IMPORTANCE OF CULTURAL INTELLIGENCE IN ORGANIZATIONS

ABSTRACT

The study generalizes the concept of cultural intelligence (CQ) as a key competency in global organizations due to its diverse cultures. Cultural intelligence is a capability, which increases the manager’s ability to effectively interact with people belonging to other cultures. The purpose of the study is to examine the importance of the cultural intelligence in organization.

Keywords: cultural intelligence, cross-cultural adjustment, globalization.

One of the main challenging propositions in business is Globalization. Lack of different cultural understanding one of the main challenges [4, p. 3].. People face with problems in adapting to unfamiliar culture cultural settings due to its unified, interactive platform, expatriates must learn to deal with cultural barriers [5, p. 2]. To effectively sustain diverse work setting and globalization, an enterprise requires managers with adaptable capabilities to different cultural settings. Organizations need to focus on the diversity as it brings more productive and innovative diverse workforce that generates new ideas from their cultures, which in turn can be used as competitive advantage for the organization. The ability to function successfully in cross-cultural settings has become important for expatriates [1, p. 5].

Expatriate’s failures in overseas can create significant direct and indirect costs for organization [13, p. 23] due to lack of individuals understanding of other cultures. Inappropriate use of language and behavior can negatively impact work performance and may lead to poor relationship building [8, p. 45]. In their study Black and Gregersen [10, p. 43] disclosed that 10–20 percent of all US managers sent abroad experience difficulties in adapting to a host country and returns early. To be effective leader new global skills must be mastered. One of the key competencies of the 21st century to manage multicultural workforce is Cultural intelligence.  Cultural intelligence (CQ) is a capability of an individual to effectively interact with people outside their culture. CQ refers to ability and set of skills that allow person to effectively interact with new cultural settings [5, p. 2]. Cultural knowledge gives opportunity to succeed in a novel culture, it is a capability to have successful interaction in diverse environment with people from different cultures, cultural knowledge [9, p. 40]. In cultural divers situations managers with high culturally intelligent can detect, assimilate reason, and act on cultural cues appropriately. The cultural intelligence ability is learned and developed over a period. Managers which has cultural intelligent ability are mostly aware of other’s beliefs, values, patterns of behavior, traditions, customs, and languages. “Cultural intelligence (CQ) captures a person’s capability to adapt effectively to a new cultural context further; it has both process and content features” [3, p. 23]. Early and Peterson [3, p. 24] emphasized that more and more organizations are expressing the need for managers who can effectively adjust in multiple cultures and perform well in multinational teams. Therefore, CQ is an important capability of a manager in modern organizations which can work successfully in different cultural contexts.

Cultural intelligence (CQ) refers to “an individual’s capability to deal with culturally diverse situations effectively” [3, p. 40]. Individuals with higher CQ considered to effectively interact and work with individuals outside their own cultures [13, p. 4]. Over the past decade, many articles have appeared on CQ (Ott and Michailova, in press). Most of the prior research that used CQ as an antecedent have linked it to cross-cultural adaptation, accommodation, cultural judgment, and expatriate work.

Today's workplaces are more multicultural than ever, and it's normal to work with people from many different places and backgrounds. This has opened up many new opportunities – but it's also created some challenges.

Cultural differences aren't just about nationality, ethnicity or belief. Many of us work in multigenerational organizations, alongside younger or older colleagues who have cultural references, assumptions and attitudes that are very different from our own. And cultural clashes can even emerge between departments and teams in the same organization.

All of this means that we need to be better at understanding and operating in a wide variety of cultures. That's where CQ comes in. CQ is a capability, which increases an individual’s ability to interact with people outside their culture. It refers to the set of skills and traits that allow one to effectively interact with novel cultural settings [11, p.32]. It is the key competence of the 21st century to manage multicultural workforce. It is the ability to have an effective interaction with people from different cultures. Cultural knowledge improves the opportunity to succeed in a new culture [11, p.65]. Culturally intelligent managers can detect, assimilate reason, and act on cultural cues appropriately in situations characterized by cultural diversity. It is capability, which is developed and learned over a period of time. Culturally intelligent managers are aware of values, beliefs, patterns of behavior, customs, traditions, and languages of different cultures. “Cultural intelligence (CQ) captures a person’s capability to adapt effectively to a new cultural context further; it has both process and content features” [4, p.10]. More and more organizations are expressing the need for managers “who quickly adjust to multiple cultures and work well in multinational teams” [5, p.100]. Therefore, CQ is a capability which can help managers to be successful in different cultural contexts.

