Reducing Biases in Cross-Cultural Top Management Team Decision-Making Processes

David Strutton and William Carter

International Journal of Business Administration, 2013, vol. 4, issue 3, 1-13

Abstract: Cross-cultural top-management-teams (cc-TMTs) are typically comprised of rational individuals. Yet cc-TMTs featuring uniformly wise and experienced executives often make irrational decisions (i.e., choices incompatible with reason or logic). Even most executives acknowledge this is true. Behavioral economics suggests a primary reason why is that iterative combinations of cultural and cognitive biases invariably arise and interact in cc-TMT settings. As they arise, these biases often undermine the rationality of decision-making processes used inside teams. The impact of such biases surely intensifies if they remain unacknowledged - and thus unmanaged. From an example of Sino and Anglo cc-TMT interactions, six guidelines intended to reduce bias are developed. These approaches, and the analysis preceding them, explain the nature and scope of these cultural and cognitive biases, how and why they arise, and what actions executives might initiate to negate these biases¡¯ potentially irrational influence on decision-making processes by consolidating divergent biases to secure mutual gain within cc-TMT settings. Cultural and cognitive biases hardly explain everything, but they explain enough of what happens inside cc-TMTs that ignoring their influence is foolish. This article offers a logical footing from which to begin this important task.

Keywords: cultural and cognitive biases; top management teams; behavioral economics; irrational/rational decision-making processes; Sino/Anglo cultural spheres (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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