Posted: October 17th, 2013
EFFECT OF POWER DISTANCE ON INDIVIDUAL DECISION MAKING ABILITIES
Effect of Power Distance on Individual Decision Making Abilities
The following report aims at developing decision-making abilities among individuals in a multinational corporation. This is through an analysis of the factors that inhibit this development and offering the needed solutions. Therefore, the subject matter consists of a look at the relationship between power distance cultures and the decision making ability of an individual inclusive of the potential issues that arise from the same. All this is with regard to the operations within a multinational corporation, given the cultural diversity of its employees.
Research methods used in this report are qualitative with special focus on how power is structured in a multinational corporation. With both, high and low power distance cultures playing pivotal roles in decision making, the findings revealed that their impact on individual decision making ability differs. An insignificant measure influences either the digression or development of these skills with a direct link to power distribution within the corporation (MorçÖL, p. 145). For instance, high power distance culture seems to undermine these abilities due to its centralized power structure that allows only managers to be involved in decision making. Many of the recommendations centre on the improvement of these systems and point them in the direction of contributing to the development of decision-making abilities of the employees in their company.
Power distance is an issue related to cultural relativism with culture. In this case, it is the social heritage of a people (Hofstede, p. 17). With this regard, power distance refers to the cultural attitude with which people in a particular society view human inequality. It is the social acceptance that there indeed exists a difference brought about by inequality arising from wealth, prestige, and power. The notion of power distance was coined by Dutch psychologist Geert Hofstede, and it seeks to understand how these differences of power are handled within society, more so in organizations as reflected in the relationship between managers and their subordinates.
This paper seeks to examine the effects of power distance on the ability of employees to make individual decisions. The setting is that of a multinational corporation which employs persons from all over the globe. With this comes the problem associated with the different aspects of power distance that each individual brings to the company. There are two different kinds of power distance: high and low power distance respectively. Both these distinctions affect the way individuals interact in an office system with regard to how decisions are made. From conducting a detailed research and seeking professional counsel, this report comes up with recommendations on how to deal with the issues that arise from power distances and how the employees’ opinions are regarded when making decisions.
The context in this situation is based on analysis of both high and low power distance after drawing comparisons and their resultant effects. The scenario presented by the cultural diversity is seen in multinational corporations all over the world. Each person in the company is influenced by their cultural background which is the basis of the power distance; therefore, their decision making ability leans towards the same (Bouyssou et al., p. 178). Given the great difference in types of power distance, there is bound to problems within the corporation which can only be resolved through amicability and cultural tolerance. This means that the corporation will have to settle on a single mechanism that guarantees uniformity and regard to individual cultures.
Decision making in low and high power distance cultures
High power distance culture refers to those cultures whereby people are more individualistic. Such societies are based on hierarchical or class systems, meaning that people conduct their affairs within their social groups. Inequality among humans is best expressed in these cultures, most prevalent in the Middle East (Lebaron et al., p. 132). In an organization under this culture, importance is placed on the social status of the employees. Authority is often displayed with managers ascertaining their rank to their subordinates. This implies that the relationship between the managers and employees is never personal with each group sticking to their delegated roles. There is little socialization between managers and their subordinates due to class divisions where managers are regarded highly unlike employees who are of a lower social class.
From the above description, it becomes obvious that the politics of decision making in such an organizational setting is utterly totalitarian (Prince et al., p. 173). This means that power being unevenly distributed dictates that those of higher rank make all the decisions with or without the others’ contribution. In this case, managers are responsible for the entire decision making without consultation with employees who do not have the power to voice their opinion. It is imperative to note that once made, these decisions are considered final with total disregard to whether they are right or wrong. Clearly, there is no room for individual decision making to be exercised in such a working environment. Many people cite this culture as the best compared to low power distance because of its ability to yield exceptional results. Regardless of this, it does little to nurture individual talents with disregard for employees’ decisions and contributions often leading to dire consequences. For instance, there is a story from the 1980s which gives details of Korea Air, which had crash rates much higher than those normally experienced in the industry where blame was laid on its high power distance culture. Pilots were held with such valued esteem and their decisions could never be challenged, thus it hindered communication and collaboration with other employees (Peng, p. 119).
