Decision Making in Organizations

Making decisions is an essential task of organizations. Like other organizational behaviours, culture influences decision making. In the United States, democratic procedures are often used for decision making typically involving a vote with the decision of the majority prevailing. Oligarchies represent an organizational structure where a few, usually at the top of the organization, make the decisions and impose them on subordinates. This top-down approach to decision

Table 10.1 Global Leadership Competency and Framework Types

Type

Example(s)

Personality characteristics

optimism, inquisitiveness

Attitude

cosmopolitan orientation, results orientation

Cognitive capabilities

cognitive complexity, intelligence

Motivation

tenacity, desire to learn

Knowledge

technical skills, global business

Behavioural skills

intercultural communication, boundary spanning

Job-based skills

interaction with clients from other countries

Leadership development

mentoring from executives outside home country

Cognitive task expertise

notice more behavioural, contextual, and cultural cues

(Bird & Mendenhall, 2016)

making is used in many American companies Matsumoto & Juang, 2017). The Japanese have popularized their decision making process that is referred to as the ringi system. Proposals are circulated to all who will be affected regardless of rank or status in the organization with the goal of consensus before any decision is implemented (Sagi, 2015). All decision making processes have advantages and disadvantages. For example, the democratic approach gives everyone an equal opportunity in the decision making process but often involves significant bureaucracy and the possibility that the majority is narrow, which leaves a large minority unhappy with the decision (Matsumoto & Juang, 2018). The Japanese ringi system is advantageous because once consensus is reached, decisions can be implemented quickly but the disadvantage is that getting to consensus takes a significant amount of time (Sagi, 2015). A variety of techniques have been used in organizations to make decisions (Lunenburg, 2011). Four of the most popular are brainstorming, nominal group technique, the Delphi technique, and concept mapping. Brainstorming is the group generation of ideas to solve problems with the goal of developing alternative strategies in order to infuse the decision making process with new, creative possibilities (Lunenburg, 2011). The nominal group technique (NGT) is a group decision making process with the aim of generating large numbers of potential solutions to a problem, evaluating the solutions, and ranking them from most to least promising (Delbecq, Van de Ven, & Gustafson, 1975). The Delphi technique is a group problem-solving and decision making process that gathers and evaluates information from a group without the group members having to meet face to face. It is often used for a group with different perspectives to reach consensus. The process begins with the Delphi question and the first inquiry. The first response is then analysed and feedback is given. The second inquiry is developed and an iterative process continues until a clear solution is reached (Delbecq et al., 1975). Concept mapping is an integrative mixed methods research approach that uses a structured conceptualization process with a group. The process yields a conceptual framework for how a group views a particular topic or aspect of a topic (Trochim, 1989).

It is common for people to avoid problems or make decisions in organizations due to complacency and defensive avoidance

(Wheeler & Janis, 1980). Complacency involves ignoring danger and continuing to do things the same way. Defensive avoidance is when people have little hope of finding a solution so rationalization, procrastination, or ‘passing the buck’ to someone else are used in place of making a decision. Another danger that can occur in relation to decision making in organizations is groupthink (Janis, 1982). Groupthink is a collective pattern of thinking and lack of consideration for alternative approaches that gets in the way of effective group decisions. Groupthink includes the group behaviours of rationalization, avoidance of conflict, feeling of invincibility, unanimity, shared stereotypes, individual censorship, and direct pressure (Janis, 1982). Groupthink is thought to be responsible for many destructive and irrational political decisions in the United States including the Bay of Pigs invasion, the escalation of the Vietnam War, and the Bush administration’s invasion of Iraq without broad-based support. Groupthink also occurs in other cultures.

Meaning of Work

The meaning of work across cultures provides a helpful lens to examine the importance of work in relation to other aspects of life such as leisure, community, religion, and family. In a classic study conducted by the Meaning of Work International Research (MOW) team with eight countries (1987), 86% of participants across cultures said they would continue to work even if they had enough money to live in comfort for the remainder of their lives. Among leisure, community, religion, and family with family ranking as the most important, work was ranked second in importance. Across the eight countries, work was considered most important to Japan, followed by now former Yugoslavia, Israel, US, Belgium, Netherlands, (West) Germany, and Britain. In this same study, professionals scored highest on importance of working, temporary workers scored lowest, and skilled workers and the unemployed had medium scores on the importance of working. Regarding gender, scores for women were lower than for men in all countries except for Belgium and the United States.

The meaning and significance of work for employees across the globe influences numerous outcomes including job satisfaction and performance, empowerment, stress, career development, organizational identification, personal fulfilment, purpose, overall well-being and work motivation, absenteeism, behaviour, and engagement (Rosso, Dekas, & Wrzesniewski, 2010). In a review of the meaning of work, Rosso and colleagues (2010) identified four primary sources of meaning or meaningfulness relative to the experience of work: the self, other people, the work context, and spiritual life. The self, relative to one’s values, motivations and beliefs, impacts the meaning of work in terms of ‘how individuals see themselves and how they are oriented toward the activity of work’ (p. 99). The interactions and relationships with others (i.e., coworkers, leaders, groups and communities, and family) have a direct influence on how individuals perceive the meaningfulness of their work. In terms of the work context and the meaning of work, areas of focus have included job tasks, finances, organizational mission and vision, and the national culture in which the organization is located. Finally, regarding spirituality and the meaning of work which is the least studied and understood source, researchers have examined employees’ sense of a higher purpose or meaning to their work and the idea of having a sacred calling to a particular type of work. Rosso and colleagues (2010) also identified four major pathways to meaningful work occurring on two axes - agency-communion and self-others. The agency-communion axis describes the drive to differentiate, create, and master (agency) versus the drive to connect, unite, and attach (communion). Similarly, other research on the meaning of work has demonstrated that workers care about nonmonetary aspects of work and find meaning in the psychological aspects of work including autonomy, competence and relatedness (Cassar & Meier, 2018). In one study of over 800 working adults (Rothausen Sc Henderson, 2018), researchers found that meaning-based job-related well-being which includes ‘satisfaction with the impacts of the job on family, life, and standard of living, how the job facilitates expression and development of the self, and sense of transcendent purpose through job role’ has a greater impact on job satisfaction and workers’ lives (p. 1).

