LINKÖPINGS UNIVERSITY & MERCEDES BENZ

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1 LINKÖPINGS UNIVERSITY & MERCEDES BENZ Decision making in inter corporate projects A qualitative and quantitative study of project workers in automobile research and pre development projects in Japan and Germany Supervisor: Rune Olsson Master thesis LIU IEI TEK A 09/00621 SE Department of Management and Engineering Division of Project, Innovation and Entrepreneurship

2 Acknowledgements In August of 2008 I got the opportunity to start an internship at Mercedes Benz Research & Development in Yokohama, Japan. During the internship I was allowed to start working on this thesis. It was a great learning experience, with a lot of hard work, but most of all a lot of fun. Many people have been involved in bringing this thesis forward and I would thank everyone that has supported me along the way. First of all I would like to thank Jochen Feese, Matthias Schulze and Christian Hansen at Daimler AG for letting me do this thesis and for all the support during the process. Also a big thank you to all the members of RDJ in Yokohama for advice and help. I would also like thank my supervisor and tutor at Linköping University, Rune Olsson for all the help and feed back. A special mention goes out to Amanda Hasselberg Sofie Löwengren, and Petter Sund who have read and given suggestions on the contents of the thesis throughout the process. Thank you all!

3 Executive summary This thesis is dealing with the integration of Japanese and German project workers in automobile inter corporate research/pre development projects. The focus is on better understanding the respective decision making process. As cultural differences play a big role in the way that people behave an extra focus was put on investigating this. The methods chosen for this study were quantitative research in the form of a questionnaire and qualitative research in the form of an interview series. For the quantitative research, literature in the cross cultural field was studied and from different cultural dimensions suggested by various authors, a synthesis was derived. This was then used as the base for a questionnaire. The data both enabled a quantitative research study and supported the qualitative study. A number of questions with a more straightforward approach to decision making in projects were also a part of the questionnaire. The data was processed using the statistical software SPSS and the results were analyzed using factor analysis and ANOVA. The factor analysis of the quantitative data had only one factor which had a significant difference between the German and the Japanese sample. The dimension was called individuality reward and describes to which degree a society reward competent group behavior versus competent individual behavior. The German sample showed a strong tendency towards favoring competent individual behavior whereas the Japanese sample leaned towards favoring competent group behavior. The questionnaire questions directly linked to decision making showed no significant differences between the samples showing that individual attitudes within the German and Japanese sample varies more than the cultural differences between the two groups. This shows that you cannot expect a Japanese or German person to act in a certain way in a certain decision making situation just judging on their cultural background. In order to get a deep understanding of the decision making process a qualitative series of interviews were conducted. All interviews with Japanese and other people on location in Japan were conducted in person at different locations around the Tokyo area. Interviews with people situated in Europe were made over the phone. The interviews were recorded and later transcribed and interpreted to gain a thorough understanding of the decision making process. From the qualitative material several differences in how German and Japanese people work and make decisions were found. More time is put into sharing information and getting consensus before a decision in Japan than in Germany were discussions and arguing in meetings are more tolerated. The reason for this behavior in Japan is to not lose face and as well as making it possible to make a decision fast once brought up in a meeting. Germans

4 remain more flexible to revisions after a decision has been made because of the shorter preparation phase. There is big overlap of members between different inter corporate research projects in the automobile industry. Japanese project members tends to be older than their German counterparts which makes them more stable as younger people might disappear from a project as they move up the corporate ladder. In Japan there is a greater emphasis put into after work activities compared to Germany where it is seen as beneficial but not as often used as a way to gain a personal relationship. The thesis concludes that by relatively small measures common decision making between Japanese and German project workers can become smooth and with few misunderstandings. Introductions to respective cultures as well as keeping an open mindset and non assertive attitude should help avoid some of the worst case scenarios. A kick off in the beginning of a project in order to build a personal relationship and trust would surely help the project come off to a good start. Setting common goals for the project and confirming data with people involved in a decision process will facilitate common consensus decision making. Also confirming decisions as simply as paraphrasing what has been said or by informal one onone discussions in a break or after a meeting can keep misunderstandings due to the language barrier to a minimum.

