Individual, Top-Down or Consultative? Task-Based or Relationship-Based? How Decision-Making Varies Across Cultures

Individual, Top-Down or Consultative? Task-Based or Relationship-Based? How Decision-Making Varies Across Cultures

by Felicity Menzies

Interpersonal effectiveness across cultures requires a ‘meeting of the minds’—shared ways of thinking, feeling, and acting that help us able to better understand, predict, and respond to the thoughts and behaviour of others. A meeting of the minds increases the likelihood that our interactions will be harmonious, and our communicative goals will be achieved. However, this is not as easy as it sounds. Certain cognitive, emotional, and behavioural barriers must be overcome for individuals from different cultural backgrounds to align their frameworks for interpreting and responding to the world.

Cultural Schemas

The human brain has a natural tendency to categorise everything in our environment as schemas. Schemas are representations in our mind, based on many repetitions of similar objects and situations. We have schemas for physical objects like flowers or vehicles, and schemas for social activities like parties. We also have schemas for intangibles like peace or freedom. Our schemas are important because we interpret these as reality. They form the basis of our understanding. They guide our perceptions—what we see, interpretations—what something means to us, and behaviours—how we respond.

During our lifetime, we are repeatedly exposed to cultural values, beliefs, and norms. We organise and store our accumulated information into cultural schemas sometimes referred to as cultural frameworks or scripts. Cultural schemas are similar to personal schemas, except that we share them with others. Through shared experiences, we develop similar schemas. Our cultural schemas have vast breadth and depth. We have cultural schemas for gender roles, sharing, achievement, decision-making, equality, leadership, and emotional expression, to list only a few.

Decision-Making Schemas Across Cultures

Who Makes Decisions?

Olivia is senior legal counsel in the London office of an accountancy firm. Her group has been working on the acquisition of a competitor business with offices in Mumbai and Dubai. One of her responsibilities is to appoint an external legal firm for drafting partnership agreements. In line with company policies, she shortlists two firms and seeks the approval of the Mumbai and Dubai offices to proceed with an appointment. She emails details of her shortlist to her counterparts in both offices and suggests that they schedule a conference call the next day to discuss.

The following morning, Olivia calls her new colleagues. “This should not take too long”, she suggests. “Both firms have excellent credentials with experience in all three markets. Let’s have a quick look at their proposals and decide by majority vote”. Olivia then gives a 10-minute summary of each firm and their proposal before seeking feedback from her colleagues. “Well gentlemen, what do you think?”

Her Indian counterpart, Aryan, answered first. “Thank you, Olivia”, he said. “I appreciate the time you have taken to put this information together and your summary is helpful. I will need to submit your proposal to our Managing Partner for his approval, however, before I revert with our decision.”

Her Emirati colleague, Ahmed, similarly replied. “Yes, I will also need some more time before I can provide you with our decision…this is an important concern for our partners and I would like to consult with them”.

Olivia was a little frustrated. She was working to a tight schedule and was eager to start work on the new agreements. Her counterparts’ hesitation to make a quick decision was likely to delay project completion, which would reflect poorly on her.

Olivia had failed to understand differences in decision-making across cultures. In England, individuals are given authority to make decisions relevant to their seniority and expertise without needing to consult others. In tasked-based England, delegating authority to individuals helps to speed up decision-making and improves efficiency.

In India, however, the decision-making process is top down. Decision-making authority is concentrated in the hands of the leaders or a small group of senior members of the organisation. Quite often individuals from more egalitarian societies perceive the process of doing business in India is slow because their counterpart does not have the same authority as they do.

In the Middle East, decision-making is heavily influenced by the concept of shura—the Arabic word for consultation. Shura is the traditional method for decision-making in Arab societies and is advocated in the Quran and tribal culture. In Islamic contexts, consultation is an important mechanism for a leader to build trust with subordinates and helps to reduce tension and instill positive morale. Although the consultative process is broad and involves canvassing the viewpoints of all knowledgeable parties that are affected by the decision, the final decision is not a majority rule but rests with the leader, who is assumed to be in the position to make the wisest choice among available alternatives.

Decision Criteria

Americans Jeff and Kyle were in Kuala Lumpur to finalise negotiations for setting up a regional distribution centre for medical equipment manufactured in the United States. Their Malaysian-based colleagues had completed due diligence and had selected a preferred partner and Jeff and Kyle had traveled from head office, New York, to settle the terms of the arrangement. After a 30-hour transit, they were keen to get down to business and finalise the terms of the deal so that they could return to the United States and attend to other outstanding matters before the weekend.

The Americans were relieved to be welcomed at the airport by company representatives. They interpreted their host’s assistance to get them quickly to the office as indicative of their shared desire to swiftly conclude the terms of the distribution proposal and sign the contract. At the distribution centre, they were met upon arrival by the CEO of their potential Malaysian business partner and were ushered into a formal dining room where a lavish breakfast was laid out for the negotiating parties. ‘Perfect! Super efficient!’, thought Jeff and Kyle. “We can get down to business straight away over breakfast”.

But it soon became apparent to the Americans that their Malaysian hosts didn’t share their urgency to conduct business. Breakfast topics were varied but not business-related—and when Jeff and Kyle attempted to raise the distribution deal, their Malaysian hosts paused for a while, before changing the subject. Jeff and Kyle assumed that once the breakfast plates had been cleared, the business negotiations would start, but instead, their Malaysian hosts suggested that their guests freshen up in their hotel room after such a long trip, and they should all meet in the lobby just before lunchtime.

