29 June 2016 Nicoleta Gurmuzachi 10551530
Topic: The role of Cultural Intelligence of the management’s team in minimizing/avoing difficulties arising from cultural diversity within the working environment
Abstract
Purpose: Because the business landscape became more complex, competitive and international, the ability to operate productively in different cultural contexts has never been more important. This paper has the goal to present a qualitative study which analyzed the role of the
managements’ cultural intelligence in overcoming or minimizing the difficulties associated with the cultural diversity within the teams they manage. In addition to providing an in-depth
theoretical background on this topic, the paper aims to present practical insights which either confirm or disconfirm the described theories obtained from managers who currently operate in international settings. Furthermore, this study is oriented towards complementing the existing literature about the implications of cultural diversity for MNCs by providing novel insights derived from real life experience of the same group of managers.
Methodology: The study combines a literature review with a small empirical study consisting of two instruments. Firstly, the selected sample filled in the 20-item, Four Factor Cultural
Intelligence Scale (CQS) in order to assess the level of their cultural intelligence. Secondly, a pilot study was conducted with each participant in order to ensure that he/she is familiarized with the concepts which appear in the interview itself. Finally, an in-depth, semi-structured interview session was conducted with each manager.
Findings: The managers scoring high in the cultural intelligence survey did not mention any negative aspect related to cultural diversity that cannot be avoided or minimized. One of them mentioned that conflicts are productive and unproductive. The first ones lead to finding the
optimal solution and thus contribute to an enhanced performance. The second ones can arise in culturally heterogeneous teams as well; thus cultural diversity does not represent the primary reason for their occurrence.
Practical Implications: In addition to the positive aspects of cultural diversity presented in the theoretical background, introducing international people in the working team represents a solution for managers operating in post-soviet societies characterized by low individualism and high groupthink.
1. Introduction.
The technological progress in transportation and telecommunications has revolutionized the 21st century. People witnessed the transition from the steam locomotive to high-speed rail or air traveling and replaced the telegraph with mobile phones and Internet (Bardhan, 2006). Globalization is known as a contemporary stage of development of capitalism over the world. The process of international integration was supported by lowered transportation costs and increased interaction through electronic connection. In result geographical and cultural barriers reduced (Bardhan, 2006). This phenomenon has impacted the business environment in an irreversible manner, making companies expand their operations from the domestic to the global level (MacDonald, 1991).
Besides the free flow of goods and money, the trend of globalization is associated with transnational migration. As stated by Landis (2008) more people are willing to activate beyond the geographical frontiers of their motherland for several reasons, such as gaining international experience, better employment opportunities, or moving from developing nations to those positioned higher on the economic scale. The increasing diversity can be observed in many European countries and in the United States, where estimates of the immigrant population is upwards of 25 million and growing (Landis, 2008). The process of globalization carries both advantages and disadvantages. In regard to the economic development, according to the World Economic Outlook 2012 that studied 42 countries – representing 90% of the global population, during the 20th century there is a significant increase in the global average per capita income;
however, it varies across countries, indicating that despite the overall increase in the output per capita, the distribution of income across countries is more uneven than at the beginning of the century (MacDonald, 1991).
The movement of populations as a result of globalization produces a cultural mix, due to which the working environment is switching from a less homogenous to a more culturally diverse one, consisting of members from different ethnic groups, countries of origin, with various beliefs, values, and religions (MacNab & Reginald, 2012). In this regards, MacDonald (1991) states that the globalization of society demands people to develop a better understanding of each other. Taking into account that nowadays organizations structure their activities by creating working groups, the challenge that international companies face is to concentrate their efforts on managing cultural diversity in a proper way. (Stahl, Maznevski, Voigt & Jonsen, 2010). According to Yeung and Ready (1995) leadership in cross-border contexts requires leaders to adopt a multicultural vision, and not a country-specific one, to find an equilibrium between local and global demands, even though they might be contradictory, and include in their teams multiple cultures rather than a dominant one. The researchers point out that that in order to achieve an effective intercultural leadership, the ability to function in culturally diverse contexts is needed.
According to a recent research, managing cultural diversity constitutes a major challenge for the management of multinational companies (Lourençoa, Dimas & Rebelo, 2014). As noted by Christian, Porter, and Moffitt (2006, p. 459) “one of the most challenging issues facing organizations today is that of dealing with workgroup diversity”. Both large and small firms have increased their number of foreign suppliers, partners, employees, shareholders and customers. The phenomenon of globalization has has not only changed the competitive landscape of business, but also the way in which leaders must conduct business and thus, the competencies that leaders need to be successful (Caliguri, 2006).
For this reason, Hofstede (2003) highlights the increasing need to enhance cross-cultural education to better prepare managers and management students to cope with the nuances of this multicultural century. Further in his research, the author states that a successful leader operating in cross-cultural contexts must deal with economic, political, and cultural practices, that may contrast each other. Therefore the careful selection and development of leaders with high cultural
intelligence who can achieve this goal represents an urgent need for this globalized century. (Avolio, Walumbwa, & Weber, 2009).
According to McNab et al (2012), the area of cultural intelligence education and development has not received sufficient consideration from the practical view point. Therefore, in this paper the accent will be put on finding practical insights for overcoming cultural misunderstandings within the working environment by conducting and analyzing several interviews with managers of multinational teams.
