Risk Perception in British and Saudi Arabia Cultures

Introduction

Overview

One of the most peculiar aspects of post-industrial living is the fact that, during the course of few recent decades, the pace of technological progress in the field of informational technologies, had attained a clearly defined exponential momentum. In its turn, this created objective preconditions for the growing number of commercial entities to face the prospect of undergoing an organizational change, as the main prerequisite of retaining their competitiveness.

What it means is that, within the context of managers addressing their professional duties, their ability to provide proper evaluation of associative risks will become increasingly indispensible. After all, the proper functioning of free-market economy cannot be ensured if those in charge of managing commercial organizations are being incapable of perceiving the full scope of positive and negative effects, deriving out of organization’s exposure to risk.

However, given the fact that the qualitative subtleties of how managers go about assessing operational and restructuring-related risks often reflect the particulars of these managers’ ethno-cultural affiliation (Douglas 2007), the risk-related decision-making, on their part, cannot be referred to as completely rationale-driven, in classical sense of this word.

A number of empirical studies, conducted on the subject matter (Al-Olayan & Karande 2000; Culp 2001; Hofstede 1980; Nair 2010) do support the validity of an earlier articulated idea – as practice shows, while indulging in executive decision-making; managers subconsciously resort to culturally defined methods of rationalization. In other words – even though the managerial risk-related choices are being often assumed rational de jure (De jure is a classical Latin expression that means ‘concerning law’, as opposed to de facto, which means ‘concerning fact’), they can rarely be considered rational de facto.

Moreover, given the fact that people’s understanding of the very concept of rationality extrapolates the inner workings of their mentality, the qualitative functioning of which is being predetermined by the specifics of their social upbringing and their genetic constitution, the manner in how they approach risk managing often appears unpredictable (Gupta 1992). The sheer acuteness of an earlier described conundrum (a logical postulation that evades resolution) comes out particularly visible today, when Western societies grow increasingly multicultural.

After all, as practice shows, even though that today’s managers do strive to endow employees with the respect towards the concept of multiculturalism, the fact that ethnically diversified employees’ executive decision-making seem to be affected by the very essence of these people’s cultural makeup, is being rarely taken into consideration. As a result, risk assessment and evaluation differs from one person to another in the same project, which causes conflict between team members.

This conflict, however, can be creative if management recognize cultural differences from the beginning and manage them positively. And, in order for the recognition of employees’ cultural differences to be practically beneficial, it represents the matter of crucial importance for managers to possess an understanding of not only technical aspects of how one’s culture affects his or her cognitive and perceptional patterns, but to also be endowed with the insight on why culture affect people’s existential modes, in the first place.

In addition, because an ongoing process of Globalization presupposes the standardization of managerial practices, managers from transnational corporations must be aware of what will account for regional representatives’ likelihood to choose in favor of a particular course of action, when faced with potentially risky situations. For that, they would have to be aware of the main provisions of Cultural Risk theory (Thompson, Ellis & Wildavsky 1990), and also of Hofstede’s Cultural model of risk perception.

In this study, I will aim to test strengths and weakness of an earlier articulated thesis (in order for the recognition of employees’ cultural differences to be practically beneficial, it represents the matter of crucial importance for managers to possess an understanding of not only technical aspects of how one’s culture affects his or her cognitive and perceptional patterns, but to also be endowed with the insight on why culture affect people’s existential modes, in the first place) and to explore how cultural theories of risk interconnect with other scientific perspectives on what defines people’s ability to adequately address life’s challenges, associated with taking/avoiding risks.

The testing of the thesis will be done by the mean of studying relevant academic literature and by the mean of conducting an empirical research onto what can be defined as culturally motivated differences in risk-perception, on the part of British and Saudi Arabian mid-level managers.

Project aim and objective

This research’s foremost objective is to define what accounts for cultural particulars of people’s perception of risk and to substantiate the idea that the proponents of Cultural Risk theory have indeed made a good point when assuming that, while assessed through perceptional lenses of one’s cultural affiliation, the potential implications of taking/avoiding risk will emerge qualitatively different. Moving forward, this study will have a specific aim that needs to be achieved by the end of the project – comparing two different cultures in the way they perceive and assess risk (i.e. Saudi culture and British culture).

The empirically obtained qualitative/quantitative data, in regards to how British and Saudi managers tend to reflect upon risky decision-making, should highlight what may account for appropriateness/inappropriateness of managerial strategies, designed to be deployed in British and Saudi Arabian commercial organizations, in general, and to specify the affiliates’ of both cultures likelihood to choose in favor of one or another risk-addressing method, in particular.

In their turn, the insights as to people’s varying capacity to enjoy emotional/cognitive comfortableness, while exposed to risk, which will be obtained during the course of conducting this research, should help transnational corporations to adopt appropriate approaches towards managing culturally diverse employees. While conducting present study, I will strive to find evidence as to the fact that, as compared to what it is being the case with Saudi managerial culture; British managerial culture is more risk-welcoming.

Literature Review on Risk Perception

What is risk?

As of today, the field of risk research continues to be affected by two methodologically different approaches to defining the very concept of risk and to reflecting upon risk’s perceptional emanations. These approaches can be generally categorized as psychometric (cognitive), on one hand, and cultural (social), on another. One of the prominent advocates of psychometric approach Slovic (1992) defines risk as: “The probability of an event occurring, combined with an accounting for the losses and gains that the event would represent if it came to pass” (p. 118).

According to the author, it is namely people’s varying ability to rationalize potential hazards/opportunities, associated with what appears as particularly risky course of action, which defines qualitative subtleties of their attitude towards such an action. At the same time, the proponents of psychometric theory point out to the fact that the workings of one’s sub-consciousness play rather important role in how he or she perceives the gravity of a particular risk.

For example, an individual would be likely to disregard the chance of dying in plane crash, when being exposed to statistical probability of such an occurrence. Nevertheless, after having been exposed to documentaries that contain explicit scenes of people dying in plane crashes, he or she will most likely to end up thinking of such a probability as being of rather clear and present nature.

The proponents of cultural approach refer to the concept of risk as essentially social construct, which cannot be discussed outside of what represents the essence of predominant socio-political, economic and cultural discourses in a particular society. Oltedal et al. (2004) outlined the theoretical premise behind this idea with perfect clarity: “Humans are influenced by their surroundings and the environment affects cognition as well as behavior and individual decisions” (p. 7).

This is the reason why definitions of risk, provided by the proponents of cultural theory, emphasize societal aspects of how people perceive surrounding reality. As it was pointed out by Thompson, Ellis, and Wildavsky (1990): “Subjectivity need not rule out regularity as long as different sorts of people feel subjective in similar ways with regard to similar objects” (p. xiii).

Given the fact that there is a plenty of empirical evidence as to the fact that the specifics of people’s ethno-cultural/social affiliation do affect their risk-related attitudes, the cultural definition of risk appears academically legitimate. This definition can be reformulated as follows: risk is what socially functioning mindset of a particular individual perceives as appropriate/inappropriate ratio between action’s associative dangers and benefits.

Given the nature of a researched subject matter, during the course of conducting consequential phases this study I will make point in referring to specifically this definition of risk as being the most contextually appropriate.

Risk perception/assessment models

Even though that, as I have mentioned earlier, just about all approaches to conceptualizing risk can be classified along the lines of Cultural (social) and Psychometric (cognitive) theories, the classification of what different researchers suggest should account for practically valuable risk perception models represents much more challengeable task. The reason for this is simple – as I am going to illustrate, many of these models feature both: the elements of cultural and psychometric risk-related theorizing, as their integral components. Nevertheless, it is still possible to outline the procedural matrix of six major risk models, as defined by Renn (1990).

Actuarial/Statistical model

This model is based upon the assumption that the potential risks, associated with a particular social, economic, political or environment-affecting activity, can be well predicted for as long as this activity remains spatially extended for long enough. For example, it does not represent much of a challenge to figure out what may account for one’s chances to die in a car accident. In order to calculate these chances, the researches would have to work out a formula, where the number of cars on the roads and the extensiveness of a traffic at given location will serve as an independent variable, and the subtleties of individual’s reliance on its car, as the method of transportation, will serve as a depended variable.

The foremost characteristic of this risk perceptional model is its systemic nature – that is, it can only accurately predict risks associated with system’s functioning as a whole. The foremost characteristic of this risk perceptional model is its systemic nature – that is, it can only accurately predict risks associated with system’s functioning as a whole (Pierce 1998). In its turn, this exposes two major shortcomings of actuarial/statistical risk assessment model:

• its predictions are too vague and statistically dependent, which implies that this model cannot be utilized to assess individual risks in every particular case,
• actuarial/statistical risk assessment model only provides long-term and never short-term predictions.

Epidemiological model

From conceptual point of view, this model is quite similar to previously mentioned one. Model’s theoretical premise is based upon an assumption that is quite possible to figure out the number and the qualitative essence of potential hazards to people’s health, which may originate in the functioning of a number of commercial, scientific and governmental organizations. While studying what accounts for the risks to people’s health, associated with the potentially hazardous situation, researchers project their knowledge of what may account for chemical/biological agents’ harmful effects onto exposed population. In its turn, this allows them to evaluate risks, associated ‘worst case scenario’.

The apparent drawback of this specific model is that researches often lack information as to spatial effects of an exposure. What also adds to the problem is that the extent of people’s physiological well-being is the subject of numerous interpretations.

Engineering model

This specific risk perception model is being primarily utilized within the context of ensuring safety of a number of technical projects, such as constructing houses, for example. In its turn, this implies that it is being just as systemic as the ones mentioned earlier. This particular model is based upon the assumption that the successful completion of a technical project cannot be accomplished without making sure that such project’s structural elements occupy proper systemic niches, as the extent of project’s structural integrity relates to the extent of its safety in geometrical progression (Lowrance, 1976).

That is – the more research is being conducted on how project’s elements will react to the exposure to force majeure circumstances, the higher would be the overall extent of an associative safety. This is why engineering risk perception model relies upon the utilization of probabilistic risk assessments (PRA), as its methodological tool. Nevertheless, just as it is being the case with the rest of technical approaches to risk perception/assessment, this particular model appears particularly prone to the factor of uncertainty.

For example, even though both WTO towers in New York were rightly deemed absolutely safe (they were designed to sustain earthquakes of 8.0 – 8.5 points on Richter magnitude scale), it never occurred to the providers of associative PRAs that anyone would attempt to fly passenger planes into these buildings. As the result, in the aftermath of 9/11 attacks, both WTO towers were proven unsafe.

Economic model

The foremost feature of this risk perception model is that it does not associate the concept of risk with the objective notion of physical harm, as much as it associates it with rather subjectively defined notion of ‘economic satisfaction’ (Smith 1986). In its turn, the qualitative essence of how a particular individual perceives such a satisfaction is being largely depended on the inherited and socially defined subtleties of such individual’s psychological constitution.

After all; whereas, one person may consider it being economically justified to indulge in heavy physical labor in exchange for being paid as little as $5 per day (as it is being the case with the majority of people in Third world countries), another person will consider making less than $5.000 per day a loss, due to such income being lesser then the daily cost of conducting business, for example. Therefore, the effective deployment of economic model for risk perception/assessment depends in finding a so-called ‘common denominator’ – a commonly shared criteria for evaluating the extent of economic activity’s profitability, in relation to the scope of associative risks (Merkhofer 1984).

What adds even more complexity to the issue is that fact that, just as it is being the case with the notion of economic profitability, the notion of related costs (risks) is highly subjective. Nevertheless, because the foremost principle of free-market economy’s functioning (generation of monetary profit) continues to be universally recognized across the globe, there can be few doubts as to the economic risk perception model’s applicational legitimacy, for as long as the qualitative evaluation of economic risks is being concerned.

Psychological model

As the very name of this particular risk perception model implies, it is being is embedded in methodological framework of psychology. Model’s foremost objective is to expose cognitive/heuristic motivations behind risky decision-making (Tversky 1972; Lopes 1983). According to model’s theoretical premise, people do resort to rationalizing, when required to make decisions that involve taking risks.

Their rationalizing, in this respect, sublimates itself in people’s tendency to consider indulging in risky behavior if such behavior’s potential benefits appear particularly high. However, this tendency is being counter-balanced by people’s aversion of what they perceive as the high probability of sustaining loss, as the consequence of choosing in favor of risky decision-making. Hence, a certain paradox – the extent of an individual’s likelihood to think twice, before making a risky decision, often reflects upon the same individual’s tendency to overlook risks, while deciding in favor of adopting a particular course of action, for as long as he or she expects its risky behavior, in that respect, to yield unusually high payoffs (Kahneman & Tversky 1974).

