Cross-cultural differences in decision-making
Their members endorse harmony, relatedness, and connection, don't view themselves as bounded or separated from others, and experience happiness as a sense of closeness to others.
For instance, the availability heuristic helps explain why individuals in collectivist cultures, exposed to narratives of social harmony, may exhibit greater risk aversion.
Similarly, framing effects highlight how cultural differences influence responses to marketing campaigns or public health messages.
Unlike mandates, nudges guide behavior by making certain options more intuitive or accessible while preserving individual freedom of choice.
For example, automatically enrolling employees in retirement savings plans or making organ donation the default option increases participation rates.
Simplifying processes also enhances desired behaviors; offering on-site bank account registration during financial literacy workshops has been shown to boost sign-ups.
[7] Occidental philosophies are known for the extensive use of analytical thinking – a methodical approach to solving complex problems by breaking them into their constituent parts, and identifying the cause and effect patterns of the constituent parts, while Oriental philosophies are well known for their emphasis on holism, typical of Eastern cultures, considers the broader context and relationships between elements, fostering a more integrative approach to decision-making.
Oriental cultures hold that age is a proxy to experience and hence to wisdom, that the individual should mind their duty without focusing on the final results of the activity, and that women are best suited to play certain roles.
On the other hand, Occidental cultures hold that age is not correlated to wisdom, the individual should focus on the end and drive to achieve it, and women are equal to men in all respects.
In Indian health-care setting customers are much less likely to sue their physicians, – who is usually a representative of an older generation – even when having enough evidence of malpractice, due to the fact that their age is treated as a proxy to experience and knowledge.
Hence, the decision to sue a physician for deficiencies doesn't occur as a choice or option to most Indian patients, who are representatives of the Oriental culture.
In the Indian setting physicians are, however, normally accountable for the care given, even though rarely blamed for unfavorable results, which can be explained by the fact they hold in high regard the means of an action, and not the end.
This trend in hiring policy can be explained against gender and role expectation dimension, and by the inculcated in Oriental cultures belief that each element has a predefined place in the system.
For example, in India, individuals often place significant importance on the opinions of authority figures, such as parents, elders, or teachers, when making major life decisions like choosing a career.
In contrast, in the United States, people are more likely to make career decisions based on their personal interests and ambitions, reflecting a cultural emphasis on individual freedom and self-expression.
This difference highlights how cultural norms shape decision-making: Indians are more likely to prioritize harmony and approval from influential figures, while Americans focus on their own goals and preferences, showing less deference to external expectations.
High-context cultures, such as China and Japan, favor indirect and nuanced communication, which promotes implicit understanding and subtle negotiation tactics.
The latter, on the contrary, are less likely to camouflage their message and conceal their intentions and prefer direct and explicit communication, streamlining decision-making but sometimes sacrificing relational harmony.
Collectivist cultures, such as those in East Asia, tend to display higher risk tolerance in financial decisions, a phenomenon explained by the "cushion hypothesis."
This theory suggests that strong social networks in these cultures provide a safety net, allowing individuals to take financial risks with greater confidence, knowing they have the support of their community or family if needed.
[16] In contrast, individualist cultures, like those in Western countries, typically exhibit more cautious financial decision-making due to weaker communal support systems.
For example, in Japan, a collectivist society, organizations demonstrate extreme risk aversion, emphasizing consensus-building in decision-making to protect the group and preserve organizational reputation.
For instance, Indians are found to accommodate to authority figures and significant others and respond to others' expectations when choosing what clothes to wear for a party, and what advanced training courses to take.
In Western cultures (Independent), strength and integrity are demonstrated by being true to one's own opinions and tastes and not being swayed by social pressure to conform.
It suggests that members of a collectivist society are more prone to risk-taking in the financial domain, because they know they will more likely receive help from their friends or extended family when they "fall", as collectivism endorses social relatedness and interdependence.
Members of individualist societies with lower levels of tolerance for power distance are less likely to exhibit brand consciousness when making choices concerning their travelling arrangements, compared with their collectivist counterparts.
[25] The literature on automatic cognition suggests that behavior is shaped by exposure to elements of the social world in a way that occurs below awareness or intention.
[27] In collectivist culture, it emphasize on the notion that individuals tend to prioritize group goals over personal preferences, and they want to pursue harmony in their social relationship.
Therefore, a mundane action like opening a refrigerator might be labeled a "decision" in individualistic cultures, as people see even small acts as exercises in personal control.
The development of technologies that increases the resources extracted from the environment inevitably allows a greater diversity of cultures to occupy a given area.
