4 Managerial Styles to Cope with Stressful Decision-Making

You are facing a global pandemic. You must decide the best approach to keeping your business afloat.

How do you protect your bottom line? Do you lay off workers? Can you do mental gymnastics and reassess your business model, making the current economy’s limitations work for you?

The way you cope with the stress of complex business decisions reflects both your personality and your culture.

Four different managerial styles have been identified through research.

We’ll call these styles:

  • The architect
  • The free spirit
  • The expert-seeker
  • The panic attack

You may recognize one – or all – of these strategies in yourself and your management methodology.

Let’s take a look at each.

The Architect

This form, which is most taught in schools of management, considers alternative solutions to complex business decisions through the attentive collection of facts.

This methodology and its application is one in which Western managers pride themselves.

An architect is a planner, accounting for the whole picture and all potential outcomes.

The Free Spirit

Complacency and spontaneity are the main tools in the free-spirit’s managerial toolbox.

No complicated decision-making process is employed; the free-spirit takes the first available practical course of action that presents itself.

In doing so, she may be blind to alternatives with better outcomes.

The Expert-Seeker

Instead of relying on his own managerial expertise, the expert-seeker passes the buck to those more knowledgeable or qualified on the subject.

The expert-seeker might consult a specialist or supervisor in all aspects of an issue in order to direct his decision-making.

The Panic Attack

The last managerial decision-making style is one you should avoid.

This tactic involves succumbing to panic mode and making reckless, ill-advised decisions largely based on hysteria.

Obviously, this decision-making methodology is not recommended.

Personality and Culture Impacts Decision-Making Methodology

Your decision-making process is largely impacted by both your personality and culture.

Although you’ll find all four strategies in every culture, some styles may be more predominant than others.

For instance, you’ll find The Architect methodology is applied more often in Western cultures (e.g. the U.S. and Australia) than in, say, Japan or other East-Asian countries.

That does not mean the chosen strategy is any less rational or effective (unless we’re talking The Panic Attack).

The difference in methodology is based on a different set of cultural norms and values so, rather, a style that is ineffective in one culture may be more effective in another.

As we discussed in past posts, people act rationally within their own culture.

One example:

Intuition and emotion often direct Japanese managerial decision-making.

Due to the collectivist values of the culture, a primary concern will be how the decision might be received by the group and how it might affect the social fabric.

Collectivist societies take stock in the collective view; the welfare of the entire group, rather than simply the individual, is most important.

We’ll talk more next week about other biases in the managerial decision-making process.

A Cross-Cultural Look at How One’s Sense of Control Influences Life Satisfaction & Well-Being

You have a dream: you want to become a famous singer.

You’re driven by an internal locus of control, meaning you believe you control your fate.

So, you take singing lessons, seek out every opportunity to perform, and invest time and money into building your skill.

You believe that if you try, you’ll make it. Destiny is in your hands. You are responsible for your own self-fulfillment.

Now, imagine you have that same dream – to become a famous singer – but you’re driven by an external locus of control; you believe your fate is predetermined. Your destiny is out of your hands and is directed by your environment.

Although you hone your craft as well, you don’t seek out opportunities to achieve your destiny, as you believe it will come to you.

If it’s ordained in the stars, you will be self-fulfilled in time.

Which locus of control do you imagine results in a more positive subjective well-being?

Internal Locus Results

It makes sense that the way you view your own personal control over your life might impact satisfaction and well-being, and various studies confirm this.

According to the study, “Locus of control and subjective well-being – a cross-cultural study”:

“Internal locus of control has been linked with academic success (Gifford, Briceño-Perriott & Mianzo, 2006), higher self-motivation and social maturity (Nelson & Mathias, 1995), lower incidences of stress and depression (Garber & Seligman, 1980), and longer life span (Chipperfield, 1993). Psychological and physical well-being has also been shown to be moderated by perceived control (Brandstadter & Renner, 1990).”

Being that those with an internal locus believe they are the director of their own lives, this sense of control allows them some predictability, as they pursue their goals with the vision that they can achieve a specific outcome through their efforts. They’re optimistic about reaching the end goal and feel a sense of power over their own lives.