In other words, just as it is being the case with theoretical premise of quantum mechanics, which refers to an atom as such that can simultaneously exhibit the traits of a particle and a wave, the psychological/cognitive model presupposes people’s ability to assess the significance of a particular risk in essentially ambivalent manner. That is, depending on qualitative essence of affiliated circumstances, people would be equally capable of referring to the same method of tackling a concrete life’s challenge as ‘risky’ or ‘safe’.

Cultural model

The main conceptual tenet of this particular model is that it addresses people’s tendency to indulge in a variety of risky/non-risky behaviors as such that is being correlative with the particulars of their ethno-cultural and social affiliation (Douglas 1966; Rayner & Cantor 1987). The foremost problem with cultural model of risk perception is that its practical application cannot always be appropriate within the context of defining single individual’s risk-related behavioral pattern.

Moreover, model’s procedural subtleties are being of clearly stereotypical essence – that is, this model rests upon the assumption that person’s culture does affect his or her risk-related attitudes in a definitive way, which presupposes that there can be no exemptions from this rule (Rowe 1977). At the same time, there can be few doubts as to the fact that its theoretical premise is indeed being consistent with the actual realities of how people from different ethno-cultural and social groups tackle risk, in statistical sense of this word (for as long as defining the risk-related attitudes of large groups of people is being concerned).

Even though that the earlier outlined models risk-assessment models are meant to apply to specific types of risk, the theoretical premise upon which they rest derives out of the idea that it, despite risk’s metaphysical essence, it is indeed possible to measure/evaluate risk. In its turn, this explains why practical deployment of just about any earlier mentioned risk-assessment model usually features the elements of other models’ theoretical premises.

In the next sub-chapter of this study, I will explore the qualitative correlation between people’s ethno-cultural affiliation and the particulars of how they perceive risk at length.

Culture and risk perception

The validity of an idea that one’s culture does exert a strong influence on individual’s positioning in life is now being considered absolutely legitimate by the majority of psychologists and social scientists. Partially, this is due to the fact that idea’s legitimacy can be well proven by empirical observations in the context of social interactions. For example, it has been noticed that Western and Oriental practices differ rather drastically in how parents go about helping their children to develop cognitive skills.

When a typical Western mother tries to familiarize its child with the notion of ‘car’, she would be most likely to describe car as something that has innate characteristics: ‘Look at this car – it has four wheels, it is red and shiny’.

Oriental mother, on the other hand, would be most likely to introduce its child to the notion of ‘car’ by pointing at car’s contextual characteristics: ‘Look at this car – it allows passengers to enjoy fast and comfortable ride’ (Yiyuan et al., 2005). Apparently, unlike what it is being the case with Western psyche, Oriental psyche it utterly eclectic, because people of East Asian descent tend to perceive universe and their place in it as being mutually interconnected to the point where it cannot even be ascertained whether emanations of surrounding reality should be referred to as such that exert ‘external’ influence onto concerned individuals’ existential mode.

Hence, Asians’ culturally predetermined tendency to think of causes and effects as such that derive out of each other in cyclical (contextual) rather than in linear (dispositional) manner. For an individual, strongly affiliated with one of Oriental cultures, the full scope of probable consequences resulting from what he or she perceives as non-action, appear to be just as acute as the effects of even particularly volatile action.

As it was noted by Peng and Knowles (2003): “Americans (Westerners) favor internal/dispositional explanations for nonsocial events more than do Chinese, whereas Chinese prefer external/contextual explanations more than do Americansn (Westerners)” (p. 1282). For example, unlike what it is being the case with Western advertisement posters, which usually feature an advertised product at the very centre, advertisement posters designed to appeal to Oriental consumers rely mainly upon contextual approached towards conveying a commercial message, which is why in these posters the promoted products are being usually situated in the corners.

In its turn, this explains why, as of today, taking into consideration the specifics of people’s ethno-cultural affiliation became an integral part of advertisement practices, designed to appeal to the workings of targeted audiences’ subconscious psyche.

Nevertheless, the fact that, as it was mentioned earlier, people’s cultural differences do affect the patters of their cognition, does not explain why it is being actually the case. Moreover, it also does not explain why, even though there are many cultures in the world, when it comes to analyzing their influence on affiliated populations’ perceptional modes, this influence ends end being conceptualized within the context of how it increases people’s individualistic (Western) drives, on one hand, and collectivist (non-Western) drives, on the other. In other words, there is a certain dilemma – despite world cultures’ apparent plurality, their influence on people’s behavioral patterns appear to have essentially dual subtleties.

The partial clue to this dilemma can be found in the works of famous French anthropologist Lucien Levy-Bruhl (1928). According to the author: “Identity appears in non-Western collective representations… as a moving assemblage or totality of mystic actions and reactions, within which individual does not subjectualize but objectualize itself” (p. 120). What it means is that there are objective preconditions for people affiliated traditional non-Western cultures to be endowed with well-developed sense of utilitarian practicality and to rely on this sense, when it comes to addressing life’s challenges.

As it was shown in Bruhl’s book, after having been asked to exclude semantically unrelated word out of wordily sequence axe – hammer – saw – log, natives from Vietnam’s remote rural areas were experiencing a particularly hard time, while dealing with the task. In their eyes, the earlier mentioned sequence made perfectly good sense as it was, simply because they considered every of these objects ‘useful’. The fact that the words axe, hammer and saw could be categorized as ‘instruments’, on one hand, and that the word log could be categorized as ‘material’, on another, never even occurred to these people. Apparently, the fact that non-Western cultures are being concerned with exploring specifically contextual aspects of reality’s manifestations, points out at these cultures’ pre-logical essence.

What has been said earlier directly relates the risk-related discourse, as it points out to the fact that one’s strongly defined aversion of risk is nothing but an extrapolation of his or her existential atavism. Apparently, people whose claiming up the ladder of evolution has not been particularly fast are being naturally predisposed towards avoiding risk at any possible cost. (Intellectually underdeveloped individuals usually experience a hard time, while subjectualizing themselves against natural environment, because they are being cognitively predisposed to think of themselves as nature’s integral parts. Hence, their tendency to avoid taking risks – as an activity that challenges nature).

The reason for this is simple – these people’s well-known affiliation with the so-called ‘traditional values’, sublimated in their strong sense of religiosity, their ritualistic-mindedness, their hypertrophied respect towards higher authority, and their often well-defined psychological sameness (hence, their collectivism), are the emanations of their intellectual inflexibility.

In other words, it is not due to their cultural uniqueness as ‘thing in itself’ that people associated with traditionalist non-Western cultures seem to always choose in favor of avoiding risk, if circumstances allow, but due to their subconscious realization of the fact that, while exposed to risk, they will not be able to adequately address it – these people’s mental rigidness create objective preconditions for this to be the case. Therefore, the more a particular person is being intellectually flexible, the more will he or she feel comfortable, while faced by such an ‘unknown’.

In this respect, a parallel can be drawn with a chess player – the more possible combinations as to how to address its opponent’s next move is being stored in such player’s mind, the better are going to be his or her chances to come out winner. Chess player’s ability to promptly switch from one combination to another, while deciding upon its response to newly emerged threat, on the part of an opponent, is what preconditions his or her success in the game.

This is why there can be no mentally inflexible chess players by definition. (This parallel is meant to explain the actual mechanics behind people’s varying attitudes towards the risk – apparently, what may appear as irrationally defined risk-welcoming attitude, on the part of a particular individual, is nothing but an extrapolation of his or her existential superiority, as someone knowledgeable enough (such person’s mind stores a multitude of effective responses to potential changes of circumstances), and as someone capable of swiftly appropriating a proper response (intellectual flexibility).

What it means is that, even though people’s attitudes towards risk are being indeed affected by their culture, this culture is itself appears to be nothing but a by-product of its affiliates’ evolutionary positioning. In other words, individual’s behavioral patterns (including risk-related attitudes) reflect the inner workings of his or her mentality, which in turn are being defined by the extent of individual’s biological and socio-cultural advancement (Wildavsky 1979).

For example, there are good reasons to believe that, given highly individualistic nature of Western societies, most people affiliated with these societies would be naturally predisposed towards taking risks, while addressing existential challenges.

The reason for this is simple – the term ‘individualism’ is essentially synonymous to the notion of ‘risk taking’. As it was pointed out by Adams (1995): “Individualism accords with a benign nature that provides a supportive context for the individualist’s entrepreneurial, trial-and-error way of life” (p. 36). Alternatively, people affiliated with strongly collectivist/traditional societies (Saudi Arabian) that do not tolerate the emanations of individualistic industriousness (Huntington 1999), would be naturally inclined to adopt more cautious attitude, while facing risks.

I’m not convinced by the points put forward… consider the development of Asian economies over the last fifty years and Asian cultures over several millennia. (The fact that, during the course of 20^th century’s second part the economies of so-called ‘Eastern Tigers’ (China, Japan, Korea, Malaysia, Taiwan) experienced an amazing economic boom cannot be discussed outside of what were objective preconditions for this to happen. And, the foremost precondition was the inflow of Western technologies, Western financial investments and Western human capital. Without it, Asian economic miracle would have been impossible).

Given the fact that behavioral patterns, in regards to risk-taking, appear culturally predetermined and spatially consistent, it makes logically legitimate sense for researchers to strive to classify them. According to Schwarz and Thompson (1990) and Hofstede (1980), there are four distinctive categories of people, whose perception of risk features qualitatively distinctive features:

Individualists

These people tend to adopt active stance in life, while acting as ‘existential sovereigns’ (this notion refers to people capable of exercising a complete mastery over their own lives). Their foremost psychological traits are: intellectual flexibility, rationalistic mindedness and entrepreneurial industriousness. The possession of earlier mentioned psychological traits causes these people to think of risk-taking as an integral part of their lives, because they are naturally inclined to think of risk in terms of an ‘opportunity’.

For them, taking risks is the integral part of life, which is why even after risk-taking, on their part, proves counter-productive, they nevertheless continue to act in essentially voluntarist manner. Traditionally, individualism has been considered the most distinctive psychological trait of Westerners. According to Watson & Morris (1994): “A self-contained individualism theoretically dominates Western personality structures and is defined by sharp self-other boundaries, a high internal sense of personal control, and an exclusion of others from one’s own personal self-definition” (p. 289).

The foremost proof as to the fact that Westerners are indeed being endowed with rather acute sense of individualism can serve the fact that, unlike what it appears to be often the case with non-Westerners, the popular political ideologies that appeal to Westerners, can be defined as anything but as such that thrive on evoking the anxieties of ethnic or religious solidarity in these people. [Today’s Westerners are being deprived of the strong sense of ethnic/racial/religious solidarity, which explains why most of them do not actively resist the implementation of policy of multiculturalism in their countries] Apparently, on subconscious level, every Westerner consider itself a ‘universe within’, which is why he or she does not experience an urge to be uniting with mind-likes.

Egalitarians

Most individuals that belong to this particular group, are being endowed with collectivist-idealistic mentality, which presupposes their lessened ability to explore their industriousness. These people believe that it is up to the government to ensure citizens’ well-being, that society’s wealth should be equally distributed among its members, and that the proper functioning of a free-market economy is being ‘immoral’, as it is being inconsistent with the concept of ‘equality’ (Kelly 2010).

[The foremost evidence is contained in the very term ‘egalitarianism’, which presupposes its affiliates’ belief in the concept of equality – hence, their traditional affiliation with the so-called ‘left-wing agenda’] It is needless to say, of course, that collectivist ideals stand in striking opposition to the ideals of individualism. In its turn, this partially explains why political movements that promoted egalitarian agenda (Communism, Socialism), had never enjoyed popularity with the citizens in Western countries.

[These egalitarian agendas were not even popular in their own countries… The popularity of communism relates to the extent of people’s inborn collectivist anxieties in geometrical progression – the more a particular individual shares the ideals of individualism, the less he or she would be likely to find Communism appealing and vice versa]. Alternatively, in countries where individualistically-minded people have always been a minority (China, Russia, India), political parties that do advance the cause of egalitarianism even today continue to remain very popular with the voters. [Why are China and India so rapidly adopting free market western ideas?.. The popularity of Socialist/Communist parties in China and India has always been high…

Even today, the Communist party is being in complete control in China. This, however, did not prevent China from adopting capitalism, which is being suggestive of the fact that, even though the majority of East Asians did adapt to the ideals of individualism/free-market, they nevertheless perceive these concepts differently from what it happened to be the case with Westerners] While reflecting upon the surrounding realities, collectivists often prove themselves quite incapable of dealing with life’s challenges on their own, which in turn is being extrapolated in their tendency to profess the ideals of communal living Thus, egalitarians are being naturally predisposed towards striving to avoid risks, as their collectivist mentality makes it harder for them to able to swiftly adjust to newly emerging circumstances.

