Differences in Strategic Issue Interpretation across Cultures – A Socio‐Cognitive Perspective.

The framing of strategic issues as opportunities or threats has been shown to significantly affect strategic behavior in organizations. However, whether and how this framing effect differs among executives from different national cultures remains unclear. Building on psychological research on culture and decision‐making, we introduce a socio‐cognitive approach to culture that offers a more differentiated explanation for the effect of culture on issue interpretation than the traditional values‐based approach. We argue that cultural differences in cognitive style affect strategic issue interpretation. However, this impact depends on the framing of the issue. We use a vignette‐based decision experiment involving 65 German and 63 Chinese executives to show that cultural differences occur if an issue is framed as a threat but not if it is framed as an opportunity. The socio‐cognitive approach to culture opens new avenues for cross‐cultural research on strategic issue interpretation in particular and strategic decision‐making in general. [ABSTRACT FROM AUTHOR]