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Cultural Intelligence- Expatriate challenges and diversified workforce management

Cultural Intelligence- Expatriate challenges and diversified workforce management

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Published by ShEny HiNe
focus on cultural intelligence and expatriate success and failures
focus on cultural intelligence and expatriate success and failures

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Published by: ShEny HiNe on May 03, 2011
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11/03/2012

Cultural Intelligence

Executive Summary This assignment highlights the challenges face by expatriates in managing highly diversified cultural teams and the need for cultural intelligence to mitigate these challenges that arise in their assignments. Also, highlighted will be the cost of failure of assignments, which result in lost opportunities for multinational companies in the particular country they operate in. These failures result in the need of repertoires that can be used to successfully implement the expatriate¶s assignment in the respective host countries. As such, the importance of Cultural Intelligence (CI) in a highly multi cultural workforce is further discussed. CI can be learned and it is plays an important role in developing the main five repertoires namely, manage diverse teams, recruit and develop cross-cultural talent, adapt leadership style, demonstrate respect and understand diverse customers; which is needed for expatriate to manage in highly culturally diversified organization. Explained further will be the four step cycle of CI that will enhance the expatriates, drive, knowledge, strategy and action needed in developing the repertoires for effective and efficient management and operation in varied cultural environment. Using this four step cycle of CI, emphasized in the latter parts will be how CI abilities such as: cultural awareness, motivational cultural adaptation, adaptive behavior and effective crosscultural communication; can be used as a success factor for developing repertoires needed for an expatriate that result in effective leadership.

Aishath Sheneen Ibrahim

Page 1 of 8

Cultural Intelligence
Introduction Globalization created more business opportunities (Dong and Liu, 2010) where companies are accounted to manage a highly culturally diversified workforce. It is common among head quarter (HQs) of multinational companies (MNCs) to send expatriates to provide management and technical skills (Suutari and Brewster, 2001) in order to implement procedures and build relationship with the host country¶s national (HCN) managers. The global workforce requires expatriates to be sensitive to different cultures (Tan, 2004) and need to learn how to deal with other cultures (Clark, 2008) so that they will be able to interact accordingly with multicultural diversified teams and be successful in the global market place. They are also in need for analyzing new cultures as it encounters (Tan, 2004). Hence, these challenges faced in the multicultural environment lead to the emergence of cultural intelligence; which is needed for successful implementation of expatriate assignments.

Cultural Intelligence (CI) is the ability to effectively interact with people from different cultural backgrounds (Earley and Ang, 2003). Cultural intelligence enables the ability to respond accordingly to different cultures through knowledge and mindfulness (Thomas and Inkson, 2009). This enables expatriate develop repertoires in order to successfully complete tasks.

Expatriate Failure: Lack of Cultural Intelligence (CI) and the need for Repertoires Issues that arise from interpersonal conflicts due to lack of cultural differences are highly important (Jassawalla et al., 2004). Decision making process in the UK is longer as they tend to weigh all the possibilities of the project during their discussion, before coming to a conclusion when accepting a new idea that have already worked in the U.S. This tend to make the U.S. expatriate frustrated as he wants the decision to be made quickly by closing the deal (Jassawalla et al, 2004). It is important for expatriates to take into account the cultural dimension of uncertainty avoidance (Powell, 2006) as well as cultural differences with regard to urgency in producing results (Jassawalla et al., 2004). The cause of frustration of the U.S expatriate was due to the lack of cultural intelligence in adapting leadership style, which resulted in increased time to get the job done. Moreover, Danone Group formed a joint venture with Robust from China in 2000, which resulted in failed relationship (Pan, et al., 2010) due to the failure of Danone Group in
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Cultural Intelligence
recognizing the cultural norm of power distance in China¶s management structure. Leading to lost opportunities and decreased revenue from this venture. As such, to manage diverse teams they need cultural intelligence.

Culture impacts managerial values. As such, guanxi signifies an important part of the Chinese culture (Dong and Liu, 2010). It is a special kind of reciprocal relationship, where guanxi has to be developed among the MNC and Chinese businesses for smooth operation. Expatriates who are not culturally intelligent will give a blind eye to this cultural norm of the Chinese and may cause disrespect to their culture. Thus, today¶s workforce requires highly skilled workforce with crosscultural sensitivity. This creates a need for cultural intelligence in developing the repertoire of recruiting and developing cross-cultural talent.