[The above suggestion relates to group assessment of risks rather directly, as it provides an insight onto the fact that, in part, people’s tendency to avoid facing potentially beneficiary risks can be explained by the specifics of their ‘brain wiring’, which in turn is the by-product of their ancestors’ continuous exposure to highly specific and locally-bounded existential challenges].

Hierarchists

These people think that it is namely their affiliation with particular social/professional strata, which defines their individuality. Such their tendency is being defined by largely environmental factors, because it is namely in countries where citizens are being denied the prospect of socially regulated (corporate) uplifting (such as Saudi Arabia or India), as opposed to what it is being the case in Western countries, that feature socially and politically inert populations. For example, in India, individual’s chances to gain social prominence are being defined by his or her affiliation with particular societal strata at the time of birth.

Very similar situation with social uplifting appears to define societal dynamics in Saudi Arabia, although such situation’s specifics are of clearly religious rather than of purely tribal nature. After all, the Law of Sharia, which even today serves as country’s Constitution, clearly emphasizes the divine origin of earthly authorities. Hence, objective preconditions for the majority of Saudi citizens to adopt rather uncritical attitude towards these authorities.

According to Al-Atawneh (2009): “(Islamic) government is considered to be vital, due to its lofty duty to protect the religion and Islamic values. Yet both religion and state fall short in providing systematic mechanisms: for delineating the ruler’s authority, for defining the relationship between the ruler and those being governed, and for providing a practical model of how an Islamic state should be” (p. 724).

Therefore, it is only natural for such their attitude to extrapolate itself in how they perceive risk – given the fact that ‘perceptional hierarchism’ suppresses one’s individualistic anxieties as ‘immoral’, it does not come as a particular surprise that the majority of traditionalist societies’ members do not put the act of taking risk in particularly high regard. In its turn, this causes most of them to refrain from welcoming risks, even when circumstances call for it – hierarchists’ intellectual inflexibility and their perceptional authoritarianism strongly undermines the objective prerequisites for them to be concerned with ceasing an opportunity, as life-advancing ‘breakthrough’.

[I am getting rather confused over your concept and discussion of risk. What sort of risks are you discussing within these categories?… Within these categories, it not the risk that is being discussed per se, but what constitutes psychological predisposition for people that belong to different cultures to perceive risk from qualitatively different perspectives].

Fatalists

This category of people tend to adopt particularly inactive stance in life, while believing that nothing depends on them. In Western societies, most fatalists consist of social outcasts and representatives of marginalized sub-cultures. In traditional societies, fatalists often appear to be individuals of high social prominence. [Is it appropriate to contrast ‘western’ with ‘traditional’ societies?… I think it is fully appropriate – after all, even though some Western policy-makers do profess their belief in ‘traditional values’, they never dare to suggest that these values should replace the values of secular ‘non-traditional’ living, governed by impersonal law.

In countries where ‘traditional culture’ dominates public discourse, this is far from being the case] Given the fact that fatalists think of fate as such, that defines their socio-political status; they tend to refer to risk-taking as something that is being associated with the notion of a blind luck, rather than something that is being associated with the rationale-based notion of taking advantage of an opportunity. As practice shows, people’s fatalist attitudes come as the result of their endowment with the strong sense of religiosity.

According to Hofstede (1980), the qualitative subtleties of people’s perception of risk also depend on their affiliation with either masculine or feminine existential virtues. Masculine virtues have traditionally been considered as such that derive out of men’s ability to rely on their sense of rationale, while facing challenges, and also out of their ability to suppress emotions, while indulging in decision-making. In its turn, this explains why it is namely people endowed with masculine rationale-driven mentality, who are being naturally predisposed towards individualistic act – hence, their tendency to welcome risks.

Alternatively, feminine virtues derive out of particulars of women’s psychological makeup, which in turn reflect the specifics of women’s physiological constitution. Hence, these virtues’ close affiliation with the concepts of ‘nurture’, ‘protection’, and ‘tolerance’. Of course, that earlier mentioned notions do not quite correlate with masculine virtues of ‘competition’, ‘dominance’ and ‘challenge’.

Therefore, it makes perfect logic that people who profess feminine ‘collectivistic’ virtues are being averted by risk to substantially higher degree as compared to what it is being the case with people who profess masculine ‘individualistic’ virtues. [You are aligning masculine with individualistic and feminine with collective ‘virtues’, why? This is because these virtues are being reflective of workings of feminine and masculine mentalities, which in turn are being physiologically predetermined.

Being capable of taking risks is what presupposes men’s ability to gain social prominence; hence, ensuring the passage of their genes to the next generations – in full accordance with the provisions of Darwinian evolution. For women, on the other hand, it is namely their ability to ‘get along’ with men, which largely defines their chances to attain social prominence – hence, women’s subconscious aversion of facing risks and their collectivist-mindedness]

[Why have you only picked up on only one of Hofstede’s cultural characteristics? Are the others not relevant?… The very context of present study implies the appropriation of namely those Hofstede’s cultural characteristics that have been discussed earlier, because the understanding of these characteristics’ origins sheds light on hidden motivations behind people’s risk-related behavior]

Classification of insurable and non-insurable risks

Even though that last two reviewed risk perception models clearly imply that the specifics of people’s psychological makeup and their ethno-cultural affiliation do affect the manner in which they assess what accounts for the extent of a particular risk’s actuality, which means that people’s risk-related judgments are not always objective, economy’s methodological framework treats risks as such that can be objectively measured and classified. Therefore, it represents the matter of crucial importance to introduce readers to economic classification of risks, as the empirical part of this research will be concerned with outlining depended inter-cultural variables within the context of specifically economic risky decision-making. [At the end of this study, inter-cultural variables are being outlined]

All risks, faced by individuals who indulge in commercial/economic activities, can be generally divided on ‘pure’ and ‘speculative’. In their article, Williams (1966) outlines conceptual difference between these two categories of risk: “In the pure-risk situation there is no chance of gain. The person faces only a loss or the status quo. In the speculative-risk situation, there is a chance of gain” (p. 577). For example, there can no potential benefits associated with the prospect of commercial enterprise’s proper functioning being affected by volcano eruption.

[This remark refers to the fact that, even though force majeure circumstances do sometimes work for the benefit of commercial organizations, these circumstances are being considered harmful in a priori] On the other hand, even though buying shares on stock market most people perceive as utterly risky, if properly commenced it is being capable of enriching the buyer. In other words, speculative risk organically derive out of the famous principle – in order to make money, one must spend money.

Whereas; most pure risks (but not all of them) are insurable, most speculative risks are not insurable. The non-insurable risk is the risk associated with unpredictable losses, which is the reason why insurance companies are being particularly reluctant to provide insurance coverage as the part of securing the safety of financial investments, for example. Yet, most insurance agents are being utterly enthusiastic when it comes to providing interested parties with insurance coverage in relation to a number of force majeure situations (Kovaleski 2005).

Non-insurable risks can be outlined follows:

1. Market risks – this type of risks is associated with a number of subjective circumstances that may lead to the loss of property or income, on the part of an affected party, such as seasonal or cyclical changes in prices, consumer apathy, the factor of strong competition, etc.
2. Political risks – these risks derive out of the possibility for drastic political tribulations to take place: the change of government, the introduction of laws that restrict free trade, the introduction of heavy taxation policies, etc.
3. Production risks – this type of risks is usually associated with equipment’s operational ineffectiveness, with the shortage of raw materials, with a variety of associative technical problems, and with the danger of labor conflicts.
4. Personal risks – these risks refer to such uncertainty factors as the prospect of unemployment, poverty due to divorce or the lack of education, the loss of health in the military, etc.

Insurable risks are the ones associated with predictable losses. They can be outlined as follows:

1. Property risks – risks from exposure to natural disasters, which lead to the loss of property.
2. Health risks – the risks of losses resulting from premature death, disability, or aging.
3. Jurisprudential risks – these risks refer to the possible losses resulting from car accidents, occupational hazards and professional errors.

In order for insurance companies to be willing to provide single individual or organization with compensation for the losses that occurred due to exposure to a particular risk, it will need to take into consideration the following:

1. Insurable risk cannot be the result of deliberate action. This means that insurance companies do not cover damages intentionally caused by the insured party.
2. The potential risk-related losses must be measurable and insurance costs must be economically justified.
3. One type of risk should be statistically predictable.
4. A covered risk cannot be affecting all the insured parties simultaneously.
5. The potential risk-related losses must be deemed substantial.

Nevertheless, despite the fact that many insurable risks cannot be considered particularly acute, because the potential losses associated with these risks can be promptly compensated, it does not prevent many people from considering these specific risks as the most discouraging. In its turn, this once again confirms the legitimacy of utilization of Cultural model for risk management, as its provisions are being concerned with taking into account the culturally defined specifics of people’s psychological constitution. [What relevance has this section? Your dissertation is about risk perception not risk management…

Since the empirical part of this study is being concerned with defining risk-related attitudes, on the part of British and Saudi mid-level managers, it proved necessary to provide readers with the insight on specifically economically driven perception of risk. By expounding on the subject of insurable and non-insurable risks, I was able to substantiate the validity of Hofstede’s cultural model yet one more time. After all, as it will be shown later, even though earlier mentioned risks appear to be the subject of rationalization, the process of their culture-based evaluation, on the part of study’s participants, proved itself largely immune to the considerations of rationale]

Approaches to risk management

The concept of risk management can be defined as the process of minimizing the scope of potential losses that may occur as the result of an individual or organization being affected by uncontrollable events (Stanley 2007). According to Culp (2001): “Risk management as an organizational process can be separated into five general activities: identify risks and determine tolerances; measure risks; monitor and report risks; control risks; and oversee, audit, tune, and realign the risk management process” (p. 210). The earlier provided definition leaves few doubts as to the fact that this concept organically derives out of the concept of business and vice versa.

Therefore, it represents the matter of crucial importance for managers to be able to properly identify risks and to measure the extent of their acuteness. Risk must be calculated to the maximum allowable limit. And, even though making mistakes while estimating the implications of a particular risk often prove unavoidable, due to managers being simply in no position to remain aware of all risk-exposure’s ever-changing associative variables at all times, there is nothing particularly challenging in preventing the same mistakes, related to risk-estimation, from occurring over and over.

The main purpose of risk-management, therefore, is best defined as establishing objective preconditions for the ‘worst case’ commercial scenarios to result in only slight reduction of profits and never in placing commercial organization on the threshold of bankruptcy.

In its turn, this explains why risk-management’s foremost operational instrument is ‘forecasting’, which can be defined as foreseeing ahead of time what will account for the qualitative subtleties of external and internal circumstances’ impact on organization’s proper functioning. The risk-mismanagement ‘forecasting’, however, is not being concerned with predicting future events per se (it would prove impossible), but with designing alternative scenarios for a particularly risk-related challenges to be effectively dealt with.

In order for the implementation of a particular risk-management strategy to yield practical benefits, it must be well thought-through and organized. The first phase of appropriating risk-management strategy is the conceptualization of what should be considered risk-exposure’s actual objectives, such as generation of an additional monetary profit, increasing the extent of organization’s operational and structural effectiveness, reducing turnover ratio, etc.

The next phase is gathering the intelligence information about how external circumstances may affect the actual consequences of managerial decision-making, in regards to a particular form of risk. The final stage of designing a particular risk-management strategy is formulating the set of risk-related recommendations for organization’s top-officials, so that that they would be able to take them in consideration, while coming up with executive decisions. The following is the list of what can be thought as risk-management’s foremost guiding principles:

• Never risk with the prospect of losing more money then you have in your factual possession.
• Always think of what will account for the whole spectrum of risk’s possible consequences.
• Never risk with much to gain little.
• Never risk when in strong doubt.
• Always consider alternatives to a particular risky decision making.
• Direct investments are always the most risky.

Nevertheless, despite the fact that the earlier provided definition of risk management and theorization on what can be considered its integral design-related and implementation-related components appears universally applicable, which implies that there can be only one legitimate approach to managing risks, there are in fact two: so-called ‘anticipationist’ and ‘resilient’ (Hood & Jones 1996).

The advocates of ‘anticipationist’ approach, which is being favored by most managers, argue that it is quite possible to predict ahead of time the number and the qualitative nature of potential risks, which will affect organization’s functioning over continuous period. Therefore, in their view, the very concept of risk management is being synonymous to the notion of ‘prevention’ – once, the scope of potential risks has been properly identified, this makes it possible for managers to avoid facing them.

