The effects of culture on decision making

This paper reports on research that explored the impact of culture on decision making. Using Jungian concepts, culture was defined as developing understanding that is derived from analytic, consultative, inspirational (charismatic), and speculative inferences. To determine the impact of culture, 108 managers from utilities, 55 from nursing homes, and 52 from hospitals rated eight project scenarios with each of the four cultures crossed with high and low performance uncertainty. Each set of eight projects described capacity expansions for a capital plan, keyed to each industry. Culture was found to be the dominant explanatory variable. In utilities and hospitals analytical cultures were preferred and consultative cultures were treated as poor prospects for investment. Nursing home managers preferred consultative culture, but become indifferent when uncertainty increased, suggesting that uncertainty made a consultative culture seem less viable. This preference for analysis is dramatically different from the manager’s personal views in which analysis is viewed as risky and consultation is preferred to cope with risk. The implications of these findings are discussed.