When we speak of fundamental attribution error, we are speaking of individuals' tendencies to interpret others' behaviors based on what we assume to be internal factors, such as a person's possible personality traits, capabilities, or even possible motives. In reality, there could just as easily be external factors governing behavior, but when it comes to fundamental attribute error, individuals will neglect thinking of external factors to interpret behavior and only interpret behavior through internal factors. A good example can be one driver witnessing a second driver running a red light. If the first driver were to judge the second driver's behavior by making a fundamental attribution error, the first driver might assume that the second driver ran the red light simply because that driver is a reckless, inconsiderate, and possibly even unskilled driver. On the other hand, another explanation could be that the second driver ran the red light simply because the driver was experiencing an emergency situation that called for drastic action, a situation such as needing to get someone to the hospital ("Fundamental Attribution Error").
Individualistic cultures are those who put more emphasis on the needs of an individual as opposed to the needs of a group as a whole, like a community as a whole or even a whole nation. When a culture is individualistic, behavior within that culture is governed by the internal attributes of individuals, such as their own personal preferences, their own personality types, and even their own motives. Another result of an individualistic culture is that, since individuals are so focused on the self and the internal attributes that govern their own behaviors, they also have a tendency to judge others' behaviors based on internal attributes as well; thus, an individualistic culture will be more prone towards making fundamental attribution errors. In other words, a focus on self and internal attributes leads to the assumption that all individuals are focused on self and internal attributes. Hence, individuals in an individualistic culture are more likely to assume that personality traits, capabilities, and even motives are reasons for another person's behavior, as seen above in the example of the first driver assuming the second driver ran the red light out of a deficiency in moral character.
In contrast, collectivist cultures are those who place more importance on the goals and needs of the group rather than on the goals and needs of the individual. Also, in a collectivist society, members of the group tend to identify themselves, not just by their own individuality, but by their relationship and connection with the whole group. Since the relationship with the whole group is so important, collectivist cultures will establish rules to develop selfless behavior, as well as rules to fulfill the needs of the entire community, not just the individual. A collectivist society will also believe that working together as a group is essential to fulfilling needs. Since in a collectivist culture rules are established to promote the good of the entire group, people in a collectivist culture are less likely to assume that someone is acting only for the benefit of themselves and not for the group.
Hence, if a culture focuses on the group, then they are more likely to assume that all behaviors are for the benefit of a group, while a culture that focuses on the self will assume that all behaviors are based on purely selfish motives.