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The Cultural Intelligence Concept in the Global Economy


There are four characteristics that are in demand within a technology oriented enterprise, namely: high market responsiveness, fast developments, low cost, and finally high levels of creativity, innovation and efficiency. What must be understood though is that such characteristics are dependent upon the type of technical teams that are the backbone of any international organization wherein through the utilization of a variety of CI management practices, a seamless integration of vertical and horizontal means of collaboration are implemented in order to create a stable organizational structure for proper operations and product development.

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On the other hand, what must be taken into consideration is the fact that though globalization and the process of outsourcing and off shoring, technology teams are no longer isolated to merely being within the same building, state or country, rather, they are now scattered across a wide breadth of countries, cultures and ethnicities which management practices of contemporary technology intensive enterprises need to take into consideration. This is where the concept of cultural intelligences comes into play and will be subsequently discussed and elaborated on in the succeeding sections.

What is CI?

Based on the work of Earley & Mosakowski (2004), cultural intelligence (CI) can be defined as a manager’s capacity to relate with employees from a vast array of cultures and ethnicities in order to create a working environment that is conducive towards effective and above all efficient operations. This practice involves being able to adapt to a wide range of cultural nuances (i.e. local business cultures, ethnic biases, traditions, religious observations, etc.) so as to understand how practices that are applicable to one set of employees may not necessarily be applicable to another set of employees with a more culturally diverse background (Earley & Mosakowski 2004). The concept of CI also applies to employees wherein through acceptance and understanding, a more cooperative working environment can be created which is not fraught with miscommunication, bias or distrust.

Do note though that cultural intelligence (CI) should not be confused with emotional intelligence (EI) since the latter deals with an employee’s/manager’s capacity to get along with and cooperate with fellow managers and employees while CI deals more with developing an understanding of different cultural backgrounds and how adaptive work practices and deeper levels of understanding are necessary in order to properly work together.

Using CI to have Effective Interactions across Cultures

One of the inherent challenges in implementing effective CI practices is in creating sufficient channels of communication within an organization (Imai & Gelfand 2010). While it is already a well known fact that channels of communication are one of the cornerstones of any successful business, what must be understood is that when it comes to working within a multinational environment, it entails the use of added practices so as to sufficiently relay messages across different ethnicities and cultures (Joo-seng 2004). What must be understood is that people from different cultures and ethnicities tend to perceive messages in many different ways due to the unique quirks of their method of understanding. Some messages may be interpreted as insulting and vice-versa and, as such, it is important to implement CI methods of communication that take this into consideration so as to reduce possible misinterpretations of what is being said.

For example Microsoft, which is one of the world’s largest software manufacturers, has development teams around the world working on different aspects of the operating systems that it produces. The inherent problem with this situation is that different methods of coding procedure combined with a variety of problems related to time difference, business culture and sheer distance involved invites problems in all stages of OS development. In fact it was seen in the case of the development of Windows Vista that problems with the operating system (which was largely considered one of Microsoft’s worst operating systems) was due to problems in effective CI practices in helping to consolidate efforts across different borders and cultures. This shows the importance of CI in creating effective interactions across cultures.

Using CI to Manage Culturally Diverse Teams Effectively

One challenge to take into consideration when managing culturally diverse teams is related to cultural bias and prejudice that impact the ability of employees to work harmoniously at their respective jobs. For example, in a 2012 news report involving Mexicans and Caucasians within Arizona and Texas there was a certain degree of cultural bias as well as prejudice resulting in work related conflict as well as instances of intentional discrimination resulting in not only substantial reductions in performance but the loss of certain operational capacities as workers from both sides left in favour of being in a less conflict ridden environment.

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Companies that want to be able to take advantage of a diversified workforce need to implement measures to reduce cultural bias and prejudice. This can come in the form of team building exercises, company sponsored behavioural training or even joint vacations all of which should help necessitate proper communication and collaboration between members of different cultural and ethnic backgrounds. The final challenge that companies should take into consideration is the concept of corporate assimilation and how this affect an individual’s productivity. Assimilation is a way in which a worker is negatively affected by an organization’s business and corporate culture wherein they are unable to sufficiently express themselves utilizing their ethnic and cultural backgrounds due to constraining rules and regulations at their work environment (Triandis 2006).

As such, companies need to take into consideration implementing new business culture practices that enable people to express themselves based on their cultural and ethnic background so as to encourage positive employee productivity rather than negative employee performance results as a direct result of constraining factors on their ability to express themselves (Triandis 2006).

Why is CI Important in today’s Global Context?

Since globalization and multiculturalism have become synonymous aspects of the global market place, companies tend to respond to the diverse consumer and cultural demographics to which they sell their products and services to stay relevant (Kwok, Bhagat, Buchan, Erez & Gibson 2005). A company that limits itself in terms of diverse employee demographics runs the risk of being unable to understand the quirks and cultural norms in certain ethnic and racial markets resulting in the creation of an ill-equipped marketing and sales strategy which very likely will result in adverse consequences for the company in relation to the number of products sold and the degree of market penetration (Van Vianen, De Pater, Kristof-Brown & Johnson 2004).

