CULTURAL INTELLIGENCE AND ITS ROLE IN ORGANISATIONAL DECISION MAKING

Introduction

Cultural intelligence is one of the most significant types of intelligence that is important in the workplace. According to Ang and Van Dyne (2008), cultural intelligence is a measure of the capability of an individual to work and manage effectively in culturally diverse settings. This cultural intelligence, as a competitive and strategic tool, can also help a leader accomplish organisational goals (Cannon & Cannon, 2003).

Cultural Intelligence (CI) is related to four different factors: Cognitive CI, Metacognitive CI, Behavioural CI, and Motivational CI. The first, Cognitive CI, explains knowledge about cultures, their differences, and similarities. The second factor is Metacognitive CI that constitutes the mental skills to gain and understand cultural knowledge. Thirdly, Behavioural CI is the ability to flex behaviours in intercultural interactions. Finally, Motivational CQ manifests as interest and confidence in working effectively in intercultural situations (Van Dyne, et al., 2016). Culturally intelligent leaders can easily adjust their behaviours and perspectives across cultures, while other leaders cannot (Van Dyne et al., 2010). Evidence of this tendency is the fact that the Navy SEALs, an elite US military unit, boasts a policy to “maintain a strong culture” to ensure success with goals (Cannon & Cannon, 2003, p. 43).

It is opined by Hester (2005), cultural intelligence helps a leader deal with new people with unique customs, who may come from different unique places. Furthermore, cross-culturally trained leaders can perform well for guiding multinational businesses (Box, et al., 2015). Cultural intelligence also facilitates making effective cultural decisions and judgments (Mannor, 2008). It is also mentioned by Kim and Van Dyne (2012) that people with high levels of cultural intelligence invest more energy and time towards learning different cultural contexts and always pay more attention to intercultural situations. While always conscious about others’ cultural preferences during interactions, they are also capable of adjusting their behaviours and facial expressions while working in multicultural teams.

Impacts of Cultural Intelligence on Strategic and Organisational Management

Cultural intelligence has become an increasingly important managerial skill as international practices of human resource management receive growing attention and globalisation gets more and more complex (Korzilius, et al., 2017). Due to the impacts of globalisation, today’s societies are becoming increasingly diverse. Business organisations, at the same time, are also adopting new hiring strategies that support diversity in businesses by adapting to the new arrivals of people coming from different societies and incorporating new communication strategies. This also enhances the need for the organisational leaders or managers to be interculturally trained so that they can be effective in the workplace and lead culturally diversified teams.

As this ability to manage in the context of cultural diversity is the core of cultural intelligence (CI), it can also play a vital role to ensure overall leadership success. Friedman (2007) explains that cultures that are able to “glocalize—that is, the more your culture easily absorbs foreign ideas and global best practices and melds those with its own traditions―the greater the advantage you will have in a flat world” (p. 422). Godin (2011) points out that “only wealthy organisms are able to culturally diversify, and as human beings get richer and richer, our instinct is to get ever weirder” (p.23).?It has been found that managers with high cultural intelligence can adapt and function well in unfamiliar environments, which makes this skill invaluable for strategic and organisational management (Caputo, et al, 2019).

In the workplace, managers often need to interact with and analyse individuals coming from different cultural backgrounds. Robbins (2005) points out that “effective communication is difficult under the best of conditions. Cross-cultural factors clearly create the potential for increased communication problems” (p. 320).

According to Robbins (2005) there are four main language-related cultural barriers: semantics, word connotations, intonation and tone, and perceptions.?While communicating, the managers often struggle with respect to language, communication, and different other barriers. This enhances the need for culturally intelligent managers who can work well in multicultural teams and adjust quickly to multiple cultures inside the organisation. Eventually, these managers can be a source of strategic and competitive advantage for the organisations (Jyoti & Kour, 2017).

As revealed by Bücker et al. (2014), cultural intelligence can positively influence both job satisfaction and communication effectiveness inside the organisations. In addition, it can play a vital role in reducing the anxiety of the organisational managers. Culturally intelligent managers can minimise the distance between their subordinates from different cultures and reduce the uncertainty during the interaction.?This can certainly have a positive influence on strategic and organisational management. Robbins and Stuart-Kotze (1986) analogise organisational culture as a “personality” that is something that managers need to recognize and understand in order to do their jobs well. The organisational culture is a perception that “exists in the organisation and not the individual'' (p. 65).?That means that it is a descriptive term regarding how “members perceive the organisation, not whether they like it or not'' (p.66). This is often a result of the internal structure of the organisation (Capon, 2004).

Capon (2004) points out that in order to appreciate differences in a global marketplace “an understanding of personal cultural provenance and national culture is important, as it allows managers to develop the cultural awareness that is needed in the world of work at the beginning of the twenty-first century” (p. 65). For long-term success, the corporate culture needs to be “grounded in socially approved values and ethical business principles” (Thompson et al., 2005, p. 382).

Cultural Intelligence and Leadership

In the 21st century, fostering cultural awareness skills is important for developing charismatic leaders. From an organisational perspective, these skills can help the leaders manage employees from a variety of backgrounds in an effective manner. Box et al. (2015) tried to find out the correlation between the leadership qualities of managers at Fortune 500 companies in America and cultural intelligence. The researchers found that there was a statistically significant positive relationship between the leadership qualities and the CI of the managers. They also suggested that the leaders should try to strengthen their cultural intelligence skills through personal and educational pursuits and transform their workplace environment into inclusive and diverse. As stated by Porter (2008) cultural factors can affect the investment into some industries because of the prestige of different occupations and fields.

As popular culture is exported, the advantages that stem from the popularity of those cultural products can give advantages to the creator nation with Soft Power leading to a stronger marketability (American credit cards, for example) (Porter, 2008). This type of influence leads from the commercial to the national interest. The popularity of the culture also leads to what Nye (2004) calls Soft Power that led to was behind every major “American foreign policy objective(s)-victory in the Cold War” (p.49).

As argued by Kim and Van Dyne (2012), the success of leadership in the international context depends on cultural intelligence. At the same time, leaders with low CI often experience conflicts as they engage in stereotyping. This may result in leadership failure at the end. Furthermore, CI helps leaders overcome burnout, which is also important for leaders working in multinational organisations (Tay et al., 2008).

Leaders with high CI are socially adept across cultural settings and have the expertise to realise how cultures are similar and different, as well as to observe and interpret new cultural interactions. This also makes these leaders more suitable for international assignments and also for handling complex demands of international work (Kim & Van Dyne, 2012). In cross-border contexts, the leaders need to work with multiple cultures at the same time and balance local and global demands which can be contradictory. Cultural intelligence can help the leader immensely to solve these issues in an effective manner (Rockstuhl et al., 2011), particularly within being able to distinguish between high context culture (reliant on non-verbal and subtle cues) vs low context (reliant on words).