This is one reason why those with an internal locus – more often than not from individualist societies – tend to clock more positive results regarding satisfaction and subjective well-being.

However, the internal locus is a double-edged sword. Individualist societies often see higher suicide rates than collectivist societies, which may be a result of unmet ambitions and a lack of communal support.

External Locus Results

Opposite the internal locus, those with an external locus believe they have no control and, thus, there’s no predictability. Their lack of power results in anxiety, a more pessimistic view of their ability to create change, and lower subjective well-being.

A quote from that same study:

“External locus of control is correlated with higher levels of stress (Garber & Seligman, 1980), and Grob (2000) notes that stress is often caused because an individual perceives the situation as beyond his or her coping abilities; with ongoing stress having a negative effect on subjective well-being…It is noted that internals actively manipulate their environments, thus acting to take control of events and to change dissatisfactory conditions (Kulshresta & Sen, 2006). In contrast, externals feel powerless to control their successes or failures (Nielsen, 1987) and, thus, are unable to remove themselves from dissatisfactory situations (Kulshresta & Sen, 2006).”

One way in which those with an external locus – more often than not from collectivist societies – combat this insecurity is to build a strong support system structure.

This is one reason collectivist societies are built upon relationships; so that the support is there when the “environment” takes an individual down a dark road.

Both the internal and external locus are cultivated by culture.

Next week, we’ll talk about the ways in which a culture’s locus of control is illustrated in media and daily life.

How Culture Impacts a Person’s Sense of Control (aka Locus of Control)

Do you believe in fate?

Last week, we talked about how the degree to which someone feels life is directed by destiny dictates their locus of control – that is their feeling of control over their own lives.

Let’s look at how the locus of control unfolds in the workplace.

The Blame Game

When a goal is set and not reached in a workplace environment, the reactions of your colleagues can be very telling.

Sheila blames Jeremy for not delivering the documents in time for her to complete her task.

Jeremy blames Tom for not communicating promptly.

Tom blames his home life for distracting him.

Team Leader Lisa admits she missed the mark and should have taken the campaign in another direction. She apologizes for the part she played in not meeting the goal.

People with an internal locus of control take personal responsibility for their role in a group’s failure, while those with an external locus point at everyone else but themselves, whether they see fault in the “weakest links” of the group or in external factors.

Cross-Cultural Factors

How do cross-cultural factors come into play in the locus?

The locus of control is directly related to personality orientation; however, social psychologists have begun to study the majority locus of control in various cultures and the factors that influence it.

They’ve discovered that quite often the people of any given culture look at fate or self-control in a generally collective manner.

As you may have guessed, individualist cultures generally demonstrate an internal locus of control. They believe they’re the masters of their own fate.

Collectivist cultures – like those of China or Japan – demonstrate an external locus. They accept that things are out of their hands and don’t put weight on the individual’s role in the whole.

To illustrate this, when Americans and Chinese were surveyed about their view of fate, these were the results.

locusofcontrol

89% of questioned Americans agreed with the statement, “What happens to me is my own doing,” while 65% of Chinese admitted, “Sometimes I feel I don’t have control over the direction my life is taking.”

This aligns with each culture’s dominant traits, with Americans espousing ambition, individualism, and the “American dream,” while China espouses harmony and collectivism.

Next week, we’ll talk a little bit about how the group locus of control can be divided up further amongst ethnic groups and even simply locations in the same country. We’ll also talk about primary and secondary control. Stay tuned.

Corporate Social Responsibility Model: Changing the Way Corporate Giants Do Business

Enhancing education, partnering with the World Wildlife Fund, committing to Conservation International’s sustainability efforts.

These are just some ways in which big corporations are leaning hard on a corporate social responsibility business model.

Last week, we talked about social responsibility and how it can be passive or active.

Corporate social responsibility (CSR) is an active approach in which businesses consciously change the way they do business in order to positively impact society.