Taking such factors into consideration most modern day companies attempt a certain degree of racial and cultural diversity in the employees they hire. This enables the creation of unique product concepts, sales strategies and marketing mixes based on the views and backgrounds of this diversified workforce.

Other benefits derived from cultural diversity come in the form of greater employee retention due to a company culture that supports equality and racial acceptance rather than discrimination and divisiveness. It is also noted that multiethnic and multi-gender companies tended to have higher rates of productivity due to greater employee satisfaction over the company’s policies which results in better overall profits for the company due to increased productivity.

Criticisms against Cultural Intelligence

Working across boundaries such as distance and business culture is advantageous for any company due to access to a greater talent pool and product markets, however, the fact remains that along with such advantages comes distinct disadvantages in the form of ill-suited management practices in dealing with a diversified global workforce and the potential for problems in a company’s supply chain due to lax standards on the part of their international partners. The current response to such a dilemma has been to assign international managers based on their capacity for cultural intelligence which would enable them to “bridge the gap” so to speak in relation to dealing with a diverse workforce and market.

Assigning a proper manager often involves having them submit to an array of tests in order to determine their CI capacity; however, under the work of Ward, Fischer, Lam & Hall (2009) they consider CI as not sufficiently distinct from emotional intelligence. What this means is that an individual’s capacity to cooperate with (i.e. employee cooperation) or manage a diverse workforce may be due to their emotional intelligence rather than preconceived notions regarding their ability to understand the nuances of a particular culture. For example, when Ward et al. conducted an examination of 115 international students utilizing tests for emotional intelligence and one for cultural intelligence, it was shown that they had a shared variance of 67.2 percent which calls into construct validity of cultural intelligence and the overall utility of the CI measure in the prediction of cross-cultural adaptation (Ward, Fischer, Lam & Hall 2009).

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On the other hand, it should be noted that the view of Ward et al. is somewhat lacking when taking into consideration the diverse array of possible situations that emotional intelligence simply cannot be applied to. One example of this was seen in the strategy of Coca Cola when it tried to enter Chinese market. Their marketing campaign consisted of merely translating their slogan of “We bring you to life” into Chinese and using that in their marketing and print ads. Unfortunately, its translation wound up as “we bring your dead relatives to life” and, as such, wound up costing the company millions in changes to its original slogan.

Another example can be seen when Gerber expanded into Africa and did not take into account the predilections of local companies to place a picture of what was inside a product on a product label due to many Africans not knowing how to read. This of course resulted in a rather embarrassing recall by Gerber due to Africans perceiving each product by Gerber as containing babies. These are good examples which show that cultural misunderstandings can arise from a vast array of possible misconceptions and, as such, it is necessary for cultural intelligence to be implemented when it comes to managerial and employee interactions since not all situations can simply be resolved utilizing EI.


As seen in the paper, there are numerous advantages when it comes to implementing when working across cultural boundaries. In the case of distance and workforce diversity this can often entail problems related to communication, proper cooperation, the implementation of effective management practices and culture shock. However, implementing proper CI can result in cost reductions for a company, the ability to access new markets as well as the creation of a diversified workforce that would expand a company’s knowledge base resulting in better operational performance.

Reference List

Earley, P, & Mosakowski, E 2004, ‘Cultural Intelligence’, Harvard Business Review, vol. 4, no. 10, pp. 139-146. Web.

Joo-seng, T 2004, ‘Cultural Intelligence and the Global Economy’, Leadership In Action, vol. 24, no. 5, pp. 19-21. Web.

Imai, L, & Gelfand, M 2010, ‘The culturally intelligent negotiator: The impact of cultural intelligence (CQ) on negotiation sequences and outcomes’, Organizational Behavior & Human Decision Processes, vol. 112, no. 2, pp. 83-98. Web.

Kwok, L, Bhagat, R, Buchan, N, Erez, M, & Gibson, C 2005, ‘Culture and international business: recent advances and their implications for future research’, Journal Of International Business Studies, vol. 36, no. 4, pp. 357-378. Web.

Triandis, HC 2006, ‘Cultural Intelligence in Organizations’, Group & Organization Management, vol. 31, no. 1, pp. 20-26. Web.

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Van Vianen, A, De Pater, I, Kristof-Brown, A, & Johnson, E 2004, ‘Fitting in: Surface- and deep-level cultural differences and expatriates’ adjustment’, Academy Of Management Journal, vol. 47, no. 5, pp. 697-709. Web.

Ward, C, Fischer, R, Lam, F, & Hall, L 2009, ‘The Convergent, Discriminant, and Incremental Validity of Scores on a Self-Report Measure of Cultural Intelligence’, Educational & Psychological Measurement, vol. 69, no. 1, pp. 85-105. Web.

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