Collectivistic cultures appear to view work and work life as extensions of themselves, thus connections and importance placed on work are stronger in collective cultures. Work in collectivistic cultures is more likely to be considered part of an obligation to the larger community or society. In contrast, people from individualistic cultures are more likely to consider work as separate from themselves and make a greater distinction between work time and personal time. It may be easier for people in individualistic cultures to perceive work as simply a way to make money in order to live (Ferraro & Briody, 2017).

Multiculturalism in Organizations

Organizations can be examined from a perspective of power and privilege and in terms of the degree of multicultural practice in the organization. Work by Scott Page (2007) has mathematically demonstrated that diverse views from informed agents result in more accurate predictions and better decisions. Many business journals cite the benefits of cultural competency and the value of diversity as seen in the more productive, efficient, and harmonious workplace. In addition, the ability to attract and retain the most talented pool of candidates means going outside one’s own culture and interacting comfortably with others. Being culturally competent ensures that businesses and institutions understand the populations with whom they work, value the diversity of employees, attract greater applicant pools, and are more likely to be desirable candidates for funding (Dolan & Kawamura, 2015).

There are various types of organizations with regard to the extent of multiculturalism present and the organization’s overall approach to diversity. Jansen and colleagues (2016) indicate that most organizations operate on a continuum from complacency to having a robust diversity strategy. Monocultural organizations are at one end of the continuum and are generally Eurocentric and ethnocentric. Monocultural organizations generally do not value diversity and their structures and policies reinforce privilege and power of dominant groups. Generally, monocultural organizations endorse the melting pot and colourblind concept - that everyone should mesh together and be treated the same regardless of culture; individual accomplishments and qualifications are valued; and group differences should be ignored. Nondiscriminatory organizations represent more enlightened organizations who are interested in people of different cultural backgrounds; however, they do not necessarily have structures and practices that support this belief. Nondiscriminatory practices are generally superficial and lack substance toward real eradication of prejudice and bias. Multicultural organizations or organizations that value diversity, actively work to end discrimination and oppression in all forms. Multicultural organizations view diversity as an asset and generally experience a higher level of thriving than monocultural organizations, reflecting the contributions of its diverse members and promoting structures, practices, and policies which support multiculturalism (Rozkwitalska, 2018; Sue & Sue, 2016).

Organizations operate at various levels of cultural competency. One model depicts six stages of cultural competence specifically designed for organizations (Cross, Bazron, Dennis, & Isaacs, 1989):

  • 1. Cultural destructiveness characterizes organizations that have been involved with forced assimilation, race-/ethnic-/culture-based oppression, and even genocide. Some historical examples include the Nazi-sponsored medical experiments conducted with vulnerable populations (Jews, Gypsies, gays/lesbians, disabled, etc.) using torture and death and many of the federal government programmes aimed at Native American Indians.
  • 2. Cultural incapacity denotes organizations that remain biased toward the dominant group and engage in discriminatory hiring and other practices against minorities. Stereotypical beliefs are common in this stage.
  • 3. Cultural blindness occurs in organizations that believe that all humans are the same and that dominant cultural beliefs are applicable to all cultures. These organizations may have good intentions but their services and approaches are ethnocentric and require assimilation to be effective.
  • 4. Cultural pre-competence characterizes organizations that are in an experimental stage with regard to cultural competency. The organization recognizes its weaknesses culturally. Cultural awareness and sensitivity are at least given some lip-service in these organizations although tokenism and minority staff without power and clout running multicultural programming are two common risks.
  • 5. Cultural competence marks organizations that exhibit ‘continuing self assessment regarding culture, careful attention to the dynamics of difference, continuous expansion of cultural knowledge and resources, and a variety of adaptations to service models in order to better meet the needs of culturally diverse populations’ (Cross et al., 1989, p. 17).
  • 6. Cultural proficiency characterizes organizations and individuals within organizations operating at a high level of multicultural competence. These organizations are not common because of the requisite shedding of many layers of racism, prejudice, and discrimination. See Figure 10.3.

Cultural proficiency

Cultural competence

Cultural precompetence

Cultural blindness

Cultural incapacity

Cultural destructiveness

Figure 10.3 Organizational Cultural Competency

All levels of the organization are invested in multicultural competence not just ethnic minorities and people of colour. Multicultural organizational competence requires constant vigilance of oppression and discrimination in organizations, recognition of power and status and the detrimental effects on the organization and its members. Culturally proficient organizations will be in a much better position to handle misunderstandings and conflict than will organizations not willing to examine their cultural practices or their lack of cultural awareness (Jansen et al., 2016).

One important component of multicultural organizations is the ability to engage in successful international negotiation (Ferraro & Briody, 2017). People and organizations from different cultures approach negotiation with differing assumptions and from diverse world views. Successful international negotiation requires negotiators to consider conceptions of negotiation process, type of issue, protocol, verbal versus nonverbal behaviour, persuasive arguments, trust, risk-taking, value of time, decision making system, and forms of agreement (Brett, Gunia, & Teucher, 2017; Ferraro & Briody, 2017).

 
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