The title image shows people waiting to be picked up by a bus at the side of the highway in Istanbul. The are standing beneath a sign saying that it is forbidden to stop vehicles on highways to let passengers get on or off…

Coping with Ambiguity and Uncertainty

This is part 3 of a series of posts on effective Ethics & Compliance in the context on Turkish national culture.

In the first post, I looked at the motivation for this analysis, the differences between Turkish and U.S. culture in the Hofstede model of national culture and the potential impact these differences might have on effective compliance.

In the second post, I summarized the currently best accepted criteria for what constitutes an effective Ethics & Compliance program, and the central role that culture plays in this context.

In this third post I take a detailed look at the cultural dimension with the highest value in Turkey’s cultural profile: Uncertainty Avoidance.

A story about limits

When we introduced a new expense policy for our Turkish field force, a curious discussion ensued. We had revised the maximum limits for representation expenses, i.e. the amount of money that can be spent per person in meals with clients. Nothing else had changed. The new limits were higher than the previous limits to account for inflation and the rise in restaurant prices. After the training, in the Q&A, the first question that was asked was: “Does the new limit include or exclude VAT?” (The old limit had always been clear, inclusive of VAT. The amount the sales representative would actually pay in the restaurant.) The second question was: “Does the limit include the tip?” The third: “What happens if I exceed this limit by 10 Turkish Lira? Is it as bad as if I exceed it by 50?” The fourth: “Who will control this?” Then: “If I exceed this for the first time, what will happen? Will I get a reminder or a warning?” and “Who can authorize an exception to this limit? Ex-ante or ex-post.” And so forth.

The sales representatives tried each and every angle to poke and prod the new expense procedure for any soft spots loopholes that might be used to justify an exception to exceed the new limits. And they asked many questions to gauge the strength of controls and the consequences of not complying with the new limits. We were really getting deep into discussing the “letter of the law” without the spirit of it, not to mention that actually nothing in the procedures had changed except the limits. I could not help but get the impression that they were trying to gauge how serious the new limits were and what their personal risk was if they were to decide not to comply with the new policy if it might offer them an opportunity for a higher business target achievement.

Let me clarify here that it was a handful of individuals, who were really pushing the limits of the discussion. However, there was a fair number of people who seemed to enjoy the deep dive into the rules just for the sake of getting the maximum degree of clarity and verbal confirmation from me as the Compliance Officer that the rules would be applied in practice as they were written on paper.

(I have written about this before from German vs. Turkish perspective, see here.)

To me this behavior is a good example I use to explore the culture dimension has called “Uncertainty Avoidance” – the way a society or group of people is tolerant – or not – of uncertainty and ambiguity.

Uncertainty Avoidance according Hofstede

The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways.  The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.

– Geert Hofstede

With a score of 85, Turkey is ranked 23rd place in the Hofstede analysis. This is a fairly high score, although there is a number of countries with even higher scores. Greece and Portugal lead the field with scores of 112 and 104 respectively. (They were studied later and exceeded the 100 point scale from Hofstede’s initial study, but the author chose not to normalize the scale to 100 because it would habe meant to re-calculate the scores of all the other countries.)

The no-smoking signs found in restaurants and public places in Turkey are a good example of a high Uncertainty Avoidance culture’s approach to compliance: The sign states the rule, the relevant regulation as well as the fine that will be applied and lists also a reporting line for complainants.

Any rules are better than no rules. But having rules doesn’t mean they will be followed.

Turkey’s high Uncertainty Avoidance score leads to a huge emotional need for detailed laws and formal as well as informal rules for people know where they stand in terms of what is right and wrong, allowed and forbidden and what kind of behavior is expected of them. Having rules reduces ambiguity. Any rules are better than no rules, more rules are better than less rules and loopholes are patched with additional rules, exceptions, approvals and controls. There is no need for the rules to be necessarily simple, easy to understand or consistent. Instead, I have observed it is more important for Turks to understand if compliance with the rules will actually be controlled and enforced and what sanctions there could be.

Purely ritual, inconsistent, dysfunctional, rule-oriented behavior is possible. Or not following the rule at all. Having rules does not mean following them. Still they reduce ambiguity because the game and the playing field are defined and one understands the risk one incurs to be caught and sanctioned.

Example: A Turkish company had observed that an outside expert consultant was violating a regulation because he was not aware of it at first. That situation created a risk for the company. When reminded of the regulation, the consultant argued that the detection risk by authorities was very low and he also didn’t agree with the regulation and would sign a sheet of paper that it was his decision. The first reaction of management was to propose a triple signature form where the consultant would accept responsibility for a potential violation of the regulation and to generalize this approach by creating a procedure to apply if a similar situation should occur again. Instead of trying to prevent such occurrences by better selection of consultants and by better briefing them on the company’s principles and the applicable regulation in advance, management first chose to accommodate the behavior of this and future consultants and create a complicated rule to be applied in the event this occurred again.

