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American Journal of Economics and Business Administration
Original Research Paper
Cultural Intelligence: Key Benefits to Individuals, Teams and
Organizations
Ana Azevedo
Faculty of Business, Athabasca University, Canada
Article history
Received: 16-10-2018
Revised: 18-11-2018
Accepted: 12-12-2018
Email: A na.Azevedo@fb.athabascau.ca
Abstract: This paper provides an overview of the empirical research on
cultural intelligence, with a special focus on discussing key practical
benefits to individuals, teams and organizations. The importance of cultural
intelligence training is also highlighted.
Keywords: Cultural Intelligence, Benefits, Training
Introduction
Cultural intelligence (CQ) has been defined as an
individual capability to effectively function in
culturally-diverse situations (Ang and Van Dyne, 2015;
Earley and Ang, 2003). This overall capability or
competence is composed of four inter-related
capabilities: CQ drive or motivational CQ (i.e., the
ability to direct and sustain energy, as well as the
confidence to adapt to cross-cultural situations), CQ
knowledge or cognitive CQ (i.e., the knowledge and
understanding regarding cultures, including their
similarities and differences), CQ strategy or
metacognitive CQ (i.e., the ability to plan, remain aware
and monitor thought processes, in order to understand
intercultural situations) and CQ action or behavioral CQ
(i.e., the ability to modify verbal and non-verbal
behaviors in intercultural settings) (Ang et al., 2015;
Livermore, 2015; Van Dyne et al., 2012). These
capabilities meaningfully complement each other to
support behavioral flexibility within cross-cultural
settings. CQ applies to different cultures as well as
subcultures, so it helps individuals and organizations to
improve work performance in highly diverse and/or global
organizational settings (Livermore, 2016; Malek and
Budhwar, 2013; Rockstuhl et al., 2011).
CQ is a malleable competence that can be increased
through training and coaching, combined with self-
assessments and individual development plans (in a
way that augments the effects of each of these
activities). In addition, after taking part in a CQ
training program, individuals and teams are in a better
position to further their own intercultural competence
via on-the-job experiences (e.g., working in a multi-
cultural team, undertaking an international
assignment, engaging in international negotiations to
open up new markets or expand sales to key
international customers) (Imai and Gelfand, 2010;
Livermore, 2011; Raver and Van Dyne, 2017).
Comprehensive reviews of cultural intelligence
research have been provided in recent years (Ang et al.,
2011; Leung et al., 2014; Ng et al., 2012; Fang et al.,
2018; Ott and Michailova, 2018). The goal of this paper
is to review and discuss key practical benefits of cultural
intelligence to individuals, teams and organizations. In
addition, the importance of providing cross-cultural
training for organizational leaders and employees is
underscored, given the need to adequately prepare them
to fully leverage these benefits (Bartel-Radic and
Giannelloni, 2017; Barrera, 2010; Bird et al., 2010).
Cultural Intelligence: Key Benefits
An extensive amount of empirical research has been
carried out since the concept of cultural intelligence was
originally proposed by Earley and Ang (2003). One of
the key issues that has been studied during the past
fifteen years is the impact of cultural intelligence on
specific outcomes that are relevant for the workplace
(Ang and Van Dyne, 2015; Ott and Michailova, 2018).
Benefits associated with an individual’s high CQ include
the ability to effectively perform in situations that are
culturally-diverse (e.g., working on a project with
culturally-diverse colleagues) or that have a global
component (e.g., working with suppliers or customers in
international markets) (Fang et al., 2018). This ability to
perform effectively also applies to work contexts
involving other types of diversity (e.g., inter-
generational or gender diversity) (Groves and
Feyerherm, 2011; Livermore, 2015).
From existing research, it is possible to conclude that
individuals and teams with high CQ will experience a
number of specific benefits that have been described as
psychological outcomes (e.g., effective intercultural
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adjustment; improved cultural judgment; greater
interpersonal trust), behavioral outcomes (e.g., improved
decision-making; higher levels of idea-sharing,
information-sharing and creative collaboration among
teams) and performance outcomes (e.g., effective
intercultural negotiations; increased work performance)
(Gelfand et al., 2015; Leung et al., 2014). Aside from
the positive impact of these individual and team-
related outcomes, organizations can derive additional
benefits such as an increase in profitability and cost
savings (due to, for example, the adoption of more
innovative methods); greater expansion into
international markets; better service that is tailored to
the specific needs of different groups of customers
and more effective Human Resources practices to
attract and manage talent within the context of an
increasingly diverse and global workforce (Ang et al.,
2011; Livermore, 2015; 2016). In the following sections,
this paper will review and discuss key CQ benefits for
individuals, teams and organizations.