Because both the economic and physical survival of companies operating a global level depend on a productive cooperation among culturally diverse workers, there exists the need to ensure intercultural understanding among employees. As a consequence, the leaders of these companies must be sufficiently endowed in order to manage appropriately the cultural differences and the issues related to it, such as cultural shocks, misunderstanding, and conflicting situations.
According to McNab et al (2012), the area of cultural intelligence education and development has not received sufficient consideration from the practical view point. Therefore, in this paper the accent will be put on finding practical insights related to the management of cultural diversity. An in-depth analysis of the existing literature concerning this topic will be provided in the theoretical framework. In the same part, a research gap will be indicated on the basis of which the research questions and propositions will be formulated. Next, in the methodology part, the steps undertaken for answering the proposed question will be described. The obtained results will be presented and discussed in the following parts of the study, by linking them to the theoretical background. The study ends with a conclusion which provides an answer to the research question, indicates directions for future studies and presents the contribution of this study to both theoretical and practical aspects of the concept cultural intelligence.
2. Theoretical Framework
In order to provide an in depth analysis of the term CQ, the key word “culture” must firstly be investigated. As explained by MacDonald (1991), culture represents a bundle of
beliefs, morals, customs, values, habits that shape peoples’ identity and their way of living. In his paper he enumerates means such as television, music, film, through which one can learn a foreign culture, but puts emphasis on museums, because unlike television which fragments reality, museums represent high cultural institutions that offer preserved information. As explained by Hofstede (2001, p.9), culture represents a bundle of common values defined as “the programming of the mind” happening on an early life stage that distinguishes the members of one group from another. From the economic point of view, Tabellini (2005) associates culture with social norms and individual beliefs sustaining Nash equilibria as critical points in repeated social interactions. In addition to the guiding role in peoples’ lifestyles, recently culture has been studied as a contributing factor in the economic development of countries. According to Tabellini (2005), culture has a causal effect on economic development. Supporters of the same idea are Huntigton (1998) and Harrison and Huntington (2000) who confirm that culture represents an important factor in the economic growth of countries. Based on their conclusion, Grennes (2015) studied the influence of culture on the economic sector by analyzing the 27 member countries of the European Union which struggled in different proportion from the financial crisis started in 2007. As stated in his paper, Italy, Spain, Greece and Portugal are the ones that experienced major financial shortages and consequently have considerable national debt. In order to identify the reason for which some countries overcame financial difficulties while others did not, Grennes (2015) examined national culture as an auxiliary/additional element to Porters’ factor conditions: location, climate, natural resoures, infrastructure, communications, demographics, skills, and research facilities. In this regard, Grennes (2015) used Hofstede’s original five cultural dimensions: power distance, uncertainty avoidance, masculinity/femininity, individualism/collectivism, long term orientation, for identifying the effect of each dimension on the economic performance, and on the varying economics fluctuations (special accent) across the 27 EU member countries. According to Hofstede (2001), in societies characterized by power distance, the administrative elites are the only ones involved in the decision-making process, and this hierarchical categorization is tolerated. The author describes people from areas with high uncertainty avoidance as being anxious, stressed, skeptical and unwilling to make a change. Next, as stated by Hofstede (2001), people belonging to masculine societies value money and work rather than quality of life and relationships. Also, there is a clear difference between the gender roles which is tolerated by both men and women.
In contrast, in the feminine societies there is a tendency of achieving equality between genders. In regard to individualistic/collectivistic communities, Hofstede (2001) points out that people belonging to the first category are able to take the initiative and make independent decisions while the representatives of the latter are hesitating and are relying on the group rather than on themselves. Finally, individuals coming from societies with a high level of long-term orientation are seeking for long-term success, are perseverant and are inclined to make savings for further investments. By conducting a correlation analysis using the results from Hofstede’s statistical studies and from The World Economic Forum Index 2012, Grenness (2015) concluded that power distance, uncertainty avoidance and individualism have a significant effect on economic performance while for masculinity/femininity and long term orientation no relevant effects were remarked. According to him, countries with a high level of power distance and high uncertainty avoidance, such as Bulgaria, Romania, and Greece have a low score on economic performance, whilst states scoring high on individualism demonstrate an increased economic performance, which are Sweden, Germany and Finland. In regard to long-term orientation the author found that the majority of European countries score low. This is explained by the fact that the conceptualization of this dimension is not characteristic to the western countries, since it was developed from Chinese values (Hofstede, 2001).
The Greenness’s study shows that culture represents a fundamental determinant of economic performance, thus carrying a valuable insight for international business practitioners who must take into account both the challenges and opportunities associated with the five cultural dimensions introduced by Hofstede. Because some cultural characteristics may indicate possible challenges for achieving the economic targets of MNCs, the management team should concentrate its effort on identifying and minimizing the undesired effects associated with cultural traits of employees.