However, this can be improved through various ways such as involving the employees through allowing them to voice their opinions but leaving the final decision to the manager. This means that authority will still remain on the manager’s side, but recognition of the subordinate’s ability to sound decision making will be considered. In this case the employees have to be cautious not to undermine the existing authority by seeking to impose but rather to be merely heard. Therefore, they must also be prepared for the outcomes of the deliberations in that their decisions may not prevail at the end. This is because such a culture is not easy to deviate from given that it is a reflection of the larger culture of the society (Henry et al, p. 283).
Alternatively, the employees in a multinational manufacturing company can be taken through the power distance of the country they are working in to make them feel at ease in their environment. This will help them to regard the high power culture not in order to undermine their individual capability but instead by virtue of the larger culture of the society. This also makes their interaction with their managers easier without losing focus as to who the real authority figure is. For instance, in a manufacturing company, it is mostly the employees’ who are in touch with the ongoing processes and make their contribution to decisions invaluable. Therefore, they should interact more often with the managers to get a platform to voice their opinions albeit cautiously. Such an industry is vulnerable, and the main subjects in their success are the employees without whom the results may not always be positive. It is essential that they as subordinates come forward and advocate for a chance to be included in the decision making process, a fact that shows personal determination. This will help to develop their individual ability to make decisions.
This structure of power helps to improve the functionality of the employees. They are motivated to think professionally at all times with the hope of rising among the ranks someday. With such a mindset, the employee can advance their decision making skills out of personal determination. This self drive achieves good results, since in no time the employee can make informed decisions, though not at the corporation, but prepared in case the opportunity presents itself. Therefore, individual decision making ability can be developed in this power distance culture through personal initiative brought about by the nature of power exercised in this working environment.
Low power distance cultures, on the other hand, advocate more for collectivism. This means that class systems are non existent and persons regard themselves as equal. In such an organization, decision making is largely democratic though the final decision still lies with the managers. This culture is characterized by more personal relations between managers and subordinates with frequent interactions. Authority is not often rubbed in the faces of the subordinates who at times are entrusted with important assignments. Such societies lean towards egalitarianism as seen in most western countries where power is decentralized.
In an organization with such a culture, there is high regard for the opinion of employees’ when it comes to decision making. For instance in a multinational hotel, decisions are made after deliberations with most if not all subordinates. The managers call for a meeting to deliberate on a certain course of action where the employees are allowed to mingle with the managers and contribute to the proceedings. The final decision arrived at will include the opinion of the subordinate staff. Although this takes up a lot of time, it has been known to enhance employees’ work motivation (Botero et al, p. 90). This is because they are made feel valuable as their opinions are put into considerations. Unlike in a high power distance culture, the decision making process involves contributions from subordinates and at other times their decisions may even prevail over those of the managers based on their effectiveness and relevance. Although such cultures may seem to provide a perfect environment for developing individual decision making abilities, they may at times derail any such progress.
In order to develop an individual’s ability to form their own decisions in such a scenario, one needs to evaluate their relationship with the managers. This is because frequent interaction may result in laxity on the employee’s part in that they become too comfortable and almost forget who the authority figure is. Therefore, one must always accord the managers the respect they deserve for being in authority, a factor that is threatened by the democratic manner in which things are handled in such a culture (Tuleja, p. 305). Employees should limit their interaction with the managers as it may have a negative effect on their decision making. Due to their relations, subordinates may often want to get away with poorly made decisions.
Additionally, the casualty with which matters are handled in this culture should be reduced. This implies that the level of democracy needs to be limited to incorporate a more professional environment where decisions are given utmost importance and, therefore, the advancement of the company is made primary (Daft, p. 231). Professionalism will make the employees pay more attention to the way they address issues and arrive at decisions. To enforce this, boundaries have to be set to distinguish clearly those exercising authority from those who are not. In comparison, high power distance cultures yield better results due to their respect for authority, as opposed to low power distance cultures.
This subsection examines the issues presented in a multinational corporation which hinder the development of individual decision making abilities. One of them is the cultural diversity experienced in a multinational corporation. An employee is influenced by various cultures including that of their home country and that of the host country. This means they are at crossroads as to which one is to exercise when it comes to decision making. This is because each culture presents a different attitude towards power. This requires a quick adjustment to the current culture in use in running the multinational corporation. The challenge here is that of cultural influence on the decisions that one is required to make. Whereas an employee is used to a certain power distance culture, they are abruptly introduced to a new one. The new one needs time for adjustment, during which they may still use the culture to which they were previously accustomed.