5 Table of Contents 1 Introduction Background Purpose Research Problems Delimitations Definitions Disposition Methodology Research Method Qualitative vs. Quantitative Research Design Inductive vs. Deductive Research Design Data Collection Secondary Data Primary Data Sampling Interview Method and Process Questionnaire Method and Process Credibility Validity Reliability External Validity Objectivity Sources of Error Thesis Work Structure Theoretical Frame of Reference Culture and Cultural Differences Hofstede Power Distance Individualism Uncertainty Avoidance i

6 3.2.4 Masculinity Long term Orientation Globe Performance Orientation Humane Orientation Hall Low vs. High Context Cultures Synthesis of Cultural Dimensions Decision Making Decision Making in Germany Decision Making in Japan German Japanese Decision Making Decision Models Intuitive Decision Model Rational Decision Model Poor Man s Hierarchy Model Value Focused Thinking Evolution of a Group Explicit and Tacit Knowledge Quantitative Results and Analysis Study Design Factor Analysis Results of the Factor Analysis ANOVA of Decision Making Questions Qualitative Dissection Inter Corporate Decision Making Preparations for Inter Corporate Decisions Overlap of Project Members After Work Activities Revisions of Decisions Communication and Documentation ii

7 5.7 Model for Decision Making Dealing With Opposition To a Decision Cultural Differences Conclusions Final notes Recommendations Start of a Project Before a Decision During a Decision After a Decision References Articles Research papers Books Internet Other Appendices Appendix 1: SPSS Descriptives Appendix 2: SPSS ANOVA for Factors Appendix 3: SPSS ANOVA for Decision Making Questions Appendix 4: Questionnaire Code Appendix 5: Questionnaire English Appendix 6: Questionnaire Japanese iii

8 List of Figures Figure 1 Research problems and categories... 2 Figure 2 Work Structure Model Figure 3 Questionnaire gender distribution Figure 4 Questionnaire age distribution Figure 5 Questionnaire tenure distribution Figure 6 Individuality Reward Figure 7 Uncertainty Avoidance Figure 8 Implicit Equals Figure 9 Humane Orientation Figure 10 Long Term Orientation List of tables Table 1 Cultural dimensions Table 2 Example of a paired comparison analysis Table 3 Rotated component matrix iv

9 1 Introduction This chapter gives an introduction to the thesis. It starts with a background, followed by the purpose and research problems of the thesis. The delimitations are presented and recurring words are defined. Finally a disposition showing an overview of the thesis is presented. 1.1 Background Inter cultural and inter corporate communication in projects is a field in which there has been extensive research performed. Research such as Hofstede s (2001) and the GLOBE project s (House 2002) give an account on which values and characteristics different cultures display in different areas. These differences might not always be so clear when you travel between countries in the same geographical region that share a similar history and underlying values. But in the case of Europe and Japan these differences are in some cases very obvious and can cause frustration for even the most experienced project member. Automobile projects research/pre development projects are due to large costs often partly funded by governments or other large organizations and the workload shared by many companies. These companies are not seldom from different countries which puts extra strain on the project management due to geographical distance as well as cultural differences. In Germany, which is the largest automobile producer in Europe, and Japan, which is the largest automobile producer in the world, it is important for these international intercorporate projects to be successful ( ). Because of this there is a need for German as well as Japanese project workers to gain more knowledge about how the other one works in projects. In discussions with supervisors at Daimler it was decided to put the emphasis on the process of decision making as this seems to be an area in which there are many misunderstandings and frustration. 1.2 Purpose The purpose of this study is to investigate the decision making process used by project members in inter corporate automobile research/pre development projects in Japan and Germany focusing on planning and management meetings. 1.3 Research Problems Based on the background presented and the purpose of the thesis several research problems were brought forward together with the supervisors at Mercedes Benz and Linköping University. These questions were categorized into three different areas in order to get a good overview. The categories are communication, culture and location & time and can be seen in figure 1 below. 1

10 Communication Culture Location & Time What kind of communication is used for the process of decision making in projects? Are decisions frequently revised/modified and why? How long have the project members worked in the field and what kind of relation do they have? What influences the process of decision making in in projects in regards to culture? Are certain processes of decision making harder (or easier) to make in Japan or Germany? Is there an influence from out of work activities on the process of decision making? Is meetings the primary place for the process of decision making in projects? How long is the process of decision making in projects? Figure 1 Research problems and categories 1.4 Delimitations The thesis should help project members to understand the process of decision making in other cultures but should not be a handbook or training manual on how to behave in working groups etc. in Japan or Germany. Further, the thesis is about the process of decision making and not about the preferred/chosen alternative(s) or the subsequent outcomes of the decision or who is responsible for a decision being successful or unsuccessful. One aspect of culture is the organizational culture. Even in those organizations where cultural issues receive little attention, how people in a company think, feel, value and act are guided by ideas, meanings and beliefs of a cultural (socially shared) nature. It is however hard to distinguish what values or ideas in an organization stems from societal culture and what is due to organizational culture. The interesting cultural aspects of organizations are not what is unique for a single organization, but deeper and broader patterns that to some extent are a part of a more general business, industrial or societal culture. Understandings of cultural manifestations in organizations should not take the organization as a self evident starting point. Organizational and cultural boundaries cannot be equated. (Alvesson, 2002, p.159) Because of this problem and since I don t have a focus on the subject, organizational culture will not be discussed any further in this thesis. 1.5 Definitions Culture Culture has many definitions and affects everything people do in their society because of their ideas, values, attitudes, and normative or expected patterns of behavior. Hofstede (2001, p.21) defines culture as the collective programming of the mind which distinguishes the members of one group from another. This is also the definition used in this thesis. 2

