Developing Global Cultural Intelligence in Multinational Firms

Organizations that work within multiple-countries have varying cultures and subgroups within their working populations. As multi-national firms become more common it is necessary for leaders to develop a level of cultural intelligence in order to function effectively with people of varying backgrounds. A team of researchers Rockstuhl, et. al. (2011) investigated an elusive concept that has been gaining attention called cultural intelligence. Where IQ helps one solve problems and emotional intelligence (EI) encourages inter-personal relations, cultural intelligence (EQ) may impact international leadership effectiveness.

Changing environments require changes in the skill set of leaders. Due to these changes the careful selection, grooming, and development of leaders within the global economy are necessary to meet new challenges (Avolio, et, al., 2009). Despite this need, most leadership literature has been focused on domestic leadership skills without emphasis on decisions within a more complex global environment.

Global leaders have a greater awareness that exists beyond national borders. To effectively work as a global leader it is necessary to 1.) adopt a multi-cultural perspective beyond national borders; 2.) balance both local and global demands even when they are in contradiction; and, 3.) work with multiple cultures simultaneously instead of with a single culture (Barlett & Goshal, 1992). As each culture views leadership slightly different it is necessary for the multi-national leader to develop a larger perspective to fit within these perceptions.

To develop this wider perspective a level of intelligence is needed to not only manage daily affairs across borders, the complexity of business operations, but also the social aspects of leading. Both general intelligence (IQ) (Judge, et. al, 2004) and emotional intelligence (EI) (Caruso, 2002) have done well in explaining leadership success in national contexts. Yet this leaves cross-border leadership still undefined and elusive to many researchers.

Metacognitive cultural intelligence (CQ) is a level of conscious awareness about different cultures, their underlining assumptions, and how these assumptions impact behavior. They use deep level processing to create cognitive maps of cultures and peoples in social settings in order to navigate those settings for effective outcomes. As more life experience is earned they continue to adjust and update their mental maps (Triandis, 2006). They are rarely stagnant and always adjusting.

Those with such skills have an intrinsic interest in cultures, understand non-verbal cues and are able to better to communicate with people (Rockstuhl, et. al, 2011). They have a natural sense of what people need and try and put them at ease in order to better communicate. With their ability to understand themselves, people within the environment, and challenge assumptions they become more accurate in their influential behavior. Throughout their lives this process becomes more accurate, more aware, and more effective.

The researchers (Rockstuhl, et. al, 2011) used 126 military leaders from the Swiss Military Academy in Zurich. Each of the participants were part of a 3 year program to improve their cross-border effectiveness due to increased likelihood of international conflict. The results found that IQ was related to effectiveness. Emotional Intelligence (EI) was related to general effectiveness within national borders but not internationally. Cultural Intelligence (CQ) was related to overall cross-border effectiveness. This increased as people become more culturally aware.

Avolio, J., Walumbwa, F. & Weber, T. (2009). Leadership: Current theories, research, and future directions. Annual Review of Psychology, 60, 421 – 449.

Bartlett, C. & Ghoshal, S. (1992). What is a global manager? Harvard Business Review (September-October), 124 – 132.

Caruso, D.,  Mayer, J.,  & Salovey, P. (2002). Emotional intelligence and emotional leadership. In R. E. Riggio, S. E. Murphy, & F. J. Pirozzolo (Eds.), Multiple intelligences and leadership (pp. 55 – 74). Mahwah, NJ: Lawrence Erlbaum.

Judge, T. A., & Piccolo, R. F. (2004). Transformational and transactional leadership: A meta-analytic test of their relative validity. Journal of Applied Psychology, 89, 755 – 768.

Rockstuhl, et. al. (2011). Beyond General Intelligence (IQ) and Emotional Intelligence (EQ): The Role of Cultural Intelligence (CQ) on Cross-Border Leadership Effectiveness in a GlobalizedWorld. Journal of Social Issues, 67 (4),

Triandis, H. C. (2006). Cultural intelligence in organizations. Group and Organization Management, 31, p. 20 – 26.

Leadership vs. Management Skills: Understanding the Differences

Leadership and management abilities are important in developing strong organizations that can create more synergy and financial benefits for the organization and its members. The skills and abilities appear to be similar for both leaders and managers but are separated by the ability to influence large groups of people. Leaders use their vision to create dynamic organizations that can overcome market challenges while managers focus more on skill based abilities.

Effective management has a number of components that lead to successful completion of duties.  Through proper skill development and appropriate perspectives management can create higher levels of organizational activity that improves upon the financial health of the.  Two lists of strong manager qualities encourage this greater understanding.

List 1) Quality managers have abilities that encourage their successful management of people (Barry, 2000):

a.       Inspiring shared vision,

b.      Strong communication Skills,

c.       Enthusiasm,

d.      Team Building Skills,

e.       Problem Solving Skills,

f.       Empathy of others,

g.      Competence under Pressure.

List 2) Gates further describes a list of qualities that strong managers should consider (2004):

a.       Thoughtful Choice of Occupation,

b.      Hiring Carefully and Firing Lazy Workers,

c.       Creating Productive Work Environments,

d.      The Ability to Define Success,

e.       Building Employee Moral,

f.       Willingness to Personally Handle Projects,

g.      Ability to Cater Decisions to Problems,

h.      Ability to Create Strong Reporting Structure.

Management abilities and leadership abilities are often seen as interchangeable. However, the skills that make a person a strong manager would not necessarily make this same person a strong leader. Strong leaders have the capacity to be effective managers but also bring with them a better sense of vision and purpose. They have the ability to draw together all of the organizational elements to solve specific business problems while not ignoring the human factors that allow this to happen. 

Leaders have slightly different skills when compared to managers that should be considered.  These skills typically focus more on motivating and encouraging larger populations to accomplish worthwhile goals. Leaders must be able to sell their vision to the organizational members as well as operationally manifest this vision through focused policies & procedures that steer an organization in the right direction. Leadership abilities are often see as personality traits (Melmuka, 2000):

a.       Ability in Persuasion,

b.      A Desire to be Generous,

c.       The Ability to Formulate a Vision,

d.      Flexibility in One’s Thinking,

e.       The Understanding of Humor in Life.

Organizations that seek to develop the next generation of leaders should encourage positive management skills from the beginning of employment so that leadership personality traits can grow. Management skills often lead to new methods of perception that are necessary in developing leadership traits. It is through these constantly refining abilities does the manager learn the wider context of decisions that encourage positive leadership traits.

Barry, T. R. (2000). Top 10 Qualities for Project Manager. Retrieved February 5^th, 2013 from http://lahcen.afif.be/files/top-10-qualities-of-a-project-manager.pdf

Gates, B. (2004). A Good Manager Has At Least 10 Good Qualities. Retrieved February 5^th, 2013 from http://www.worklifecoach.com/bill_gates.pdf

Melymuka, K. (2000). “Born To Lead Projects”, Computerworld, 43(13): 62.