11.2.1.2 Uncertainty avoidance

Uncertainty avoidance is the second cultural dimension. It is the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity (Hofstede 1984a: 83). Cultures with high uncertainty avoidance try to reduce risk and develop methods, systems and organisations for dealing with ambiguities (Hodgetts and Luthans 1993: 44-45). The reduction of uncertainty and ambiguity can be accomplished by technology, law and religion for a society and by technology, rules and rituals for an organisation (Hofstede 1983: 81-83; 1984b: 114-115). People in high uncertainty avoidance societies rely on clear procedures, well-known strategies to reduce uncertainties, whereas people in low uncertainty avoidance societies are more at ease with unknown situations (Hofstede 1984b: 140-144; Li and Harrison 2008b: 377). The pursuit for certainty and the reduction of ambiguity will lead to more supervision in the companies of high uncertainty avoidance societies. Therefore, companies in countries with high uncertainty avoidance are expected to have relatively high levels of board independence, whereas companies in countries with low uncertainty avoidance are expected to have relatively low levels of board independence (Li and Harrison 2008b: 377-378).