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Journal of Management

Education
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Examining Cultural Intelligence and Cross-Cultural Negotiation


Effectiveness
Kevin S. Groves, Ann Feyerherm and Minhua Gu
Journal of Management Education published online 30 July 2014
DOI: 10.1177/1052562914543273
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543273
research-article2014

JMEXXX10.1177/1052562914543273Journal of Management EducationGroves et al.

Review Article

Examining Cultural
Intelligence and
Cross-Cultural
Negotiation Effectiveness

Journal of Management Education


135
The Author(s) 2014
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DOI: 10.1177/1052562914543273
jme.sagepub.com

Kevin S. Groves1, Ann Feyerherm1,


and Minhua Gu1

Abstract
International negotiation failures are often linked to deficiencies in negotiator
cross-cultural capabilities, including limited understanding of the cultures
engaged in the transaction, an inability to communicate with persons from
different cultural backgrounds, and limited behavioral flexibility to adapt
to culturally unfamiliar contexts. Although management educators are
concerned about developing students cross-cultural capabilities, there exists
very little empirical research demonstrating the impact of such abilities on
negotiation performance. To address this limitation while advancing research
on the development of cross-cultural capabilities, we examined the impact
of cultural intelligence (CQ) on cross-cultural negotiation performance.
Using assessment center and consensus rating methodologies, 113 fully
employed MBA students participated in a negotiation exercise designed to
underscore key cultural differences with respect to both negotiation style
and substantive issues. Controlling for prior negotiation and international
experiences, personality (openness to change and extraversion), and
emotional intelligence, our results demonstrated that CQ predicted
negotiation performance while interest-based negotiation behaviors partially
mediated the CQnegotiation performance relationship. CQ capabilities
facilitated negotiators ability to demonstrate cooperative, interest-based
1Pepperdine

University, Los Angeles, CA, USA

Corresponding Author:
Kevin S. Groves, Graziadio School of Business and Management, Pepperdine University,
6100 Center Drive, Los Angeles, CA 90045, USA.
Email: kevin.groves@pepperdine.edu

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Journal of Management Education

negotiation behaviors in a negotiation context that demanded behavioral


adaptation. We conclude by discussing a series of practical implications for
management educators and suggestions for future CQ research.
Keywords
cultural intelligence, negotiation, interest-based negotiation, assessment
center, intercultural negotiation
International negotiations often fail due to a lack of understanding and
knowledge of the multiple cultures involved in the transactions (Brett &
Okumura, 1998; Gelfand et al., 2001; Tinsley & Pillutla, 1998). Prior
research suggests that deficiency in cross-cultural competence is a primary
cause of international negotiations that fail to meet both parties expectations (Gelfand & Raelo, 1999). Effective negotiators in global contexts possess the knowledge and skills to work with the nuances of communication,
values, and behavioral cues of individuals from different cultural backgrounds. As educators of current and future business leaders, we must be
concerned about the development of our students cross-cultural competencies as part of their management education experience. Equally important
for the business education community is advancing theory and research on
cross-cultural competencies in a business context (Eisenberg, Hartell, &
Stahl, 2013), particularly concerning fundamental management functions
such as negotiating agreements with customers, suppliers, government officials, and other stakeholders.
Theory and research on cross-cultural competence has evolved from a
focus on cultural knowledge to cross-cultural communication skills (Adair,
2003; Adair & Brett, 2005) to the current formulation of cultural intelligence
(Ang et al., 2007; Earley & Ang, 2003). Cultural intelligence (CQ), defined
by Earley, Ang, and Tan (2006) as a persons capability for successful adaptation to new cultural settings, that is, for unfamiliar settings attributable to
cultural context (p. 5), has been linked to task performance in cross-cultural
settings such as leadership effectiveness in cross-border contexts (Rockstuhl,
Seiler, Ang, Van Dyne, & Annen, 2011), leadership and team effectiveness
in culturally diverse teams (Groves & Feyerherm, 2011), and international
assignment effectiveness (Kim, Kirkman, & Chen, 2006). However, with
the notable exceptions of Imai and Gelfands (2010) analysis of negotiation
transcripts between parties from different national cultures, and Engle,
Elahee and Tatoglus (2013) findings that higher metacognitive CQ was
related to higher problem-solving scores in cross-cultural negotiations,

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Groves et al.

published research on the links between CQ and negotiation processes and


outcomes is largely absent.
Overall, this study addresses three critical gaps in theory and research on
the association between CQ and cross-cultural negotiation processes and performance outcomes. First, we extend the very limited empirical research of
the impact of CQ on intercultural negotiation processes. Second, we expand
the nomologial net of CQ theory by illustrating a key mediating process that
partially explains CQs effect on complex intercultural processes. While
empirical studies examining the direct effects of CQ competencies on performance outcomes are growing (e.g., Ahn & Ettner, 2013; Chua, Morris, &
Mor, 2012; Eisenberg, Lee, et al., 2013; Salmon et al., 2013), research
addressing the key explanatory mechanisms of CQs effects on intercultural
processes and performance outcomes is scarce. Third, echoing the sentiment
of a growing number of cross-cultural management education scholars (e.g.,
Blasco, 2009; Eisenberg, Hartel, et al., 2013), this study advances the fields
shift from examining cross-cultural competence as cognitive knowledge
bases to cognitive experiences and transformations via experiential exposure
to intercultural situations. Although our study does not directly address the
efficacy of an experiential, assessment center intervention for enhancing CQ
competencies, we extend cross-cultural management education research by
examining CQs direct and indirect effects on intercultural negotiation processes and outcomes in a highly experiential context that facilitates students
affective and cognitive engagement (Jones, 2003). Asserted by numerous
cross-cultural management education scholars (e.g., Blasco, 2009; Molinsky,
2007; Pless, Maak, & Stahl, 2011), intense experiential activities such as
assessment center role-playing exercises and simulations offer a much more
meaningful examination of CQs impact on complex intercultural processes.
To address the research gaps and management education needs discussed
above, we offer an empirical examination of CQ and its impact on negotiation processes and outcomes in a cross-cultural context. In a class dedicated
to developing the managerial skills of fully employed MBA students, we conducted a cross-cultural negotiation simulation in which students completed a
role-playing exercise that was subsequently assessed by a panel of assessors.
Our article is organized as follows. First, we offer a brief review of the CQ
construct and its multiple dimensions. Next, we develop a series of hypotheses through a review of the key theoretical and empirical research on CQ,
interest-based negotiation (IBN) behaviors, and negotiation outcomes in
cross-cultural contexts. After describing our sample, measures, and assessment center methodology, we present the results and discuss a series of management education implications.

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Cultural Intelligence Background


Cultural intelligence presents a unique framework to study how individuals
successfully adapt in unfamiliar surroundings (Earley et al., 2006, p. 5).
CQ not only represents the cultural knowledge that one possesses and behavioral flexibility but also the ability to reason and act on observations and
subsequent cognition in a culturally diverse setting. Similar to studies examining cognitive intelligence and the nature of emotional intelligence (EQ;
e.g., Cote & Miners, 2006), CQ comprises how ones abstract thinking and
motivation influence his or her behavior. A culturally intelligent individual
possesses the necessary background knowledge of a particular culture, as
well as the motivation to learn about new cultures and create new mental
frameworks in order to expand his or her behavioral repertoire. Earley and
Ang (2003) identified four CQ capabilities (metacognitive, cognitive, motivational, and behavioral), which are discussed below.
Metacognitive CQ is an individuals cultural consciousness and awareness
during interactions with those from different cultural backgrounds (Van Dyne,
Ang, & Koh, 2008, p. 17), which reflects the ability to actively think about key
assumptions as one is engaged in cross-cultural contexts and revise such understanding and cultural knowledge accordingly. It not only promotes active cognitive process when one faces a cross-cultural situation, it also drives the critical
thinking behind reasoning, decision making, and judgment regarding the situation. Metacognitive CQ enables individuals to evaluate and adjust cognitive
schema when cross-cultural situations are involved, particularly complex processes such as intercultural negotiations. Recently, Chua et al.s (2012) study of
executives concluded that high cultural metacognition was strongly associated
with positive outcomes in intercultural relationships, including affective closeness and creative collaboration. Further discussed below, these results offer
support for examining the potential mediating role of IBN behaviors.
Cognitive CQ is an individuals cultural knowledge of norms, practices,
and conventions in different cultural settings (Van Dyne et al., 2008, p. 17).
It reflects ones knowledge of a certain cultural setting, which encompasses
the fundamental knowledge of cultural similarities and knowledge of cultural
differences. Similar to metacognitive CQ, cognitive CQ is closely related to
decision making (Ang et al., 2007). Beyond its effects on decision making,
cognitive CQ consists of the culture knowledge base while helping one to
behave aptly in cross-cultural situations. Recently, two multinational longitudinal studies examining the effects of cross-cultural management courses on
students CQ found that in addition to significantly higher student CQ scores
at Time 2 (postcourse), the courses had much stronger effects on cognitive
and metacognitive CQ than on motivational and behavioral CQ (Eisenberg,

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Groves et al.