The academic debate build around the effects of cultural diversity on team performance indicates two opposing views. On one hand, in their research, Williams and O’Really (1998) have studied the similarity-attraction theory suggesting that people are inclined to working with individuals having similar values, beliefs and attitudes. According to Byrne (1997) there are several reasons for which people prefer to interact with the ones who espouse similar attitudes to their own. Firstly, this tendency is associated with corroboration, allowing people to obtain an
additional confirmation of their own beliefs; thus having the feeling of confidence and correctness of their ideas. Secondly, knowing that others share similar values enables people to predict others’ future behaviors. Finally, people are inclined to interact with other individuals who share their own values because it allows them to satisfy the need of belonging. Because of the similar values, people believe they will automatically be accepted as a member of the group. This idea is supported by Tajfel (1982), who describes the social identity and categorization theory, by highlighting the need of people to categorize themselves into groups, which most often happens on the basis of nationality, race and ethnicity. According to these two theories, people prefer to be part of a culturally homogeneous group and work with individuals having similar cultural backgrounds. As a result, companies find themselves coping with a tendency to ethnocentrism. As stated by Schopmeyer and Fisher (1993), the issue of ethnocentrism is associated with perceiving the practices of one’s own culture as superior to those of other cultures. Further in the article, the researchers state that the problem of ethnocentrism is correlated with a discriminatory behavior, since the members of the same group treat each other with favoritism, while other individuals are viewed as outsiders. Consequently, these people feel underappreciated because they experience non-acceptance, which reduces their satisfaction and leads to decreased individual and organizational performance (Indrawati & Dyson, 2005).
Summing up the findings from the two theories, cultural diversity is associated with a limited collaboration between people belonging to different cultures; thus homogeneous teams will be more effective than heterogeneous ones (Kulik, 2004).
On the other hand, the positive effect of cultural diversity on organizational performance cannot be overlooked. By capitalizing the potential benefits of diversity, organizations can build competitive advantage and overcome the culturally homogeneous competitors (Distefano, Maznevski, 2000). The researchers refer to the culturally diverse teams as being “the creators” since the members recognize the mastery of the others, and have the common goal to leverage synergies and focus their cumulative potential on achieving the best results. The advantages of a culturally diverse workforce have been explored by Stahl et al. (2010) who state that according to the information processing theory, culturally diverse teams have a broader range of information, knowledge and expertise; thus offering a higher contribution of creativity and innovation. The multiple and distinct perspectives provided by culturally diverse workgroups not
just enhance the problem solving processes, but increase the probability of identifying the most efficient solution. Proponents of the same idea are Cox and Blake (1991) who point out that heterogeneous groups might experience performance improvement faster because culturally diverse people are more open-minded and possess flexibility skills, which allows them to easily integrate into different environments and overcome ethnocentrism among group members. Therefore, the more culturally diverse a team is, the greater the resources available to conduct problem solving processes and the higher chances to create competitive advantage (Bantel & Jackson, 1989).
Summarizing the above described theories, it can be stated with certainty that cultural differences in the working environment encompass both advantages and disadvantages. In order to identify which of them dominates, Stahl et al. (2010) analyzed the positive and negative effects of cultural diversity on team performance by classifying them into divergent and convergent processes.
The authors define the convergent processes as a mechanism that aligns the team around common objects and enhances the commitment of each member to push his/hers limits for achieving the best group result. The convergent processes are based on effective communication and yield process gains such as group cohesion and satisfaction. In the same time, the effective communication leads to groupthink; thus reducing the range of opinions. The results of the research indicate that cultural diversity decreases convergent processes, meaning that the effect of “groupthink” is lowered, but the positive aspects of convergence (group cohesion and satisfaction) are minimized as well.
Further, Stahl et al (2010) define divergent processes as the activities that bring different points of view into a team; thus enabling the group to achieve more than individual members could. The activities that bring positive contribution create process gains, which in case of multicultural teams are creativity and innovation. However, the researchers point out that divergence can also cause a process loss - conflicts arising from numerous ideas and distinct understanding which may contrast each other. According to the results, cultural diversity is associated with increased divergence. Namely, the outcome of culturally diverse teams consists of increased creativity and innovation but also increased conflict. To be mentioned is that conflict arising from cultural difference is not always viewed as a process loss. Jehn and Mannix
(2001) state that conflicting situations may lead to a process gain by enhancing team communication and developing group cohesion.
Summing up, Stahl et al (2010) have identified three negative effects of cultural diversity upon team performance: conflict, low group cohesion and satisfaction. However, in regard to the first one – conflict, research suggests that it can also have a positive influence. Therefore, an analysis should be conducted in order to identify a moderating factor that can lower the negative effects of cultural diversity, or even convert them into positive ones. Nowadays this represents the goal followed by all MNCs aiming to overcome their culturally homogeneous counterparts.
This academic debated leads to the following research question: to which extent does cultural intelligence help the management team to overcome or diminish the negative effects of cultural diversity: conflict, low group cohesion and low satisfaction upon multinational team performance? In order to provide an answer, the next propositions will be analyzed.
Proposition 1. The moderating role of CQ will convert the negative effect of conflict into a positive one
Proposition 2. The CQ of the management team enhances group cohesion within multicultural teams.
Proposition 3. The CQ of the management team contributes to the enhancement of the employee’s satisfaction operating in multicultural teams.