Furthermore, One Korean manager quit making an effort to speak with his multinational team after many failed attempt to convey his message; where the team changed topics or were not listening. (Tan, 2004) This resulted in heightened costs and low performance of the Korean manager. Having cultural intelligence would have helped him communicate according to their backstage culture.

For all these reasons, expatriates should be culturally intelligent to keep in mind the cultural differences when interacting with the HCN managers (Loh et al., 2010) and has to be prepared to meet with the cultural challenges. As mentioned above failure to do so, result in failed missions (Mansour and Wood, 2010) which is quite costly in terms of opportunity loss, breakage in relationships, (Avril and Magnini, 2007; Storti, 2001 as cited in Mansour and Wood) and poor productivity (Cavusgil et al., 1992 as cited in Jassawalla et al., 2004). Thus, the failure affects career development and self esteem of expatriates (Yavas and Bodur, 1999).

Hence, we can see that leading without cultural intelligence results in increased time to get the job done, heightened costs, growing frustration and confusion, poor job performance, decreased revenues and loss opportunities (Livermore, 2010).

Aishath Sheneen Ibrahim

Page 3 of 8

Cultural Intelligence
The above mentioned failures create the need for repertoires that expatriate can develop using cultural intelligence. Executives identified five main repertoires that can be developed using cultural intelligence to overcome the challenges faced by expatriate leaders today. The five main repertoires executives identified where cultural intelligence is needed to develop these repertoires are: Managing diverse teams, recruit and develop cross-cultural talent, adapt leadership style, demonstrate respect and understand diverse customers (Livermore, 2010).

Developing Repertoires with CI Deng and Gibson (2009, pg. 4) states that ³Merely understanding cultural differences is far from achieving leadership effectiveness in cross-cultural contexts.´ As such, cultural intelligence is put forth to acquire the relevant skills needed to maintain and understand the cultural differences for effective leadership (Earley and Ang, 2003).

Figure 1 below is used to see how cultural intelligence can be learned in developing the above mentioned repertoires with the four key cultural intelligence abilities; cultural awareness, motivational cultural adaptation, adaptive behavior and effective cross-cultural communication identified in Ling Deng and Paul Gibsons research; which helps expatriate leaders to deal with cultural differences (Deng and Gibson, 2009, pg. 8).

Figure 1: The Four-Step Cycle of Cultural Intelligence (CQ)

1-CQ Drive

4- CQ Action

2- CQ Knowledge

3- CQ Strategy

(Source: Livermore, 2010)
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Cultural Intelligence
The four dimensional model represents four aspects of cultural intelligence. Namely; Cognition, metacognition, motivation and behavior (Ang et al., 2004 as cited in Amiri et al., 2010). This is used to create the four-step cycle of cultural intelligence shown in figure 1; where CQ drive is the motivational dimension, CQ Knowledge is the cognitive dimension, CQ Strategy is the metacognition dimension and CQ Action is the behavioral dimension (Livermore, 2010). These four aspects of cultural intelligence is used for the effective and efficient management and operations in varied cultural environments (Amiri et al., 2010).

CQ drive (Motivational Dimension) CQ drive deals with being involve in intercultural interactions by having a sense of belief in their own capabilities (Amiri et al., 2010). The cultural intelligence ability of motivational cultural adaptation gives a clear sense of understanding of cultural adaptation, involving self awareness and self management of the expatriates (Deng and Gibson, 2009) which leads to motivational elements that enable to challenge themselves in an uncomfortable situation.

Leaders with high CQ drive influence the way they perform in multi cultural situations by way of learning and adapting to new and diverse culture through motivation (Livermore, 2010). Thus, expatriate leaders take cultural differences as an enjoyable challenge rather than as frustration (Deng and Gibson, 2009).

In the case of the Korean Manager mentioned before, despite of understanding what was going on he was unable to deal with his team (Tan, 2004) because of his lack of confidence and low motivation to adapt in that situation to work effectively. Hence, if he had acquired CQ drive and ability of motivational cultural adaptation; he would have been able to self motivate and develop the repertoire of adapting leadership style in accordance to the situation in rising to the challenge without disengaging from his team.