Lee, et al., 2013). The researchers concluded that the cognitive CQ dimensions (cognitive and metacognitive) are affected by traditional academic
classroom interventions while motivational and behavioral CQ are more
readily affected by extensive, purposefully designed experiential learning
interventions or through an intensive direct experience with other cultures,
gained by spending a meaningful amount of time abroad (Eisenberg, Lee, et
al., 2013, p. 616). Ahn and Ettners (2013) recent examination of CQ in MBA
curricula also concluded that intensive experiential activities, such as international work experiences and obtaining a degree from a foreign country, are
the most important drivers of enhancing CQ.
Motivational CQ drives attention so that one can focus on both cultural
differences and cultural similarities while also mobilizing energy toward
adapting to unfamiliar cultural contexts. Defined by Ang and Van Dyne
(2008) as the ability to direct(s) attention and energy toward cultural differences, motivational CQ is the foundation of ones self-confidence concerning the ability to deal with people and situations of a different culture. This
self-efficacy effect (Ang & Van Dyne, 2008) is critically important as it
requires a high-level personal confidence to perform successfully in a crosscultural setting (Earley et al., 2006). Imai and Gelfands (2010) research on
intercultural negotiations found that integrative information sequences and
their subsequent joint outcome gains were predicted by the negotiators motivational CQ. Most recently, Salmon et al. (2013) found evidence that motivational CQ was a significant factor in predicting the effectiveness of
manipulative mediation styles in intercultural disputes. Overall, these
research findings suggest that motivational CQ may affect the efficacy of
negotiation strategies, including manipulative, cooperative, and interestbased behaviors, for resolving intercultural conflicts.
Behavioral CQ is the ability to act appropriately when interacting with
people and situations in an unfamiliar culture. Behavioral CQ is essentially
how one can play a role very convincingly and consistently (Earley et al.,
2006) in a cross-cultural setting. Such performance demands a wide range of
behaviors that can be flexibly deployed based on the situation. Behavioral
CQ consists of the ability to properly adapt both verbal and nonverbal behavior (Ang & Van Dyne, 2008) in culturally unfamiliar contexts. Ang et al.
(2007) showed that behavioral CQ and motivational CQ are positively associated with ones cultural adjustment, well-being, and task performance.

Cultural Intelligence and Negotiation Process Behaviors


Cross-cultural negotiation is increasingly becoming an invaluable management competency that often determines an organizations success in the

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global business community. Prior research suggests that international negotiations frequently fail due to an overall lack of understanding and knowledge
of the multiple cultures involved in the transactions. For example, Adair
(2003) indicated that in high context cultures, indirect communication is
favored, while in low context cultures, direct communication is preferred.
She also discovered that it was more difficult for those from low context
cultures to adapt to the negotiation style of those from high context cultures
than vice versa. Tinsley and Pillutla (1998) argued that different cultural
groups developed negotiation strategies that were consistent with their cultural values, and thus, the joint gains of negotiation and negotiator satisfaction were moderated by culture. When Brett and Okumura (1998) examined
the simulated negotiations between Japanese and American managers, they
found that intercultural negotiation resulted in lower joint gains because both
Japanese and American negotiators used different scripts to communicate
with one another.
On the basis of CQ theory and research to date, we posit that negotiators
with high CQ should be better equipped to navigate the difficulties of negotiating in a cross-cultural context. We draw on the work of Imai and Gelfand
(2010), Gelfand et al. (2001), Busch (2012), and others in postulating that CQ
capabilities facilitate ones ability to exercise cooperative, IBN behaviors,
which are associated with stronger joint gains and overall negotiation efficacy in cross-cultural contexts. Imai and Gelfand (2010) argued that integrative negotiation processes, which draw on IBN behaviors as opposed to
competitive behaviors, are critical for determining overall negotiation effectiveness and mutually agreeable joint gains among the negotiating parties.
Because of the anxiety caused by encountering an unfamiliar culture, it is
often more difficult for negotiators from different cultural backgrounds to
behave cooperatively and flexibly during cross-cultural negotiations
(Hewston, Rubin, & Willis, 2002; Imai & Gelfand, 2010).
In their negotiation simulation study, Imai and Gelfand (2010) found that
individuals with high CQ were more likely to form cooperative relationships
during the negotiation. As demonstrated through prior CQ research, negotiators with high CQ are more agreeable, flexible, and cooperative while also
possessing greater motivation to accurately perceive the nuances inherent in
cross-cultural negotiation contexts (Ang et al., 2007; Chen, Liu, & Portnoy,
2012). When presented with the challenge of a negotiation involving culturally bound issues (e.g., issues underscored by cultural values such as individualism/collectivism, power distance, universalism/particularism, etc.) as
well as an opposing party who demonstrates a disparate negotiation style,
negotiators with high CQ will accurately perceive and decode culturally relevant information and adapt their negotiation behaviors accordingly (Hewston

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Groves et al.

et al., 2002). The behavioral flexibility demonstrated by high CQ negotiators


is also associated with the relationship-building process, which generates
greater overall joint gains that effectively meet the common interests of both
parties (Fisher & Ury, 1991). Finally, research on simulated negotiations
demonstrates that negotiation dyads engaging in complementary and cooperative relationship management behaviors are more likely to create joint
profits (Imai & Gelfand, 2010). This study concluded that overall CQ is associated with complementary and cooperative relationship management behaviors in cross-cultural negotiation contexts. On the basis of the theory and
research reviewed above, we present the following hypothesis:
Hypothesis 1: Negotiators with high CQ will demonstrate higher negotiation performance outcomes than negotiators with low CQ.

Mediating Effects of Interest-Based Negotiation Behaviors


Extending the work of Imai and Gelfand (2010) and others (Ang et al., 2007;
Chen et al., 2012) on the relationship between cooperative negotiation behaviors and negotiation outcomes, we examine the effects of CQ on IBN behaviors and subsequent negotiation outcomes. The following review of theoretical
and empirical research suggests that negotiator CQ will predict the ability to
demonstrate IBN behaviors in cross-cultural contexts. In turn, an IBN strategy will partially explain the relationship between negotiator CQ and negotiation outcomes in cross-cultural contexts. Given the nascent stage of
research on the theoretical relationships between CQ competencies and both
negotiation processes and performance outcomes in cross-cultural contexts,
as well as the incredible complexity of intercultural negotiations and disputes
(e.g., Molinsky, 2007; Salmon et al., 2013), we predict that IBN behaviors
will partially explain the positive relationship between CQ and cross-cultural
negotiation performance. Based on existing CQ theory and research, we
acknowledge the likelihood that CQ competencies affect cross-cultural negotiation performance via other explanatory processes, including the interaction
of negotiator individual differences (Barry & Friedman, 1998), interpersonal
trust (Salmon et al., 2013), problem-solving style (Engle et al., 2013), and
other processes. As such, this study adopts a conservative approach to
explaining the causal mechanism between CQ and intercultural negotiation
performance.
Negotiation processes, aside from the substantive negotiation issues,
include negotiators motivations, cognitions, behaviors, and emotions
(Thompson, Wang, & Gunia, 2010). A specific type of negotiation, IBN
depends on the parties willingness to explore the other partys interests,

