why do we make the decisions that we do? How do we rationalize these decisions?
Research is constantly evaluating how and why business managers make the choices we make, which we’ve outlined over the last few weeks.
To sum up, the three main biases discussed:
- Availability bias – involves making a decision not based on an outcome’s true frequency/probability, but rather on how frequent an event enters the forefront of one’s mind.
- Representativeness bias – involves judging the likelihood of an event based on how closely it relates to another event – i.e., on a mental model that does not exist in reality.
- Anchoring bias – involves reaching a decision from an initial set point, often grounded in your culturally-influenced values and norms.
However, these are only a few ways in which culture creeps in to bias our decision-making.
Even our confidence in our decision-making ability is often influenced by culture.
Confidence in the Veracity of Decision-Making Ability
Research shows that, compared to their U.S. counterparts, Mexican managers are exceedingly confident in the veracity of their decision-making.
In a study by Christine Uber Grosse, entitled, “Global Managers’ Perceptions of Cultural Competence,” one Mexican manager explained the differences between leaders in Mexico and America, saying:
“We in Mexico are more colloquial or informal and are not so inclined to statistics. The Americans are very ‘manual-oriented’ and organized and we are more relaxed and ingenious.”
So, while before committing to a decision, U.S. managers expect to hear a complete plan laid out, including costs, a schedule, and the target results, Mexican managers rely more heavily on their gut instinct.
Moreover, when Mexican managers commit and something fails, they are more likely to double-down on that commitment, throwing good money after bad (as U.S. managers might put it).
According to research conducted by J. Frank Yates and Stephanie de Oliveira (“Culture and Decision-making“):
“A high degree of overconfidence has been found among Mexicans relative to Americans (Lechuga & Wiebe, 2011)…Overconfidence was widespread but differed in degree according to region.”
This overconfidence was attributed by the authors not so much to a manager’s judgment in confidence, but rather to differences in ability, as the latter varied substantially across countries.
Simplified Mental Models
Tying this all together with cross-cultural business, knowledge of the biases that influence decision-making – and another’s confidence in their decision-making – will help you navigate another culture’s rationale while also redirecting yours accordingly.
With various worldviews and cultural backgrounds, subjective realities exist, resulting in different mental decision models.
But one thing is universal: managers use their simplified and biased mental models to make their decisions.
Although likely different than your own, their simplified mental model is not irrational; it is based upon their subjective cultural perception and reality, just as yours is.
Oftentimes, no matter how illogical a decision may seem to you, the other is acting rationally within their own cultural framework, their baobab.
So, before concluding that a foreign manager’s decision makes no logical sense, familiarize yourself with the culture, its perception, and its reality.
You may then understand how a manager’s availability, representativeness, and anchoring biases – or any other culturally-influenced bias – enter into their decision-making.
Success Across Cultures 