The Importance Of Cultural Intelligence In International Business

Role of Cultural Intelligence

According to Liu and Anne Liu (2006) “Cultural intelligence (CQ), defined as one’s capability to adapt to new cultural contexts, is a new concept in organizational literature”. Culture and language play important role in International Business as both are importance part for every country as both are glimpse of the country history. Companies are started to engage with cross cultural management in their business as culture and languages of other countries are parts of the business to stay in market and competition.

In this globalization world of business, cross culture intelligence becomes necessity for large, medium as well as small scale organizations.

Cultural Intelligence in International Business

International organizations who wants to start their projects in other country must learn about their culture, technology, tastes, trends of business, perspectives and ways to enter and conduct projects. They should be skilful enough to adjust themselves with the culture and employees from other countries. They may be able to adapt lifestyle of other countries. Must be able to know how interact with foreign colleagues equally. According to Kiznyte et.al (2015), cultural intelligence has four factors that requires any organization to start their business in international Market. Magna International need to acquire that four factors to establish and to maintain their production successfully in UK.

The Motivational (Drive) factor

This factor shows the organization’s interest, confidence and intensity to accept foreign culture. Self-Efficacy is the confidence that person can behave effectively in cross-cultural encounters. However, this factor explains ability of the organization involvement in cross cultural interactions in various ways. To solve problems, it is importance that how organization or individual efforts to benefit from people of other culture.

The Cognitive (Knowledge) factor

It is based on understanding the problems and differences of various culture as a aspect of knowledge in the concept of Cultural Intelligence. This factor is addressed mostly to emphasize typical approach to intercultural competency. This factor describes the understanding of cultural values, religious belief, norms, language and communication rules, customs that influences one’s behaviour.

The Metacognitive (Strategy) factor

It illustrates strategic approach for cultural diversity. It helps to adjust the communication strategy to solve cultural problems and to improve strategy in a long-term project.

The Behavioral (Action) factorBased on ability to adapt verbal and non-verbal communication to a cross-cultural situation. This factor describes level of cultural awareness and knowledge of leader when need to take actions against cross cultural issues. It mainly concentrates on individuals’ action instead of their thoughts and feelings.Understanding different customers and stakeholders as knowledge of local culture is essential for Magna International to be successful in their objectives.

Management of multicultural teams

As a Magna is Canadian company and opened centres in UK, it has employees and customers from UK and other part of the world. Cultural Intelligence plays important role for the leader to adapt cultural policies and strategies and to implement to various cultural groups. Conversation with different workers (Local and International) is essential to organization as it determines organization’s ability to succeed. Recruiting and developing talent: to find good employee, company hires candidates globally. But, cultural issues can create obstacles to keep employees from the different countries and ethnicities. Cultural Intelligence boosts company’s capability to find and possess cross cultural talent.

Adapting the leadership approach to different cultures: Different cultures have different leadership format

Cultural Intelligence requires to alter or modify leadership perception to be successful in other culture. For example, In India, First and second line manager involves employees to make decision, while in some country, managers are independent to make decisions. To create trust and lead various cultural groups and projects, person should have high level understanding of cultural intelligence. Negotiation: Person with higher cultural intelligence level, are successful at cross cultural negotiations than person with lower cultural Intelligence. Negotiations is an important part of global business.

Cultural Intelligence helps Magna International to be succeed: There are four Cultural Intelligence steps:

Enhance CQ Drive

This step is based on raise awareness about other culture, languages, pros and cons, list the benefits of cultural intelligence to project, business and organization, set cultural intelligence goals, define appropriate model for cultural intelligence incorporation. This step shows how cultural intelligence form used in project management is different from one company to another.

Develop CQ Knowledge

This step is based on Cultural intelligence self-assessment, theoretical approach of the organizations, seminars, online e-learning materials on cultural differences identification. It provides basic awareness about cultural differences management.

Build CQ Strategy

This is based on to justify the individual knowledge about intercultural action with real tasks. Based on ‘Hands on’ approach, coaching based cultural intelligence, about future collaboration and on time diverse condition, discussion.

Adapt CQ Action

It is based on cultural intelligence re self-assessment. Organize workshops on cultural intelligence problem solving. It also includes about future planning based on learning from the current issues.

Conclusion

In today’s era, Cultural and linguistic knowledge is necessity for the organization to develop their business in foreign countries. Cultural Intelligence is a medium between two nations through which one can easily understand issues, situations and find the appropriate solutions. Knowledge, skill, training require to gain enough information about culture of other countries. To maintain position in the world market, cultural intelligence plays a key role. Employees and leader of the organization must learn how to adjust with others’ cultural behaviour.