Participative Decision Making

by René Heunen

The decision-making process is considered one of the most important organizational phenomena. Most choices are based on more than one perspective; besides the end responsible entity, other individuals or groups contribute to the choice process through self-determined choices among possible actions during the decision process. This is referred to as participative decision making or PDM. It might seem very evident to
ESTIEMers, but even though the importance of the cultural context in PDM is acknowledged or implied by some authors, it hasn’t been systematically studied. Hofstede (2001) criticized some researchers for avoiding the issue of culture in explaining the substantial variations in participation across countries by asserting that ‘One cannot write meaningfully about organizational participation without embedding it within a national cultural context’.

Hofstede’s (1980) framework of cultural dimensions is mostly cited and adopted by other cross-cultural studies. He examines two dominant dimensions: power distance and individualism/collectivism (I/C), as their relationship with PDM, is strongest compared to other cultural dimensions
(Heller et al.,1998). ‘Power distance’ concerns the extent to which participation is practiced, while I/C helps to identify the participant(s) in the decisionmaking process.

In high power distant cultures, responsibility for and authority in decision making is vested in the hands of a few at the top, and delegation is avoided (Sagie & Koslowsky, 2000). Decision making is a privilege of management and there can be fear of punishment when employees influence or disagree with the choices made. In low power distant cultures, everyone has equal rights and the potential to contribute to the decision making process.

In cultures that are low on individualism (or high on collectivism), the wellbeing of the community is considered more important than individual goals and interests. No one is allowed to make decisions without approval
of the entire group. Joint effort is required to bring about change, whereas in individualistic cultures it is believed that individuals have the potential and power to change things. Here, individuals are responsible for their own choices.

When these dimensions are combined, four different approaches of PDM are derived: face-to-face, collective, pseudo, and paternalistic participation. Face-to-face PDM is a direct boss-member interaction; the employees themselves rather than their representatives (e.g. trade unions) are involved in the decision-making process. The task itself is more important than the relationship between hierarchical levels. Only rarely, participation applies to strategic decisions (e.g. whether or not to initiate the development of a new product).
Generally, it is relevant to tactical and operational issues (e.g. how to
implement the product that top management already decided to initiate; Latham et al. 1994; Sagie, 1997). Participating employees are those who possess the necessary knowledge and information that a superior doesn’t have at his/her disposal. This PDM form seems to be more common in English speaking countries sharing the American I/C and power distance patterns (Hofstede, 1980) than in other regions of the world.

Collective PDM (low/medium individualistic orientation, low/medium power distance) is more widespread in several countries in Western Europe, such as Sweden, Germany, and Norway. Subordinates are involved indirectly through councils, committees, etc. From that perspective, one could argue that this is the dominant approach of PDM within the organization of ESTIEM. After all, its members are free to determine their level of participation by choosing for example whether or not to get involved in committees or projects, to use their votes in the council, or to apply for a position on the board.

The European Union mandates that firms with 1000 or more employees from more than a single European country must set up European works councils. The German law even requires, in some industries, an equal number of employee and stockholder representatives on the board, with a neutral selected to cast the tiebreaking votes (Heller et al., 1998). In the UK ‘A widespread negative public reaction’ prevented legislation here (Clarke, 1987; Knudsen, 1995); apparently it shares more the American face-to-face
PDM than its neighbors do.

Paternalistic PDM is frequently observed in developing countries such as India (Mendonca & Kanungo, 1994), Korea (Jang & Chung, 1997) and Turkey Kabasakal & Bodur, 1998) that emphasize high power distance and low individualism. It resembles a parent-child relationship in which the parent is trusted to make the right decisions; the employees don’t favor having power and the responsibilities that come with it. A paternalistic leader is required
not to exploit the subordinates, but to consult them and communicate the decisions taken. Meanwhile, employees are expected to support and commit to these decisions rather than directly contribute to them.

The fourth and last approach is named pseudo-PDM and combines a high level of individualism with a high power distance. This implies a situation in which participation of employees is preached, but their influence on the final decisions is rather small; a democratic facade covering up the actual autocracy, of which the majority is very aware. Eastern European countries like Russia and Poland might more or less fit in this description, carrying the imprint of the communist era which partly shaped the local cultures.

Assuming the relevance of this framework, the need for cooperation between people with differing cultural backgrounds might cause a collision of PDM-
approaches. Especially within multinational organizations like ESTIEM, acculturation is necessary in order to facilitate optimal work relationships. The presented framework can improve the understanding of issues such as reluctance to or fear of participation and willingness to take responsibilities (Frese, 1995).

It speaks for itself that the four approaches mentioned do not exhaust all forms of participative decision making. Also, any approach is not suggested to be limited to certain nationalities. The properties of the two dimensions examined can vary within different regions, industries, within a company, a department or…. a working group! Nevertheless, Sagie and Aycan (2003) propose that culture, among other factors, helps to shape the dominant form
of PDM. So make sure to keep that in mind the next time a project leader asks you for input…

Credit: 28th issue of ESTIEM Magazine

choices.

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