In their article, Culp and Planchat (2001) outline the following major components of an ‘anticipationist’ risk management process: identification, determination of tolerances and control. According to the authors, in order for managers to be able to properly identify risks, they will need to define what represents the factor of uncertainty in the functioning of organization’s systemic elements. For example, while assessing the extent of employees’ professional effectiveness, managers would not only have to take into account the factor of educational adequacy, on the part of these employees, but also to evaluate the qualitative essence of their psychological traits.

After all, company’s proper functioning cannot be ensured if, for example, employees tend to show up late at work or if they are known to indulge in absenteeism (Yperen & Hagedoorn 1996). Once, all the potential risks have been properly identified, managers will face the challenge of figuring out what will constitute tolerable deviations in the systemic functioning of a particular organization, in order to ensure such functioning’s stability.

As Lowrance (1976) had put it: “A thing is safe if its attendant risks are judged to be acceptable (tolerable)” (p. 8). It is needless to mention of course, that the process of calculating the extent of a particular risk’s acceptability cannot be thought of as ‘thing in itself’ – after all, risk’s acuteness and what people perceive to account for such risk’s acuteness do not always correlate.

Therefore, it comes as not a big surprise that the ‘anticipationist’ process of determining risk-related tolerances often involves the element of compromise. However, the negotiable nature of a process of how people go about determining what can be considered tolerable risks, within the context of assuring the operative integrity of a specific project, does not make it less rationale-driven.

The reason for this is quite apparent – measuring the extent of a particular risk’s acceptability may result in only limited number of managerial responses to risk. According to Hallowell (2010): “Every safety decision is made with a subjective assessment of risk acceptability and a selection of one of the following alternatives: proceed as planned, invest resources to mitigate a portion of safety risk, or do not proceed (p. 404).

Thus, it would not be much of an exaggeration to suggest that, when it comes to defining the range of a specific risk’s acceptability, managers mainly rely on their own (often intuitive) discretion – the important thing is to bring the associative factor of uncertainty down to a minimum. And, the more provisions have been made to reduce the extent of project’s vulnerability to uncontrollable events, the more such project is being considered safe.

‘Anticipationist’ risk control is being mainly concerned with continuous observation of a ratio between perceived and actual risks, associated with organization/project’s functioning. What it means is that, while in charge of controlling risks, managers must never cease paying close attention to what represents qualitative characteristics of how anticipated risks extrapolate themselves in immediate dangers, the exposure to which undermines the effectiveness of organization/project’s performance.

For example, if predicted and actualized risks, associated with organization’s functioning for some time, relate to each other in proportion 3:4, it means that managers had failed throughout all three phases of risk management process. To address the situation, they would have to work out techniques, the implementation of which would result in eventual leveling of a ratio between identified and materialized risks (Pelletier, 2008). In other words, to be able to exercise control over risks, managers must be continuously aware of risk-exposure’s highly dynamic and qualitatively transformative essence.

The promoters of ‘resilient’ approach to risk management offer methodologically different strategy for reducing the extent of organization’s vulnerability to uncontrollable events. Hood and Jones (1996) outline the theoretical premise behind such an approach with perfect clarity: “The ‘resilient’ implication is that risk management regimes should be designed to promote resilience against unexpected catastrophes, rather than to rely on being able to spot them coming in time to take action to prevent their occurrence or lessen their impact” (p. 12).

The researchers that promote ‘resilient’ risk-management strategies point out to the fact that managers are being simply in no position to forecast all the impending operational dangers, which is why they insist that, while striving to ensure the functional safety of an organization, managers should place emphasis on strengthening the extent of organization’s structural integrity, as their foremost priority. The soundness of such a suggestion appears especially self-evident nowadays, when the rapid pace of technological and societal progress continuously transforms the very template of Western living, which in turn causes ‘anticipationist’ risk-prediction methodologies to grow progressively unreliable.

Just as it is being the case with a rotor, which stabilizes itself after being pushed out of balance, structurally balanced organization/project is assumed quite insensitive to the external forces in a sense that the exposure to these forces does not affect organization’s systemic subtleties: “Being resilient is the quality of being able to return to an original form or position after being bent, compressed, or stretched; in business, it means being able to spring back or rebound” (Kotler & Caslione, 2009, p. 105). According to Turner (1978), the main principles of ‘resilient’ risk management can be outlined as follows:

1. Technical rationality – managers are expected to adopt technical (systemic) rather than societal outlook on what represents potential hazards to organization’s functioning. Hence, advocates’ of ‘resilient’ approach tendency to downplay the value of ‘human capital’ as the actual subject of risk management.
2. Systemness – instead of trying to predict what will account for system individual components’ reactions to a variety of different aggravators, the advocates of ‘resilient’ risk managing strive to assess the extent of system’s overall robustness, in regards to how it is being affected by uncontrollable events.
3. Responsibility over reliability – this principle of ‘resilient’ risk assessment corresponds to the idea that the qualitative essence of system’s functioning, as a whole, is not simply the sum of its integral elements’ qualities.

The ‘anticipationist’ and ‘resilient’ lines of risk management-related argumentation correspond to different philosophies for risk assessment, which can be generally defined as quantitative and qualitative. According to the proponents of quantitative risk assessment and management, it is quite possible to calculate the whole scope of potential hazards, which may undermine the effectiveness of deployment of a number of different organizational strategies.

As Knights and Vurdubakis (1993) had pointed out: “Constituting something as a statistically describable risk makes possible the ordering of the future through the use of mathematical probability calculus” (p. 730). The advocates of qualitative approach to risk management address this type of an argument by stressing out the fact that it is conceptually fallacious to think of the process of managing risks as something solely associated with the notion of rationale. According to Shrader-Frechette (1991): “All judgments about hazards or risks are value-laden” (p. 220). This idea correlates with that of Slovic’s (1992): “There is no such thing as ‘real risk’ or ‘objective risk” (p. 119).

Apparently, the foremost drawback of a quantitative risk management derives out of the fact that its proponents believe that the overall extent of organization’s vulnerability to risk amounts to the sum of potential risks, which organization’s structural elements may face at particular point of time. However, such assumption appears methodologically inconsistent with cybernetic Law of Requisite Variety, which states that – the greater the number of an open system’s (commercial organizations are such systems) components, the greater there is going to a qualitative differentiation between system’s overall utility and the utilities of system’s integral components.

The validity of an earlier statement can be illustrated in regards to the phenomenon of a so-called ‘crowd psychology’. For example, even though that the majority of individuals who compose a crowd of soccer fans are being clearly non-violent on personal level – while the part of a crowd, these individuals would be quite likely to indulge in violent behavior. And, the larger is the crowd, the higher would be the chances for it to succumb to violence.

Hence, a certain paradox – whereas, the risk for crowd’s every individual member to begin acting violently is being deemed low, the overall risk for such a crowd to grow violent is being simultaneously deemed high. In its turn, this exposes the sheer limitedness of quantitative risk management’s applicability. As it was noted by Toft (1996): “The techniques of quantitative probabilistic risk analysis are inappropriate for the evaluation of many of the risks to which organizations are exposed and are, therefore, of limited usefulness” (p. 105). Thus, it is fully explainable why, as of today, the emphasis in risk management discourse gradually is being gradually shifted in naturalistic direction.

That is, as time goes on, more and more researchers come to realize the fact that, in order for managers to be in position to design truly effective risk-assessment strategies, they would have to adopt rather multidisciplinary perspective on the issue. In its turn, this would naturally lead them to discuss the very concept of risk within the methodological framework of natural sciences, instead of referring to it as something that should be solely elaborated upon within two-dimensional matrix of statistics.

In the next part of this study, I will explore the soundness of an earlier articulated idea at length. [I am not sure why this section on risk management is included as it is not specifically what your dissertation is about… I believe that, by elaborating on the specifics of ‘anticipationist’ and ‘resilient’ approaches to risk management, I was able to promote an idea that people’s cultural/psychological characteristics do in fact affect the process of risk-related decision making, on their part. The reason for this is simple – as it appears from the subchapter above, managers’ choices, in regards to risk managing, are the subject of intuition rather than the subject of rationale]

Risk vs. uncertainty

There can be few doubts as to the fact that the notion of ‘risk’ is being synonymous to the notion of ‘uncertainty’. Nevertheless, when trying to lessen the extent of organization’s exposure to risks, many managers continue to face the challenge of lacking a clear insight onto how both notions interrelate. Moreover, as practice shows, some of them even appear quite unaware that despite both notions’ synonymousness, there is a fundamental difference between these notions’ semiotic significances. What also adds to the problem is the fact that, besides being rarely conjunctive, the definitions of uncertainty, offered by social scientists, can be hardly referred to as thoroughly scientific.

For example, the definition of uncertainty provided by Smithson (2008), invokes a number of clearly moralistic overtones: “Uncertainty is obstructed vision. Uncertainty is blindness. To know is to see. Vague ideas are blurry, murky, hazy, unclear, obscured. Knowledge is brilliant, illuminating and enlightening. Uncertainty is dim and dark” (p. 17). This definition, however, cannot be thought of as truly enlightening, as it does not explain uncertainty’s fundamental nature.

Essentially the same (although to much lesser extent) can be said about the definition of uncertainty, offered by Cleden (2009): “Uncertainty represents a threat, but we cannot be sure what form it takes otherwise we would identify it as a risk” (p. 4). Some authors even go as far as implying that uncertainty represents an impossible obstacle on the way of just about any organization’s proper functioning: “If the consequences of an action… are subject to scientific uncertainty, then it is better not to carry out the action rather than risk the uncertain consequences” (Aven 1992, p. 31).

Nevertheless, in order for us to gain a scientific understanding of uncertainty as the most fundamental law of universe’s existence, I will have to refer to the definition of this notion, formulated in 1927 by one of 20^th century’s most influential physicists – Werner Heisenberg. According to Heisenberg’s Principle of Uncertainty: “The more precisely we determine the position, the more imprecise is the determination of momentum in this instant, and vice versa” (Cassidy 2010, p. 161). Heisenberg’s Principle points out to the fact that it is impossible to have information about elementary particle’s speed and coordinates at the same time.

Given the fact that the physical reality is made out of elementary particles, it means that the qualitative essence of such reality’s emanations cannot be predicted with the high degree of probability, even when the functioning of macro-systems is being concerned. To put it plainly – the world is not fatal, because the principle of uncertainty is embedded into the very matrix of universe. [I think that the reference to one of most basic physical concepts is methodologically appropriate, given both: the interdisciplinary nature of this study and also the fact that the understanding of what Heisenberg’s Principle stands for is absolutely indispensible, within the context of just anyone gaining awareness of what constitutes difference/similarity between the terms ‘uncertainty’ and ‘risk’]

This, however, is exactly what makes the linear continuation of cultural, scientific and economic progress possible: “If someone had evaluated the risk of fire right after it was invented, they (people) may well have decided to eat their food raw” (Appell 2001, p. 24). [This shows that the concept of risk is being embedded into the concept of progress] The realization of the full validity of an earlier articulated idea has implicational importance for conducting this study, as it substantiates the suggestion that, while addressing their professional duties, managers should not refer to uncertainty as something necessarily negative.

Apparently, organization functioning’s exposure to uncertainty may simultaneously be beneficial and counter-productive. And, it is namely the observation of uncertainty’s circumstantial properties which should define the qualitative nature of how managers perceive uncertainty’s actual significance. As it was pointed out by Clampitt and DeKoch (2001): “It is important to legitimize ‘not knowing’. Leaders shouldn’t feel compelled to provide a definitive answer when one doesn’t exist” (p. 5). Apparently, one’s exposure to uncertainty often preconditions his or her commercial success.

Another conclusion, which naturally derives out of what has been said earlier, is that, while there can be very little beneficence to confusing the notion of uncertainty with the notion of risk, opposing two notions as conceptually incompatible, and consequently striving to avoid exposure to risk at any cost, cannot be considered appropriate either. The reason for this is simple – as it was mentioned earlier, the measure of risk’s acuteness often appears subjectively perceptional.

Whereas; the measure of uncertainty, related to organizational performance, corresponds to organization’s size in geometrical progression (the larger the size of an organization, the more predictable are the subtleties of its functioning), the acuteness of associated risks often seems being irrespective of organization’s actual size. In other words, the concept of risk is best discussed in terms of a social construction; whereas, the notion of uncertainty is best referred to as an emanation of most fundamental laws of nature (Green 2009).