Need for rules, control and punishment

If the controls are tight, if the detection risk is high and if sanctions are applied visibly and consistently, then one can expect a larger extent of compliance. Because there is less ambiguity, higher certainty. On the other hand, if there is little control and consequences and sanctions are obscure and not consistently applied, compliance becomes optional. Because of higher ambiguity. And in case non-compliant behavior is detected, people will be quick to point out the ambiguity and a number of instances that similar behavior of others went undetected or unsanctioned and that this is unfair…

In an ethical climate survey I conducted in three companies from the Turkish healthcare sector with more than 700 participants over two consecutive years, there was high agreement amongst first line and mid-level managers as well as their subordinates, that in order for people to be compliant, detailed rules, tight management control and punishment were needed.

Interrelation between Uncertainty Avoidance and other cultural dimensions

Since Turks have little love for uncertainty and ambiguity they feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these. Amongst these institutions are power and authority (tribute to Turkey’s high Power Distance) and trust and loyalty to in-groups (low Individualism score, collective culture).

Uncertainty Avoidance and Power Distance

Turks look to authority and power to tell right from wrong, set rules, give instructions and make decisions. At the same time, it is accepted and expected that the more powerful enjoy privileges, status symbols; and that rules and sanctions don’t necessarily apply equally to them. Authority figures may be exempted from certain controls, may override controls and may not be subject to the same sanctions as subordinates.

… and Collectivism

In addition to the above, as a collectivist society Turks look to the norms, traditions and rituals of their social in-group – be it their team, department, company, family or the society – and the paternalistic leader (not necessarily a male!) of that in-group to set and enforce rules of behavior, protect them from out-groups, make sense of ambiguity and give them a sense of security through (inter-)relationships. This is a mechanism to build trust and loyalty amongst in-group members. Frequently this results in tendencies of favoritism or nepotism and there is a pervasive risk of conflicting interests.

Another result of the interaction of the strong Collectivism and the high Uncertainty Avoidance of Turkish culture is that Turks have a vivid imagination when it comes to conspiracy theories that can serve to give a possible – but not necessarily a probable – explanation of observed events, e.g. in international politics but also in business (employee-to-employee relations; employee-to-manager relations) and in private life. Conspiracy theories help reduce ambiguity and offer a reasonable story. High Power Distance also implies that information asymmetries are expected, and that powerful people have hidden agendas. Conspiracy theories help fill the expected information gaps. This can have an immense impact for Compliance investigations, where it can become very difficult to separate “real” facts from “possible” facts resulting from people’s relations and motives.

What does this mean for effective Ethics & Compliance in Turkey?

So where does this leave the Ethics & Compliance Professional trying to implement and run a Compliance program that is effective by international (i.e. U.S.) standards?

People express a huge need for rules, so the rules had rather be clear and consistent. People might be more willing to break or circumvent rules and regulations that are not clear and have grey areas and loopholes; and of course those that are not tightly controlled and enforced by authorities (within and without the organization).

Principles-based compliance alone is difficult as it creates uncertainty and hence fear of not clearly knowing what is right and wrong. This doesn’t mean that principle-based approaches don’t work, but the principles are not regarded as something different from rules. Rather they are regarded as a kind of vague, high-level rules. As a Compliance Officer I regularly find myself in a position where I am requested to explain the true and correct application of principles.

This also means you have to clearly spell out how a high-level code of ethics relates to actual daily activities of employees and you cannot rely on people reaching these conclusions themselves; unless you have a quite rules-based code of conduct that is very clear and specific on dos and don’ts.

Turks also want to clearly understand the processes of control, how detected rule violations are evaluated and how sanctions are determined and applied. Sanctions need to be visible, otherwise there may be conspiracy theories of favoritism and unfair application of sanctions.

In investigations, conspiracy theories may bury the relevant facts.

A strong tone from powerful senior leaders is essential to reduce uncertainty for employees and set clear compliance expectations for the in-group(s) of the organization.

Organizational justice on peer level is important to reduce ambiguity in the application of rules and sanctions but can be undermined by Collectivism (favoritism, nepotism, unclear accountabilities) and Power Distance (paternalistic application of punishment as well as mercy, override of rules, expectation of different rules for powerful people).

The series continues…

To give my readers more certainty about Turkey, I will keep updating this post with additional insights, so keep checking back.

Next in this series of posts I will examine Power Distance, another “dominating” (pun intended) culture dimension in Turkey.