Risk-Taking or Risk-Averse

Introduction

Some cultures might move quickly with a limited amount of information, while other cultures need a great deal of informations in order to make even a small decision. Therefore, cultures may be risk-taking or risk-averse.

Argentina

Latin cultures, in general, are risk-averse, and that is one of the driving reasons for the creation of structure and hierarchies. Argentina is no exception, There are levels of bureaucracy that arc breathtaking in their byzantine regulations, and in order to get things done in business and the public arena. there are usually many different officials who need to sign off at different stages.

The pace can be slow, as people need to develop trust in order to do business with you, and the need for “enchufados”, or people with contacts and connections to help you through, is critical. Providing whatever details you need to in order for your Argentine associate to feel comfortable is important in this risk-averse culture, and repeated efforts often must be made to convince and motivate, especially if it means changing the way something is done. Even when individuals are empowered to make the decision, there can be a reticence to take the required final step.

Australia

As a nation of immigrants without a welldeveloped hierarchy, there is a high comfort level for risk taking, for living with uncertainty and ambiguity. However, the need to create a smoothly working society that benefits most of the people also serves to keep wayward risk taking in check. There is a balance here.

China

China is essentially a risk-taking culture. Perhaps this is a result of the need to seize the few fortuitous opportunities that might come one's way from time to time, perhaps it comes from the fact that when one is not in control. one has little to lose. or perhaps it is the result of a removed. distant bureaucracy that enabled the average peasant of the past and businessperson of today to try some things out on their own. Whatever the reason, Chinese society is composed of numerous small entrepreneurs who will generally gamble and take risks when given the chance. This is probably one of the cultural reasons for the resounding success and startling numbers of Chinese immigrant communities around the world.

Colombia

Latin cultures, in general arc risk-averse. and that is one of the driving reasons for the creation of structure and hierarchies. Colombia is no exception. The rigidity of the system makes Colombia one of the most risk-averse cultures in the region: this, means that repeated efforts must he made to convince and motivate. especially if it means changing the way something i, done. This is a culture of entrenchment, and change and movement are generally seen as destabilizing and unwelcome to the status quo. Decision making can be slow and tedious. as various levels of the hierarchy need to be consulted. and as information must be made available to many in order for it to occur. Even when individuals are empowered to make a decision. there can be a reticence to take the required final step.

Congo

Congolese are prone to taking risks when in positions of authority, hut avoiding them when they are not. Within organizations, the decision makers can be bold. even reckless, but subordinates generally are not, and take action only when instructed to do so. Therefore. comfort with uncertainty, in general, is low. and much information may need to be exchanged with different people before decisions can be made. Even when decisions are made at the top, the concern for others within the group requires decision makers to consult with subordinates before making decisions. There will be much discussion with trusted others about what you, as a foreigner, bring to the table. after you leave the meeting.

Egypt

Egyptians, and most Arabs, are prone to taking risks when in positions of authority, but avoiding them when they are not. Within organizations, the decision makers can be bold, even reckless, but subordinates generally are not, and take action only when instructed to do so. Therefore, comfort with uncertainty, in general, is low, and much information may need to be exchanged with different people before decisions can be made. Even when decisions are made at the top, the concern for others in the group requires decision makers to consult with subordinates before making decisions. There will be much discussion with trusted others about what you. as a foreigner, bring to the table, after you leave the meeting.

England

Here again we have the curious mix of two opposing ideas: England is a conservative culture that approaches new ideas cautiously and skeptically, yet the British can equally feel very confident and comfortable in the most remarkably threatening and "risky" situations. Perhaps it is the universalism of the British and their reliance on their rules and ways of doing things that gives them their remarkable confidence in dealing with uncertain or chaotic conditions. After all, these are the same people who, to para-phrase Noel Coward, were mad enough to go out in the noonday sun and sip their tea at four o'clock, no matter where on earth they may actually have been. Risk-taking, yes; but as we see below, change-oriented, no.

France

Latin cultures, in general, are risk-averse; that is one of the driving reasons for the creation of structure and hierarchies. France is no exception. Decision making can be slow and tedious, as various levels of the hierarchy need to be consulted, and because information must be made available to many, in order for a decision to be made. The French try to do it right the first time; analyze everything carefully, several times, if necessary; and to debate all aspects of a decision until a]] is clear and agreed upon. Even when individuals are empowered to make the decision, there can be a reticence to take the required final step.

Germany

This is general1y a risk-averse culture. Before new ideas can be adopted, before changes can be made, before modifications can be accepted, the German needs to know why. After all, they have probably already developed a method or a system for handling the proposed change, and it has probably been effective.

Unless the reason for doing something differently is compelling, clear, and proven, the German will not accept it. Information will be analyzed, data gathered, and decisions usually made at the top after careful consideration. The ability to move flexibly and experimentally is not a natural German attribute.

India

Indians are prone to taking risks when in positions of authority, and avoiding risks when not. Within castes, families, and organizations, the decision makers can be bold, even reckless, but subordinates generally are not, and take action only when instructed to do so and only when they are sure that all "i”s are dotted and all "t"s are crossed. Therefore, comfort with uncertainty, in general, is low, and much information may need to be exchanged with different people before decisions can be made; however, this is rarely to develop consensus, but rather to force the correct individual to make the ultimate decision. Because this is often being done with individuals who have no incentive to facilitate the business themselves, this can be a slow and frustrating experience.