Therefore, it would only be logical to conclude that the practical implications of risk-exposure should be accessed through operational lenses of sociology, while the significance of uncertainty is best evaluated through methodological apparatus of natural sciences. At the same time, given the contextual similarity of both terms, especially when the concept of organizational management is being concerned, there can be no good reason to expect managers’ professional efficiency to depend of the measure of their awareness of what constitutes fundamental difference between these terms.

Literature Review on Culture

The Concept of Culture

Just as it is being the case with the concept of risk, the concept of culture continues to remain the subject of various interpretations, which is why many researchers often define culture from qualitatively different perspectives. Moreover, the manner in which authors define culture also points out to the fact that this particular concept never ceased being affected by the very essence of spatially predominant socio-political discourses. In its turn, this corresponds with Foucault’s idea that the essence of just about any discursive concept, such as culture, cannot be discussed outside of an affiliated historical context (Foucault 1978).

Nevertheless, up until comparatively recent times, it constituted a fully legitimate practice among Western social scientists to refer to the concept of culture as something that is being synonymous to the concept of civilization. As it was noted by Jenks (1993): “The dominant European linguistic convention equates ‘culture’ largely with the idea of ‘civilization’: they are regarded as synonymous. Both ideas may be used interchangeably with integrity in opposition to notion of that which is vulgar, backward, ignorant or retrogressive” (p. 9).

In other words, according to the advocates of euro-centric conceptualization of culture, the extent of one’s cultural refinement reflects the extent of his or her ability to act as society’s productive member. Such point of view, of course, is not altogether deprived of a rationale – after all, it is only the people who had evolved to the point of being in position to push forward civilizational progress, who may elaborate on the subject of culture, in the first place.

[This remark refers to the fact that, in order for just about anyone to be in position of landing its opinion on the subject of culture, he or she would have to be aware of a number of different definitions of culture, which in turn would presuppose person’s possession of Western education – the concept that cannot be discussed separately from the concept of Western rationale-driven, individualistic and technology-intensive civilization]

During the course of recent decades, however, the concept of culture has been increasingly assessed through the lenses of so-called ‘cultural relativism’, the proponents of which deny that there are dialectically predetermined links between culture and civilization. According to cultural relativists, it is inappropriate to think of Western cultural accomplishments as the criteria, against which the accomplishments of non-Western cultures should be measured, because cultural aspirations, on the part of people from different parts of the world, differ metaphysically.

In his article, Prasad (2007) outlines theoretical premise behind cultural relativism: “Cultural relativists assert that differences exist endemically between cultures and should be respected” (p.590). Nevertheless, as it was pointed out earlier, there are good reasons to believe that the concepts of culture and civilization indeed derive out of each other.

The reason for this is simple – only the people whose ability to operate with abstract categories allowed them to advance science, who do not have to be concerned about ensuring their physical survival as their foremost priority, which in turn leaves them with time to indulge in cultural pursuits (Lynn & Vanhanen 2002). This suggestion substantiates the idea that emanations of culture should not only be assessed from aesthetical, but also from a variety of different sociological, economic and organizational perspectives. Throughout study’s next few subchapters, we will elaborate on the soundness of such a proposal at length.

National culture

Given the fact that, as of today, the policy of multiculturalism had attained an official status in most Western countries, it now represents a particular challenge defining the concept of a national culture. After all, this concept has traditionally been associated with the notion of identity – however, in multicultural societies, citizens are expected to think of their existential identity in terms of a civic virtue, rather than in terms of what when represents the subtleties of their ethnic uniqueness.

As it was noted by Wilcox (2004): “The civic virtues necessary for liberal democratic citizenship can be developed in the absence of a common culture or shared civic national identity” (p. 560). For example, in today’s states of E.U., citizens are being at liberty to explore their cultural roots. This, however, does not prevent most of them from affiliating their existential mode with what they perceive as specifically European identity.

At the same time, it would be quite inappropriate suggesting that the very concept of national identity, in traditional sense of this word, has grown outdated. The validity of this statement can be well illustrated in regards to such countries as China or Russia, for example, where policymakers continue to think that the extent of their countries’ greatness reflects the specifics of citizens’ endowment with a strong sense of national/ethnic identity.

This is the reason why there can be few doubts as to the full legitimacy of Smith’s (1998) definition of national culture as: “Both an inter-generational repository and heritage, or set of traditions… that serve to unite a group of people with shared experiences and memories and differentiate them from outsiders” (p. 187). Apparently, even though that, as of today, national culture in civilized countries had effectively ceased being strongly associated with the idea of a nationhood per se, it nevertheless continues to exert influence on post-industrial living, as it legitimizes the social extrapolations of people’s collective psyche, which in turn serves as the basis for designing nationally bounded socio-political policies.

As it was pointed out by Dziemidok (2003): “For every nation a feeling of collective national identity is of paramount importance… it provides a bond between its members, a tie which fosters the emergence of bonds of solidarity and mutual help” (p. 86). This partially explains why today the discourses that revolve around the concept of national culture can be divided into two categories: those that refer to such a culture as the actual source of nation’s accomplishments, and those that refer to nation’s accomplishments as metaphysical ground, upon which national culture thrives, while implying conceptual separateness between the notions of culture and civilization.

According to the advocate of a first discursive approach Crang (1998): “Nationally rooted culture is not imagined as the outcome of material and symbolic processes but instead as the cause of those practices – a hidden essence lying behind the surface of behavior” (p. 162). The validity of this idea can be well illustrated by empirical observations in regards to what defines every particular country’s socio-political positioning. For example, even though that the form of political governing in Britain is monarchy, this country has traditionally been thought of as nothing less than one of world’s few democracy-beacons.

On the other hand, there are many countries in the world, which despite proclaiming themselves ‘people’s republics’, such as China, North Korea, or Iran, nevertheless remain authoritarian states in reality. Such observation does support Crang’s thesis that the extent of nation’s political and economic well-being is geometrically proportionate to the extent of such nation’s cultural refinement [the more a particular nation’s culture is being celebrative of ‘civilization’ (as opposed to being celebrative of ‘tradition’), the more this nation appears to be socially, culturally and scientifically advanced], and that the qualities of the national culture define a particular nation’s ability to remain on the path of progress.

The proponents of another discursive approach, which can be generally characterized as ‘culturally-relativist’, suggest that the significance of every particular national culture should be thought of as ‘thing in itself’ – that is, that such culture’s value is being irrespective of nation’s civilizational positioning. Unlike what it is being the case with theorists who treat the concepts of ‘culture’ and ‘civilization’ as essentially synonymous, the promoters of cultural-relativism suggest that the measure of national culture’s value should be discussed in regards to the strength of such culture’s affiliation with the notion of tradition.

According to Singer (1972): “Tradition becomes the core culture of an indigenous civilization and a source, consciously examined, for defining its moral, legal esthetic and other cultural norms” (p. 7). Nevertheless, there are good reasons to think that the validity of culturally-relativist approach to defining the significance of a national culture is being undermined by the fact that, while substantiating the soundness of their line of argumentation, cultural relativists never cease being ideologically engaged. After all, the foremost dogma of multiculturalism stresses out the fact that, regardless of the specifics of their ethno-racial affiliation, all people are absolutely equal.

Yet, the objective reality exposes the sheer fallaciousness of such a claim, which is why cultural relativists are being called upon explaining the apparent inconsistency between the theoretical essence of an idea of ‘equality’ and such idea’s practical emanations: “Political correctness is the principle that states that presumptions of cultural relativism are true and should not be discussed” (Pasamonik 2004, p. 207).

Therefore, while conducting the consequential phases of this study, I will resort to utilization of specifically euro-centric outlook [I think this is being fully appropriate, since the term of euro-centrism is being synonymous to the notion of ice-cold rationality, which in turn presupposes the academic legitimacy of euro-centric research-methodologies, especially given the fact that there no other ones in existence] onto how one’s affiliation with particular culture defines the qualitative subtleties of his or her existential mode – in our case, the specifics of individual’s perception of risk.

Industrial culture

The emergence of industrial culture, as one of the foremost aspects of a modern living, has been triggered by Industrial Revolution, which had taken place in Western countries, during the course of 19^th century. Back then, the exponentially increased profitability of industrial manufacturing, created objective preconditions for the very fabric of Western societies to undergo a drastic transformation.

For example; whereas, prior to the beginning of Industrial Revolution in Britain, 89% of country’s population resided in rural areas, by the time this Revolution had entered its final phase in early 20^th century, Britain’s population of rural dwellers accounted for only 45% (Greenberg 1982). In its turn, this explains why the concept of industrial culture has been strongly associated with the process of urbanization, on one hand, and with the process of industrialization-driven social stratification, on another.

As of today, there are no fully compatible definitions as to what the notion of industrial culture stands for. For example, Byrne (2004) refers to industrial culture as: “The culture of industrialism, a culture which intersects with a specific kind of proletarian class consciousness but is by no means in exact correspondence with that class consciousness (p. 281). According to Byrne, industrial culture is essentially an entrepreneurial extrapolation of social antagonisms within bourgeois society.

Monclus and Guardia (2010), on the other hand, suggest that industrial culture’s association with the concept of class struggle is of purely formal nature and that concept’s actual significance should be assessed within the context of what defines qualitative properties of the process of urbanization: “Industrial culture is about controlling cities – their images, meanings, comparative advantage, destinies, and corporate appeal” (p. 22).

Nevertheless, it is namely the insight onto the essence of industrial culture, provided by Levin (2010), which appears being the most appropriate, as it exposes such culture as an integral part of civic living, with which Western civilization became strongly associated, even prior to the beginning of post-industrial era: “Industrial culture is based upon civic ideal, which holds that technology and science – and the ideas of progress coded within them – benefited all classes, and remained above politics and partisanship” (p. 138).

Therefore, it would only be logical, on our part, to refer to the concept of industrial culture in study’s consequential parts as something quite inseparable from the idea that it is namely the activities, associated with the processes of industrial manufacturing, out of which people’s material well-being originates, in the first place. What it means is there are good reasons to expect individuals, who adopted the conventions of industrial culture, to address existential challenges in qualitatively different manner from what it is being the case with individuals that live in pre-industrial societies. [To what extent is this appropriate or relevant to Saudi Arabia?…

The above statement is being suggestive of the fact that there are good reasons to expect Saudi participants of the study not to share the ideals of industrial culture, since Saudi Arabia had never even undergone the process of industrialization, in classical sense of this word. Saudi society skipped the industrial phase of development – from being feudal, it went straight towards becoming post-industrial]

Organizational culture

The concept of organizational culture has come to its current prominence ever since managing of an organization had adopted subtleties of rather complex process, the successfulness of which greatly depends on managers’ ability to provide employees with proper performance-enhancing incentives. In its turn, such situation came to being as the result of the fact that, during the course of 20^th century’s last half, the very functioning of free-market economies sustained a substantial transformation.

Whereas, in time of a so-called ‘wild capitalism’, facing the prospect of being provided with a monetary reward served as a strong enough motivation for employees to do their best, while executing their professional duties, it nowadays had effectively ceased to be the case (Barton 2011). Due to realities of economic and informational globalization, more and more employees seek from their jobs to provide them with not only material, but also with psychological and even spiritual satisfaction.

Thus, it does not come as a particular surprise that contemporary definitions of organizational culture tend to address the concept as an essential element of ensuring organization’s inner integrity. For example, according to Kunda (1992), organizational culture provides: “The shared rules governing cognitive and affective aspects of membership in an organization, and the means whereby they are shaped and expressed’ (p. 8).

The explanation of organizational culture provided by Alvesson (2002) resonates with that of Kunda’s in a sense that it emphasizes such a culture as the tool of managing workforce: “Organizational culture is one of the key areas of management and organization studies as well as practice” (p. 14). Therefore, it makes a perfectly good logic that contemporary theoreticians of organizational culture point out to the fact that there exists a dialectically predetermined interrelation between such a culture and the concept of managerial leadership.

After all, it is namely when managers prove themselves effective leaders in the eyes of their subordinates that they may expect to be able to effectively implement different organizational strategies (Brown & Mitchell 2010). However, as practice shows, managers’ vision in regards to what constitutes effective leadership varies rather considerably.

Moreover, such their vision also appears being affected by the particulars of managers’ ethno-cultural affiliation and what is the most important – by the specifics of social environment where the process of workforce’s managing takes place. In its turn, this explains why the essence of different organizational cultures can be conceptualized along the lines of managers professing the values of collectivism (support/facilitation/spirituality), on one hand, and the values of individualistic rationalism (individualism/competition/authoritarianism), on the other.