The literature defines this competence as cultural intelligence (CQ) – a concept introduced by Early and And (2003) has gained increased attention from both practitioners and researchers such as because of its indisputable relevance in cross-cultural management. According to Early (2002), a person having a high level of cultural intelligence is able to ensure a smooth inter-cultural interactions by fostering tolerance and bridging the divides occurring from distinct beliefs. Bennet (2009) defines cultural intelligence as the ability to interact sensitively and competently with people having distinct cultural backgrounds both in long-term and immediate times. However, in this paper the definition proposed by Osland (2008) will be used since it relates to global leadership, thus being the most appropriate for answering the proposed research question.(?) As stated by the author, intercultural competence is the skill that enables a leader to influence the thinking, attitudes, and behaviors of an international team to
work together towards a common vision and a common goal. Caliguri (2006) associates cultural intelligence with possessing international business savvy without living abroad and highlights the importance of being endowed with a certain set of knowledge, skills, abilities and personality characteristics (KSAOs) for becoming a successful global leader. This idea is supported by Distefano and Maznevski (2002) who state that for managing complex and tense situations in a culturally diverse environment one must possess a portfolio of technical, interpersonal and conceptual skills. Despite the various interpretations that researchers attributed to cultural intelligence, the common parts that can be remarked in their studies are referring to a person's capacity of functioning efficiently in an unfamiliar cultural settings, and to the need of possessing a certain set of skills for developing cultural intelligence. In order to understand which are the necessary characteristics it is important to perform a deeper evaluation of the construct CQ. According to Ang and Van Dyne (2008) CQ represents a multidimensional concept comprised of metacognitive, cognitive, motivational, and behavioral dimensions. The metacognitive CQ represents a persons’ level of cultural awareness related to preferences and norms that other societies have. It represents the ability to process information, strategize and develop guidelines for efficient social interactions in novel cultural settings. The cognitive dimension is the knowledge of values, practices, and conventions of different cultures acquired from education and experience. This allows not just the understanding of cultural differences but also the anticipation of certain behaviors of people with different cultural backgrounds. Motivational CQ is driven mostly by intrinsic interest in culture and is associated with the desire to invest attention and energy in discovering new cultures by both learning and operating in different cultural settings. Lastly, behavioral CQ represents the ability to adopt an appropriate behavior within a culturally diverse environment. It is related to both nonverbal verbal actions, implying the opportune usage of words and phrases when interacting with people from other cultures. People possessing a high level of behavioral CQ are flexible and can easily adapt their behaviors in a way that facilitates effective interactions with people from distinct cultural settings. The four facets are associated with different capabilities which together contribute to achieving a higher level of cultural intelligence.
However, Van Dyne, Ang , Ng, Rockstuhl ,Tan, and Koh (2012) argue in their recent study that the construct of cultural intelligence should be further studied in order to obtain a deeper understanding of the four facets. Therefore, the researchers introduced an updated
conceptualization of CQ that has sub-dimensions for each of the four factors. For metacognition the authors delineate the following sub-dimensions: planning, awareness, and checking, while for the cognitive CQ they outlined the culture-general knowledge and the context specific knowledge. Both intrinsic and extrinsic interests and self-efficacy represent the sub-dimensions for motivational CQ. In regard to behavioral CQ, the researchers outlined the flexibility in both verbal and non-verbal actions and the speech acts as being the most relevant sub-dimensions. By conducting this advanced theoretical conceptualization of cultural intelligence, the researchers had the goal of identifying the capabilities needed for the development of each CQ factor; thus facilitating the process of self-development for leaders aiming to enhance their intercultural competence.
In regard to this challenge, MacDonald (1991) stated that intercultural understanding implies not only speaking foreign languages but understanding the ways of life of different cultures, examining their priorities, and discovering their worldviews. By building up these abilities, a person enhances his/hers capacity to operate within a multicultural-environment.
Methodology Research Strategy
In order to perform the analysis which in turn will answer the paper’s research question, the following research techniques are applied. Firstly, a solid literature review was provided, in which the most relevant concepts related to the researched topic were introduced and developed, followed by a small empirical study consisting of questionnaires –the 20-item Cultural Intelligence Scale (CQS) and in-depth semi-structured interviews conducted with the same participants. The interview sessions were preceded by a pilot study.
An inductive qualitative approach is applied because it yields a broader range of information including specific practical examples, thus giving a deeper understanding about the usefulness of the management’s CQ in dealing with psychological issues occurring in the working environment: eliminating the negative effects of conflict, creating group cohesion and enhancing the satisfaction of the employees. Also, this method was chosen because it allows going beyond the theoretical aspect of cultural intelligence, and discovering some other insights
related to intercultural competence that occur in practice, which is the goal of this study. Since the data-gathering will be held at a specific point in time, the study can be classified as a cross-sectional one. To be mentioned is that despite the inductive approach used in examining the research question, the concepts used in the analysis of the problem are extracted from the literature review. Concerning the research strategy, because the study begins with the collection of qualitative data on which theory will be built after the evaluation of interviews, grounded theory will be used.