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engage in creatively seeking options for resolution, rely on objective third


party criteria, and separate the people from the negotiation issues (Fisher &
Ury, 1991; Marcus, Dorn, & McNulty, 2012). Cooperative negotiation strategies such as interest-based behaviors demand communication skills such as
active listening and articulating in a way that others can clearly comprehend.
Negotiation processes that capitalize on the explicit or implicit sharing and
processing of information are critical to capturing integrative potential
(Marcus et al., 2012; Pruitt & Carnevale, 1993). Interest-based conflict resolution processes facilitate greater joint gains by engaging each party in revealing, enlarging, and generating enlightened shared interests, which expand the
range of acceptable solutions to both parties.
We postulate that negotiator CQ will predict overall cross-cultural negotiation performance while IBN behaviors will partially mediate the CQ
negotiation performance relationship. The theoretical justification for our
prediction is based on the intersection of CQ and negotiation theory, specifically the critical role of frames or the cognitive perspective that each party
uses to organize and interpret information about the negotiation issues
(Lewicki, Saunders, & Barry, 2006). Negotiation theorists assert that the
frames or perspectives assembled by each party are self-generated, fundamentally affected by cultural values and assumptions, and reflect both substantive
and symbolic interests (Marcus et al., 2012). As such, the negotiation parties
must achieve a profound understanding of one anothers interests, based on
both substantive negotiation issues and symbolic interests associated with cultural values, to collectively reframe how they perceive and generate the range
of options for arriving at a mutually acceptable solution. Based on the CQ
theory and research reviewed below, we contend that CQ competencies facilitate the requisite reframing that drives effective IBN behaviors and ultimately performance outcomes in cross-cultural negotiations.
Recent research supports the contention that CQ competencies are associated with the ability to demonstrate IBN behaviors in cross-cultural negotiation contexts. Related to metacognitive CQ, Antal and Friedman (2008)
describe negotiating reality as a process whereby people become aware of
their culturally shaped interpretations to a given situation, openly inquire into
the interpretations of others, jointly test their interpretations, and design
action strategies that make sense to all parties (p. 364). Similarly, a series of
quasi-field and experimental studies found strong support for the impact of a
key metacognitive strategycultural perspective takingon intercultural
coordination and cooperation (Mor, Morris, & Joh, 2013). Recently, Imai and
Gelfands (2010) study of intercultural negotiations concluded that integrative information sequences and their subsequent joint outcome gains were
driven by the negotiators motivational CQ.

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Effective IBN behaviors require each party to engage in multidimensional


problem solving that reveals the tangible and intangible gains that each
party hopes to achieve, the relative power and influence of each of the stakeholders, the experiences that each party brings to the table, and the history of
the parties relationship to each other (Marcus et al., 2012, p. 340).
Importantly, the breadth of issues relevant to the negotiation will be perceived
differently by each party according to their own perspectives and cultural
assumptions. Prior research suggests that CQ competencies are associated
with more advanced, multidimensional problem-solving skills and a general
willingness to exert cognitive effort for complex, analytical thinking that
leads to a greater range of negotiation solutions addressing mutual interests.
Engle et al. (2013) found that higher metacognitive CQ scores of both Turkish
and U.S. students were related to higher problem-solving scores in crosscultural negotiations. Along a similar vein, recent research suggests that cognitive motivation and complexity also provide an avenue to successful
cooperative negotiation strategies and the ability to demonstrate IBN behaviors. Schei, Rognes, and Mykland (2006) found that cognitive motivation,
defined as a stable individual difference in the tendency to engage in arduous, analytical thinking (p. 74) helped sellers achieve more integrative outcomes. Kassin, Reddy, and Tulloch (1990) concluded that high cognitive
motivation aided negotiators in remembering more information cues, while
Osberg (1987) noted that such negotiators are more likely to focus energetically on cognitive tasks. Berzonsky and Sullivan (1992) found that individuals with high cognitive motivation actively searched for and used relevant
information. Pruitt and Lewis (1975) found that individuals with higher cognitive complexity were more likely to reach integrative solutions, when coupled with high levels of communication. Overall, cognitively complex
individuals are more likely to entertain alternative scenarios and gather and
integrate more information into their decision making.
Given that cognitive motivation and complexity are likely to produce IBN
behaviors and integrative negotiation outcomes, in concert with the research
reviewed above, it follows that high CQ negotiators (incorporating metacognitive, cognitive, and motivation dimensions) are more likely to exhibit IBN
behaviors. Individuals with high metacognitive CQ, conceptually similar to
cognitive complexity, are able to evaluate and adjust their cognitive schema
in cross-cultural negotiation contexts. As such, they are more likely to reconsider culturally bound thinking and revise their understanding of the negotiation context through IBN behaviors that challenge ones own assumptions
about the other party (e.g., asking questions about the other partys goals and
interests, demonstrating active listening skills via reflective and clarification
questions, avoiding discussion of hard positions, etc.). Similarly, individuals

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with high motivational CQ, which is conceptually consistent with key aspects
of cognitive motivation, are more likely to demonstrate the requisite drive,
curiosity, and cognitive attention to exercise IBN behaviors in cross-cultural
negotiation contexts. An individuals attraction to and willingness to sustain
effort in a culturally unfamiliar context is likely associated with the ability to
actively search for relevant information, propose and critically evaluate alternative scenarios, and integrate more diverse information into decision making, all of which are fundamental IBN behaviors (Fisher & Ury, 1991).
In addition to cognitive complexity and cognitive motivation, other
research streams suggest that individuals with behavioral flexibility are more
likely to demonstrate IBN behaviors. A problem-solving orientation was seen
to have had a positive effect on dyads reaching a more integrative solution by
encouraging heuristic trial and error and inhibiting behavior that would lead
to a more distributive solution (Pruitt & Lewis, 1975). This trial-and-error
approach indicated behavioral flexibility on the part of the negotiators who
were able to achieve integrative solutions. Behavioral flexibility is conceptually consistent with behavioral CQ, which taps ones ability to use a broad
range of verbal and nonverbal behaviors that are appropriate for varied cultural contexts (Van Dyne et al., 2008). Similarly, prior research has demonstrated that behavioral mimicry improves the joint gains of the party that
invokes subtle mimicry behavior (Maddux, Mullen, & Galinsky, 2007).
Mimicry requires negotiators to be attentive to the behaviors of counterparts
so that they can make in-the-moment adjustments to their own behaviors.
Based on the research reviewed above, we offer the following hypotheses:
Hypothesis 2: Negotiators with high CQ will demonstrate greater IBN
behaviors than negotiators with low CQ.
Hypothesis 3: Interest-based negotiation behaviors will partially mediate
the relationship between negotiator CQ and negotiation performance.

Method
Sample
A total of 113 fully employed MBA students, each representing a different
organization, participated in this study. The reported ethnic background of
the sample was as follows: 43% Hispanic/Latin American (n = 49), 28%
Asian American (n = 32), 15% Multiethnic (n = 17), 5% Caucasian (n = 6),
4% African American (n = 5), and 3.5% Native Hawaiian/Other Pacific
Islander (n = 4). The reported nationality was as follows: 40% United States
(n = 45), 17% China (n = 19), 13% Mexico (n = 15), 6% Philippines (n = 7),

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Groves et al.

5% El Salvador (n = 6), 3% Saudi Arabia (n = 3), 4% Vietnam (n = 5), 3%


Armenia (n = 3), and 9% other nationalities (n = 10). Fifty-eight percent (n =
65) of the participants were female, and the mean age was 33.21 years (SD =
3.96). Drawn from a diverse mix of industries, including financial services
(n = 19, 17%), aerospace (n = 16, 14%), health care (n = 17, 15%), hospitality
(n = 14, 12%), government services (n = 14, 12%), the participants reported
their position title as department supervisors or frontline managers (n = 45,
40%), project team leaders (n = 42, 37%), regional or district managers (n =
15, 13%), and executive-level managers (n = 11, 10%).