The theoretical premise behind first approach to perceiving organizational culture has been articulated by Baker (1980): “Good (organizational) cultures are characterized by norms and values supportive of excellence, teamwork, profitability, honesty, a customer service orientation, pride in one’s work, and commitment to the organization” (p. 10). The practical aspects of how collectivist organizational culture is being deployed in organizations can be illustrated with the example of Japan.

To a considerable extent, the functioning of most Japanese companies is being ensured by employees’ endowment with a ‘team spirit’. Once individual becomes an employee of a particular Japanese company, this individual is usually being given a guarantee that, for as long as his or her work-related performance remains professionally adequate, there would be no need for him or her to fear the prospect of layoff (Love & Bishop 1994).

[The concept of so-called ‘Japanese corporate culture’ is an extrapolation of Oriental psyche’s subconscious workings. And there are no objective reasons to think that, ever since 1994 this psyche began assessing surrounding reality in qualitatively different manner] Whatever allegorically it might sound, but while working for Japanese companies with a strong corporate culture, employees do feel being treated as family members – hence, their professional loyalty. [This remark refers to the characteristic of Japanese corporate culture]

There is another important aspect to the practical implications of ‘collectivist’ organizational culture – the fact that, while taking care of their job-related duties, even company’s comparatively low-ranking employees consider it their right to participate in the process of executive decision-making: “When someone in a Japanese company initiates a proposal – ringi – it is passed up and down the corporate ladder. At each level it must receive a stamp of approval, a ban (Cooney, 1989, p. 59). Paradoxically enough, this does not prevent ‘collectivist’ organizational culture to be essentially hierarchical – that is, when a particular executive decision has been passed down for implementation, employees are being expected to think of this decision as nothing less of an imperative.

What has been said earlier, in regards to collectivist/supportive model of organizational culture, allows us to hypothesize on what will account for its implementational strengths and weaknesses.

Strengths:

• the increased degree of organization’s structural integrity,
• the increased extent of employees’ professional loyalty,
• the reduced sensitivity of organization’s functioning to a variety of external factors, such as fluctuations in market-demand.

Weaknesses:

• managers’ reduced willingness to resort to utilization of organizational change, as the instrument of increasing the extent of organization’s functional competitiveness, even when circumstances call for it,
• the fact that the factor of ‘seniority’ plays important role, when it comes to designing employee-promotion policies,
• managers’ reduced ability to perceive what accounts for the potential opportunities, associated with undertaking a particular organizational risk.

Another model of organizational culture, which can be generally referred to as rationalistic/authoritarian, is based upon qualitatively different (rational) perception of the factors that account for effective management. The proponents of this model advocate the appropriateness of specifically utilitarian approach to managing organization, which in turn is being reflective of highly rationalistic manner of in which

Western psyche assesses surrounding reality. As Alvesson (2002) had put it in the book from which I have already quoted: “The ideal of instrumental rationality is… a key feature of Western society and, in particular, of business life” (p. 130). The foremost characteristic of rationalistic/authoritarian organizational culture is that it strives to reduce the influence that system’s (e.g. commercial organization) integral elements (e.g. employees) exert onto system’s functioning, as a whole.

The validity of an earlier statement can be explored in regards to what accounts for the essence of organizational policies, deployed by Western fast-food and retail industries. The foremost conceptual premise, upon which these policies are being based, is that for as long as there is a great supply of potential employees, capable of performing their duties with even minimal efficiency, there is no need to consider them as such that represent ‘human capital’ of particularly high value.

In her article, Reiter (1986) provides us with the insight on the most fundamental principle that laid behind the emergence of Burger King’s organizational culture, the values of which are expected to be professed by corporation’s entry-level employees and high-ranking managers alike: “Since the motion of the factory proceeds from the machinery and not from the worker, working personnel can continually be replaced. Frequent change in workers win not disrupt the labor process – a shift in organization is applauded” (p. 312). Thus, the main characteristic of rationalistic/authoritarian model of organizational culture is that, due to its technology-intensiveness, it implies the lessened value of employees as the essential part of organization’s proper functioning.

There is another important aspect to this particular model – the fact that the advocates of rationalistic/authoritarian of organizational culture often downplay the importance of employees being provided with any other performance-enhancing incentives but solely material ones. As Grieves (2004) had put it: “The ‘scientific’ rationality… ignores the subterranean effects of workers’ attitudes, behaviors and social relationships because the work contract itself is seen as the new vehicle of enlightened self-interest” (p. 17). Thus, I can define what accounts for rationalistic/authoritarian organizational culture model’s strengths and weaknesses as follows.

Strengths:

• the lowered extent of model’s sensitivity to fluctuations of labor-market,
• technological friendliness,
• systemic stableness.

Weaknesses:

• model’s lessened applicability in organizations that employ multicultural personnel,
• the fact that this organizational culture often appears ignorant of workers’ psychological needs,
• the narrowed scope of performance-enhancing incentives that it provides to the employees.

From what it appears out of an earlier provided outline of both organizational cultures’ theoretical premises, in organizations associated with collectivist/supportive corporate culture, managers would be less likely to consider taking operational risks, as compared to what it would be the case with managers in organizations affiliated with rationalistic/authoritarian organizational culture.

The reason for this is simple – given the fact that organization’s exposure to risk may potentially result in undermining the proper functioning of its integral elements (e.g. employees), such exposure would prove much more hazardous to organizations that, due to their adherence to the ideals of collectivist/supportive corporate culture, are being not in a position to quickly replace some of these elements with other qualitatively similar and easily available ones (to undergo organizational change), if it proves necessary.

I expect to find confirmation to the validity of an earlier expressed idea, in regards to what represent the specifics of Saudi and British managerial perception of risk, as there are objective prerequisites for Saudi managers to be associated with collective/supportive type of corporate culture and for British managers to be associated with individualist/competitive type of corporate culture, which should be reflected by the qualitative essence of study participants’ attitudes towards risk.

The Impact of culture on behavior

Although there can be few doubts as to the fact that, while reacting to life’s challenges, different people behave differently, the spatial characteristic of one’s behavior may be well conceptualized along the lines of behavioral model, provided by Nair (2010). This model stresses out the linear subtleties of a process of how individuals, required to adopt a certain behavioral mode while exposed to a certain situation, go about formulating such a mode.

According to the author, the consequent phases of individual’s behavior fit into the following conceptual framework – stimulus (input), sensation, perception, core cognitive process, decision making, action taking (output). Nevertheless, even though Nair’s model implies that people come to choose in favor of certain course of action in essentially similar manner, which means that it is possible to work out a formula for predicting what would account for circumstantial essence of one’s behavior, the objective reality points out to something entirely different – people often act in a way quite inconsistent with predictions of how they should be acting.

Apparently, ‘perception’ and ‘core cognitive process’ phases of a decision-making process are being greatly affected by the particulars of how a concerned person perceives the qualitative significance of an ‘input’. And, there are good reasons to believe that the specifics of such person’s ethno-cultural background play rather substantial role in defining his or her attitudes towards what should account for the proper way to address a particular situation.

As it was noted by Linton (1999): “The culture as a whole provides the members of any society with an indispensable guide in all the affairs of life” (p. 13). The validity of this suggestion can be well proven in regards to a number of academic publications, the authors of which have established an undeniable link between culture and behavior, while pointing out to the fact that these two concepts organically derive out of each other.

For example, after having conducted a research on what accounts for Indian immigrants’ in U.S. attitude towards health care, Bhushan (2010) concluded that: “Asian Indians tend to use informal systems of social support such as family and place of worship more often than formal social support systems” (p. 17). Apparently, it is namely due to these people’s endowment with the remnants of essentially rural mentality, which professes the virtues of collectivist living, that when it comes to dealing with health issues, they tend to rely upon communal rather than governmental support. This confirms the validity of an idea that the specifics of people’s ethno-cultural makeup do in fact influence the qualitative characteristics how they perceive surrounding realities.

However, it is not only on personal level, where the variations in individuals’ cultural affiliation appear to define their behavior, but also on organizational one, as well. The reading of Bower’s (2000) article, illustrates the full soundness of an earlier articulated idea. According to the author, there is a metaphysical difference between how Westerners and East-Asians indulge in the cognitive process: “In a variety of reasoning tasks, East Asians take a ‘holistic’ approach. They make little use of categories and formal logic and instead focus on relations among objects and the context in which they interact” (p. 57).

In its turn, this explains the apparent incompatibility between the specifics of Western and Oriental corporate cultures – whereas; Western corporate cultures are best described as essentially ‘rationalistic’, Oriental approach to managing organizations is best described as ‘paternalistic’. According to Yeung and Tung (1996), while executing their professional duties, most Chinese managers are not being concerned as much with applying rationale to increase the extent of commercial organizations’ objective competitiveness, but with establishing ‘useful connections’ with people of social prominence (usually governmental officials).

Authors discuss such tendency, on the part of Chinese managers, within the conceptual framework of guanxi, which they define as: “The establishment of a connection between two independent individuals to enable a bilateral flow of personal or social transactions” (p. 55). [‘Networking’ is rather an artificial term, which came to being during the course of comparatively recent times; whereas, the concept of guanxi has been remaining the cornerstone of Oriental existential mode for thousands and thousands of years] And, there can be few doubts as to the fact that such tendency, on the part of Chinese managers, is culturally motivated – it is being nothing but social extrapolation of the workings of these people’s collectivistically/traditionally functioning mentality.

Thus, there is a number of valid reasons to refer to non-Western (traditionalistic/collectivist) existential mode, which greatly affects its affiliates’ behavioral tendencies, as essentially ‘apollonian’. The culturally predetermined ‘apollonian’ worldview is based upon the assumption that the soul is ordered cosmos, that the conflict is evil, and that the life is threatened from outside. This worldview stands in striking contrast to ‘faustian’ (scientific/rationalistic) existential mode of Westerners, based upon the assumption that individual’s will-power must never cease combating obstacles, that the catastrophes of existence come as an inevitable culmination of past choices and experiences, and that the conflict is the essence of existence (Greenwood 2009).

Therefore, it does not come as a particular surprise that it is specifically Westerners’ tendency to actively challenge nature (and to be willing to face risks, during the course of the process), as opposed to ‘blending’ with it, which defines the qualitative essence of their reactions to life’s challenges: “The dominant tradition in Western culture has constructed an idiosyncratic view of nature and consciousness… Nature is deemed merely an object, resource, or lower life-form” (Adams 2010, p. 15). [This remarks relates to the topic of discussion in a way that it exposes the rationale behind paper’s hypothesis]

The earlier provided examples of how people’s cultural affiliation define their behavioral patterns, on individual and communal levels, and the theoretical insight as to what should be considered such process’s actual mechanics, correlates with Hofstede’s (1980) conceptualization of culture as the foremost motivational factor, behind decision-making. In the next sub-chapter of this study, I will discuss theoretical and practical implications of Hofstede’s cultural model at length.

Debates on Hofstede’s approach

As of today, no study on international marketing is being conducted without authors mentioning the cultural theory of Geert Hofstede. [Since the process of designing marketing strategies is often being concerned with managers with defining what represents the extent of targeted populations’ affiliation with ‘feminine’ and ‘masculine’ virtues, I consider making reference to the generic concept of marketing quite relevant] Throughout the course of sixties and seventies, this Dutch sociologist had researched what accounts for IBM managers’ cross-cultural differentiation in perceiving the essence of their professional duties.

The obtained empirical data, allowed Hofstede to classify managers’ professional attitudes along the lines of power distance (managers’ standpoint on an unequal distribution of authoritative power), individualism/collectivism (managers’ affiliation with either individualistic or collectivist existential modes), masculinity/femininity (the extent of managers’ affiliation with either masculine or feminine values), short-term/long-term orientedness (managers’ likelihood to choose in favor of either short-term or long-term objectives, while executing their professional duties), and high/low uncertainty avoidance (the extent of managers’ comfortableness with facing risks)

According to the author, given the fact that in such countries as China, Mexico, India and Egypt, the extent of people’s social stratification has traditionally been very high, in order for marketing campaigns (indented for deployment in these countries) to prove effective, the process of their designing much exploit the motif of respectful attitude towards the elders and the motif of celebration of ‘traditional values’.

Alternatively, because Anglo-Saxon Westerners’ perception of existential challenges has always been based upon the principle of ‘faustian’ individualism, in order for Westbound (U.S, Canada, Germany, Britain) marketing strategies to be successful, they need exploit the motifs of celebration of personal liberty, secularization and intellectual flexibility. Unlike what it is being the case in traditionalist societies with unequal distribution of authoritative power, Western societies are utterly egalitarian, in a sense that they do prompt citizens to exploit the full extent of their existential potential, without the regard to what happened to be the specifics of their social, religious or cultural affiliation at the time of birth.