Sample Characteristics
The participants of this empirical study are 5 managers, both females and males with ages between 27 and 45. Two of them are Spanish expatriates working for a Spanish clothing brand in the position of store managers of two stores located in Amsterdam, Netherlands. The other three are Moldovans representing top- and middle-level managers in two non-governmental organizations located in Chisinau, the Republic of Moldova. The expatriate participants have been living and working in Netherlands for more than 10 years. They hold managerial positions in the retail industry for approximately 6 years and their duty is to manage the activity of employees working in the store: sales advisors, visual merchandisers, and stock responsible people. The Moldovan participants have gained from 10 to 15 years of experience in managing different departments of the NGOs that provide consultancy in the agricultural development. The common factor that participants have is working with people with different cultural backgrounds and managing the issues occurring from cultural differences in order to achieve the best team performance.
Even though confidentiality and anonymity was guaranteed to each of the participants, some of them allowed mentioning their real identities in this particular research, which is the case of the store managers, while the names of others have been changed. Therefore, the people who brought their contribution to this analysis will be introduced: Bahare – store manager, Ainara – store manager, Jim- project manager, Doina- HR manager, Aurelia – executive director.
The store managers working in Amsterdam were approached by direct contact in the stores they manage, while the other three managers working in Moldova were interviewed by using skype. Informed consent was obtained from all interviewees and they were given the right not to answer a particular question.
Firstly they were asked to fill in the Four Factor Cultural Intelligence Scale CQS in order to assess the level of their intercultural competence. Secondly, before proceeding to the interview session, a pilot study was conducted to make sure that all participants are familiarized with the concepts used in the interview. The set of questions itself was focused on discovering the perspectives and viewpoints of the managers related to both the benefits and drawbacks of cultural diversity that they remarked from their own experiences, and to the concept of CQ. Namely, they were asked to express their opinion concerning the usefulness of this competence in dealing with cultural diversity, and in particular with the three factors analyzed in this paper: conflict, group cohesion, and satisfaction. The participants were asked to describe the ways in which they manage to increase group cohesion and satisfaction and to lower or avoid conflicting situations arising from a variety of viewpoints. To be mentioned is that the discussion about conflicting situations had the goal to reveal the managers’ opinion about both the positive and negative consequences they carry, and which of them dominates. Furthermore, the interviewees were asked to exemplify some other factors (if any) related to cultural diversity that influenced the performance of the teams they managed. Finally, they were asked to give some pieces of advice about how to manage cultural diversity and how to increase the cultural intelligence for future managers willing to operate to international contexts.
During the interview the interviewee’s statements have been digitally recorded in order to ensure that all information is captured and not distorted through the interviewer’s own perception and later transcribed verbatim. Afterwards the information was grouped and ordered in a meaningful way which allows to either support or disapprove the theories presented in the introduction and to identify the existence of other issues related to cultural diversity which are not discussed in the literature. Consequently, the obtained information is used for analyzing the three propositions, answering the research question, revealing insights from real life experience, giving practical solutions that will help international leaders to overcome difficulties related to cultural diversity and indicating directions for future research.
Generalizability, Validity, Reliability
Even though the interviewed managers work in different companies, and in different countries, the generalizability of the results is rather limited because of the small sample size of 5 people. However, due to the pilot study conducted before the interview itself, it is assumed that sufficient observations will generate more information, evening out unsystematic faults; thus a more accurate conclusion will be drawn. Furthermore, considering the willingness of workers to cooperate and provide full answers to the questions, the absence of any obvious threats to the internal validity of the paper is confirmed. By using The 20-item, Four Factor Cultural Intelligence Scale and the pilot study in the empirical study all the main aspects related to cultural intelligence were covered, thus increasing the content validity of the paper.
Taking into account the accuracy of the formulated questions which covered issues directly related to the research propositions, such as cultural intelligence, cultural diversity, conflict, group cohesion and satisfaction, it is estimated that the reliability of the paper is relatively high.
Results
Firstly the results from the 20-item, Four Factor Cultural Intelligence Scale are analyzed. This survey is comprised of four categories: metacognitive-CQ, cognitive- CQ, motivational- CQ, behavioral - CQ, each having from 4 to 6 affirmations which participants should answer by indicating a number from 1 – strongly disagree to 7 – strongly agree, where 4 represents a neutral position. Unexpectedly, the answers received from the Spanish managers showed a low score for metacognitive –CQ, cognitive – CQ and behavioral – CQ and a high score for motivational – CQ. Questions referring to metacognitive, cognitive and behavioral CQ have received answers not higher than 3, meaning that they disagree with the affirmations from these sections. However, they scored high on motivational – CQ, indicating at least a 5 for each of the corresponding affirmations, which exceeds the neutral position. Since 3 out 4 factors received codes lower than 4, it can be concluded that managers do not possess a high level of cultural intelligence.
The other three managers showed different results. For the affirmations related to metacognitive and cognitive CQ the values indicate an agreement, since no affirmation received a lower code than 5, which was given for only two out of ten affirmations describing these two factors. Towards the motivational and the behavioral components, the managers indicated only codes 6 and 7, which proves their strong agreement. Therefore, it can be concluded that Moldovan managers possess a high level of intercultural competence.
The pilot interview questions revealed that all participants were familiarized and could provide an explanation of the concepts: cultural diversity, cultural intelligence, group cohesion, member satisfaction, conflicts, which were used in the interview itself.