Procedure
Participant Recruitment. The participants were recruited from the part-time
MBA program at a medium-sized public university in Southwestern United
States. The participants were fully employed MBA students enrolled in three
sections of a Managerial Skills course taught by the first author over the
course of three consecutive academic quarters. The three sections consisted
of 36, 38, and 39 students (113 overall), respectively. The learning objectives
of the course centered on the assessment and development of a series of management skills, including performance feedback, conflict mediation, developing teams, and negotiation. During the first week of the course, students
were asked to complete an online survey that measured CQ and a series of
demographic, work background, and psychometric questions. During the
first 3 weeks of the course, students were also asked to participate in an
assessment center negotiation exercise that would elicit important feedback
on their negotiation skills in a cross-cultural context. As detailed below, all
students completed the negotiation exercise prior to the delivery of any
course content or learning activities addressing negotiation skills. The course
content and learning activities addressing negotiation skills was delivered
during the final 2 weeks of the term. No part of the course addressed CQ,
leading diverse teams, or other topical areas related to cross-cultural skills.
Assessment Center Development. The assessment center was developed by
first selecting a cross-cultural negotiation exercise from the Dispute Resolution Research Center at Northwestern Universitys Kellogg School of
Management. The selected negotiation exercise, International Lodging
Merger (negotiationexercises.com/Details.aspx?ItemID=116), was modified to suit the present studys goals. This exercise was an integrative negotiation about the merger of U.S. and Brazilian hotel chains. The exercise
was designed to motivate culturally different behaviors from the negotiators, as key cultural differences between the United States and Brazil (e.g.,

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power distance, individualism/collectivism, universalism/particularism)


are integrated into the exercise. For the purpose of the present study, the
exercise was modified so that each participant (n = 113) performed the role
of the negotiator for the U.S. hotel chain (Lambert Hotel) and a trained
graduate student played the role of the negotiator for the Brazilian hotel
chain (AAA Hotel). The exercise instructions for each role included general
background information on both hotel chains and Lamberts recent overtures to AAA for the purpose of acquiring AAAs chain of properties.
Although the original exercise included seven substantive negotiation
issues, the exercise was modified to include three such issues: (a) number
of voting seats on the 8-person executive board for each firm, (b) the management of AAA hotels after the merger, and (c) the incentive compensation plan for AAA hotel managers. These three issues were selected for the
exercise because they underscored key cultural differences between negotiators from national cultures that diverge across national values (e.g.,
power distance, individualism/collectivism, universalism/particularism,
masculinity, low/high context communication, etc.).
Given the present studys goal of assessing the impact of CQ on negotiation performance outcomes, we sought to create a cross-cultural negotiation
context whereby participants engaged with a negotiator demonstrating a
negotiation style that was significantly different from their own style. The
behavioral manipulation of the AAA managers negotiation style served the
purpose of testing the participants adaptation to an unfamiliar negotiation
context attributable to the cultural context, which meets Earley et al.s (2006)
definition of CQ. The role for the AAA hotel negotiator included several
behavioral instructions intended to emphasize cultural differences concerning aspects of negotiation style. Supported by theory and research (e.g., Brew
& Cairns, 2004; Gelfand & Christakopoulou, 1999; Volkema & Fleury, 2002)
on negotiation style differences between negotiators whose values are aligned
with the United States (low power distance, high individualism, high masculinity, high universalism, low-context communication, etc.) in contrast with
negotiators whose values are aligned with Brazil (high power distance, high
collectivism, low masculinity, high particularism, high-context communication, etc.), the AAA negotiator was instructed to negotiate indirectly, patiently,
unemotionally, and passively (see the appendix).
The participants were instructed to complete the exercise within a
20-minute time limit. The participants were provided the role play instructions for the Lambert Hotel manager on arriving at the conference room
facility. They were given 30 minutes to review the role play instructions and
prepare for the negotiation. Each negotiation was recorded via video camera
for subsequent assessment by a panel of three assessors. To minimize the

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effects of AAA negotiator fatigue, a maximum of six negotiation exercises


were conducted in a single session.
The graduate student playing the role of the AAA Hotel manager completed several training sessions conducted by the first author. The goal of the
training sessions was to prepare the student to demonstrate the negotiation
style of the AAA negotiator role. The AAA Hotel managers stated goals were
to (a) obtain multiple members on the executive board as . . . this issue is a
point of pride . . . you do not want to be taken over by Lambertyou desire a
merger that is respectful of your identity and accomplishments as AAA; (b)
minimize any disruption to the existing management of the AAA Hotel properties (you are proud of AAAs success, and you see little need to change the
way you operate your hotels . . . you realize that a merger will probably involve
some standardization of practices); and (c) minimize contingent incentives
for AAA property managers (. . . you want to continue the family atmosphere
among managers and discourage competitive behaviors whereby they refuse
to help one another, or lobby for specific properties [that are easier to make a
profit]). The graduate student completed readings on cross-cultural negotiations, reviewed films of cross-cultural negotiations, and conducted 10 mock
negotiations using the modified International Lodging Merger exercise. The
mock negotiations were video-recorded and subsequently reviewed and evaluated by the graduate student and first author for the purpose of role performance improvement. The video-recorded mock negotiations were also used to
develop assessment instruments concerning negotiation process skills (interest-based behaviors) and negotiation performance outcomes.
Assessor Training. Three assessors were trained to provide assessments of the
video-recorded negotiations. The assessors included the first author and two
faculty members from the universitys business school with disciplinary
training in organizational behavior and cross-cultural/comparative management. The assessors completed a 1-day intensive workshop for the purpose of
developing skills in methods of observation and recording and categorizing
negotiation behaviors reflecting the negotiation variables (e.g., interest-based
skills and negotiation performance outcomes). The assessors conducted
assessments of the 10 video-recorded mock negotiation exercises completed
by the graduate student and several volunteer graduate students (none of
whom were participants in the present study). The training workshop was
intended to assist the assessors with developing a common understanding of
the negotiation behaviors and dimensions being observed and evaluated. The
workshop was also designed to teach the assessors which negotiation behaviors to observe and how to observe them accurately using the behavioral
instruments described below.

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Assessment Center Instruments.Two assessment instruments were developed


for the purpose of measuring the IBN behaviors and performance outcomes of
the Lambert Hotel negotiator (participant role). Based on the scoring sheet that
accompanied the International Lodging Merger exercise, the first assessment
instrument was developed to measure the negotiation performance outcomes
for the Lambert Hotel negotiator. Based on the three substantive negotiation
issues addressed in the exercise, as well as analysis of the video-recorded mock
negotiations that were used in the AAA Hotel negotiator training sessions, the
negotiation performance instrument consisted of three assessment items (one
for each substantive negotiation issue). The first assessment item rated the
Lambert Hotel negotiators performance according to the number of AAA
Hotel voting seats on the 8-person executive board. The second assessment
item rated the negotiators performance according to the management of the
AAA Hotel properties after completion of the merger. The third and final
assessment item rated the negotiators performance according to the management incentive policy for AAA Hotel properties after completion of the merger.
Each assessment item was measured on a 6-point scale according to the
stated goals of the negotiation for the Lambert Hotel manager (see the appendix). The Lambert Hotel managers goals (as stated in the exercise role play
instructions) were to (a) obtain as many voting seats on the board as possible
(to prevent . . . a voting block of [AAA board members] that could disrupt
the delicate dynamics of Lambert boards decision-making); (b) improve the
management practices at the AAA Hotel properties (Lambert has built its
reputation on the consistency of its properties and services . . . you would like
to see experienced Lambert managers operating all of the AAA properties,
but you are willing to consider other approaches to the consistency and management efficiency challenges); and (c) implement a contingent pay plan for
AAA property managers (. . . you prefer to pay your managers contingent on
the performance of their properties.). The instrument was pilot tested with
the 10 mock negotiation exercises conducted during the training session for
the AAA Hotel negotiator role. After the assessor panel conducted consensus
ratings (described in detail below) of each negotiation performance item as
part of the training session for the AAA Hotel negotiator, we conducted an
internal reliability test of the three negotiation performance items. The resulting Cronbach alpha of .86 for the pilot test demonstrated support for the
internal reliability of the instrument.
The second assessment instrument was developed to measure the frequency of the participants demonstrated IBN behaviors. Based on existing
theoretical and empirical research on IBN behaviors (Fisher & Ury, 1991;
Kolb, 2004; Kopelman & Olekalns, 1999; Leventhal, 2006; Maddux et al.,
2007; Senger, 2002), a seven-item measure was developed (see the appendix)