11 Inter corporate project A project where several companies cooperate to achieve a common goal. 1.6 Disposition Each part of this thesis is connected from the problem background to the conclusions and recommendations and is presented in nine chapters. Chapter 1 contains the thesis background, purpose and research questions. Additionally, this chapter presents the delimitations, definitions, and disposition. Chapter 2 addresses the methodology of the thesis, where the choices of actions are presented and justified. The topics raised are research method, credibility, sources of error and data collection. Chapter 3 contains the theoretical frame of reference relevant for this study. The main topics are culture and cultural differences, decision making, decision models and the evolution of groups. Chapter 4 presents the quantitative study results and analysis based on the questionnaire created and distributed among Japanese and German project workers. Chapter 5 presents the qualitative study results based on the interviews conducted in the study. Chapter 6 contains the conclusions from the qualitative and quantitative study. Chapter 7 contains recommendations based on the findings in the thesis. Chapter 8 presents the sources used for the thesis. Chapter 9 contains the appendices of the thesis. 3

12 2 Methodology In this chapter the choice of research design, research method, data collection, and analysis method will be presented. In conjunction with this the intentions for the analysis as a whole and how it is pursued is displayed. Finally, the reliability and validity of the study will be discussed. 2.1 Research Method The choice between qualitative and quantitative approach is one of the major decisions in research methods. This choice will set the structure for the whole following study and the way it is outlined. (Denscombe, 2007) Qualitative vs. Quantitative Research Design A qualitative approach gives the opportunity to look at details, and to receive a deeper understanding and a general picture of what the situation appears to be. It can be interviews or observations and is characterized by flexibility and closeness to the test object. The quantitative approach has its fundamental starting point in that the society can be measured by methods that give information in numbers. The quantitative approach gives the possibility to measure different opinions on a large number of questions from a large range of respondents. (Denscombe, 2007) The thesis use a mixed mthod approach to the research design in that it includes both a questionnaire which will give quantitative data as well as interviews which will give qualitative data. The use of more than one method can enhance the findings of research by providing a fuller and more complete picture of what is being studied. The benefit of the Mixed Methods approach in this instance is that data produced by the different methods can be complementary. They can provide alternative perspectives that, when combined go further towards an all embracing vision of the subject than can be produced using a monomethod approach. (Denscombe, 2007, p.110) Inductive vs. Deductive Research Design The deductive approach goes from theory to empiricism. When a researcher adopts a deductive approach, he has to obtain certain expectations about how the world appears, and then collect empirical data to see if the expectations coincide with reality. (Gummesson, 2000) The inductive approach goes the opposite way, from empiricism to theory. The researcher goes into the reality without any expectations, collects all relevant information, and finally systematizes the data collected. Deductive research primarily tests theories that already exist, whereas inductive research primarily generates new theories. (Gummesson, 2000) 4

13 The abductive approach is a mix between the inductive and deductive approach, combining already written material with new information received through the interviews and questionnaires (Gummesson, 2000) This thesis includes both inductive and deductive research design. First relevant theory was collected on the subject through secondary data, and then a collection of empirical data was created on this foundation. This approach was chosen to able to make good questionnaire and interview material. This could be considered being deductive. However, the risk with this approach is that only information that support my own expectations are collected. This can lead to that important and relevant information is ignored (Denscombe, 2007). Therefore, the approach boarders against being abductive, as it also aims to get additional information from the interviews and questionnaire in a more exploratory nature. 2.2 Data Collection This study consists of both secondary and primary data. As mentioned, I started out by reviewing secondary data to gain a better understanding of the subject and to have a good foundation to build on when collecting primary data Secondary Data Secondary data is data that is already collected by other people to serve another purpose. The biggest attraction to collecting this kind of data is that it is easily available compared to primary data (Denscombe, 2007). The secondary data in this study includes books, articles, and web sources. These sources have primarily been found using Business Source Premier, netlibrary and ebrary databases found available on the Linkoping University Library homepage as well the Metropolitan Library in Tokyo. Google was also used a few times to find interesting websites and information. There is a need to evaluate the credibility of the source and the procedures used to produce the original data. It should also be kept in mind that the material is secondary data and has therefore likely been produced for another purpose than the specific aim of the investigation. (Denscombe, 2007) Primary Data Primary data is information that has been collected for the specific research at hand. The data collection is specifically structured for the study and can be done through interviews, surveys or observations. (Denscombe, 2007) The primary data for this thesis was collected by doing interviews with project workers from 15 different companies and organizations in Japan and Europe. To further add to the results of the interviews an internet questionnaire was created. 5

