The Effect of Culture on Decision Making

16 May

In my early days researching organisations, culture was never high on my list of priorities. I was mostly focused on behaviour, cognition and decision making. This meant I was investigating how people make sense of their environment, use their environment as a resource, make choices and update choices (or not) based on environmental feedback. As much as this research tells you, it plays out on a stage which influences both behaviour and cognition. And this stage could be described as culture. In other words, culture, as part of an environment, enables, influences and loads both behaviour and reasoning within an organisation.

I consider culture a vital part of the environment people interact with, use and are influenced by in their decision making in organisational settings.

Weick and Sutcliffe (2007) succinctly defined culture as the answer to the question “what people expect to happen here when X happens”. So, if something goes wrong within an organisation, and people expect someone will be found to blame, it tells us a lot about that organisational culture. In this case, we have a potential blame culture which could lead to defensive decision making. Defensive decision making can be described as choices made to protect against potential blame and for reputation management as opposed to the “best” decision for a particular situation.

In health care this could manifest as following procedures and processes even when patient care would be best served by using initiative. In blame cultures, initiative is seen as risky, so procedures and orders get followed, even if it leads to falling off a cliff. If a decision is easier to defend, then it becomes easier to make. Following rules and orders is therefore a seemingly credible defence. The psychologist, Gerd Gigerenzer (2014), provides a good example of commercial decision making in this type of cultural environment.

A company needs to hire a consultant. Two consultancies are under consideration. Consultancy A is a large, well known, global organisation and Consultancy B is a small boutique organisation with an excellent track record. Consultancy A and B submit proposals, make presentations and answer the difficult questions. At the end of the selection process, Consultancy B is offering the superior product. However, in a blame culture, Consultancy A is selected. The reason-if something goes wrong, selecting the famous, global consultancy is far easier to defend to the board. Quality can take a back seat to risk aversion and reputation management in these environments.

Culture primes cognition, influences decisions, and produces behaviours. In safety critical environments, initiative is crucial as procedures and processes are frequently hitting their limits. If a culture suppresses initiative in safety critical environments then bigger accidents occur. And the types of accidents which occur are generally more serious incidents, since the near misses get covered up for fear of reaction. The frontline cuts off types of feedback from managers, planners and leaders as an attempt to avoid blame, and\or massage performance stats. This leaves feedback operating at the level of “giving people only what they want to hear”. Opportunities to learn and adapt are lost.

Cultures which promote initiative stand a better chance of learning from their frontline workers. In an excellent article by Rankin at el (2014), investigating how frontline workers successfully adapt formal procedures in safety critical environments, the authors highlight the benefits of closing the gap between “work imagined and work carried out”. To achieve this, an open organisational culture which develops staff expertise, values experience, and is ready to learn from the practical reality of delivering plans is required.

Organisations designed to collect, investigate and apply how formal procedures are adapted in frontline situations gain the opportunity to continually refresh their culture. Refreshing a culture is important for organisational vitality, leadership and motivation.

Refreshing a culture based on the experience of frontline workers not only increases safety and performance, it also avoids organisational stagnation, energises leadership, and perhaps most significantly, makes all staff active contributors to the type of organisation in which they work. This leads to initiative and innovation in decision making.

Reading

Rankin, A. Woltjer, R. Rollemhagen, C. Hollnagel, E. (2014) Resilience in Everyday Operations: A Framework for Analyzing Adaptations in High-Risk Work. Journal of Cognitive Engineering and Decision Making March 2014 vol. 8 no. 1 78-97

Gigerenzer, G. (2014) Risk Savvy: How to Make Good Decisions. Allen Lane

Weick, K. E., & Sutcliffe, K. M. (2007). Managing the Unexpected: Resilient Performance in and Age of Uncertainty, Second Edition. San Francisco, CA: Jossey-Bass

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