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and pilot tested with the 10 mock negotiation exercises conducted during the
training session for the AAA Hotel negotiator role. The seven behavioral
items were assessed according to the frequency of behaviors demonstrated
during the exercise (1 = not at all, 2 = rarely, 3 = occasionally, 4 = fairly
often, and 5 = very frequently). After the assessor panel conducted consensus
ratings (described in detail below) of each individual item as part of the assessor training session, we conducted an internal reliability test of the sevenitem scale. The resulting Cronbach alpha of .83 for the pilot test demonstrated
support for the internal reliability of the scale.
Consensus Ratings. On the basis of prior validation research concerning the
aggregation of assessor ratings of behavioral exercises, we opted to conduct
consensus ratings for measuring negotiation performance outcomes and IBN
behaviors. After viewing each video-recorded exercise, the assessors completed individual ratings of the behavioral exercises and then immediately
conducted consensus ratings. Used in prior empirical studies (Earley, 1999;
Gibson, 1999; Tziner, Ronen, & Hacohen, 1993), the consensus method
involves presenting a panel with a rating scale for the purpose of forming a
single group response to a set of items. After discussing each item, the panel
uses consensus decision-making techniques to determine an agreed on rating
on a Likert-type scale.
Prior empirical research by Kirkman, Tesluk, and Rosen (2001); Pulakos,
Schmit, Whitney, and Smith (1996); and Kleiman, Lounsbury, and Faley
(1987) demonstrates the incremental validity of consensus ratings beyond the
aggregation method of individual ratings. Because the consensus process
demands that assessors discuss their ratings for each scale item, rich contextual and nuanced information concerning the behavioral performance is
shared and deliberated across panel members (Kirkman et al., 2001). Gibson,
Randel, and Earleys (2000) experimental study of a negotiation task concluded that, regardless of whether consensus ratings occurred before or after
individual ratings were completed, the consensus method was a superior predictor of multiple performance indicators compared with aggregated individual ratings. Kleiman et al.s (1987) study of job performance ratings found
that consensus ratings possessed significantly fewer halo and leniency errors
and greater validity compared with aggregated ratings. Finally, Pulakos et al.
(1996) found that consensus ratings demonstrated significantly higher validities of interviewer ratings compared with an aggregation of individual interviewers ratings. The authors concluded that consensus ratings may produce
significantly higher validities because . . . the consensus process increased
interviewers accountability (to their peers) and hence the accuracy of their
ratings (Pulakos et al., 1996, p. 99).

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Manipulation Check. On completion of the negotiation exercise, participants


completed a short survey that included two manipulation check items. On a
Likert-type scale (1 = Strongly disagree, 2 = Disagree, 3 = Neither disagree
nor agree, 4 = Agree, and 5 = Strongly agree), participants responded to the
following statements: The AAA negotiator had a very different negotiating
style than my own (M = 4.56, SD = 1.02; 93% responded either Agree or
Strongly agree), and The AAA negotiator demonstrated significantly different cultural values than my own (M = 4.43, SD = 1.04; 90% responded either
Agree or Strongly agree).

Measures
Negotiation Performance.A panel of three assessors observed each of the
video-recorded negotiations and conducted group consensus ratings using the
negotiation performance assessment instrument (see the appendix). To limit
the effects of assessor fatigue, the panel conducted assessments for no more
than six exercises in a single session. The assessor panel conducted consensus ratings of each negotiation performance item: (a) number of voting seats
on the 8-person executive board to be controlled by AAA Hotel, (b) management of AAA Hotel properties, and (c) management incentives for AAA
Hotel property managers.
Interest-Based Negotiation Behaviors.The same three-assessor panel observed
each of the video-recorded negotiations and conducted group consensus ratings
using the IBN behaviors assessment instrument (see the appendix). The assessor panel conducted consensus ratings of the seven IBN items according to the
following scale (1 = not at all, 2 = rarely, 3 = occasionally, 4 = fairly often, and
5 = very frequently). The Cronbach alpha for the seven-item scale was .85.
Cultural Intelligence. Cultural intelligence was measured by Ang et al.s (2007)
20-item self-report scale comprising the following subscales: metacognitive
(checks the accuracy of his/her cultural knowledge as he/she interacts with
people from different cultures; four items; = .88), cognitive (knows the
rules for expressing nonverbal behaviors in other cultures; six items; =
.91), motivational (enjoys interacting with people from different cultures;
five items; = .86), and behavioral (changes his/her non-verbal behavior
when a cross-cultural situation requires it; five items; = .87). Respondents
completed the scales according to a 7-point scale (1 = strongly disagree; 7 =
strongly agree). Overall, the CQ scale demonstrated strong internal reliability
( = .90). The means of the four subscales were calculated and then averaged
to produce an overall CQ mean.

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Control Variables
Emotional Intelligence.Emotional intelligence was measured by Wong and
Laws (2002) 16-item, self-report measure based on the Mayer and Salovey
(1997) model of EQ. EQ was included as a control variable to more readily
demonstrate the incremental validity of CQ in a cross-cultural performance
context beyond the effects of a competing competency. Earley and Angs
(2003) seminal work on CQ asserts that EQ competencies should not transfer
across nationalities because a persons ability to anticipate and react to the
affective states of work colleagues differs considerably across cultures. Consistent with prior research that assessed the predictive validity of CQ beyond
the effects of EQ in cross-cultural performance contexts (e.g., Crowne, 2013;
Groves & Feyerherm, 2011; Rockstuhl et al., 2011), and specifically crosscultural negotiation (Imai & Gelfand, 2010), the present study included EQ
as a control variable for hypothesis testing. The measure includes the following four-item subscales: self-emotion appraisal (I have a good understanding of my own emotions; = .88), others emotion appraisal (I am sensitive
to the feelings and emotions of others; = .84), use of emotion (I am a
self-motivated person; = .90), and regulation of emotion (I have good
control of my own emotions; = .91). Respondents completed the scales
according to a 7-point scale (1 = strongly disagree; 7 = strongly agree). Overall, the EQ scale demonstrated strong internal reliability ( = .92). The means
of the four subscales were calculated and then averaged to produce an overall
EQ mean (M = 5.36, SD = 1.00).
International Experience. Prior research suggests that length and intensity of
international experiences may be associated with the development of cultural intelligence (Ang & Van Dyne, 2008; Crowne, 2013). To control for
the influence of negotiators prior international experiences, we used
Takeuchi, Tesluk, Yun, and Lepaks (2005) measure of international experience as the total length of time the participants spent living abroad. Participants were asked to list in chronological order the countries and duration of
living experiences abroad. The total list of living experiences abroad were
summed and converted to weeks as the international experience variable (M =
28.05, SD = 5.99).
Negotiation Experience.To control for the depth of the negotiators prior
negotiation experiences, which may influence the relationships among the
study variables (e.g., Imai & Gelfand, 2010), participants were asked to
report the level of prior negotiation experiences with the following question:
According to the following scale, how much prior experience do you have

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in formal negotiations? The scale consisted of the following: 1 = no experience, 2 = little experience, 3 = some experience, 4 = significant experience,
5 = substantial experience, and resulted in a mean of 2.55 (SD = 0.89).
Openness to Experience and Extraversion. To control for individual difference
characteristics that prior research has found to affect CQ and negotiation outcomes in intercultural contexts (e.g., Ang, Van Dyne, & Koh, 2006; Imai &
Gelfand, 2010; Ma & Jaeger, 2005), the present study included openness to
experience and extraversion as control variables in hypothesis testing. The
inclusion of these personality traits allows for a more conservative assessment of whether CQ is associated with IBN behaviors and performance outcomes in a cross-cultural negotiation context. The personality traits openness
to experience and extraversion were measured with John and Srivastavas
(1999) Big Five personality assessment. Respondents completed the scales
according to a 7-point scale (1 = extremely uncharacteristic to 7 = extremely
characteristic). The 10-item openness to experience scale (Is curious about
many different things; = .88) and 8-item extraversion scale (Is outgoing,
sociable; = .89) demonstrated acceptable Cronbach reliability estimates.
The mean scores for openness to experience and extraversion were 4.59
(SD = 0.91) and 4.68 (SD = 0.67), respectively.