14 2.2.3 Sampling Sampling is the final stage in the research process before data is collected, and is concerned with identifying the objects for our primary data collection. The sampling process for the interview of this thesis was a purposive non probability sampling as the interview object were handpicked by me with the help of Jochen Feese (for Japan) and Matthias Schulze (for Germany/Europe)(Denscombe, 2007). This process was chosen since I wanted to interview people that had a deep knowledge of the research area. For the questionnaires the sampling process was a mixture of purposive non probability sampling as I handed it out to people at different companies and also snow ball sampling (Denscombe, 2007) as those people were asked to recommend other people that they thought might be relevant for the purpose of the research (or in other words that they worked or had worked in inter corporate development projects) to send the questionnaire to Interview Method and Process All the Interviews in Japan were made face to face in Japanese or English depending on the nationality of the person. All of the people interviewed in Japan were located around the Tokyo/Yokohama area. The interviews with people located in Europe were made in English over the phone. The interview material was produced to answer the research questions and the questions were open ended since answers that reflect opinions, attitudes and explanations were wanted. The interviews were structured in that sense that there was a list of questions which were asked to everyone. But also non planned follow up questions were asked to interesting answers to produce new insights that were not thought of in advance (Timm, 1994). 24 interviews were conducted. 9 Germans, 10 Japanese and 5 people from other European countries were interviewed. The people who were not German or Japanese had experience in working in projects with Japanese or German people. The interview method was based on that of Kvale (1996). Notes were taken during the interviews which were also recorded. The interviews were as soon as possible transcribed, with the help of the recordings and the notes, according to the meaning condensation process (Kvale, 1996) whereby the important parts of the interviews were extracted to be used in the later analysis. When the analysis phase began the information from the interviews was put into categories to find common themes. 6

15 2.2.5 Questionnaire Method and Process The questionnaire was used to further probe the results from the interviews and to see if it was possible to see quantifiable cultural differences between the Japanese and German project workers. Because of the large geographical distances and many companies involved the questionnaire was sent out with e mail. For creating the internet questionnaire the website Surveymonkey ( ) was used. The website Surveymonkey is a tool which with it is possible to create reliable internet surveys. To measure possible cultural differences between the Japanese and German project workers I used already existing theories on cultural dimensions created by Hofstede (2001), the GLOBE project (House, 2001) and Hall (1995) to come up with relevant questions. I also included relevant questions concerning decision making. The questionnaire was first made in English and then translated into Japanese with the help of three Japanese colleagues at the Mercedes Benz R&D office in Yokohama. I first made a translation to the best of my ability. This translation was then checked by the three Japanese colleagues with good English skills to see that the translations were correct. After this procedure I translated every question back into English to see that the question had not lost its meaning or nuance according to the procedure used by Martinsson (1999). 2.3 Credibility It is important for all researchers to be able to show that the methods used and the results of the research are credible. According to Denscombe (2007) the conventional bases for judging the quality of research are: validity, reliability, external validity and objectivity Validity A high degree of validity implies that the data and the methods for the research are correct. Validity describes whether the research data reflect the truth, reflects reality and covers the important areas. (Gummesson, 2000) The idea of validity hinges around the extent to which research data and the methods for obtaining research data are deemed accurate, honest and on target. (Denscombe, 2007, p.335) Reliability A high degree of reliability is gained if the data that the research produces can be trusted. That if anyone else where to follow the same procedures and repeat a study; the study would show the same results as the prior one. A study with high reliability can thus be replicated by others. (Gummesson, 2000) External Validity The external validity (generalizability) of research is about being able to apply the results to other examples of the phenomenon. The ability of research results to explain phenomena at 7

