Cross Cultural Attitudes to Risk and Uncertainty

Matthew MacLachlan

12 Nov 2010

Risk and uncertainty are integral elements of doing business, but they are even more present when dealing with international teams and global counterparts. Attitudes to risk and uncertainty can differ widely from one culture to another and can strongly influence the way we are perceived by others. Cross cultural awareness trainingcan provide an understanding of how cross cultural attitudes to risk and uncertainty influence working practices, cross cultural communication and international management.

Cross cultural sociologist Geert Hofstede examined how values in the workplace are influenced by culture. Through the research he conducted in the 60s and 70s, Hofstede collected and analysed data from over 100,000 individuals from forty countries. Using these results Hofstede developed a model of five key categories that cultures can be measured against. One of the dimensions called Uncertainty Avoidance looks at how cultures deal with and are influenced by ambiguity, uncertainty and risk. Understanding your global counterparts’ attitudes to risk and uncertainty will help you to understand why they behave, plan and communicate the way they do in international business.

Cultures showing high uncertainty avoidance have a low tolerance for ambiguity and vagueness in most day-to-day situations. In other words, they tend to be risk-averse and favour rules and a well-structured environment over unknown or unstructured situations. People in cultures with a low tolerance to uncertainty will also tend to establish laws, rules, regulations and control mechanisms to prevent any ambiguity or risk. In a business context, this means that in cultures that have a low tolerance to uncertainty you may find:

  • Employees tend to stay with one employer for a long period of time
  • Decisions are made by consensus
  • Traditional gender roles
  • Job roles often require a very high level of expertise
  • Projects are carefully planned
  • Many rules, laws and regulations in place

Countries in Latin America, Japan and Germany are some examples of where there is high uncertainty avoidance.

Low uncertainty avoidance cultures, on the other hand, are open to new ideas and influences. Flat organisational structures are favoured and people are flexible and more willing to take risks.
In a business context, this would mean that:

  • People will be more open to innovation and change
  • There is an increased willingness and readiness to take risks
  • People approach projects from different angles and have a more flexible attitude to deadlines
  • There is a preference for flexible rules and informal activities

Countries such as the US, the UK and Denmark are examples of where there is a low level of uncertainty avoidance.

Countries with a common history and similar cultural heritage tend to have many of the same value orientations and therefore share many of the same attitudes and behaviours. Cross cultural awareness trainingcourses such as Working Effectively across Cultures will explain why, for example, Latin cultures show similar degrees of uncertainty avoidance and often therefore have many of the same working practices and communication styles.

Working effectively across cultures requires an understanding of cross cultural values and attitudes towards risk and uncertainty. With this knowledge, international working employees will be better equipped to adapt to other cultural working styles and anticipate cross cultural challenges or frustrations that can stem from different attitudes to risk and uncertainty.