Results
Preliminary Analyses
Potential Interactive Effects of Ethnicity and Nationality. Given the potential for
participant ethnic background and/or nationality to significantly interact with
the studys key variables, we tested for any significant differences between
the major ethnic backgrounds or major nationalities across IBN behaviors
and negotiation performance. Tukeys honestly significant difference (HSD)
test identified no significant differences across the major ethnic backgrounds
(Hispanic/Latin American, Asian American, Multiethnic, Caucasian, African
American, Native Hawaiian/Other Pacific Islander) for IBN or negotiation
performance. Similarly, Tukeys HSD test again revealed no significant differences between the main nationalities represented in the sample (United
States, China, Mexico, Philippines, El Salvador, Saudi Arabia, Vietnam, and
Armenia) for IBN or negotiation performance.
Measurement Model.Prior to testing the hypotheses, confirmatory factor
analyses (CFA) were conducted to provide support for the construct validity
of the study variables. Given consistent research findings regarding the most

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Groves et al.

appropriate fit indices for conducting CFA analyses (Sharma, Mukherjee,


Kumar, & Dillon, 2005; Shevlin & Miles, 1998; Wolf, Harrington, Clark, &
Miller, 2013), we tested a measurement model using the following goodnessof-fit indices: TuckerLewis index (TLI), relative noncentrality index (RNI),
normed noncentrality parameter (NNCP), and root mean square error of
approximation (RMSEA). The measurement model tested the self-report
variables, which included the four CQ capabilities (metacognitive, cognitive,
motivational, and behavioral), EQ, openness to experience, extraversion, and
IBN behaviors. Using Amos software, (Arbuckle, 1999), the measurement
model was tested to assess whether each of the measurement items would
load significantly onto their respective scales. Consistent with prior structural
equation modeling (SEM) research concluding that measurement models
with three indicators per latent construct are ideal while such models can
carry up to five indicators without estimation problems, we completed a parceling procedure for those constructs with more than five items. Parceling
offers the benefits of reducing random errors, simplifying the measurement
model, and maintaining the structural integrity of models that include multiple-indicator constructs. For those variables with more than five items (EQ,
openness to experience, extraversion, and IBN behaviors), the items for each
variable were randomly parceled into three composite indicators and entered
into the measurement model. For cultural intelligence (four subscales), the
respective subscales were entered into the model as indicators of the latent
construct.
Based on these conventional indices, an eight-factor model demonstrated
a reasonable degree of fit: TLI = .94, RNI = .94, NNCP = .92, and RMSEA =
.06. All loadings were statistically significant and the structure coefficients
demonstrated that each item loaded highest with their specified latent factor.
This model was compared with a single-factorial solution, which provided
significantly worse fit: TLI = .77, RNI = .77, NNCP = .72, and RMSEA = .13.
Overall, the results from CFA analyses demonstrated support for the variables as distinct constructs.

Hypothesis Testing
The following section includes the results of hypothesis tests using hierarchical regression analyses. We chose this analysis approach in lieu of SEM
given the considerable research on the impact of sample size, indicators, and
factor loadings on SEM results. Barrett (2007), Bentler (2007), and Wolf
et al. (2013) indicate the significant challenges of using SEM analyses on
small sample sizes, as Bentler (2007) cautions about samples of less than
100 while Barrett (2007) asserts that SEM analyses based on samples of

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less than 200 should simply be rejected outright . . . unless the population
from which the sample is hypothesized to be drawn is itself small or restricted
in size (p. 820). Furthermore, Wolf et al. (2013) assert that mediation models with smaller direct effects require larger sample sizes to achieve acceptable statistical power. Given the relatively small sample size in the present
study as well as the expectation of relatively modest effect sizes in light of
the current state of research on CQ competencies and cross-cultural negotiation performance, we chose to use hierarchical regression analysis for
hypothesis testing.
Table 1 presents the means, standard deviations, and correlation coefficients among the primary study variables. Openness to experience, extraversion, and EQ demonstrated significant positive relationships with Overall
CQ (range of r = .30 to r = .49) and the CQ dimensions (range of r = .21 to
r = .48). Cultural intelligence was associated with both IBN behavior (r =
.35, p < .01) and negotiation performance (r = .49, p < .01). The CQ subscales were moderately correlated with one another (r = .21, p < .05 to r =
.45, p < .01). Finally, IBN behaviors were related to negotiation performance
(r = .48, p < .01).

Cultural Intelligence and Negotiation Performance


Hypothesis 1 predicted that negotiators with high CQ would demonstrate
higher negotiation performance than negotiators with low CQ. The results
of hierarchical regression analysis testing the effects of the CQ competencies on negotiation performance are presented in Table 2. After entering
international experience, negotiation experience, openness to experience,
extraversion, and EQ into the model (Step 1), Step 2 illustrates that cognitive CQ ( = .29, p < .05) and behavioral CQ ( = .26, p < .05) explained
unique variance in negotiation performance (R2 = .28, F = 9.77, p < .05).
In comparison, none of the control variables were significantly associated
with negotiation performance in Step 2. Overall, these results offer support
for Hypothesis 1.

Mediating Effects of Interest-Based Negotiation Behaviors


Hypothesis 2 predicted that negotiators with high CQ would demonstrate
greater IBN than negotiators with low CQ, while Hypothesis 3 predicted
that IBN behaviors would partially mediate the relationship between negotiator CQ and negotiation performance. Table 3 presents the results of a
series of regression analyses testing the mediating effects of IBN behaviors.
To test for mediation, we followed Baron and Kennys (1986) suggested

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.13
.13
.03
.09
.10
.12
.09
.03
.09
.01
.17
.18
.23*

Note. N = 113. Italicized coefficients are Cronbach alphas.


a1 = Male and 2 = Female.
*p < .05. **p < .01.

1.Gendera

1.58 (0.50)
2.Age
33.21 (3.96)
3. International Experience
28.05 (5.99)
4. Negotiation Experience
2.55 (0.89)
5.Openness to Experience
4.59 (0.91)
6.Extraversion
4.68 (0.67)
7. Emotional Intelligence
5.36 (1.00)
8. Overall CQ
4.32 (1.07)
9. Metacognitive CQ
4.91 (1.21)
10. Cognitive CQ
3.32 (1.39)
11. Motivational CQ
5.07 (1.19)
12. Behavioral CQ
4.29 (1.34)
13.Interest-based Negotiation 3.49 (1.17)
14.Negotiation Performance
3.90 (1.31)

M (SD)

.67**
.08
.09
.06
.05
.16
.18
.16
.06
.10
.03
.13

.08
.09
.06
.05
.16
.18
.16
.06
.10
.03
.14

.18 .88
.03 .52** .89
.15 .46** .49**
.08 .30** .36**
.09 .28** .42**
.05 .26** .24**
.12 .24*
.31**
.03 .21*
.27**
.04 .15
.19*
.08 .01 .06

.92
.49**
.50**
.32**
.48**
.31**
.05
.04

Table 1. Means, Standard Deviations, and Correlation Coefficients of Study Variables.

