Impact of Cultural Intelligence on Global Business

Impact of Cultural Intelligence on Global Business

Harish C. Chandan
DOI: 10.4018/978-1-4666-7492-9.ch004
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In today's globalized business world, intercultural effectiveness is crucial to a firm's survival. Cultural intelligence, CQ, is a four-dimensional construct that helps one to understand how the individual cultural beliefs and values influence motivations and behaviors (Ang & Van Dyne, 2009). CQ is related to the three aspects of intercultural effectiveness that include cultural judgment and decision making, cultural adaptation, and task performance (Ang et al., 2007). CQ plays an important role in the areas of global leadership (Van Dyne & Ang, 2006), achievement of managers (Rahimi et al., 2011), global strategic alliances, cross-cultural communications, negotiations, multinational teams (Early & Gibson, 2002), culturally diverse domestic teams, overseas work assignments (Bhaskar-Shrinivas, 2005; Lee & Sukco, 2010; Ramalu et al., 2012), global business competencies, and organizational effectiveness in the global marketplace (Creque, 2011). CQ is also relevant in establishing global identity in culturally diverse virtual teams (Adair et al., 2013).
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Culture, Perspectives, Motivation, And Behavior

To understand the perspectives, motivations, behavior and communication style of people in a culture, one has to understand the role of the national culture in determining their beliefs and values. Culture has been described as patterned ways of thinking, feeling and acting (Kluckhohn, 1951, 1954 1962) and “software of the mind” (Hofstede, 1980). “Culture is to a society what memory is to individuals”. Individual memory plays a key role in establishing individual values and beliefs. Culture determines the society’s values and beliefs. Hofstede’s seminal work on culture was originally based on work values in an organizational setting. He defined culture as the collective mental programming of the human mind through socialization that distinguishes one group of people from another (Hofstede, 1980). Culture is reflected in the meaning people attach to various aspects of life and which become crystallized in the institutions of a society. This does not imply that everyone in a given society is programmed in the same way. There are considerable differences between individuals within a group (Hofstede, 1980; Hofstede, 2001; Hofstede et al., 2010).

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