Slightly confused, but glad they had an opportunity to revise their notes before the next meeting, the Americans checked into their hotel and spent an hour together reviewing the terms of their proposal. At midday, they were met in the Lobby by a representative of their Malaysian hosts and driven to a local restaurant where they were again joined by key senior employees of their potential Malaysian partner.

Similar to breakfast, the Malaysians were reluctant to discuss business. Annoyed by the apparent stalling, Jeff suggested that they should go through the proposal and reach agreement on the terms. “I’d like to reach agreement on the deal this afternoon. We are on a tight deadline and are keen to wrap this up so that we can make the evening flight back to New York tomorrow. We’ve travelled a long way and, to be honest, we are frustrated that we haven’t had an opportunity to present our proposal to you.”

The Malaysian CEO laughed but nodded for the Americans to continue, and the discussion finally turned to business. To Kyle and Jeff, all seemed to go well. Although a couple of questions were raised regarding their suggested terms, no opposition was expressed, and the Americans believed that an agreement had been reached.

The next morning, the Americans took their luggage with them to the office. They had intended on quickly signing the deal that they believed they had agreed with the Malaysians the previous afternoon, before heading directly to the airport. But to their surprise, the CEO’s assistant delivered them a message that the CEO was not able to sign the agreement. Instead, he thanked the Americans for coming and wished them good luck in finding a suitable partner.

Kyle and Jeff had failed to understand the difference between task-based and relationship-based cultures. America is a task-based culture. In task-based cultures, transactions come before relationships. In those cultures, business is conducted on the basis of cognitive trust. Cognitive trust involves confidence in one’s competence, abilities, and experience. You enter into business relationships when you trust that person has the skills and knowledge to do a good job. In task-based cultures, business decisions occur quickly on the basis of assessments of competence and reliability. Task-based cultures are more concerned with what you do than who you are.

In relationship-based cultures like Malaysia, relationships come before transactions. In relationship-based cultures, affective trust plays a significant role in business decisions. Affective trust involves how emotionally secure you feel that the other party has your interests at heart. Affective trust develops from warm relationships and friendships. In relationship-based cultures, many meetings might be needed before business is transacted. In initial meetings, business issues might not be addressed at all; discussion is focused on assessing the character and intentions of the potential business partner. In relationship-based cultures, business decisions are formulated slowly as the parties get to know each other personally. Relationship cultures are more concerned with who you are, rather than what you do.

Building relationships can seem tedious for members of task-based cultures. In those cultures, deadlines and punctuality are valued. It can be particularly difficult for members of task-based cultures who are traveling for business and are struggling with jet-lag and time-zone differences to cope with the social demands of relationship-based cultures. Members of relationship-based cultures, on the other hand, can feel rushed and pressured by members of task-based cultures. The eagerness of task-based cultures to conduct business before relationships have had a chance to develop can breed distrust and suspicion.

Bridging Cultural Differences

Effective interactions across cultures are possible, albeit not easy. Our cultural frames are deeply embedded, largely unconscious, highly resistant to change, and aggressively defended. Intercultural effectiveness requires great determination and perseverance, an understanding of and genuine respect for how we are similar and different, a heightened perceptual ability to detect cultural subtleties and nuances, and an authentic and skilful response to cultural differences. Together, these competencies form Cultural Intelligence (CQ).

Individuals with high Cultural Intelligence display four main competencies:

  • CQ Drive is the willingness to work with others from diverse backgrounds. It includes an ability to overcome explicit or unconscious bias and the capacity to persist in challenging intercultural settings—even when the individual feels confused, frustrated, or burnt out.
  • CQ Knowledge is an understanding of culture and cultural differences. That involves more than awareness of variations in language, customs, and appearance. Core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked.
  • CQ Strategy is the ability to flex mentally. With high CQ Strategy, individuals are not confined to a single worldview. They are open to new or integrative ideas.
  • CQ Action is the ability to flex verbal and non-verbal behaviour. CQ Action decreases the risk of miscommunication and helps an individual respond to diverse others in a manner that conveys respect and builds trust and rapport.

The four competencies that form high Cultural Intelligence are not abstract ideas. Social scientists have demonstrated that those competencies map to particular regions of the brain. Studies show they predict important measures of performance in diverse cultural settings, including better problem solving and decision-making, improved well-being, and better task performance. In fact, Cultural Intelligence is a better predictor of effectiveness in diverse settings than cognitive ability, emotional intelligence (EQ), personality, demographic characteristics, and international experience.

Felicity Menzies is CEO and Principal Consultant at Include-Empower.Com, a diversity and inclusion consultancy with expertise in inclusive leadership, unconscious bias, cultural intelligence and inclusion, gender equity, empowering diverse talent. Felicity is an accredited facilitator with the Cultural Intelligence Centre and the author of A World of Difference. Felicity has over 15 years of experience working with and managing diverse workforces in blue chip companies and is a Fellow of Chartered Accountants of Australia and New Zealand. Felicity also holds a Bachelor of Commerce and a Bachelor of Arts in Psychology.