CSR Objectives

There are two main motives to CSR:

  1. To improve quantitative social aspects – including the company’s societal impact
  2. To improve qualitative social aspects – including efficient employee management and processes

This relatively new concept of CSR has evolved as shareholders have. Today’s shareholders are often concerned in a company’s ripple-effect – its impact on the environment and society – rather than simply on the bottom line.

Industrial repercussions are at the forefront of the social conscience, thus shareholders are more apt to hold a corporation responsible for environmental and social impact.

This is not an individualist approach to business; it’s a collectivist approach.

personal values societal resp.jpg

As you can see in the chart above, rule-based/individualist cultures lean towards personal responsibility, while relationship-based cultures lean towards societal responsibility.

In this way, you can see how economic management business models can benefit from cultural values other than our own.

CSR injects rule-based cultures with relationship-based cultural values.

And it’s a beautiful thing.

Mandated CSR

In some cases, governments mandate corporate social responsibility.

India, for example, required that companies donate 2% of net profits to charitable organizations in 2014, becoming the first country to enact such legislation.

The law required that a CSR board committee be established within the company, designating that 2% over the previous three years’ net profit to CSR. The board director would, at fiscal year’s end, review the company’s efforts to ensure compliance.

But, oftentimes, CSR is voluntary, as in the following cases.

Voluntary CSR

Microsoft’s Bill Gates is well known for his charitable efforts.

The Bill and Melinda Gates Foundation has done a huge part in eradicating hunger and poverty.

The Microsoft company, itself, has focused its efforts on social responsibility, with the Reputation Institute’s Chief Research Officer, Stephen Hahn-Griffiths, stating:

“Microsoft is committed to enhancing education as a highly relevant global human issue – and, unlike Apple, operates as an open-source platform that fosters perceptions of good citizenship and good governance.”

Another example of CSR done right is the Danish company, Lego.

Lego promotes sustainability, partnering with the World Wildlife Fund to fulfill its “Build the Change” and “Sustainable Materials Center” initiatives.

In 2017, Lego extended this partnership, with goals to push global action on climate change and reduce manufacturing- and supply chain-CO2 emissions.

These are just two examples of CSR in action.

What do you think of corporations taking an active approach in positive social change? As a conscious consumer, does a corporation’s social responsibility influence your purchases?

“Fair and Generous” Missteps in Cross-Cultural Business: A Case Study

An American company was looking to build an assembly plant in Eastern Europe.

In an attempt to be “fair and generous,” the company decided not to pay the average living wage of the area, which was much lower than the average living wage in America; rather, they offered to pay new laborers four times that average.

Sounds pretty generous, right?

Well, what they didn’t consider is the disharmony this would sow in the community.

The new lucrative jobs tore the town’s social fabric apart. Folks were anxious about which families would benefit. Things got cutthroat.

The company was now in a precarious position. What should they do in this situation?

Identify the Culture’s Values

With relationship-based cultures, the family unit is often the most important unit in society. Unlike in rule-based cultures, which are often individualist, the family is more important than the individual. In fact, the two are one.

Many in relationship-based cultures support the family financially. Not just parents taking care of their children, but sons taking care of their parents, older brothers and sisters financially responsible for their younger siblings.

In hearing of such a lucrative wage for labor, who wouldn’t jump at the opportunity? Especially when it meant you could better support your in-group financially.

Moreover, the families of potential workers were also invested in these top-paying jobs. Securing the work would mean more money to go around.

Considering this society’s cultural values, what did the company do?

Did they close up shop in Eastern Europe for fear of the consequences of their offer?

Did they take the initial offer off the table and put forth a more comparable living wage?

Nope, they found a cross-cultural solution.

Work within the Culture’s Values

Rather than cut their losses or go back on their word, the company identified the culture’s values and incorporated them into their own.

In order to preserve social harmony in the town, they hired one person from every family unit. The anxiety of potentially being refused this opportunity was spared, and each family was better supported.

This is just one example of a cross-cultural solution that works.

Identify the culture’s values and work within those values the best you can. If you know what your workers care about, what matters most to them, then you know how best to support them, which is mutually beneficial to you.