16 a universal level rather than something that is particular to the cases used for the research. (Denscombe, 2007) Objectivity This is about there being no bias in the research. The research should be impartial and neutral and the data collection and analysis should be fair and even handed. (Denscombe, 2007) 2.4 Sources of Error In this section the factors that could affect the validity, reliability external validity and objectivity of the thesis are discussed. A problem with a having a qualitative approach is how to handle the gathered information. Due to its nature there is no fixed process for analyzing qualitative data (Kvale, 1996). One thing that can affect the reliability of a study is the preconceived notions of the researcher concerning the topic as this can influence the collection and interpretation of the data. These might be personal biases or prejudices that have become internalized in the researcher through research or experience in the area of investigation. This is especially true in the case of qualitative research which depends heavily on the process of interpretation (Denscombe, 2007). The researchers identity, values and believes can however not entirely be eliminated from the process of analyzing data (Denscombe, 2007). I believe that by being a Swedish person investigating German and Japanese project workers that I am relatively unbiased. The interview questions and the questionnaire were tested on colleagues at Mercedes Benz Research and Development in Yokohama to make sure they were easily understandable. During the translation process the translations were checked by several different people at the office to make sure that the meaning of the questions carried over from English to Japanese. These precautions should have minimized the risk of people misunderstanding questions or translation errors and therefore raising the reliability and validity of the thesis. There are a number of common techniques that provides a rough guide on how to navigate in the information obtained via the interviews. In this thesis the style called meaning condensation (Kvale, 1996) has been chosen whereby an interpretation of what the interviewee has said are made and important parts are extracted. This condensation is then used in order to build reasoning and draw conclusions. By using an established technique it should be easier to repeat the findings for consequent researchers. In other words, this improves the reliability. The possibility of not capturing the true meaning of what the interviewee has intended to say may render the analysis erroneous and thus lower the validity of the results. However, 8

17 the process of listening to the recordings were made with caution not to make any mistakes and this combined with extensive notes that were taken during interview sessions should limit the consequences of this potential source of error. All the people interviewed in Japan were located around the Tokyo/Yokohama area and were interviewed in Japanese if the interviewee preferred that over English. The interviews with people in Europe were made in English over the phone. It would have been nice to meet these people face to face as I might have missed important clues by not being able to see the person s posture, gestures or facial expressions which can be as important as the statements (Gummesson, 2000). Due to the geographical distance and economical restraints this was however not possible. This might have lowered the validity of the study somewhat. The selection of people to interview and send questionnaires to were made with the support of Jochen Feese (General Manager for Research & Development Japan, Mercedes Benz Japan) and Matthias Schulze (Senior Manager ITS & Services, Daimler AG, Germany). They have long experience in the industry and helped contacting knowledgeable people at companies in Japan and Germany. By interviewing and sending questionnaires to people from many different companies in both Japan and Germany I believe that the external validity of this thesis is quite high. Making a thesis on inter corporate decision making and only investigating the process in one company would most likely give low levels of validity and reliability to the research. To get as many good questionnaire respondents as possible a method called snow ball sampling was used. Relevant people were asked if they would like to answer the questionnaire. If they agreed they were also asked to suggest other people to send the questionnaire to. It is possible that the suggestions of some people not were good. But this should have a minimal effect on the result of the thesis since the questionnaire responses were screened and respondents not fitting the sample was removed before analysis. The interviewees all had experience within the research area, in many cases having been involved in inter corporate projects over a long period of years. This increases the validity of the study. However, the people interviewed are also captured inside their own pattern of thoughts, and might have based some of their statements on behalf of single incidents or personal prejudice. I have limited the amount of web sources to a minimum since they in general not are as stable as other sources and tend to disappear or be relocated. The internet sources that were chosen to be in the thesis are considered to be reliable. 9

18 2.5 Thesis Work Structure In figure 2 below the work structure of the thesis is displayed. Figure 2 Work Structure Model Problem Background Purpose & Research Questions Communication Culture Location & Time Methodology TheoreticalFramework Data Collection Preparation Interview Material Questionnaire Data Collection Qualitative Data Quantitative Data Analysis Additional Theory Added Conclusions Recommendations The thesis work started with the creation of a problem background. This led to a purpose and research question being created in cooperation with supervisors at Daimler and Linköping University. Then a methodology suited to the thesis was decided upon and after that a theoretical framework was created from sources relevant to the thesis subject. When the theoretical framework was in place the preparations for the thesis data collection was started. In this phase interview questions and the questionnaire were created and translated from English to Japanese. Upon finishing the data collection material the interviews were held and the questionnaire was distributed. When the data collection was completed the data was analyzed and additional theory was added to fill in subjects not thought of earlier. From the analysis created conclusions were made and recommendations on how to improve the situation were given. 10