Indonesia

Indonesia is essentially a risk-avoiding culture, because the social and business hierarchies and individual people's positions must be carefully considered within the larger group context. There may be much information that will need to be exchanged before decisions are made, and many people brought into the process in order to develop trust (with outsiders, such as the foreign businessperson) and consensus. There is a high need for certainty and much energy will be spent looking to minimize danger and risk. Immigrants, in general, may be more prone to taking risks than natives with Chinese Indonesians (who have a more individualistic background) perhaps more willing to take risks than Hindu Indian immigrants (who have a caste-bound tradition).

Italy

Latin cultures, in general arc risk-averse, and that is one of the driving reasons for their creation of structure and hierarchies. In Italy this tendency is more extrema as one moves south through the country. Decision making can be slow and tedious in Naples' but quicker in Milan: in both cases, more or less, various levels of the hierarchy need to be consulted, and information must be made available to many, eventually moving through the “cordata” to the final individual decision maker, who listens to the advice from below, and then makes the final decision. While debate is common, evidence supporting alternate views must fit with subjective expectations, or else it is ultimately unconvincing. Even when individuals are empowered to make the decision, there can be a reticence to take the required final step.

Japan

Japan is one of the world's most risk-averse cultures. While the group protects and ensures, comforts and advances. risk aversion seals the effects. Avoiding the unknown, taking all possible precautions, gathering as much information as possible ahead of time, reviewing proposals again and again from all possible angles-all describe Japanese behavior when it comes to risk. When combined with the other aspects of the culture (for example. hierarchy and group orientation), this means that many individuals must act this way, in concert, in order to come up with the most perfect possible solution to the needs of the superior, and must take whatever action is required to protect the supervisor from any problem that might have been avoided had individuals performed more carefully together.

Nigeria

Nigerians are prone to taking risks, especially when in positions of authority. Within organizations, the decision makers can be bold, even reckless, but subordinates generally are not. Therefore, comfort with uncertainty, in general, is high, and while much information may need to be exchanged with different people before decisions can be made in large groups, individuals can make decisions quickly. There can be much discussion with trusted others about what you, as a foreigner, bring to the table, after you leave the meeting.

Philippines

The Philippines has a risk-avoiding culture, because the social and business hierarchies and individual people's positions must be carefully considered within the larger group context. However, while most Filipinos defer to authority for decision making, they will often go ahead and do things on their own if the expected action is not taken.

Poland

Here is that Slavic duality: seize an opportunity when you see it or make it, for it may not come again, and there is often little to lose; at the same time, one must be careful not to take any action that may jeopardize one's situation, or the situation of others (especially one's family), any further. The former approach therefore usually lends to quick and sudden risk taking, while the latter usually causes slow and plodding movement toward a specific goal. You will see both mindsets in Poland (and in most Slavic countries). As market economies, and perhaps democracies, develop in the region, there will be an increase in risk taking, and as long as it succeeds without corrupting the general society, this former tendency will be reinforced; if such action is seen as advancing individual power at the expense of society, the latter tendency will be reinforced. You will feel both attitudes at different times, while working in Poland, and to prepare yourself to respond to either -- to both the eager Pole who has an opportunity that is too good to be true, and to the Pole who demands more and more information without making a decision -- requires some substantial pre-trip homework.

Russia

Here is that Slavic duality again: seize an opportunity when you see it or make it, for it may not come again, and there is often little to lose; at the same time, one must be careful not to take any action that may jeopardize one's situation, or the situation of others (especially one's family), any further. The former approach usually leads to quick and sudden risk taking, while the latter usually results in a slow and plodding movement toward a specific goal. You will see both mindsets in Russia, to the extreme. Under the Communists, there was great fear to say and do anything without being absolutely certain that it was safe, according to your superior, to do so. As a result, things today can move remarkably slowly, and while decisions are being made by other powers, your immediate contact might be stalling and equivocating. As the market economy (and shadier versions of it) develops, however, there is increased risk taking, and as long as people prosper or get away with it, it continues. Working in Russia, you will feel both approaches at different times, and to prepare yourself to respond to either -- to both the eager Russian who has an opportunity too good to be true, and to the Russian who demands more and more information without making a decision or giving anything up-requires some substantial pre-trip homework, time, a thick skin, and stamina.

Saudi Arabia

Saudis, and most Arabs, are prone to taking risks when in positions of authority, but avoiding them when they are not. Within organizations, the decision makers can be bold, even reckless, but subordinates generally are not, and take action only when instructed to do so. Therefore, comfort with uncertainty, in general, is low, and much information may need to be exchanged with different people before decisions can be made. Even when decisions are made at the top, the concern for others in the group requires decision makers to consult with subordinates before making decisions. There will be much discussion with trusted others about what you, as a foreigner, bring to the table, after you leave the meeting.

Slovenia

Throughout much of the region, the answer to this is ... both. When people are extremely eager to do business with Westerners, they will promise things they cannot deliver and propose all sorts of deals they may not be able to follow through on, in the hope of doing business with someone with resources from the outside who is willing to make an investment in their country. When one has nothing to lose, it is easy to take risks. At the same time, true day-to-day business is still encumbered by regulations and wars, and the general mistrust between people who do not know each other can take a long time to overcome. History has taught these people to be ready at any moment to change course and be flexible, but to initially resist anything new and different. There may be some softening in this attitude among the younger generation (this still remains to be seen, especially as they themselves get older).

Sweden

The Swedes are generally in the middle in this category (“lagom” again i), but they will see and act on opportunities. However, it will not be without first giving careful thought and consideration to all sides, participants, and details. Everyone involved must be brought into the consultation. New information is not taken at face value: it is usually suspect at first. Taking action without having all the facts is foolhardy, and the Swedes, when they do take action, usually do so carefully and without heroics or fanfare.