Uncertainty avoidance

a. To what extent does top management concern itself with the “big picture” (1), rather than the detail (5), in decision-making?

b. Does top management tend to be aggressive (1), or cautious (5), in its decision-making?

c. How risk-embracing (1), versus risk-avoiding (5), is the top management? LO5

d. To what extent is top management control-oriented in the management of its direct reports: low (1) or high (5)?

Score the uncertainty avoidance on a scale from 1 to 5 as follows:

1 2 3 4 5 very low moderate very high There are different types of information that can be relevant to answer these four questions.

To assess whether or not top management concerns itself with the “big picture,”

relevant data includes information on what types of reports management requests: if they request reports on overall sales, EBIT, and/or investments, this signals a focus on the “big picture.”

If it asks for reports on deviations on a number of non-cost issues, such as the number of sick days individual employees have, this signals a focus on the detail.

To get a picture of the risk preference of the top management, take a look at some of the big investments that the organization has made. Then assess the risk related to these investments.

To assess the top management’s control orientation, it may be relevant to gather information on what types of direct reports management asks for: does it require annual, monthly, weekly, or even daily reports (e.g. sales)? A high frequency will indicate high control.

For all four questions, interviews with the top management team may also enable additional insights.

Again, if you are top management, or part of it, remember to answer these questions based on what your preferences are, not necessarily how you, given the current situation, are required to lead.