Rule of Law in Culture: Are Laws More Important Than Relationships?

A hypothetical scenario:

Your best friend is picking you up to head out on the town. As you head into the city center, you notice your friend is driving quite fast; 40 mph in a 20 mph zone down a crowded street.

You see a pedestrian take a step off the sidewalk ahead of your friend’s car. “Look out!” you shout. But it’s too late. Your friend accidentally hits the pedestrian.

An ambulance is called, paramedics try to save the victim, but he doesn’t make it. He dies on the way to the hospital.

Weeks later, you are called to court as a witness to the fatal accident. You know your friend was driving well over the speed limit, but if you tell the truth, he’ll go to prison. If you lie for your friend, he’ll walk away.

Would you lie? Or would you tell the truth?

Survey: Venezuela vs. USA

This was the exact scenario given in a survey sent to 46,000 managers in 40 different countries in a study by Fons Trompenaars and Charles Hampden-Turner.

As a preface, Hofstede’s cultural dimensions define the US is a rule-based society; Venezuela is a relationship-based society.

Knowing this, which society do you think would choose to be truthful in this matter? And which do you think might lie to protect a friend?

As you can see below, the results were exactly as you’d expect.

additional_charts_CMYK-02

96% of American citizens surveyed said that, when confronted with this situation, they would tell the truth and abide by the law. Only 34% of Venezuelans agreed.

The majority of those from the relationship-based society of Venezuela would protect their friend above the law, while the overwhelming majority of Americans would put their societal responsibility before their friend’s fate.

Everyone is Equal in the Eyes of the Law

Western cultures are largely rule-based or “universalist.” Generally, they believe that, in order to be just, established rules and laws should be applied universally.

According to the purest form of justice, all people – friend or stranger, rich or poor, black or white – should be treated equally in the eyes of the law. And, with that perspective, most people in a law-based society would strive toward the rule.

Rules and laws are also seen, more or less, as a black and white matter.

A red light at a pedestrian crossing illustrates the seriousness of law in a rule-based culture.

In Germany or Switzerland – both strict rule-based cultures – place a foot out of line when the pedestrian crossing light is red, and you will see the reaction. Those around you will make it clear – albeit, likely with only a frown – that they’re not happy with your disobedience, albeit likely just with a frown. Even if it’s 2 in the morning.

Laws in a rule-based society are also considered essentially permanent.

For instance, a law that is a law today is unchangeable; it will be the same tomorrow (unless, of course, it’s changed through an often lengthy democratic process that involves party votes and public opinion).

Not even the highest office in the country has the right to change the law in an instant; neither is this highest office immune to the laws.

Beyond the Individual

While rule-based cultures often align with a high degree of individualism, relationship-based cultures walk hand-in-hand with collectivism. This results in a different prioritization of social norms in individualist vs. collectivist cultures.

One Confucian ideal puts this in perspective: care for one’s parents/grandparents comes first; then comes care for one’s children; then, for oneself.

Collectivists see human existence as reaching beyond the individual; rather an individual’s existence is a symbiotic relationship with extended family, the tribe, the village, society. One’s connection to others is part of his/her existence. Existing apart from this is a form of death.

As such, relationships are highly important; oftentimes, more important than rules. The alternative is ostracism which is, again, death.

Imprisonment is a form of ostracism. Should you confess that your friend broke the law, thereby sending him to prison, you are virtually putting him to death.

In this way, you can see the stark and dramatic difference the truth would make in this matter.

In this way, you can see the difference in perspective between relationship-based and rule-based cultures.

In this way, you might begin to understand motivations across cultures.

Directive vs. Supportive Leadership: Which Style Works in Your Culture?

Say, you believe that the success of the team is more important than personal goals, ambition, and achievements.

If that were the case, what type of management style do you think you’d prefer?

Would you want a supportive, inclusive leader offering you relative autonomy? A work environment where everyone can freely voice their opinions and concerns and stand out from the crowd?

Or would you want a directive, authoritarian leader within a company culture where harmony is more important than self-expression?

We’ve talked about how collectivist cultures view the “group” as more important than self. We’ve also discussed that thegroup” differs across cultures.