Another potential issue is the structure of decision making within the corporation. This is particularly in the case of a high power distance culture where decisions are made solely by the managers. This directly denies an employee the chance to develop their individual skills more so because they will not be put into use (Goolaup, p. 1). Since little chance is granted to subordinates to speak out their opinions, any skills they might have become useless with time. The individuals themselves also become reluctant to improve their abilities bearing in mind that they will not be invited into any deliberations to arrive at decisions in the multinational corporation. Therefore, it is clear that high power distance cultures in organizations undermine the ability of individuals to make decisions because of their total lack of consideration for their opinion. In such organizations, employees are rarely given crucial tasks due to the following of a class system. They have to perform tasks dictated to them without being involved in making decisions despite the fact that they are also affected by the same decisions by virtue of being affiliated to the corporation.
Low power distance culture presents the issue of dilution meaning that one’s ability to make sound decisions is affected by casualness in the working environment. Although this culture allows employees to contribute in making decisions, the laid back manner in which their affairs are conducted is not proper (Sadri et al., p. 233). The professionalism that is needed in a work setting is undermined, and this affects the employees in that they tend to rely more on personal relationships with colleagues at managerial positions. Individual contributions may be considered even though they are not of good professional standards. As much as they have had their opinions acknowledged in the decision making process, no improvement is seen in their abilities, thus it presents a potential issue for evaluation.
Additionally, the democratic manner of making decisions in low power distance cultures gives little room for personal advancement. Arriving at a consensus may take a lot of time, and in order to prevent this, the number of people raising issues is limited (Daft et al., p. 152). Therefore, the personal attributes of an individual may not be noticed. One may be left disappointed after such occasions resulting in silence and resolve to watch others make decisions on their behalf. Although cited as a good platform for acknowledging individual decision making skills, low power distance could also serve as a hindrance to the same.
Overcoming potential issues
This is a discussion on the factors that can help to curb the above potential issues and prevent them from occurring. One such factor is educating the employees in a multinational corporation on the required culture to be used in their company (Minkov et al., p. 179). This helps to ease the confusion of working in a culturally diverse workplace. Such an orientation gives an employee the opportunity to adjust faster to the new environment, and this is reflected in their ability to make decisions given that they have become aware of the culture of power being exercised at the corporation. Although it is a difficult adjustment, especially if it is to the extreme opposite of their previous culture, it will help employees know when to forward their contributions and when not to.
In high power distance cultures, a platform should be created to incorporate decisions made by the subordinate staff. It is difficult to make decisions without including subordinate staff, which like in the case of a manufacturing company may possess more knowledge of operations than the managers (Marais-Swanpoel, p. 1). This can be done without necessarily destroying the existing power structure within the company. Low power distance cultures can place guidelines to dictate the relations between managers and subordinate staff. The democratic processes should endeavor to accommodate everyone’s opinion in the decision making process.
The problem lies with the structuring of power in the corporation. Being culturally diverse points at an indefinite power distance culture with implications that stream onto the ability of its employees to make sound decisions. In order to overcome fully this problem, there is urgent need to employ only one culture, in this case, possibly the low power distance culture because of its ability to infuse collectivism without necessarily undermining authority. This or any other form of compromise adopted should aim at nurturing the employees’ decision making abilities while still paying attention to the figures of authority in the corporation. Their contributions are valuable because of their different backgrounds and should therefore be developed. Acknowledging this diversity will serve as a significant milestone in overcoming the earlier mentioned potential issues (Oloko et al, p. 50).
Having seen the different implications of power distance on an individual’s decision making ability the need arose to offer solutions or recommendations to the above issues. One such recommendation is motivational training. This training will give the employees’ the self drive to improve their decision making abilities. With the personal drive for self improvement, the rest will take a natural course. The training should encompass the topic of power distance cultures in order to prepare the employees for working in any environment. This helps to prevent any time wasted on adjusting if posted in a society with the different power distance culture. It also provides them with the opportunity to examine the challenges they might face later and offers possible solutions beforehand.
High power distance cultures as mentioned earlier should strive to provide a platform for subordinate staff to exercise their decision making ability. This ability needs nurturing, and the only way to do so is to put it into practice. This does not mean that the status quo will be disrupted as subordinate staff can offer their contributions and leave the final decision making to the managers who are in higher authority. This culture holds power with high regard, and it is crucial not to dismember such a structure, but it is also essential not to disregard sound advice that could aid in decision making in any organization.