19 3 Theoretical Frame of Reference In this chapter a number of theories relevant for the thesis are presented and discussed. The topics raised are cultural differences, decision making models, German and Japanese decision making and the evolution of groups. 3.1 Culture and Cultural Differences There is much literature on culture and cultural differences. In this thesis the focus has been on classifying cultural characteristics in regards to Germany and Japan and therefore literature that is relevant for this has been reviewed. The most prominent author is Hofstede (2001) who created a multidimensional cultural model during the 80 s. His proposed multidimensional cultural model quickly gained wide recognition and has since been proven again and again by other researchers. His research should thus provide accurate information on relative cultural differences between countries. A more recent study by GLOBE, which is a large scale international project that improves upon Hofstede s work, is also discussed. Both GLOBE and Hofstede provide statistical data and suggested cultural dimensions concerning Germany and Japan and have therefore been chosen as the main theoretical works to be discussed in this frame of reference. Also the high low context dimension proposed by Edward Hall is discussed. 3.2 Hofstede Geert Hofstede is a Dutch researcher and writer on the interaction between national cultures and organizational cultures. At the end of the 60s and the beginning of the 70s he started a large amount of attitude surveys within IBM s offices in 64 countries all over the world. The results from these studies and subsequent studies of students in 23 countries, elites in 19 countries, commercial airline pilots in 23 countries, up market consumers in 15 countries, and civil service managers in 14 countries (a total of over people in 72 countries) were published in 1980 in the book Culture s Consequences. He was able to distinguish five distinct cultural value dimensions; power distance, individualism, uncertainty avoidance, masculinity and long term orientation. (Hofstede, 2001) Power Distance Low vs. high power distance reflects the degree to which less influential members of an organization and institutions accept and expect power to be distributed unequally. This dimension suggests that a society s level of inequality is created as much by the followers as by the leaders. This has a direct effect on if decisions of power holders are challenged or readily accepted. Low power distance countries people regard each other more as equals regardless of formal position and subordinates are used to and demand the right to contribute and critique their superiors. In high power distance countries less influential people accept and acknowledge the power of others based solely on where they are situated 11

20 in a certain predetermined hierarchal system. The power distance dimension as such does not really measure the actual power difference between individual people but rather how people perceive the difference in power. (Hofstede, 2001) Individualism High vs. low Individualism refers to which degree individuals within a society are integrated into groups. In societies with high individualism people are expected to act and take care of themselves and the people in their immediate family. The people in these societies tend to create relationships with larger amounts of people, but with the relationship being weak. In societies with low individualism people are from birth integrated into strong life long groups and the ties between individuals are strong. People in such societies lean towards collective responsibility. (Hofstede, 2001) Uncertainty Avoidance Strong vs. weak uncertainty avoidance deals with to which extent a culture tolerance uncertainty and ambiguity. It refers to which extent a person feels insecure and threatened in uncertain situations and tries to avoid it by establishing more structure around them. Cultures with strong uncertainty avoidance prefer to avoid conflict and desire consensus. Cultures with weak uncertainty avoidance have a high tolerance for uncertainty and ambiguity and believe in and accept taking risks and trying new things. (Hofstede, 2001) Masculinity High vs. low masculinity (femininity) refers to the distribution of roles between the genders. Hofstede s studies reveal that women s values differ less than men s values across different cultures. Men s values however contain a dimension from very competitive and assertive on the one side to modest, caring and similar to the women s values on the other. In highly masculine cultures things such as ambition, assertiveness, and the accumulation of wealth are highly valued. Women in these cultures are somewhat assertive and competitive, but not as much as the men. These cultures show a larger gap between men s and women s values. People in cultures with low masculinity (feminine cultures) put more value on relationships and the quality of life. In these cultures the women have the same modest caring values as the men. (Hofstede, 2001) Long term Orientation High vs. low long term orientation (short time orientation) describes the importance attached to the future versus the past and present. Values associated with Long Term Orientation are thrift and perseverance values. Associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. (Hofstede, 2001) 12