The group one most values often directs its workplace norms and preferences, including what motivational factors are effective and what type of leadership is preferred.

As to the latter, two styles of leadership are applied in varying degrees across cultures: directive and supportive leadership. Let’s take a look at both.

Directive Leadership

What makes a directive leader?

Here are some directive leadership behaviors:

  • Being task-oriented
  • Demonstrating control over subordinates
  • Dominating interactions
  • Personally managing the completion of tasks
  • Supervising closely
  • Pressuring employees to complete targets accurately and efficiently
  • Focusing on time management

With a directive leader, employees are placed in a role of dependency – depending on the leader to direct every aspect of their task, including how and when to move forward. Employees under directive leaders often demonstrate little personal initiative.

A number of studies have shown directive leadership often contributes to lesser satisfaction and team cohesion. Moreover, directive leadership unsurprisingly leads to less open communication.

However, directive leadership can also result in higher productivity.

Supportive Leadership

What makes a supportive leader?

Here are some supportive leadership behaviors:

  • Meeting employee needs/preferences
  • Showing concern for employee welfare, individual/group needs, and conflict within the group
  • Encouraging a supportive work environment
  • Providing positive feedback
  • Fostering team cohesion and openness
  • Inviting employees to be part of the decision-making process
  • Promoting positive morale
  • Facilitating discussions (as opposed to dominating them)

With a supportive leader, employees are provided more autonomy and encouraged to demonstrate personal initiative and to be individuals within a cohesive group dynamic.

Studies have shown supportive environments can empower and promote positive dependency among team members, despite being open to more potential conflict as a result of open communication and individual expression.

In his study on “Rights and Responsibilities of Dissent: Cooperative Conflict,” Dean Tjosvold concludes that:

“…asserting the right to self-expression contributes to establishing a conflict-positive climate in which differences and frustrations can be discussed openly.”

The hard part when managing across cultures is finding that fine line between cooperative conflict and just plain conflict.

Next week, we’ll discuss the hybrid leadership style that combines directive and supportive leadership. Stay tuned.

Understanding Cultural Values: With What “Group” Does Your Culture Identify?

Some cultures most identify with their nationality. Others their church. And still others, their family, tribe, or even workplace.

We’ve discussed collectivism in this blog and the mentality of society over self or group over individual.

But of what “group” are we speaking?

In order to better understand the values and norms of a culture, identifying the group with which a culture most closely identifies is essential.

Let’s take a look at some examples.

Who is Your Group?

  • The Irish culture strongly identifies with religion, the Roman Catholic Church.
  • The former Eastern Bloc identifies with Slavic ideals and the party.
  • The French identify with their country, which they call “la grand nation.”
  • The Japanese identify with their company and workplace.

While these are all generalizations (after all, not everyone falls in line with societal values and norms), these broad strokes do highlight the roots of the cultural baobab.

Group identity is flexible. And this is not to say that other groups in said societies are not important.

Family, after all, is important in nearly every culture, and there are other in-groups – like subcultures and company cultures – to which individuals of any society might feel strong ties.

But when trying to understand a culture as a whole and what makes that culture tick, identifying the group that most often defines or impacts the mechanics of society as a whole is essential.

Collectivist vs. Individualist

Group identity, social responsibility, and interdependence are values emphasized in collectivist cultures.

Individuality, self-fulfillment, and independence are those emphasized in individualist cultures.

One wants to fit in.

The other strives to stand out.

One sees conformity as negative.

The other sees singularity as deviant.

As one of Hofstede’s Cultural Dimensions, the scale between collectivist and individualist cultures is just that – a scale. No culture is at the polar extreme, one way or the other.

There are elements of collectivism and individualism in every culture.

And sometimes, these elements are surprising.

We’ll talk about that more next week.

Society Over Self: Collectivist Cultural Management

The core group in collectivist cultures is family.

And the definition of family differs across cultures, as we’ve previously discussed.

The West often considers the two-generational core to be “family,” while other cultures include extended relations – or even an entire village – under the umbrella.