.90
.66**
.65**
.74**
.74**
.35**
.49**

.88
.31**
.21*
.40**
.29**
.41**

.91
.36**
.22**
.32**
.47**

10

12

13

14

.86

.45** .87

.22* .30** .85

.26** .43** .48** .90

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Table 2. Results of Regression Analyses for Testing the Effects of CQ Facets on


Negotiation Performance.a
Variables

Step 1

Step 2

International Experience
Negotiation Experience
Openness to Experience
Extraversion
Emotional Intelligence
Metacognitive CQ
Cognitive CQ
Motivational CQ
Behavioral CQ
R2
Total R2
F
Total F

.14
.06
.04
.08
.04

.04
.06
.02
.19
.15
.24
.29*
.14
.26*
.28
.31
9.22*
9.77

.03
.03
.55
.55

Note. N = 113.
aStandardized regression coefficients are shown.
*p < .05. **p < .01.

mediation analyses. First, we tested the direct relationship between the CQ


competencies and the mediator, IBN behaviors. As illustrated in the first
column of Table 3, metacognitive CQ ( = .30, p < .05), cognitive CQ ( =
.33, p < .05), and behavioral CQ ( = .27, p < .05) were positively associated with IBN behaviors. These results offer strong support for Hypothesis 2.
Second, we tested the direct relationships between the CQ competencies
and negotiation performance, which are listed in Step 1 of the regression
model. Next, we added the mediator, IBN behaviors, to the regression
model in Step 2 (third column). As anticipated in Hypothesis 3, the presence of IBN behaviors in the model considerably reduced the strength of
the relationship between the CQ competencies and negotiation performance. Baron and Kennys recommended mediation analyses showed that
IBN behaviors satisfied all three conditions for partial mediation: (a) metacognitive CQ, cognitive CQ, and behavioral CQ were strongly associated
with IBN behaviors; (b) cognitive CQ and behavioral CQ were strongly
associated with negotiation performance; and (c) the relationship between
all four CQ competencies and negotiation performance lessened significantly when IBN behaviors was entered into the regression model. To test
the significance and stability of this change, Sobels (1982) method found
that the beta weight changes for cognitive CQ (z = 4.01, p < .01) and

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Groves et al.
Table 3. Results of Hierarchical Regression Analyses for Testing the Mediating
Effect of IBN Behaviors.a
Negotiation Performance

International Experience
Negotiation Experience
Openness to Experience
Extraversion
Emotional Intelligence
Metacognitive CQ
Cognitive CQ
Motivational CQ
Behavioral CQ
Interest-based Negotiation
R2
Total R2
F
Total F

IBN Behaviors

Step 1

Step 2

.07
.04
.12
.25*
.15
.30*
.33*
.20
.27*

.04
.06
.02
.19
.15
.24
.29*
.14
.26*

.25
.25
3.44**
3.44

.31
.31
9.77**
9.77

.08
.04
.06
.02
.05
.12
.15
.04
.11
.41**
.07
.37
16.05**
25.82

Note. N = 113.
aStandardized regression coefficients are shown.
*p < .05. **p < .01.

behavioral CQ (z = 3.89, p < .01) were statistically significant. Thus,


Hypothesis 3 was supported.

Discussion
We set out to address an important gap in the cross-cultural negotiation literature by examining the impact of negotiator CQ on IBN behaviors and negotiation performance. Despite the clear need for managers to possess the
ability to effectively negotiate across cultures in an increasingly global business environment, there exists very little empirical evidence for the predictors of cross-cultural negotiation effectiveness. The results of our study
demonstrate that CQ is strongly associated with negotiation performance outcomes, while IBN behaviors partially mediate the relationship between CQ
and negotiation performance. Cultural intelligence capabilities facilitated the
negotiators ability to demonstrate IBN behaviors in a negotiation context
that demanded behavioral adaptation. Perhaps due to a lessening of the anxiety caused by encountering an unfamiliar culture in a negotiation context,

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high CQ negotiators possessed both the capability to behave cooperatively


and flexibly (Hewston et al., 2002; Imai & Gelfand, 2010) as well as the
motivation to engage in a demanding task that required knowledge of cultural
differences between the negotiation parties (Schei et al., 2006). High CQ
afforded negotiators the ability to accurately perceive and decode culturally
relevant information and adapt their negotiation behaviors accordingly
(Hewston et al., 2002). Furthermore, cognitive CQ and behavioral CQ were
the strongest predictors of negotiation performance beyond the effects of
prior international and negotiation experiences, openness to experience,
extraversion, and EQ.

Implications for Theory


Our findings offer a valuable contribution to the negotiation and CQ research
literatures concerning the predictors of cross-cultural negotiation effectiveness. With few exceptions (e.g., Imai & Gelfand, 2010), the negotiation literature largely includes cross-cultural comparisons of negotiation processes
and outcomes while the present study offers direct evidence of CQ as a capability that predicts negotiation performance in a cross-cultural context.
Furthermore, this study represents the first known application of assessment
center and consensus rating methodologies to test the capabilities that predict
cross-cultural negotiation performance.
Our findings also add to the growing body of empirical CQ research.
First, this study expands CQs nomological network by demonstrating a
relationship between CQ and an objective behavioral outcome, adding to the
many affective outcomes (cross-cultural adjustment, expatriate adjustment,
integration in multinational teams, etc.) that comprise CQ empirical research
to date (Ang et al., 2007; Flaherty, 2008; Shaffer & Miller, 2008). Our findings also provide initial support for an explanatory mechanism that links CQ
capabilities and negotiation performance outcomes in cross-cultural contexts. IBN behaviors partially mediated the relationship between CQ (cognitive and behavioral) and negotiation performance, suggesting that high CQ
negotiators are more likely to reconsider culturally bound thinking and
revise their understanding of cross-cultural negotiation contexts through
IBN behaviors that focus on challenging ones assumptions about the other
party (e.g., asking questions about the other partys goals and interests, demonstrating active listening skills via reflective and clarification questions,
avoiding discussion of hard positions, etc.). The finding that IBN behavior
partially mediates the CQnegotiation performance relationship offers first
time support for the explanatory mechanisms of CQ on negotiation performance in cross-cultural contexts while also providing important links to

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Groves et al.

research on cognitive complexity and cognitive motivation as mediating


cross-cultural negotiation performance outcomes (Berzonsky & Sullivan,
1992; Kassin et al., 1990; Schei et al., 2006).

Implications for Management Education


Our findings point to several implications for management education, specifically negotiation, cross-cultural management, and the potential transferability to the workplace. Since CQ is a malleable capability, it can be
developed through education and intercultural experiences (Van Dyne et al.,
2012). Given the impact of CQ on negotiation performance outcomes, particularly cultural knowledge and behavioral adaptability across cultural contexts, it follows that management education in negotiation should include the
development and behavioral demonstration of cross-cultural knowledge.
Indeed, as Moon (2010) points out in his example of Walmarts difficulties
entering Germany, the organizations cultural intelligence was lacking in that
the CEO and top management team did very little to generate integrative
routines that would increase adaptability across cultures. Firm-level research
concludes that the CQ of the top management team is a valuable resource to
the organizations CQ and ability to operate in multiple cultures (Ang &
Inkpen, 2008).
In our analyses, two CQ dimensions stood out for further examination and
discussion with respect to implications for management education. Cognitive
CQ, which is developed from ones understanding the specifics of a countrys
culture, norms, habits, and practices, is often included in cross-cultural education courses by exposing students to different countries relative to certain cultural dimensions (e.g., Hofstede, 1980). Similarly, negotiation education
frequently incorporates didactic learning (or principle-based learning); however, by itself this learning modality is not as effective as other types of learning processes (Nadler, Thompson, & Van Boven, 2003) for development of
cross-cultural capabilities (Eisenberg, Hartel, et al., 2013; Szkudlarek et al.,
2013). Triandis (1977) recommends that learning the full range of cultural
variations may be more beneficial in the long run since people are likely to be
exposed to a wide variety of cultures, even when based on a single team or
negotiation experience. Indeed, management educators recognize that information and principles alone are insufficient as most cross-cultural training
includes experiential exercises (Tan & Chua, 2003) and international business
experiences (Ng, Van Dyne, & Ang, 2009), or as suggested by Blasco (2009),
to see business activities (such as negotiation) as a culturing activity.
Additional implications for management education concern metacognitive CQ, the mental capability to acquire and evaluate cultural information by

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strategizing and thinking about ones assumptions. Eisenberg, Lee, et al.