In order to ensure clarity of ideas, the description of the results will be categorized by themes and will further be linked to the theoretical background in order to identify which theories were confirmed/disconfirmed by managers dealing with cultural diversity on a daily basis. A comparison between the interviewees’ opinions upon cultural diversity and cultural intelligence will be provided, and finally new insights and relevant pieces of advice will be presented.
Culture and Cultural Intelligence
Concerning the importance of culture in economic performance, the managers had different opinions. On one hand, Aurelia – the executive manager strongly agreed with this statement, and provided an example about the relation between the management and the employees which in different cultures is perceived differently. According to her, in countries with a soviet past (CIS countries) this relation is distant, employees view the management of the company as a superior organ, while in European countries this relationship is more democratic. She brought the example of the way employees address their managers. According to her, in post-soviet countries employees always use the following formula when addressing their managers: “Mister/Madame and the last name”. During her first years of working with European people, she was surprised by the way younger people called her “they called me just like my mother did, Aurelia”. Even though she used this simple example, Aurelia said that the cultural features have a considerable
influence on the work; thus affecting the economic performance of the company. On the other hand, the statement of the store manager, Bahare, “work is work and culture is culture” reveals that she does not recognize a link between culture and economic performance.
However, all the five participants outlined the importance of the concept cultural intelligence and its application in managing culturally diverse teams. Ainara- the store manager pointed out that today this competence is even more important because the working environment has become more diverse. She pointed out that during the 8 years of holding a managerial position in the retail industry she has observed that in last couple of years there is almost a double amount of different nationalities comparing to previous years. According to her, a possible explanation is the global crisis which affected mostly countries from the South of Europe, including her own motherland – Spain. Therefore, people are moving to more developed countries in search for a better quality of life. Doina – the HR manager, mentioned the phenomenon of globalization and also pointed out that the working environment became more culturally diverse; therefore, “being culturally intelligent is a must”.
Cultural Diversity
When asked their opinion about cultural diversity, Ainara and Bahare stated that diverse teams bring more input but also increased conflict and misunderstandings. After the experience of being a leader of both a homogeneous and a heterogeneous team, Bahare stated that is was much easier in the first case. Apart from knowing what to expect from the culturally homogeneous team (which happened to consist of mostly German people), she used less time in explaining and coaching this team than in the case of a heterogeneous team. According to her this happened because they already knew how to cooperate and thus achieved high performance in a relatively short time. Moreover, they understood things in the same manner and were able to split duties and follow the plan without her implication. Bahare pointed out that especially in the beginning it was a lot harder to manage the heterogeneous team, since the multiple ways of understanding created dispute among team members and hindered their performance. However,
after people got familiarized they wanted to bring their own contribution and even proposed their own schedule of work to the manager. Ainara, the second store manager is a proponent of the same idea. She stated that members from culturally diverse teams require more time to adapt to each other. She, as the leader of the group applies the technique of “breaking the ice” every time somebody new joins the team, just to ensure a smooth introduction of that particular employee into the team. Also, she brought an example of conflict which occurred due to different religions. In the sales assistants team, one girl was Muslim, and in the period of Ramadan, which lasts several months, she had to pause more times per day for praying, even though she was not given a break for that. This situation has created discontent among the other workers, because it slowed down the working process, but also because she had more free time. Even though Ainara tried to overcome the problem by explaining the other workers the girls’ needs to follow the religion norms, conflicts happened on a constant basis.
Aurelia and Jim both expressed their content related to the cultural diverse team they are managing. The executive pointed out that in a country with a soviet past, where people were receiving fragmented information, without having the right to express a different opinion, a “fresh pair of eyes coming from another place is the best we can get”. By bringing novel ideas and business plans concerning the agricultural industry, they help the team enlarge its vision and abandon the “one-way of thinking”. Aurelia stated that did not experience any serious issues occurring from culturally heterogeneous teams. However she outlined that in the first years of working with international people it was more difficult for her, as she was not aware of cultural differences, and did not have a proper strategy for managing this diversity. A couple of years were enough to overcome this problem, and currently she feels confident and comfortable while working with international people, even if she does not speak their language, and did not visited their country. When asked about the way she achieved this level of intercultural competence, she said that “everything starts with the thirst of discovering”. As she stated, she is lucky to be endowed with personal traits such as flexibility and open-mindedness, which helped her in becoming culturally intelligent. Moldovan managers stated that cultural diversity represent a valuable asset in such a small country with a rough competition.
All five participants said that a high group cohesion yields high members’ satisfaction. Therefore, the managers put emphasis on rewarding good teamwork, such that the employees have an incentive to cooperate. Ainara also brought an example of ethnocentrism which occurred in a team she managed in the past, where more than 50% of the team were Dutch. According to her, the Dutch workers preferred to team up between them, speak Dutch even though their colleagues did not understand, consequently all the other non-Dutch workers were left as outsiders, which of course decreased the group cohesion and the members’ satisfaction. Even though she tried to neutralize the effect of ethnocentrism in that team, by organizing team meetings and discussing the problem with the whole team, she did not really succeed and left the job. Her current team has not changed its composition for more than half a year – which she believes it’s her merit. Ainara states that even though culturally heterogeneous teams require more time for adaptation, there are higher chances of achieving group cohesion than in the case where a particular nationality dominates in a team. When asked about ethnocentrism, Aurelia had another opinion. She stated that even though in her team Moldovan people are in a higher proportion she did not witness situations in which international people were left apart. On the contrary, Aurelia said that international people receive more attention at the beginning, just to make sure they can smoothly adapt to the new working environment. As measures for enhancing group cohesion, Aurelia mentioned the team building activities to be a solution. She said that during their adaptation period of international people, she organizes regular meetings with them, and with the whole team to ask their impressions, and to answer any of their questions. Also, she finds it extremely important to organize activities through which international people get to know the Moldovan culture.