Earley and Ang introduced the concept of CQ. It refers to an individual’s capability to function effectively in situations characterized by cultural diversity [9, p.3]. CQ is a four-factor construct that includes metacognitive, cognitive, motivational, and behavioral dimensions [8, p.3]. Those with higher CQ have the ability to encounter confusing situations, think deeply about what is happening (or not happening), and make appropriate interpretations and adjustments to how they understand, relate, and lead in the context of these different cultures [15, p.34]. It is malleable (adaptable) state that can be developed over time. Adaptation is the process of altering one’s behavior to fit within a new environment and circumstances or positive response to social pressure.

Cross-cultural experience increases the confidence and exposure to effectively interact with people outside their culture which helps them to adapt to their host region [11, p. 12-23]. Previous international experience provides an individual with the means of predicting what a foreign assignment involves, increases the probability of realistic expectations, and reduces uncertainty and thereby easing the adjustment [14, p. 12]. Experience of working outside their home region helps culturally intelligent expatriates to learn appropriate work behaviors and to learn how to interact with local coworkers, which help them to adapt to host region. When the culturally intelligent expatriates have more work experience, they tend to adapt more easily during their out of home state assignments. But some of the studies have revealed an insignificant effect of cross-cultural experience on cross-cultural adjustment. So there is lack of consensus regarding this relationship. Therefore, to clearly understand the role of previous work experience in the relationship between CQ and CCA, the present study will examine the integrative model wherein positive work experience moderates the impact of CQ on CCA [13, p. 23]. Therefore, previous work experience strengthens the relationship between CQ and CCA.

Motivational factor of CQ means the wants and expectations of the people so as to conform to another cultural situations. People with a significant level of an inspirational part are viewed as focused on the culturally diverse conditions from a place of inborn incentives and the behavioral factor of CQ means the limit of people as to show the activities of cooperating to the general population of various cultures.

Previous studies have revealed that CQ significantly affects CCA [3, p. 132]. Culturally intelligent managers have the capability of adapting to a new cultural context [12, p. 8]. Jyoti and Kour revealed that CQ positively influences cross-cultural adjustment, that is, managers who are culturally intelligent are able to adjust in out of home assignments (posted from home state to other states in India) in a better way.

Culturally intelligent employees often work with colleagues from different countries on a daily basis, so in addition to their own native language, they must also understand and be open to the customs and cultures of their colleagues in the host region [7, p. 14] which helps them to adapt in the host region. According to Selvarajah [10, p. 34], the ability to communicate in the local language is the most important factor in successful integration.

Culturally intelligent managers are able to give their best performance and these people can be sent for foreign/overseas assignments as they are able to interact effectively with people belonging to different cultural backgrounds. During the selection process, the human resource department can make use of psychological tests for managers. The CQ scale is a good example of an instrument that may be used to measure the ability of an expatriate to effectively adapt to new cultural environments.

Secondly, organizations can develop training programs, which increase the manager’s CQ capability. In training programs, the managers should be made familiar with the basic knowledge about the country and company’s culture, which is important to develop interpersonal skills. These programs will prepare managers to deal with unfamiliar cross-cultural situations. Further, training programs could include a module on motivational and behavioral component of CQ rather than focusing primarily on knowledge or cognitive training.

Thirdly, before sending the managers to out of home state assignment, organizations should give predeparture language training to managers, which helps them to interact with locals of that region, which in turn will help to improve their adaptation process. India being a diverse country has different languages spoken in different regions. The north, south, east, west, and central regions have their own distinct cultures.

Fourthly, organizations should encourage their managers to interact with people from different cultures and should motivate managers’ desire to learn about diverse cultures. The misunderstandings, or stress, created by a different culture can be reduced. Fifthly, previous out of home state assignment work experience for selecting managers for expatriation will be beneficial to acquire expatriates, who have high levels of CQ and the potential to adapt well in a host region. Selecting linguistically proficient managers, with the positive experience of the host region, helps the managers to adapt in culturally diverse settings. The inclusion of previous international work experience of selecting candidates for expatriation will be beneficial to acquire managers, who have a high level of CQ and the potential to adjust well in a foreign country, since the results of the present study highlight that the managers who have more work experience are more culturally adaptable.

Lastly, organizations should also arrange informal gatherings that increase intercultural interactions. This supportive environment will also contribute in terms of helping managers to adjust themselves better to the local culture. Organizations should encourage and motivate their employees to learn different languages as language proficiency helps them to adapt themselves in host region environment.

Developing culturally intelligent managers will help organizations have sustainable competitive advantage. Culturally intelligent managers help organizations to complete out of home state assignments, which enhance the organizational performance. This helps organizations to establish their business in different parts of the country successfully.

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