Cultural Influences on Leadership Decisions

Cultural approaches to decision-making and authority are arguably the most important aspects in the leadership context. As such, attitude to leadership and decision-making are among the most outstanding points of difference across cultures. There is the need to understand the disconnect particularly in instances where deference to leadership and hierarchy are deeply entwined into the national psyche. Leaders experience difficulties in understanding the process of decision-making since they need to be aware of cultural context in order to understand the thinking behind a decision. It follows that having some cultural intelligence is vital in understanding how workmates from different cultures and clients make decisions.

The theory of bounded rationality posits that the rationality of individuals during decision-making is limited by their cognitive ability, the information they possess and the finite amount of time to reach a decision. Inasmuch as humans are rational beings with the tendency to understand logical connections and make sensible choices, the sheer vastness and complexity of the world limits the ability. Therefore, most decisions made at the organizational level are only rational within the limits of cognitive ability, amount of relevant information and time. In this regard, leaders working in a different country are bound to make flawed decisions due to their limited cognitive ability in a new cultural context, the limited amount of information in their possession and time limits.

Participative leadership style is the most appropriate in a cross-cultural context since it accommodates differing views from stakeholders and synthesizes them to make an informed decision. Although managers underscore the importance of participative leadership, they underestimate subordinates’ ability in decision making, which impedes decision-making. The leadership style is almost rendered ineffective if subordinates lack the creativity needed to provide valuable ideas. Leaders can restructure the process of decision making through incremental deliberate steps to reduce the power distance between them and the subordinates. By embracing egalitarianism instead of hierarchy in a cross –cultural setting, it creates conditions that allow subordinates to contribute to decision making. Additionally, leaders should nurture cross-culturally proficient team leaders with stout ambiguity tolerance, minimal ethnocentrism and a high level of cultural flexibility. A bottom-up decision-making approach should be adopted in cross-cultural setting to allow input from multiple levels. Also, representative decision-making can streamline the process of decision making by allowing a representative of the subordinates to present collective views pertaining to an issue at hand.

The traditional management orthodoxy of stamping authority in organisations is criticised for lacking fit in the context of the contemporary emerging markets. Concerning the bounded rationality theory, it is criticised on the basis that there is no single way in which data concerning a phenomenon can all be collected, analysed and interpreted precisely for decision-making. Participative leadership is critiqued on the basis that leaders differ widely in their understanding and interpretation of participative leadership and some believe that participation does not wield better results. Concerning the power distance dimension, it only has two levels namely high and low, which means that its ability to measures is restricted to two values and it may not respond to changes which are not initiated by the management. Regarding bottom-up decision-making approach, it is critiqued on the basis that subordinates are not accountable to shareholders and may subvert organisational goals to focus on personal sub goals.

In summary, the approach to decision-making is an important component of leadership in a cross-cultural context. Therefore, there is the need for leaders to possess some cultural intelligence to aid in the process of decision-making. In a foreign culture, the decision-making process is complicated by the problem of bounded rationality where the cognitive ability, amount of relevant information and time limit the quality of decisions made. The process can be improved by involving experienced and competent subordinates with the potential to generate valuable ideas. As such, leaders can employ the participative leadership style, use bottom-up decision-making approach or representative decision-making to streamline the process and ensure that all variables that matter in a foreign culture are addressed.