Low distance power cultures should pay attention to the level of interaction between the managers and their subordinate staff (Lussier et al., p. 313). This is because it may contribute to the lowering of professional standards in an organization. This lack of professionalism results in laxity among the employees. They no longer see themselves as subordinates but as equals with those in authority. This coupled with measures to strengthen authority in this culture will help to bring the subordinates back to focus on developing their decision making skills.
In conclusion, this report has drawn comparisons between high and low power distance cultures and used the findings to examine the possible effects on an individual’s decision-making ability. It is evident that they contribute both negatively and positively to how individuals exercise this ability in their daily work schedules at a multinational corporation. Overcoming the potential issues and recommendation of possible solutions was based on analysis of the power distance and its subsequent effects on general decision making in an organization. Given the importance of decision-making in individuals, it is necessary for the above recommendations to be considered.
Individuals contribute to the overall wellbeing of any organization; therefore, they should be incorporated into the decision making process (Khatri, p. 5). This is regardless of the power distance culture being exercised within the organization. The primary concern should always be advancing the company’s goals and anything else including power distance should be placed aside. Though not seeking to change the power distance culture in place in a multinational corporation, subordinate staff should be heard through whichever means so that their decision making abilities are put into use. This way they are able to get prepared for the future in case of a shift in power distance culture and the opportunity to rise among the ranks of the corporation.
Botero, I. C., & Dyne, L. V. (2009). Employee Voice Behavior: Interactive Effects of LMX and Power Distance in the United States and Colombia. Management Communication Quarterly, 23(1), 84-104. Retrieved from http://www.linnvandyne.com/papers/MCQ2009Botero_VanDyne.pdf
Bouyssou, D., Dubois, D., Prade, H., & Pirlot, M. (2010). Decision Making Process Concepts and Methods. London, John Wiley & Sons. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=477628.
Daft, R. L. (2013). Organization theory & design. Mason, OH, South-Western Cengage Learning.
Daft, R. L., & Lane, P. G. (2005). The leadership experience. Mason, Ohio, Thomson/South-Western.
Goolaup, S. (2011). The Influence of Power Distance On Leadership Behaviours And Styles. Academia.edu. Retrieved from http://www.academia.edu/1568939/The_influence_of_power_distance_on_leadership_behaviours_and_styles
Henry Fock, Michael K. Hui (2013). Moderation Effects of Power Distance on the Relationship Between Types of Empowerment and Employee Satisfaction. Journal Of Cross Cultural Psychology. Vol.44: 281-298. Retrieved from http://jcc.sagepub.com/content/44/2/281.full.pdf+html
Hofstede, G. H. (2001). Culture’s consequences: comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks, Calif, Sage Publications.
Khatri, N. (2009). Consequences of Power Distance Orientation in Organisations. Vision: The Journal of Business Perspective. 13, 1-9. Retrieved from http://vis.sagepub.com/content/13/1/1.abstract
Lebaron, M., & Pillay, V. (2006). Conflict across cultures a unique experience of bridging differences. Boston, Intercultural Press. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=174067.
Lussier, R. N., & Achua, C. F. (2013). Leadership: theory, application & skill development. Mason, OH, South-Western Cengage Learning.
Marais-Swanpoel, V. (2010). Avoid A High Power Distance Culture. PAG Media. Retrieved from http://www.pag.co.za/downloads/PAG_Sept_2010.pdf
Minkov, M., & Hofstede, G. (2013). Cross-cultural analysis: the science and art of comparing the world’s modern societies and their cultures. Los Angeles, Calif, SAGE Publications.
Morcol, G. (2007). Handbook of decision making. Boca Raton, CRC/Taylor & Francis.
Oloko, M, Ogutu, M. (2012). Influence of Power Distance on Employee Empowerment and MNC Performance: A Study of Multinational Corporations in Kenya. Education Research Journal. Vol. 2(2):47-61. Retrieved from http://resjournals.com/ERJ/Pdf/2012/Feb/Oloko%20and%20Ogutu.pdf
Peng, M. W. (2009). Global business. Mason, OH, South-Western Cengage Learning.
Prince, D. W., & Hoppe, M. H. (2000). Communicating across cultures. Greensboro, N.C., Center for Creative Leadership. http://www.books24x7.com/marc.asp?isbn=1882197593.
Sadri, H. A., & Flammia, M. (2011). Intercultural communication: a new approach to international relations and global challenges. New York, Continuum International Pub. Group Inc.
Tuleja, E. A. (2005). Intercultural communication for business. Mason, Ohio, Thomson South-Western.
Place an order in 3 easy steps. Takes less than 5 mins.