CQ Knowledge (Cognitive Dimension) This dimension helps in identification and understanding of basic cultural issues that are relevant to the expatriate¶s assignments (Livermore, 2010). It helps in recognizing economic, legal and social systems in culture and subcultures (Amiri et al., 2010) through training and personal
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Cultural Intelligence
experience. As such expatriate leaders are able to demonstrate appropriate role behaviors through awareness of potential differences in cultures. Furthermore, they will be able to understand rules often unspoken of, while been able to appreciate the rules behind their lives and society (Livermore, 2010).

Leaders having high CQ knowledge having the ability of cultural awareness, will be able to fully understand the concept of guanxi and work with the Chinese effectively as they will be able to appreciate the cultural norm that bring guanxi into place. Furthermore, leaders who have cultural awareness ability will be able to develop the repertoire of managing diverse teams by engaging in honest communication. In this case they will be aware that Chinese leaders prefers to be given ³bad news´ so as to enhance that the problems are been solved before it becomes unsolvable (Tuttle et al., 2010). Hence, expatriate leaders will be able to complete their assignments successfully with the acquiring of CQ knowledge.

CQ Strategy (Metacognitive Dimension) CQ strategy reflects those mental processes which used by people to acquire and understand cultural knowledge including recognizing and controlling mental processes regarding a culture. Leaders with CQ Strategy will have an understanding with regard to priorities of other cultures prior to and after during interactions of that culture (Amiri et al., 2010). Leaders will be able to attain the skill of planning, controlling and revising the models of cultural norms (Livemore, 2010). Leaders with high Strategy CQ know when and how to apply their cultural knowledge. Due to this they have a better and accurate understanding on what to be expected from situations rising from cultural diversity. Leaders with high CQ strategy develop ways to use cultural understanding to develop a plan for new cross-cultural situations. These leaders are better able to monitor, analyze, and adjust their behaviors in different cultural settings as they have a clear understanding about the unfamiliar cultures (Amiri et al., 2010). As such they are also able to articulate and communicate in an inspiring fashion their visions (Deng and Gibson, 2009) hence, able to easily implement MNC¶s procedures in the Host Country.

Aishath Sheneen Ibrahim

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Cultural Intelligence
As mentioned above Danone group leaders who failed to recognize high power distance of the Chinese management, through cultural intelligence will now be able to use the mentioned abilities gained from CQ strategy to develop the repertoire of managing diverse team by effective motivation strategy.

CQ Action (Behavioral Dimension) According to Amiri, et al (2010, pg.4) ³The elements of behavioral cultural intelligence reflect a capability to express and represent verbal/nonverbal actions when interact people with other cultures´. Leaders with high CQ Action will be able to utilize the other three dimensions to their benefit by engaging in effective motivation, understanding and planning skills (Livermore, 2010) to meet the needs and requirements of a certain cultural situation.

As per the example of the U.S. expatriate, if he had cultural intelligence and acquired CQ action will be able to succeed by developing the repertoire of showing respect to the U.K culture. Thus, cultural intelligence gives the expatriate the ability to communicate well by accepting the culture and adapting to it, in turn reducing the time needed for closing the deal.

Furthermore, culturally intelligent leaders can provide a competitive edge in product development and marketing strategies to different consumer groups by leveraging cultural diversity to align marketing and product development (Tan, 2004). As such, for successful growth of the business Levi Strauss capitalized on this strategy (Tan, 2004).

Organizations and individuals who see the strategic value of cultural intelligence are able to effectively develop the repertoire of recruiting and developing cross cultural talent. Particularly it enables to transfer organization-specific knowledge through expatriation of key individuals (Harvey and Novicevism, 2001) thus, achieve competitive superiority in the global marketplace. Novartis and Nike adopt cultural diversity in their strategic human resource management, and hire culturally intelligent individuals to gain competitive advantage in the global market (Tan, 2004).

Aishath Sheneen Ibrahim

Page 7 of 8

Cultural Intelligence
Conclusion Cultural intelligence focuses on developing an overall repertoire of understanding, skills, and behaviors that enable to manage effectively in the different cultural environments. Expatriate leaders are able to acquire several personality traits such as good listening skills, openmindedness, and loyalty towards firms (Jassawalla et al, 2004) resulting in successful completion of expatriate assignments. Hence, the skills acquired from been culturally intelligent can result in effective leadership.

Aishath Sheneen Ibrahim

Page 8 of 8

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