Satisfaction
The HR manager – Doina stated that without achieving employees’ satisfaction it is impossible to keep the team united, or perform any teamwork. She stated that cultural diversity does not hinder the satisfaction, as long as each employee is performing the activities he is best at, and respects the norms of his international colleagues. Jim claimed that satisfaction is achieved as a result of hard work and cannot be offered “like a piece of cake”. He stated that as the project manager of an international team he wants to inspire his colleagues, and even though they have different cultural backgrounds, they all should work for achieving one common goal.
Aurelia said that achieving satisfaction at the work place is firstly driven by mutual respect. This is especially important in an international setting.
Conflict
The managers of non-governmental organizations stated that they did not experience significant conflicting situations related to cultural diversity. According to them, cultural diversity is always a plus, because of the irreplaceable benefits such as different points of view, innovation, and brainstorming. Jim mentioned that the locals are always excited about receiving somebody new, and before a new international joins their team, the management team informs the workers about the culture of that person, and the behavior they need to adopt towards him/her. Aurelia stated that she had “never experienced something like conflict”. She said that disagreements represent normal phenomena which occur in each working environment regardless of its employees’ cultural background. She outlined that in these situations the participation of the management is of high importance, since misunderstandings may be resolved through productive discussions. She stated that conflicts arising because of multiple viewpoints about how a problem should be approached “make her happy”. Aurelia says that a productive working environment should be lively and people should argue with each other. In this way the company is able to find the optimal solution. Unproductive conflicts arising from personal circumstances or unacceptance of some other values/religion/race must be discussed. However, she mentioned that it is extremely important to hire people who are not only skilled but also tolerant and open-minded. In the absence of these characteristics unproductive conflicts are unavoidable.
Recommendations
Even though Ainara and Bahare have recognized some positive aspects of cultural diversity, they claimed that “there is nothing better than working with people with whom you share similar beliefs”. Therefore they encouraged avoiding cultural diversity at the working place if possible. However, Ainara said that it is the experience with working with people coming from different cultures that made her better at managing cultural differences. Bahare said she increased her cultural intelligence by travelling and getting to know people from different parts of the world. She encourages future managers willing to work in international contexts to spend some time on travelling before starting their career. According to Doina, the development of
cultural intelligence begins with increasing one’s general knowledge, through reading, studying, travelling, meeting new people. Jim and Aurelia pointed out that not every manager is able to deal with cultural differences in his team, even if he is good at working with people. They highlighted the importance of having personal characteristics such as flexibility and open-mindedness. Aurelia mentioned the importance of team-building activities, and introducing the international to the local culture.
Discussion
An unexpected aspect is the one referring to the low score of cultural intelligence of Ainara and Bahare. Despite their experience in working with culturally diverse people, both of them scored low on metacognitive, cognitive and behavioral CQ. However the result of the questionnaire is in line with the answers they have provided. Both of them associate cultural diversity with conflicting situations, and prefer working with people having similar beliefs. According to Ang and Van Dyne (2008), a low metacognitive CQ score shows the absence of awareness about cultural differences, the inability to plan a correct strategy and to check its outcome. Ainara confessed that was unable to solve the problem of ethnocentrism in the first team she managed and did not mention having a concrete plan that did not work. Also, even though she did not experience flow of employees in the second team, she was not able to solve the conflict created because of religious norms. Moreover, as stated by Ang and Van Dyne (2008) a low score of cognitive CQ describes one’s low culture-general knowledge and low context-specific knowledge. Ainara said that in the first team, more than 50% of employees were Dutch. A possible reason for which she was not able to manage that team is her low culture-general knowledge or her low knowledge about the Dutch culture in particular. The low score of behavioral –CQ indicates a lack of flexibility which is also explained by her will to work with people having the same cultural background as she does. This confirms the theory of Caliguri (2006) who highlights the importance of being endowed with a certain set of knowledge, skills, abilities and personality characteristics (KSAOs) for becoming a successful global leader. The high score of the motivational –CQ shows that both Ainara and Bahara have intrinsic and extrinsic motivation to work with international people. This fact was not denied by them, but taking into account their wish to avoid cultural diversity, it can be assumed that the intrinsic
motivation lacks. The store managers confirm the similarity-attraction theory, according to which people are attracted to work with the ones who share their own values. Also, the results they gave confirm the theory of Stahl et al. (2010) which says that cultural diversity increases the divergent processes; thus culturally heterogeneous teams bring high creativity and innovation but also a high rate of conflicting situations.
