What does uncertainty avoidance refer to?

Uncertainty avoidance refers to the extent to which individuals or cultures can tolerate risk and uncertainty in their lives and environments. Societies characterized by high uncertainty avoidance tend to prefer structured conditions and may have strict rules and norms to govern behavior, helping to minimize risk. These cultures often value predictability and are less comfortable with ambiguity, which influences their approach to decision-making, planning, and engagement with new ideas or innovations.

In contrast, cultures with low uncertainty avoidance are more accepting of risk and ambiguity. They may be more open to change and less reliant on rules and guidelines, allowing for greater flexibility and adaptability in various situations. Understanding this concept is crucial in international business because it helps to identify how different cultures approach uncertainty, which can directly impact negotiation styles, management practices, and organizational behavior.