28.07.2021 Publication: Intercultural differences in issue interpretation: Effects of emotions and framing

Dr. Franziska Neumann, Prof. Dr. Torsten Wulf


Abstract
The interpretation of strategic issues as threats or opportunities influences strategic actions and firm performance. The extant research identifies cultural differences as an important driver of strategic issue interpretation. Specifically, research from a socio-cognitive perspective shows that differences in cognitive styles across cultures lead to differences in the interpretation of strategic issues by East Asian and Western managers. Based on cross-cultural research on emotions and decision-making, we argue that cultural affordances also lead to differences in emotional experiences and behavioral consequences across cultures which affect the strategic issue interpretation of managers from East Asian and Western cultures in different ways. We theorize that Chinese managers are similarly affected by fear and happiness in their strategic issue interpretation, while German managers are only affected by fear. For German managers, this effect is moderated by issue framing, which is not the case for Chinese managers. A vignette-based decision experiment involving 194 German and 174 Chinese executives offers support for our hypotheses. These findings have implications for cross-cultural research on strategic issue interpretation and for cross-cultural research on strategic decision-making in general.

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