Hofsdede’s cultural model also implies qualitative interconnectedness between existential values. For example, according to the author, the emanations of people’s endowment with the sense of individualism, often correlates with the fact that they are being psychologically affiliated with a number of clearly masculine virtues, such as voluntarism, courageousness, non-religiosity, and willingness to take risks.

In its turn, this explains why ‘celebration of masculinity’ even today remains an integral part of a fair share of advertisement campaigns, meant to appeal to subconscious workings of Westerners’ psyche. In its turn, this presupposes Anglo-Saxon managers to be concerned with attainment of specifically short-term commercial goals – the lessened acuteness of their uncertainly avoidance anxieties and their perceptional individualism create objective preconditions for it to be the case.

The qualitative essence of empirically obtained data, as to the influence of earlier outlined cultural dimensions onto the matrix of managerial practices in world’s different countries, confirms the full validity of Hofsdede’s hypothesis. For example; whereas, the index of Long Term Orientation (LTO) in such Western European countries as Germany, Canada, Britain, Australia and Norway appears particularly low (it ranges from 23 to 31), the index of Individualism (IDV) in the same countries appears very high (it ranges from 74 to 91).

Alternatively, managers’ preoccupation with striving to avoid exposure to risks in such countries as Saudi Arabia, Japan, Mexico, Singapore and Turkey (Uncertainty Avoidance Index [UAI] ranges from 68 to 92), correlates with the lowered acuteness of their individualistic anxieties, extrapolated by the fact that in these countries the rate of managerial Individualism ranges from 27 to 46 (low).

Nevertheless, even though Hofstede’s cultural model does provide transnational corporations’ officials with the tool for enhancing the operational integrity of their businesses in different parts of the world and for increasing the effectiveness of locally designed marketing strategies, it continues to be criticized – mostly on the account of its ‘euro-centrism’. As it was pointed out by Fougere and Moulettes (2007): “What seems to characterize the criticism towards Hofstede’s study is that most of it is concerned with the validity of his model from a Western ‘scientific’ viewpoint” (p. 4).

And, given the fact that it now became a commonplace practice among a number of politically engaged Western sociologists and political scientists to associate the very notion of ‘euro-centrism’ with the notion of ‘evilness’, it is not utterly surprising why Hofsdede’s conceptualization, as to how people’s ethno-cultural affiliation influences the process of decision-making, on their part, has fallen out of favor in certain academic circles.

However, there are also other perspectives from which Hofsdede’s model is now being criticized. For example, according to Smith (2002), the reason why this model cannot be thought of as truly representative of what accounts for the specifics of people’s culturally-dependant perception of existential challenges, is that the relevant empirical data, collected by Hofstede during the course of seventies (which supposedly legitimizes the validity of Hofsdede’s model), has become outdated.

Such authors as Anderson (1983) and Kwek (2003), on the other hand, suggest that the main deficiency of Hofstede’s model derives out of the fact that Hofstede treats culture as something rather homogeneous and static, while in fact national cultures never cease undergoing the process of qualitative transformation, which deems quantitative approach to defining the mechanics of how the particulars of one’s cultural background affect his or her cognitive capabilities, conceptually fallacious.

From our perspective, the main inconsistency of Hofsdede’s model appears to be the fact that, while rightly accentuating that people’s cultural affiliation does affect the manner in which they indulge in decision-making and such decision-making’s consequences, it downplays the factor of race. And yet, it is namely the specifics of people’s racial affiliation, which have been proven to define such people’s varying ability to operate with abstract categories (IQ) – hence, forming their cultural attitudes (Lynn & Vanhanen 2002).

In its turn, this explains why application of Hofstede’s model to the countries with racially mixed populations may hardly be justified, as people’s endowment with apollonian (collectivist, supportive, introversive, feminine, uncertainty avoidable, long-term-oriented) psyche, on one hand, and with faustian (individualistic, competitive, masculine, extroversive, uncertainty non-avoidable, short-term-oriented) psyche, on another, is being genetically rather than environmentally/culturally predetermined. Nevertheless, given the fact that, up to this date, no better risk-perception cultural model has been worked out, I find that it would be fully appropriate, on my part, to be referring to Hofsdede’s model, while conducting study’s consequential phases.

Differences in risk perception: UK and Saudi Arabia

The fact that culture does affect the manner in which people perceive risk can be illustrated in regards to what happened to the aspects of risk perception in Saudi Arabia and UK. Given the fact that Saudi Arabia is allocated among top-countries on Hofstede’s Power Distance (PDI) list, it would only be natural to expect that the marketing strategies, deployed within the country, to be marked with the exploitation of the motifs of seniority and security (High Risk Avoidance).

The reading of Al-Olayan and Karande’s (2000) article, legitimizes the full validity of such an assumption, as according to the authors, Saudi magazine advertisements are indeed being designed to appeal to citizens’ security-related anxieties: “Advertisers try not to make promises that they cannot deliver and tend to focus on the product” (p. 72).

In their article Morris and Al Dabbagh (2004) explain Saudi managerial strategies’ strong association with High Risk Avoidance principle by government’s meddling in economic affairs for the purpose of ensuring solidarity within the society: “The main purpose of Islamic legislation on economics … is to maintain the solidarity of society, to introduce high morality to the world of business, and enforce the law of god in that sphere of enterprise” (p. 3). The of maintaining of society’s solidarity, however, can only be achieved at the expense of endowing people with the idea that they should think of their individualistic urges as something rather shameful – this is exactly what Saudi government strives to do.

Nevertheless, during the course of last decade, it started to become increasingly clear to more and more Saudi officials that it is namely citizens’ entrepreneurial spirit and not the laws of Sharia, which stimulate the proper functioning of country’s economy. This is the reason why, as of today, country’s Sharia laws that are meant to regulate economic affairs within the society, continue to become ever more relaxed. According to Abdul‐Muhmin (2008): “The Saudi government and religious establishment have turned a blind eye to the payment and receipt of interest by Saudi banks as long as the latter maintain the label of ‘service charge’ for what is essentially loan interest” (p. 201).

Thus, even though due to the essence of their religious and societal beliefs, most Saudis continue to think of risk-avoidance as ‘virtue’, there are good reasons to believe that it will eventually cease to be the case. The reason for this is simple – whereas; the laws of religion are utterly subjective, the laws of free-market economy are objective.

The situation with risk-perception among Britons appears to be strikingly different, as compared to what it happened to be the case among Saudis. In UK, due to most citizens’ well-developed sense of individualism, one’s willingness to face risks is often being considered a confirmation that he or she does posses leadership qualities, which serves as the foremost confirmation of the fact that such person does in fact qualifies to be hired as a manager.

According to Lawrence and Edwards (2000): “British culture tends to valorize leadership… All this is conducive to the conviction that the talents and qualities of individuals will be critical in a range of achievements” (p. 197). The soundness of Lawrence and Edwards’s suggestion, in this respect, can be confirmed in regards to the insights as to the essence of British managerial culture, contained in Butler and Price’s (2006) article: “The British sequential approach is to hear something once and then implement it” (p. 5).

Apparently, Churchill’s famous principle that one must be willing to get involved in the fight, prior to considering such involvement’s consequences, even today lays at the conceptual foundation of British management. Grant (2004), who in his study pointed out to the fact that voluntarism has always been the distinctive feature of how most Britons address life’s challenges, is promoting essentially the same idea. According to the author, it is namely on the account of British managers’ endowment with the sense of being in full control over objective reality’s emanations, that their professional attitudes appear particularly risk-friendly.

Thus, while conducting the empirical phases of this study, it will only be logical, on our part, to expect empirically obtained findings to provide an additional proof to the soundness of one of study’s initial premises that, on average, British managers should prove themselves much more risk-welcoming, as opposed to what it being the case with their Saudi counterparts.

Research Methodology

Objectives

Even though, while reviewing relevant academic literature on the subject of risk management and risk perception, I was able to confirm the validity of a suggestion that people’s culture does affect the qualitative essence of how they cognize risk and how they go about managing risk, the interdisciplinary nature of this literature review implies a certain vagueness of findings-related implications.

Therefore, in order to be able to test the legitimacy of Cultural model of risk management, as the practical tool of designing risk-management strategies meant to be deployed within the boundaries of different cultural environments, I decided to conduct an empirical research on what defines British and Saudi mid-level managers’ risk-related attitudes. Hence, the objectives of this particular phase of my study:

• To confirm the existence of culturally predetermined differences between how the affiliates of British and Saudi cultures (consisting of mid-level managers) assess risk.
• To define the extent to which Saudi managers’ affiliation with Saudi culture affects their perception of risk.
• To define the extent to which British managers’ affiliation with British culture affects their perception of risk.

Structure

According to Hussey and Hussey (1997), in order for the empirical study to yield academically valid insights as to the essence of a researched subject matter, it has to be well structured. In its turn, this requires researchers to design a structural ‘blue print’ as an indispensible guiding tool, which will allow them to remain focused on study’s objectives, throughout its entirety. After having selected risk analysis as this research’s actual methodology, I decided to utilize the following structural outline:

• Developing the tools and techniques.
• Collecting data.
• Analyzing data.
• Determining data’s significance.
• Comparing the implications of a collected and analyzed empirical data with earlier conducted literature reviews.

Research tools and techniques

Given the fact that, as today, the influence of culture on people’s decision-making continues to remain the subject of a debate, while proceeding to conduct an empirical research, I will resort to utilization of two conceptually different but mutually supportive research techniques – namely, qualitative and quantitative ones. By doing it, I will be able to provide an additional proof to the academic legitimacy of obtained data’s implications (Schonfeld & Farrell 2010). The following are the brief explanations as to both techniques’ methodological premises and as to how I intend to utilize these techniques while collecting and analyzing data, relevant to the researched subject matter.

Qualitative research

According to May (2002) the utilization of a qualitative research is being particularly justified in studies concerned with defining motivational factors behind people’s behavior and with analyzing these factors’ spatial subtleties. Partially, this can be explained by the fact that, even though the relevant data, obtained during the course of conducting qualitative research, cannot be easily quantified, the possession of this data nevertheless often proves crucial within the context of researchers making analytical inquiries as to the actual nature of a researched phenomena.

Apparently, there are good reasons to think of utilization of qualitative research methodology especially suitable within the context of proceeding with the study, where exploring the significance of subject-related psychological aspects constitutes an important element of a research process. As it was pointed out by Rubin and Rubin (1995): “Qualitative research methods emphasize the depth of understanding associated with idiographic concerns. They attempt to tap the deeper meanings of particular human experiences and are intended to generate theoretically richer observations that are not easily reduced to numbers” (p. 25). The main advantages of a qualitative research are:

• Its methodological simplicity (qualitative research is being often concerned with reviewing easily accessible academic literature).
• Its cost-effectiveness.
• The wide range of its applicational appropriateness (the deployment of a qualitative research has proven its effectiveness within the methodological framework of both: social and natural sciences).

Nevertheless, there are also a number of drawbacks to this research method, the main of which is the fact that very often, the data obtained during the course of conducting qualitative research, can be interpreted from a variety of different perspectives. However, as of today, qualitative research methodology continues to be extensively resorted to as effective and valuable tool, particularly in studies concerned with risk analysis. The current research deploys a questionnaire as the qualitative method for collecting responses from sampled respondents and analyzing the obtained responses

Quantitative research

The main objective of quantitative research is to quantify the essence of empirical data, collected during the course of study’s qualitative phase, by analyzing data’s significance within the framework of a certain mathematical or algorithmic framework, in order for researchers to be able to define a number of such data’s statistically calculable implications (Franses & Paap 2001). The foremost advantage of this particular research method is the fact that, while being exposed to the quantified data, in regards to spatially transforming essence of a studied phenomenon, researchers are able to define the direction of such transformation’s vector.

In this study, I will rely upon utilization of quantitative research, as the instrument of obtaining study-related qualitative insights, when it will come to analyzing spatial implications of obtained responses to the questions contained in questionnaire.

The foremost consideration behind our decision to utilize quantitative research methodology, while conducting this study, was the fact that utilization of this methodology allows the establishment of dialectical links between empirical observations and mathematical expressions of these observations’ discursive significance. In other words – the utilization of quantitative research in our study is meant to confirm the validity of previously obtained insights as to the influence of one’s culture on his or her risk perception.