On the other hand, the Moldovan managers do not mention any negative outcome resulting from cultural diversity. Aurelia disconfirms the theory of Stahl et al. (2010) by stating that cultural diversity does not represent a cause for a conflictual behavior. According to her, conflicts are productive and unproductive, the later occurring not because of the diversity itself, but as a result of a lack of respect, or inappropriate people in the team. The productive ones can yield positive outcomes if are managed correctly. The topic related to the positive and negative aspects of conflict in culturally diverse teams has not been researched much; therefore it represents an indication for further research which will enable managers to not be afraid of cultural diversity, but eliminate the negative parts associated with it. Also, Jim disconfirms the theory of Stahl et al. (2010) which says that cultural diversity leads to decreased group cohesion and satisfaction. According to Jim, the management of the company should prepare the team before an international employee joins them, by analyzing his cultural background and showing respect towards his norms. Doina has the same opinion, and states that achieving group cohesion and satisfaction represent two areas upon which each working team works, regardless of its cultural composition. In this regard Aurelia enumerated several solutions that can help a manager achieve group cohesion and satisfaction in a culturally diverse settings: rewarding teamwork, organizing team-building activities, introducing the international people to the local culture.
In addition, Aurelia, Jim and Doina confirm the theory of Distefano and Maznevski (2000) who associate cultural diversity with a resource for competitive advantage. Aurelia said that in her company cultural diversity represents a valuable resource which allows the company to overcome national competition from NGOs that do not possess culturally heterogeneous teams. When explaining the reason for which cultural diversity represents a valuable assets, Aurelia highlighted a historical factor. She pointed out that people coming from post-soviet societies have similar points of view, and cannot think out of the box. The Soviet Union imposed certain rules of behavior and offered fragmented piece of information which did not allow people
to develop an independent way of thinking. This fact is proved by the theory about the five cultural dimensions of Hofstede. According to the researcher, countries characterized by a low level of individualism show a decreased economic performance. In this situation, cultural diversity represents a solution for companies operating in these countries that managers can use in order to increase the level of individualism in their companies.
Even though all the five participants made certain recommendations for future managers willing to operate in international contexts, considering the low score of cultural intelligence obtained by the Spanish managers it is suggested that only the recommendations obtained from Moldovan managers are taken into account.
Except for the small sample size which represents a limited generalizability, the overall validity of the results can be empowered by investigating their face or content validity. In this regard, the help of experts who check the relationships between elements examined in this paper may be needed, in order to give their approval/denial for the conclusion drawn in the end of the paper.
Conclusion
In the current globalized century, organizations do not limit their activity to the domestic level, rather they augmented their operations globally. This requires the leaders of MNCs to develop the intercultural competence allowing them to successfully manage the multinational teams. Literature suggests that cultural diversity in the working teams is associated with both positive aspects, such as increased creativity, innovation, problem solving skills, elimination of
groupthink and negative aspects like low group cohesion, low employees’ satisfaction and increased conflicting situations. In order to assess the extent to which cultural intelligence can minimize or avoid the disadvantages related to cultural diversity, an interview session was conducted with five leaders who manage the performance of culturally diverse teams. The interview itself was preceded by a pilot study which was conducted for ensuring that the interviewees are familiarized with the concepts used in the interview questions. In addition, the participants were asked to fill in a questionnaire which allowed measuring their intercultural competence. The main results are in line with theory. The group of managers scoring low on three out of four dimensions of cultural intelligence did encounter problems related to cultural diversity that they could not solve. The managers scoring high on the cultural intelligence survey claimed that cultural diversity does not represent a reason for conflicts, low group cohesion or low satisfaction. The analysis of the propositions is conducted by referring to the results of the second group of managers, as they possess a high CQ and their responses are representative. In regard to conflict, the executive said that there are two kinds of conflicts: productive and unproductive. While the first ones are associated with brainstorming, productive arguing and lead to finding the optimal solution, the second one can be resolved by discussion. If this is not the case, the problem should be studies from the root, but diversity does not represent the primary cause. The literature provides little evidence for the positive aspects of conflict in culturally diverse teams; therefore this represents an indication for future research. According to the affirmations of the participants scoring high on CQ, proposition one is supported. Cultural intelligence can convert the negative aspects of conflict into positive ones. In regard to group cohesion and satisfaction all five participants claimed that the terms are interrelated. A high group cohesion leads to a high satisfaction of each member from the group. In order to enhance these two aspects, the managers recommended organizing team-building activities, rewarding team work, establishing group meetings and introducing the international people to the local culture in order to avoid the situation in which they feel outsiders. Therefore propositions two and three are also supported. This leads to the conclusion that cultural intelligence can certainly enable the managers of a culturally diverse team to overcome conflict, increase group cohesion, and satisfaction. However, it is worth mentioning that both the literature and the interview results indicate that a manager is able to obtain this result only if he/she possesses the personal characteristics: flexibility, open-mindedness and has intrinsic motivation to working in
international contexts. These characteristics combined with good managerial skills enables a manager to exploit cultural diversity in a beneficial way. From the results of the interviews a novel attribution of cultural diversity has emerged. It represents a potential solution for business practitioners operating in post-soviet areas, who aim to increase the individualistic competences across the workforce.
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