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 cross-
cultural communication; can be used as a success factor for developing repertoires needed for an
expatriate that result in effective leadership.

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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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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 cross-
cultural 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).

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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 “Merely 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)

(Source: Livermore, 2010)

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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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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
“bad 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.

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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) “The 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).

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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, open-
mindedness, 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.

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