Why Some Societies Embrace Failure While Others Hide It

Read this blog post to learn more about:

• Why different cultures view failure as either a setback or a learning opportunity

• How attitudes towards failure influence entrepreneurship, innovation, and career mobility

• Why shame, risk tolerance, and cultural values shape economic behaviour

• How organisations and institutions can encourage innovation by changing their approach to failure

The acceptance of failure is an integral part of economic and social life (Sen, 1999)․ In some societies‚ failure is seen as an important learning experience to greater success (Dweck, 2006). In others it is looked down upon because it is associated with shame and in the longer term‚ social stigma (Benedict, 1946)․ These are differences in cultural beliefs‚ not in psychological preferences: they are about innovation‚ entrepreneurship and career mobility (Hofstede, 2001; Aghion et al., 2010)․ Understanding how societies deal with failure can help explain differences in labour market flexibility and economic dynamism across nations (North, 1990)․

Culturally‚ attitudes towards failure can take the form of shame‚ responsibility‚ and redemption (Benedict, 1946)․ In anthropology and sociology‚ shame-based cultures are often contrasted with guilt-based cultures‚ each representing different moral archetypes (Benedict, 1946; Goffman, 1967)․ In the culture of shame‚ social judgment and loss of face are the main mechanisms for regulating behavior‚ and failure is highly visible and expensive (Goffman, 1967)․ However‚ in a guilt culture‚ a high degree of moral internalization tends to make people more able to separate their self-worth from their success and failure (Lewis, 1971)․ East-West differences in the culture of responsibility help explain whether failure is seen as a defining aspect of a person's identity or as a temporary setback (Markus & Kitayama, 1991)․

Cultural psychology can help explain these differences; Geert Hofstede ranked countries on two factors with the greatest variance: avoidance of uncertainty‚ and individualism (Hofstede, 2001)․ Both strongest predictors for failure tolerance (Hofstede, 2001; Shane, 1993)․ Uncertainty avoidance implies that failure is viewed as risk‚ unpredictability and lack of control (Hofstede, 2001)․ Cultures with greater uncertainty avoidance tend to prefer stable careers‚ and a more incremental approach to innovation (Shane, 1993)․ Cultures with low uncertainty avoidance tend to be more tolerant of unstructured situations and experimentation (Hofstede, 2001)․ Also‚ in individualist cultures‚ the individual perceives a failure as a personal failing and thus there is a decrease of reputational loss from failure by trying (Markus & Kitayama, 1991)․

These cultural values are seen also to be conducive to innovation and entrepreneurship‚ as failure is normalized‚ experimentation is seen as a positive and learning from failure is seen as virtuous (Aghion et al., 2010; Manso, 2016).

Culture shapes labour markets mainly through failure tolerance‚ the extent to which organizations tolerate people leaving their job‚ industry‚ or career (OECD, 2015)․ In cultures with high failure tolerance‚ redundancy or bankruptcy would not greatly impact future employability‚ whereas it would in cultures with low failure tolerance (OECD, 2015; North, 1990)․ Career paths are also more flexible in high-tolerance cultures․ Experiencing failure early in one's career can prevent future attempts at career development (Graham, 1994)․ Such individuals are less likely to take risks when making career changes; less experimental and more conventional despite their ability to innovate (Hall, 2004).

Other organizational behaviors are influenced by attitudes towards failure (Edmondson, 1999)․ In a culture of hiding failure‚ organizations punish employees for failure‚ so it is in the employees' interest to hide failure (Edmondson, 1999)․ This inhibits learning‚ reducing transparency and increasing systemic risk to the organization (Argyris & Schön, 1978)․ In contrast‚ organisations with failure tolerant cultures are more likely to use learning driven practices‚ such as post project reviews‚ and open discussions of failure‚ practices that are pivotal to organizational learning and adaptation‚ and which may be necessary for success in a fast-moving economy (Edmondson, 1999)․

The cultural expectation of failure can be shaped‚ for example‚ through the design of institutions or public policies (North, 1990)․ History provides the evidence base for decisions‚ for example‚ whether an entrepreneur is permanently barred from further business creation after a failure or whether they are granted a second chance (Eberhart, Eesley & Eisenhardt, 2017)․ These signal whether risk-taking is legitimated in society (North, 1990)․ Reinforcing educational systems that reward experimentation and process‚ rather than simply perfection‚ may be a way to impart resiliency and a growth mindset at an early age (Dweck, 2006)․

However‚ doing so does not justify a slack attitude towards risk-taking (Manso, 2016)․ Failure-tolerant cultures still differentiate between responsible risk-taking and negligence‚ even in the face of adverse outcomes (Edmondson, 1999․ The key difference is failure as information versus failure as moral condemnation (Argyris & Schön, 1978)․ When failure is viewed as an opportunity to learn‚ individuals and organisations are more likely to take risks and innovate (Edmondson, 2011)․ When it is seen as shameful‚ they are more likely to hide their mistakes and risk stagnation (Benedict, 1946)․

This means that our views on failure touch on deep cultural views of shame‚ identity and redemption‚ shaping individual and organizational behavior‚ as well as the national systems of innovation (Hofstede, 2001; Aghion et al., 2010)․ Societies that are tolerant of failure are more entrepreneurial‚ innovative and mobile in employment (OECD, 2015)․ If a society stigmatizes failure‚ the individuals in that culture will tend to be more risk averse‚ more conformist‚ and place a higher value on job security‚ probably at the cost of dynamism in the longer term (North, 1990)․ This helps explain differences in national economic performance and in innovation (Aghion et al., 2010)․ Moreover‚ understanding such cultural origins helps in forming institutions that provide people with opportunities to succeed‚ but also to fail‚ learn from failure‚ and try again (Sen, 1999)․

Reference list:

Aghion, P., Algan, Y., Cahuc, P. & Shleifer, A. (2010). “Regulation and Distrust.” Quarterly Journal of Economics, 125(3), pp. 1015–1049.

Argyris, C. & Schön, D. (1978). Organizational Learning. Reading, MA: Addison-Wesley.

Benedict, R. (1946). The Chrysanthemum and the Sword. Boston: Houghton Mifflin.

Dweck, C. (2006). Mindset. New York: Random House.

Edmondson, A. (1999). “Psychological Safety and Learning Behavior in Work Teams.” Administrative Science Quarterly, 44(2), pp. 350–383. (JSTOR)

Edmondson, A. (2011). Teaming. San Francisco: Jossey-Bass.

Eberhart, R., Eesley, C. & Eisenhardt, K. (2017). “Failure Is an Option.” Organization Science, 28(2), pp. 237–254.

Goffman, E. (1967). Interaction Ritual. New York: Anchor Books.

Hall, D. T. (2004). “The Protean Career.” Journal of Vocational Behavior, 65(1), pp. 1–13.

Hofstede, G. (2001). Culture’s Consequences (2nd ed.). Sage.

Lewis, H. B. (1971). Shame and Guilt in Neurosis. New York: International Universities Press.

Manso, G. (2016). “Experimentation and the Returns to Entrepreneurship.” Review of Financial Studies, 29(9), pp. 2319–2340.

Markus, H. & Kitayama, S. (1991). “Culture and the Self.” Psychological Review, 98(2), pp. 224–253.

North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press.

OECD (2015). Back to Work: United States. OECD Publishing.

Sen, A. (1999). Development as Freedom. Oxford University Press.

Shane, S. (1993). “Cultural Influences on National Rates of Innovation.” Journal of Business Venturing, 8(1), pp. 59–73.