(2013) found that both metacognitive CQ and cognitive CQ increased for
those students taking academic cross-cultural management courses.
Therefore, it would be helpful to educate students about the multiplicity of
cultures and the notion that as global citizens we are all an amalgam of cultures (Phillips & Sackmann, 2002). In addition, enhancing students thinking about thinking would reinforce metacognitive abilities and hence
negotiations. Antal and Friedman (2008) illustrate a process based on student-generated intercultural cases, which are then processed by using several
tools designed to have students examine their own mental models and
assumptions. This process enhances students planning, awareness, and verification of information and assumptions, which are subcomponents of metacognitive abilities (Van Dyne et al., 2012).
From the perspective of management educators, motivational CQ
addresses the following practical issues: Are our students curious about discovering something new about a culture that is unfamiliar to them? Will they
pursue more information and rich experiences in such cultures? The management education implications for motivational CQ include tapping into the
agency of individual students and their self-efficacy regarding cross-cultural
learning and encounters. There are ways that an instructor can provide
salience of being curious and increase the level of self-efficacy. For example,
Yamazaki and Kayes (2004) propose that interpersonal skills may be the most
important skills for expatriates to be effective learners when challenged with
a new culture. Mor et al. (2013) demonstrate the efficacy of providing students with a cultural perspective taking intervention during cross-cultural
negotiations, which improves cooperative behavior orientation, based on
their upcoming simulated negotiations with a Chinese business representative. This is a practice that could easily be incorporated into the preparation
of workplace negotiations.
Behavioral CQ, which deals heavily with verbal and nonverbal communication, could best be developed by observing others and practicing in a
simulated environment, consistent with social learning theory (Weiss,
2003). In an experiment comparing different learning conditions for
improving integrative negotiation skills, Nadler et al. (2003) found that students who were exposed to observing skilled negotiators subsequently performed at the highest level of the four learning conditions, yet could not
articulate why. The authors conjectured that the students were acquiring
tacit knowledge, which is by definition harder to bring to the level of explanation required in the teaching simulation. In turn, however, this process
positively influenced their behavior. As demonstrated in the present study,

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Groves et al.

assessment center methodologies may be employed to offer students both


CQ and negotiation skill assessments, simulated negotiation exercises that
address culturally bound issues and parties, and the opportunity to observe
their own negotiation performance to develop greater self-awareness
(Salacuse, 2010).

Limitation and Future Research


The findings of this study should be viewed in the context of several limitations. First, future research should examine the impact of CQ on negotiations in
actual business settings, as this studys assessment center methodology limits
the external validity of our findings. Second, although CQ was assessed via a
validated self-report instrument (Ang et al., 2007), there are limitations associated with the self-report methodology. As such, we recommend that future
research use peer and/or multisource CQ assessments when examining negotiation performance outcomes to corroborate our findings. Also, the sample
was comprised of fully employed MBA students residing in the Southwestern
United States, a population and geographic location that may have affected the
results. Additionally, the temporal nature of negotiation, specifically the series
of steps and exchanges that would characterize an actual intercultural negotiation, was not reflected in the studys negotiation exercise and should be
addressed in future assessment center methodologies. Finally, a potential drawback related to the use of consensus ratings is the risk of groupthink, conformity, and domination of panel discussion by one or few members. However,
these concerns were mitigated by adopting consensus processes such as calling
on silent assessors when appropriate, rotating who begins the discussion of
each item, repeatedly checking with all assessors to evaluate satisfaction with
the assessment process after each session, and ensuring no status or power difference among the assessors.

Conclusion
This study addressed important limitations to the negotiation and CQ research
literatures by illustrating CQ as a key predictor of cross-cultural negotiation
effectiveness. Our findings demonstrate that high CQ negotiators facilitate
cross-cultural negotiation performance outcomes through IBN behaviors.
Organizations seeking to improve the outcomes of international negotiations
and better prepare their managers for an increasingly global business environment should focus management education efforts on CQ assessment and
development.

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Appendix
Behavioral Instructions for the AAA Negotiator
Behave Indirectly. You prefer to start the negotiation with a short presentation
which discusses AAA Hotels, its general goals in the market, and optimism
for the future relationship with Lambert. You are hungry for information
from the Lambert executive, but not very forthcoming with information.
After the other party has answered a question, you may respond by asking
another question, repeating the question, or just remaining silent. You may
often ask for information to be repeated in order to search for areas of agreement. In your culture, it is inappropriate to promote your own positions;
rather, you prefer to listen until you hear where your positions and interests
come together with the other party. You seldom use the word no; rather,
you might say that would be difficult. You value relationships and to be
completely negative would not be relating sympathetically to the other party.
Behave Patiently. Since it is culturally inappropriate to promote ones own
ideas or positions, you wait patiently until the other side suggests something
that is acceptable. You seldom make any concessions except at the very end
of the negotiation.
Behave Unemotionally.You value self-control and have been trained since
childhood not to show emotion. Public displays of emotion are believed to
lead to confrontation and conflict, which interfere with normal, cooperative
relationships. Do not show your frustration with or distaste of the other partys negotiating behavior. Maintain an unemotional and impassive face and
demeanor throughout the negotiation.
Behave Passively. You consider the aggressive, persuasive negotiator skilled I
argumentation to be insincere and vulgar. When confronted with such a negotiator or one using threats or other crude tactics, retreat to silence.

Assessor Rating Form: Negotiation Outcomes


1. Number of voting seats on the 8-person executive board to be controlled by AAA Hotel.
Rating Scale:
0 = no agreement
1 = five AAA seats
2 = four AAA seats

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Groves et al.
3 = three AAA seats
4 = two AAA seats
5 = one AAA seat
2. Management of AAA Hotel properties

Rating Scale:
0 = no agreement
1 = Lambert provides two regional representatives to AAA corporate
offices, AAA general managers report to AAA corporate offices, and no
new training for AAA managers
2 = Lambert provides two regional representatives to AAA corporate
offices, trains all AAA general managers for one month in AAA home
country, and AAA general managers report to AAA corporate offices
3 = Lambert provides two regional representatives to AAA corporate
offices, trains all AAA general managers for one month in U.S., and AAA
general managers report to AAA corporate offices
4 = Lambert provides one regional manager per 5 AAA properties, trains
all AAA general managers for one month in U.S., and all AAA general
managers report to regional managers
5 = Lambert expatriates (experienced U.S. Lambert managers)
3. Management incentives for AAA Hotel property managers
Rating Scale:
0 = No agreement
1 = Less than 10% of managers pay is contingent on
performance
2 = Between 10% and 20% of managers pay is contingent on
performance
3 = Between 21% and 35% of managers pay is contingent on
performance
4 = Between 36% and 50% of managers pay is contingent on
performance
5 = 51% or more of managers pay is contingent uon
performance

property
property
property
property
property

Assessor Rating Form: Interest-Based Negotiation Behaviors


(1 = not at all, 2 = rarely, 3 = occasionally, 4 = fairly often, 5 = very
frequently)

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Journal of Management Education

1. Sought to identify and understand the AAA managers goals.


2. Clearly stated AAA hotels goals for the negotiation.
3. Was sensitive to the AAA managers needs and interests; demonstrated empathy.
4. Discussed mutual interests of AAA and Lambert hotels; avoided discussion of hard positions.
5. Demonstrated effective listening skills; offered reflective statements
and clarification questions.
6. Identified several options across the three negotiation issues.
7. Identified relevant standards (property values, hotel profitability) for
evaluating options.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research,
authorship, and/or publication of this article.

Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.

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