Increased Intercultural Adjustment
Individuals with high CQ show better emotional and
psychological adjustment to situations involving
different or unfamiliar cultures (and subcultures). This
helps individuals experience less burnout and have
higher resilience (i.e., the ability to bounce back and
recover in stressful situations) when working across
cultures/subcultures. Culturally intelligent individuals
show greater perseverance in tough situations, as well as
higher levels of stamina and productivity. In addition,
individuals with high CQ can adjust more easily to
uncertain, complex and shifting work demands which are
typically encountered in intercultural situations (e.g.,
working in multi-cultural team) (Guomundsdottir, 2015;
Lin et al., 2012; Malek and Budhwar, 2013; Moon et al.,
2012; Tay et al., 2015; Tuleja, 2017).
Improved Cultural Judgment and Decision-Making
Culturally intelligent individuals are better equipped
to understand and evaluate situations that include
multiple perspectives and to make high-quality decisions
within intercultural contexts. Cultural intelligence helps
individuals and teams to cooperate in finding
effective/mutually acceptable solutions that address
different priorities and perspectives (Ang et al., 2007;
Van Dyne et al., 2010; Ng et al., 2009).
Greater Effectiveness in Intercultural Negotiations
Individuals and teams engaged in international
negotiations (e.g., international contract negotiations) often
face complex and lengthy discussions in order to reach an
agreement. Whether these discussions involve diverse
company colleagues, clients or suppliers, individuals and
teams with high CQ show more patience and greater ability
to persist and collaborate across cultures and borders, in
order to negotiate and develop favorable, ‘win-win’
agreements. These positive results come from their ability
to better understand and incorporate diverse perspectives
into the negotiation process (Imai and Gelfand, 2010;
Chua et al., 2012; Groves et al., 2015).
Higher Levels of Trust, Idea-sharing, Information-
Sharing and Creative Collaboration
In spite of the great potential of diversity to enhance
creativity and innovation for individuals and
organizations, the evidence suggests that heterogeneous
multicultural teams tend to underperform homogeneous
ones, unless team members have a good amount of
intercultural competence. Individuals and teams with
high CQ are more capable of trusting each other, which
leads to higher levels of information-sharing and idea-
sharing. Consequently, culturally intelligent individuals
and teams engage in more creative collaboration and
come up with more innovative solutions. It is
noteworthy that CQ helps to reduce the perceived
interpersonal risks of speaking up among culturally-
diverse teams of work colleagues and/or partners.
Culturally intelligent individuals and teams are more
likely to experience greater psychological safety, due to
the positive association of CQ with higher trust (teams
with high CQ also show faster acceptance and
integration of team members, as well as greater team
cohesion). The significant association between cultural
intelligence and trust can be explained by CQ’s role in
attenuating social categorization processes that
negatively impact interpersonal interactions among
culturally-diverse individuals and teams (e.g.,
individuals categorizing others as belonging to either in-
groups or outgroups). (Chen and Lin, 2013; Chua et al.,
2012; Flaherty, 2015; Janssens and Brett, 2006;
Livermore, 2016; Mor et al., 2013).
Increased Work Performance
Individuals with high CQ perform better when their
leader or subordinate comes from a different cultural
background, as compared to individuals with low CQ.
Similarly, multicultural teams with high CQ outperform
teams with low CQ. There are a number of studies
supporting this positive relationship between cultural
intelligence and work performance within a variety of
intercultural contexts. For example, high CQ positively
impacts task performance in culturally-diverse settings,
adaptive performance (i.e., proficiency in changing one’s
behavior to fit the demands of the environment or the
specific situation), global leadership effectiveness, sales
performance in international or cross-cultural contexts
and export performance (Groves and Feyerherm, 2011;
Oolders et al., 2015; Presbitero, 2016; Wang 2016).
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Conclusion
Organizations that invest in cultural intelligence
training can increase work performance of culturally-
diverse individuals and teams. CQ training can be of
special value to organizations that want to improve
the collaboration and work effectiveness of global teams
(e.g., geographically dispersed teams), to strengthen
specific diversity and inclusion initiatives (e.g., accelerate
leadership development among women and minorities)
and to further support learning and development goals for
different groups of employees. Considering the growing
adaptive challenges associated with the so-called VUCA
(i.e., volatility, uncertainty, complexity and ambiguity)
world, cultural intelligence training can help promote the
development of key ‘future skills’ in individuals and
teams, such as adaptability/flexibility, teamwork and
collaboration, resilience and creativity and innovation.
(Pearse, 2017; Tuleja, 2017; Van Dyne et al., 2017;
Morris et al., 2014; WEF, 2018).
Acknowledgment
This literature review is part of a comprehensive pilot
study which was designed and implemented between the
July 2016 and December 2017. The author gratefully
acknowledges the support of Athabasca University
during her research and study leave.
Ethics
This article is original and only contains unpublished
material.
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