21 3.3 Globe GLOBE (Global Leadership and Organizational Behavior Efficiency) is multi method projects in which investigators from all over the world examines the inter relationships between societal culture, organizational culture and organizational leadership. (House 2002) Almost 150 social scientists and management scholars from 61 cultures representing every major region of the world are involved in this study. In the GLOBE project 9 different cultural dimensions are studied. 7 of them have their origin in the dimensions of culture that Hofstede (2001) and will therefore not be discussed. The two discussed are performance orientation and humane orientation Performance Orientation This dimension defined as the extent an organization or society encourages and rewards group members for performance improvement and excellence (House 2001, p.6). This dimension has according to the GLOBE researchers turned out to be a very important. Performance oriented societies will exercise direct, explicit communication and will value more what one does than who one is. Societies which are not so performance oriented will typically have a rather indirect style of communication with a large extent of implicit communication. They will tend to value who one is more than what one does. (House 2001) Humane Orientation This dimension defined as the degree to which individuals in organizations or societies encourage and reward individuals for being fair, altruistic, friendly, generous, caring and kind to others (House, 2001, p.6). Societies high on humane orientation will regard the interests of other people to be important and believe that everyone in the society has a responsibility to promote the wellbeing of others. Societies low on humane orientation will regard the one s own interests as important and they will be motivated primarily by a need for power and material possessions. (House, 2001) 3.4 Hall The Low vs. high context model was developed by Edward Hall (1989) and deals with the way different cultures tend to communicate and seek information Low vs. High Context Cultures In low context cultures feelings and thoughts are expressed in words and communication is mostly explicit. People in these cultures seek for information in databases and reports etc. People in high context culture mostly seek out information through personal networks. In these cultures feelings and thoughts are not so often communicated through words and communication is mostly implicit. Interpretation of what is going on depends heavily on the context. (Hall, 1989) 13

22 3.5 Synthesis of Cultural Dimensions From the work of Hofstede, the GLOBE researchers and Hall 8 different cultural dimensions has emerged and are displayed in table 1 below. Dimension Description Author Power distance The degree to which less influential members of an organization and institutions accept and Hofstede expect power to be distributed unequally. Individualism To which degree individuals within a society are integrated into groups. Hofstede Uncertainty avoidance To which extent a culture tolerance uncertainty and ambiguity. Hofstede Masculinity The distribution of roles between the genders Hofstede Long term orientation Describes the importance attached to the future versus the past and present. Hofstede The extent an organization or society Performance encourages and rewards group members for orientation performance improvement and excellence GLOBE The degree to which individuals in Humane orientation organizations or societies encourage and reward individuals for being fair, altruistic, friendly, generous, caring and kind to others GLOBE High Low Context Table 1 Cultural dimensions How different cultures tend to communicate and seek information Hall These dimensions will be used as a base for the questionnaire to determine relevant cultural differences between the Japanese and the German project workers. 3.6 Decision Making Since the aim of the thesis is to investigate the decision making process of German and Japanese project workers it is interesting to take a look at what conclusions other researchers have made concerning the topic Decision Making in Germany Making decisions in German companies are usually a linear process. Different courses of actions are identified and rejected one after the other until the best solution for the problem at hand has been identified. The decisions are ideally made by those highest up in the company and then passed down from senior management down the hierarchy. This model is often called top down method. (Haak 2004) 14

23 The corporate decision making in Germany is pyramidal with one person or a handful or professional managers ruling from the top down. Middle management might not even be aware of the final purpose of their efforts. Recommendations upwards from lower hierarchies are not expected. Middle management s main responsibility is the operational day to day overseeing of strategic decisions they have had little or no part in making. The German traditional respect for authority makes this acceptable. (Flamini 1997) Decision Making in Japan Decision making in Japanese companies can be described as circular. Generally in Japan, decisions within the company often first start as suggestions prepared by middle management. Thereafter starts a process called nemawashi which is a consensus building practice where a proposal initiator will discuss a proposal with other middle managers, peers and support staff informally to build support and discover any opposition. The initiator attempts, through persuasion and discussion of merit, to turn opposition into support. By this process a solution that fits harmoniously with the environment and creates as little friction as possible is created. Everyone that is affected by the decision gets to be more or less involved in the decision making process and enables the group to avoid heated discussions or debates in the official meeting. A suggestion by an employee in a meeting might make his superiors lose face, causing a potentially disastrous situation (Peltokorpi, 2006). As a result of this process, decision making in Japanese organization takes more time than in the west but the execution is faster. (Kobayashi 1997) Nemawashi is a time consuming process but has in the end some favorable aspects (Haak 2004): Many people have been able to give input to the proposal. By the time a proposal makes it to the formal meeting, potential problems and means of solving them have been identified. The proposal can be approved without debate or challenge and the possible resulting embarrassment, which the Japanese desire to avoid in order to maintain harmony and save face. Senior management takes on a guiding function for all the lower hierarchies but in the end they still have responsibility for the decision. (Haak 2004) The Japanese stile of decision making is often called a bottom up process or top directed bottom up decision making (Kobayashi 1988, p.33) to stress senior management s responsibility German Japanese Decision Making Since in many cases the Japanese style decision making process takes longer time than the German one it can create frustration. Germans can find the long nemawashi process whereby a certain problem is discussed over and over again with different Japanese employees irritating and time consuming. The Japanese style has the benefit that when the decision in the end is taken it can be implemented quickly since complete consensus has 15