Other “groups” in collectivist cultures include in-groups, like the company one works for, or society as a whole.

A group’s success and survival – whether the group is family, the village, the company, or society – ensures individual success and survival.

Because of this, harmony is valued in collectivist cultures, as is interdependence of individual members.

Children are socialized in groups early on in order to become interdependent.

Everyone depends on everyone else, because the group only survives as one.

Being recognized for individual achievement is almost unheard of; rather, collectivists work in tandem and share with group members – both their successes and their failures.

Group Loyalty = Self-Loyalty

In a collectivist culture, group loyalty is self-loyalty.

Think of it this way: society, a company, or a family is like a human body. Each member is a limb or an organ; each member is vital to the body’s function.

So, if one organ fails, the body fails.

If one limb is neglected, then the body isn’t functioning at its most optimal.

It’s with this mentality that collectivist cultures place a higher value on the group than the individual.

An individual’s personal goals and ambitions come second to the group’s overall success and well-being.

To return to our analogy, if a body’s personal goal or ambition was to win an arm-wrestling contest, so it pumped iron every day, focusing only on building up the biceps, but forgot about its legs or its core, then the arms might be able to succeed in meeting their ambition, but the rest of the body would suffer.

This is how collectivist societies view personal goals and ambitions.

Your arm (you, the individual) does not work alone.

A collectivist would sacrifice his own career goals for the sake of the group’s.

Society, First

When society comes first, self comes second.

This is one of the main reasons that in collectivist societies, management differs from individualist cultures.

Last week, we talked about how these differences clash through workplace incentives. “Employee of the Month” is one way in which management in individualist societies incentivize hard work.

But would this work in collectivist cultures? Not so much.

What would then?

We’ll talk about that more next week.

“Employee of the Month”: Self-Realization & Individualist Cultures

What is the “American Dream”?

The Commission on National Goals had the answer for President Eisenhower.

They reported that the primary motivator of American citizens was the possibility of individual self-realization.

What does this mean?

Pull Yourself Up By Your Own Bootstraps

The American Dream doesn’t often include the economic success and overall wellness of one’s neighbor or third cousin.

It’s a dream of one’s own economic success.

In individualist societies – like that of the United States, western Europe, and other Western countries – a person often identifies with themselves above all others and looks to satisfy his own needs before those of the group.

He also sees his path as one of self-determination. “Pull yourself up by your own bootstraps,” so to speak.

Self-reliance, personal freedom, and independence are the values glorified by individualist societies.

The individual is the smallest unit of survival.

Employee of the Month

This is why, at an American company, “employee of the month” is a successful incentive for productivity and improved performance in work culture.

The strong individualist culture means that employees will seek any way in which they can stand out from the pack in a positive light.

When your name and photo are posted on a bulletin board of achievement in the company lobby, recognition is your reward, and it fuels individualist motivation.

As a Swiss manager in the US, I appreciated the effectiveness of this reward system. So, I attempted to bring it back to Switzerland with me.

When I implemented “employee of the month” at the Swiss company I was managing, it fell flat. In fact, not only was it not a motivator, the reward system was met with immediate and breathtaking negativity on the staff’s part.

“This is ‘typical American,’” they said, adding that Swiss workplaces traditionally don’t single out individual successes, as they see success as a result of teamwork.

Although “employee of the month” type of recognition is frowned upon by Swiss companies, they are not so collectivist as to dissuade pay-for-performance or achievement-based promotion, also distinctions. The difference is, these are in-group and colleague-approved.

Collectivist Thought

On the other hand, a collectivist culture, which centers around group betterment, rather than individual development and freedom, would not even humor the idea of “employee of the month.”

An international survey asked managers from Egypt, China, Japan, and the US whether they agreed with the following statement:

“When individuals are continuously taking care of their fellow human beings, the quality of life will improve for everyone, even if it obstructs individual freedom and individual development.”

Who agreed?

  • 70% of Egyptian managers
  • 59% of Chinese managers
  • 61% of Japanese managers
  • 31% of US managers

We’ll talk more about that difference in mentality next week.