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Business Home > Opinion Analysis
Emotions, language and business decisions

Oksana Tashakova (MAXIMISE YOUR POTENTIAL) / 1 July 2012

English is the most commonly used language in business circles across the globe and in light of new research, you could have an advantage if English is your second language. In fact, thinking in any foreign language may result in better business outcomes.

University of Chicago researchers conducted a study of how thinking in a different language affected decision-making. According to “University of Chicago News,” participants weighed risks and opportunities when they thought about things in a language other than their native tongue. The key, it seems, lies in the emotions connection.

In a paper published in “Psychological Science” psychology professor Boaz Keysar wrote: “A foreign language provides a distancing mechanism that moves people from the immediate intuitive system to a more deliberate mode of thinking.”

Co-author Sayuri Hayakawa explains that our native tongues are more emotionally resonant for us and that this emotional link could cloud business decisions with fear of loss. Humans are naturally averse to the risk of loss and this can make them forgo great opportunities. When a choice is presented in terms of possible gain; people are more cautious about taking risks. When options are presented in terms of what they may lose; they’re more likely to take a risk to avoid that loss.

The University of Chicago researchers found that when participants evaluated choices in a different language, these fearful biases disappeared and the participants were able to make better-informed and more economically sound decisions concerning risks.

In a compelling part of the study, participants were given the opportunity to win $2.50 for every dollar they bet. When they considered the issue in their native tongue, participants were more fearful to take the bets even though statistically, they had much better opportunities for winning than they did losing. They only took the bet a little over half the time. When the students considered the bets in a foreign language; they took the bets 71 percent of the time.

The study authors wrote: “People who routinely make decisions in a foreign language might be less biased in their savings, investment and retirement decisions, as they show less myopic loss aversion. Over a long time horizon, this might very well be beneficial.”

This study doesn’t mean that it’s always better to make business decisions in this way. The scientists are now trying to determine when that might not be true. That’s because all decisions do have an emotional component and oftentimes those emotions should be taken into consideration.

Emotions are involved in decision-making because our memories and perceptions are stored in the brain emotionally. This is a kind of necessary shortcut in order to be able to quickly assess information and act in situations — the emotional component gives us access to summaries and beliefs that help us to respond to new but similar situations. So when you’re weighing risks and benefits, you’re calling upon remembered experiences of good feelings or bad. Unfortunately, the bad memories often outweigh the good and can interfere with your ability to see the advantages in taking a risk.

Editor Andrew O’Connell of the Harvard Business Group writes about a different study in the Harvard Business Review Blog, one conducted by the combined efforts of a business researcher and a psychology scientist. Myeong-Gu Seo of the University of Maryland and Lisa Feldman Barrett of Boston College found that strong emotions can help people make better business decisions. The scientists used an investing simulation and had participants report their emotions before buying and selling stocks. Those who experienced intense emotions before making investment decisions did much better in the long run.

Why? It seems that heightened emotions also heighten our attention and memory. The key is that participants who made successful investments also had some degree of emotional intelligence (EQ). They were able to manage their emotions and use them to inform their decision-making rather than being hijacked or overcome by their feelings. Participants that were able to identify their emotions, especially those that might be negative (i.e. fear), were able to reason well and prevent emotional biases from affecting their decisions.

Increasing your self-awareness and EQ competencies could go far in terms of your business outcomes and thinking in a different language may help prevent negative perceptions from clouding your judgment.


The writer is an executive coach and HR training and development expert. She can be reached at oksana@academia ofhumanpotential.com or www.academiaofhumanpotential.com. Views expressed are her own and do not reflect the newspaper’s policy


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