24 been reached and everyone is therefore willing to support it. In the German style it might take longer to implement the decision as complete consensus might not have been reached leading to internal resistance from employees not having been involved in the process. The problem that German management might have in getting cooperation from their employees in implementing a decision they have imposed can irritate the Japanese management and make them question the managerial ability of the Germans. (Flamini 1997) 3.7 Decision Models The reason for creating a model is in many cases to be able to exploit or control a system in some way. In other cases, systems are modeled to gain deeper understanding about something. Many system models are mathematical and analysis of such a model can lead to insights and understanding about the workings of the natural system. Decision models are system models used specifically for decision making purposes. Such models explicitly incorporate decisions, the available alternatives, and a way to measure the value of possible outcomes. (Keeney, 1992) Humans have different approaches to making decisions. Some weigh more towards the rationalistic approach of weighing facts, and others have the tendency for a more normative (intuitive) approach. The latter involves relying primarily on experience based tacit knowledge, subjective judgments, intuition and gut feeling as opposed to hard data. There is however a tendency to view both as intermingled and complementary. (Hatami, 2005) Intuitive Decision Model An intuitive decision making model is the easiest decision making model and is based on experience and gut feeling. An intuitive model could look like these four steps. (McKim 1980) A problem occurs Wondering, thinking, sleeping on the problem. Idea and insight! Checking to see if solution works. The same four steps illustrated in as a meeting agenda could look like this: Discussion meeting. Investigating, defining and bringing out alternatives. Time for afterthought. Analysis of ideas. Decision meeting 16

25 3.7.2 Rational Decision Model The rational decision making model is a systematic way of analyzing a problem and making a decision. The model has in this case been divided into 8 steps in 2 different stages; problem identification and problem solution. (McKim 1980) Problem identification 1. Assess the decision environment. 2. Define the decision problem. 3. Specify decision objectives. 4. Diagnose the problem. Problem Solution 5. Develop alternative solutions. 6. Evaluate alternatives. 7. Choose the best alternative. 8. Implement the chosen alternative. The difference between rational and intuitive decision making models is that there is a structure to the rational model which is not in the intuitive one. The gut feeling and experience factor of the intuitive model is here replaced by information gathering and evaluating all available alternatives until the best one is found Poor Man s Hierarchy Model This model can help work out the importance of a number of demands or options relative to each other and can be extra helpful when you don t have any objective data to base a decision on. Paired comparison analysis can for example be used when prioritizing conflicting demands on resources. (Taylor, 2006) These are the steps that are carried out when working with the model in a worksheet: 1. List realistic demands or options 2. If needed make a rough division into two groups 3. Put the demands which is in the most important group under the column Demands 4. Put the demands in the same order at the top of columns. 5. Compare the different demands and decide which one is more important. Put a 1 in the cell if the demand in row demand won. Otherwise put a zero. 6. Do this comparison with all pairs. 17

26 7. Count the amount of each row demand s won comparisons and make a ranking from this. Demands Demand 1 Demand 2 Demand 3 Result Ranking Demand Demand Demand Table 2 Example of a paired comparison analysis In the example of a paired comparison analysis which can be seen in the table above demand 2 is decided as the most important when compared to both demand 1 and 3 and is therefore the most important of the three as can be seen in the ranking. Paired comparison analysis is a good way of weighing up the relative importance of different options where priorities are not clear. (Taylor 2006) 3.8 Value Focused Thinking When it comes to decision making the normal focus is usually on alternatives. Decision problems are created by the action of others (stakeholders, suppliers, management, etc.) or as a result of result of circumstances (economic recession, change of business focus, etc.) When the problem has arisen the solving begins. Most often the decision makers concentrate mainly on the alternatives and first thereafter address the objectives or criteria used to evaluate the alternatives. This is called alternative focused thinking and is according to Keeney (1992) a limited way to think about decision situations and is reactive, not proactive. Alternatives are in the end only relevant because they are means to achieve the values of the decision maker. Because of this Keeney (1992) thinks that it is of greater importance for the decision makers to first focus on their values and later on the alternatives that might achieve them. There should be iterations between articulating values and creating alternatives but the principle is values first. This way of thinking is called value focused thinking. By using this process a decision problem can instead be thought of as a decision opportunity. (Keeney, 1992) 18