Data Analysis

As it was emphasized by Heaton (2004), it is only when researches assess qualitative and quantitative aspects of the same studied phenomena as such that represent phenomena’s spatially interconnected manifestations, that they would be able to adopt a proper perspective on phenomena, as a whole. While collecting and analyzing information, concerned with how culture influences British and Saudi respondents’ perception of risk, I will make point in continuously observing the earlier mentioned guideline.

After all, even though the process of distributing questionnaires among sampled respondents and analyzing the obtained data, on one hand, and the process of mapping the PI-Grid [the mechanics of mapping PI-Grid are explained later], on another, are based upon different technical principles, both processes nevertheless share the common aim – determining the qualitative essence of how Saudi and British managers tend to perceive risk.

Questionnaire

A questionnaire is the instrument of gathering contextual information, in regards to what represents people’s attitudinal and behavioral patterns, reflected by the qualitative essence of sampled respondents’ responses to provided questions. While conceptualizing the questionnaire, I aimed to define intrinsic subtleties of how Saudi and British respondents tend to perceive the implications of risk exposure, which explains the specifics of its design.

The questionnaire consists of ten questions, the responses to which could be categorized along the lines of Low Uncertainty Avoidance (LUA)/High Uncertainty Avoidance (HUA) criteria, as specified by Hofstede’s uncertainty avoidance table, and also along the lines of people’s behavioral characterization, as specified by Schwarz and Thompson. I believe that this will provide an interdisciplinary depth to the insights that I expect to obtain, when conducting this particular phase of the study.

While deciding upon what would constitute the appropriate number of questions that were to be included in questionnaire, I was primarily driven by consideration related to the size of respondents’ samples in UK and Saudi Arabia, and by consideration of ensuring the structural integrity of this particular phase of the study. Five questions were designed to elicit LUA-oriented responses. The other five questions were designed to elicit HUA-oriented responses.

I believe that by designing and organizing questions in this specific manner, it will not only prove possible to collect quantified data as to mechanics of how respondents’ ethno-cultural affiliation affects their perception of risk, but also to obtain an insight onto the qualitative essence of a relationship between respondents’ culture and their psychological phenotypes.

Table 1.

[While deciding upon what would constitute the appropriate number of questions that were to be included in questionnaire, I was primarily driven by consideration related to the size of respondents’ samples in UK and Saudi Arabia, and by consideration of ensuring the structural integrity of this particular phase of the study. Five questions were designed to elicit LUA-oriented responses.

The other five questions were designed to elicit HUA-oriented responses. I believe that by designing and organizing questions in this specific manner, it will not only prove possible to collect quantified data as to mechanics of how respondents’ ethno-cultural affiliation affects their perception of risk, but also to obtain an insight onto the qualitative essence of a relationship between respondents’ culture and their psychological phenotypes]

In the questionnaire, all ten questions are being listed in random order, so that respondents would be less likely to recognize them as such that fall into two distinctive categories, which in turn will ensure that the replies to these questions would be largely intuitive. The samples of British and Saudi respondents consist of twenty mid-level managers from each country, which were selected on the basis of their professional duties’ similarity.

Specifically, twenty British and Saudi managers that agreed to participate in the study are being in charge of hiring personnel and designing guidelines for maintaining corporate culture within their companies. Saudi and British respondents’ age ranges from 25 to 40 years old. They work for the companies that operate in service-oriented and technology-intensive sectors of both countries’ economies.

The rationale behind choosing in favor of this particular sample-size has to do with the fact that, while the process of obtaining and analyzing responses, on the part of twenty sampled participants, is being only moderately resource-consuming, it nevertheless should ensure the representational legitimacy of an analyzed data, as study’s participants can be well referred to as affiliates of spatially limited sub-culture (in our case, the so-called ‘yuppie’ sub-culture).

I also made a point in selecting respondents not only on the basis of their professional duties’ similarity but also on the basis of their de facto rather than their de jure affiliation with Saudi and British cultures – that is, all twenty British respondents are natives of Anglo-Saxon descent and all twenty of Saudi respondents are the natives of Bedouin descent. [This was assured by the mean of investigating potential participants’ ethno-cultural backgrounds, before notifying them that they have indeed been selected] Ten out of twenty British and Saudi respondents are males and twenty are females.

Saudi respondents:

Table 2.

British respondents:

The distributing questionnaire among sampled respondents was done via mail. After the process of respondents’ questioning was completed, it became possible to calculate the percentile ratio of received positive and negative responses to each question, on the part of British and Saudi study’s participants, and to compare and contrast these ratios.

PI-Grid

The Probability-Impact Grid (PI-Grid) is a two-dimensional template that allows study’s participants to assess the relative significance of a particular risk. While being asked to define the extent of every individual risk’s actuality, respondents allocated on the grid the measure of such risk’s chances to occur (probability) and the measure of what will account for its potential impact, when occurred (impact). The extent of probability and impact’s severity is assessed on X and Y-axes, ranging from Very High (VHigh) to Very Low (VLow):

The perception grids are given their own numerical values, as recommended by Merna & Al-Thani (2008, p. 75). These values have been assigned to corresponding grids in order to provide convenience to the process of analyzing quantified data. The below table illustrates logic behind assigning numerical values to risk perception grids:

Table 3.

Table 4.

The arithmetical average of how impact scores relate to the corresponding ones on a probability axe is the multiplication of both scores.

The respondents, consisting of twenty Saudi and twenty British mid-level managers (the same ones that were asked to fill out the questionnaire), were asked to allocate the abbreviation of every of nine risks (as defined by Hofstede) into the appropriate grid on PI-template [Here, I refer to the second part of questionnaire] – hence, allowing me to assign a numerical value to their perception of every individual risk’s two-dimensional corporeality.

The risks that were to be assessed by study’s participants on PI-Grid, have been abbreviated in the following manner: Political Risk (PR), Financial Risk (FR), Economic Risk (ER), Natural Risk (NR), Market Risk (MR), Technical Risk (TR), Safety Risk (SR), Project Risk (PrR), Human Risk(HR). The total arithmetical average of every individual risk’s assessment by Saudi and British respondents is the sum of all twenty PI-based assessment scores, divided by twenty.

Research Results & Findings

Saudi Perception

Questionnaire

The analysis of the data, obtained through distributing selected Saudi respondents with a questionnaire, allows us to define the strength of their risk-avoidance anxieties as rather high:

LUA-oriented questions (LUA) (HUA)

Yes           No      Maybe

Table 5.

As it appears on the above chart, while being presented with LUA-evoking questions, most Saudi respondents (63%) have shown their clearly defined uncomfortableness with the prospect of facing risks as something rather potentially beneficial. Given the design of these questions (every question was meant to elicit phenotype-specific response), the qualitative subtleties of Saudi respondents’ responses to them can be explained by their tendency to perceive professional challenges through the lenses of collectivism, fatalism, hierarchism and femininity.

(HUA) (LUA). HUA-oriented questions.

Yes         No     Maybe

Table 6.

Unlike what it was the case with the responses to LUA-oriented questions, most Saudi responses to HUA-oriented questions were positive (56%), which points out to the fact that, while coming up with answers, most Saudi managers in the sample never ceased experiencing a variety of risk-aversion anxieties. And, just as it is being the case with Saudi managers’ responses to LUA-oriented questions, the qualitative pattern of their responses to HUA-oriented questions reveals an essentially rudimentary nature of these managers’ endowment with the sense of individualism – hence, their clearly defined tendency to think of risk-management as the most important part of designing organizational strategies.

PI-Grid

Table 7.

[The total arithmetical average of every individual risk’s assessment by Saudi and British respondents is the sum of all twenty PI-based assessment scores, divided by twenty]

As it appears from the figure above, only two out of nine averaged risk perceptions (SR and FR), on the part of Saudi respondents, fall into LUA category (below 0.1). However, the rest of averaged risk perceptions, as seen in the figure, point out to the fact that the majority of Saudi respondents do experience a number of rather heightened risk-avoidance anxieties. Moreover, the fact that it is namely TR, NR and ER that are being perceived by sampled Saudi managers as particularly acute, can be thought of as an indirect indication of these managers’ only superficial affiliation with the concept of highly technological Western living. This finding is being consistent with study’s initial hypothesis and with insights, obtained during the course of reviewing relevant academic literature.

British Perception

Questionnaire

The analysis of data, in regards to the qualitative essence of responses to the questions contained in the questionnaire, on the part of British respondents, suggest that most of them are being quite comfortable with the idea of undertaking risks:

LUA-oriented questions (LUA) (HUA).

Yes          No     Maybe

Table 8.

As it can be seen on the above percentile chart, 59% of sampled British managers replied positively to LUA-eliciting questions, which confirms the validity of an initial hypothesis that, due to culturally-defined the specifics of their risk perception, British managers tend to think of risk in terms of an ‘opportunity’, rather in terms of an ‘undesirable’ obstacle. This finding is being consistent with what has been theorized earlier on the subject of how people’s behavioral patterns reflect the subconscious workings of their psyche.

(HUA) (LUA) HUA-oriented questions.

Yes      No      Maybe

Table 9.

The above chart illustrates a clear tendency, on the part of sampled British managers, not to prioritize ensuring organization’s operational safety above other considerations. Obviously enough, even though some respondents demonstrated their emotional comfortableness with HUA-affiliated notions of equality’, fairness and safety, most of them nevertheless had proven themselves to be endowed with risk-welcoming individualistic (Faustian) mentality.

PI-Grid

Table 7.

As it appears from Figure 2, British respondents defined only three out of nine perceived risks (ER, MR, PR) as such that fall into Medium Uncertainty Avoidance (MUA) category (above 0.1 and below 0.3). None out of nine risks has been defined as belonging to HUA category. This points out to the fact that, just as it was hypothesized in study’s earlier parts, British managers in general are being indeed much more open to the prospect of facing risks, as to compared to what it happened to be the case with their Saudi counterparts.

Discussion/Conclussion

The data, obtained during the course of conducting study’s empirical phase, does support the validity of our initial hypothesis as to the fact that there are objective reasons to expect Saudi managerial culture to be much more risk-cautious, as compared to what it is being the case with British managerial culture. However, it is not only that this data does confirm hypothesis’s legitimacy, but also highlights what can be considered motivational factors behind British managers being more comfortable with taking risks, on one hand, and behind Saudi managers’ tendency to adopt rather cautious attitude towards organizational risks, on another.

As Figure 1 illustrates, it is specifically Natural Risk (NR) and Technical Risk (TR), which Saudi respondents considered the most acute. Whereas, Market Risk (MR) and Safety Risk (SR) had been ranked by them as comparatively negligible. In its turn, this can be explained by the particulars of socio-cultural situation in Saudi Arabia, as a country that had only recently undergone the process of industrialization, and as a country where religion continues to greatly affect the process of social and economic policy-making (Butler 2008).

Apparently, Saudis’ strong affiliation with traditional values and their religion-based collectivism naturally predisposes them to adopt cautious attitude to just about anything they associate with the notion of technical/scientific progress and with what they perceive as one’s unlimited liberty to exploit its individualistic ambitions – hence, these people’s ill-hidden fear of specifically science-driven innovations.

At the same time, Saudi managers’ strong sense of religiosity appears to have served as the main motivational force behind their fatalistic attitudes, sublimated in their ranking of Safety Risk (SR) as not very pressing. Although, as Saudi managers’ responses indicate, they are not altogether deprived of a taste for risk, such their taste appears to be essentially rudimentary.

British respondents, on the other hand, ranked specifically Economic Risk (ER), Market Risk (MR) and Project Risk (PrR) as the most acute ones, which is being suggestive of these respondents’ rationalistic-mindedness. Whereas; the systemic nature of Technical and Natural risks (TR, NR) makes it possible to reduce them down to a minimum, it would prove much more challengeable to reduce Market Risk (MR) down to the appropriate level, for example, as this particular risk often reflects the unpredictable workings of consumers’ sub-consciousness.

Thus, even though the specifics of people’s cultural affiliation do affect their perception of risk, it would be quite inappropriate to refer to these specifics as independently existing – apparently, a number of clearly environmental and biological factors play an important role in defining people’s risk-related cultural attitudes. [The analysis of study’s findings allowed me to conclude that the culture is only an intermediate agent of differentiation between perceptions of risk, on the part of British and Saudi managers, because the qualitative essence of this culture itself appears to be reflective of the specifics of respondents’ ‘brain wiring’]

Just as it is being the case with physicists, who refer to the ratio between elementary particle’s mass and speed in terms of energy, social scientists discuss people’s behavioral patterns in terms of culture. Yet, the concept of culture cannot be discussed outside of a number of affiliative aspects that account for such culture’s actual making. Studying these factors should become the subject of a future research, regarding what amounts to dialectic interconnectedness between culture and risk perception.

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