MGMT20144 Management Business Context Master of Business Administration (MBA) School of Business and Law MGMT20144 Management Business Context Unit 11 Issues related to cross cultural and international management . Introduction The determinants of culture include religion, political philosophy, economic philosophy, education, language and social structure. This unit focuses on the impact of, social structures, religion, language, and education on the framing of national culture. The section on religion explains the the economic implications of Christianity, Islam, Buddhism and Confucianism. In addition, Geerte Hofstede’s most recent model of national cultural dimensions is considered. (Hofstede, Hofstede & Minkov, 2010). Though criticized in some quarters and by some academics, it remains the most applied model for research on comparisons of cross cultural difference. According to Hofstede, Hofstede and Minkov (2010), cultures vary along six dimensions. These are power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance, long term orientation versus short term orientation and finally, indulgence versus restraint. The concept of ethnocentric behavior is also discussed as are the common approaches afforded to managing human resources in the international firm. Of particular importance to this topic is the development of a growing awareness at the theoretical level and the practical level of the need for business organizations and their managers to be aware of cross cultural and diversity issues within the markets they serve and customers needs they wish to fulfill. Also significant is the awareness of diversity within a global workforce with different international operating units for a firm. This poses both challenges in identifying core homogeneous practices and values settings as well as the need to incorporate diverse needs and finally the opportunity to create unique corporate identity from diversity. Many of the issues covered in this topic, in particular cross cultural and international management have facets that will be discussed in courses such as as MRKT20052 Advanced Marketing Management and MGMT20133 Strategic Business Management. In these courses the impact of localization and globalization will be prevalent as well as the need to craft structures and systems respondent to cross cultural aspects of markets and competition. Learning objectives This unit has the following learning objectives: ⦁ To understand the key concepts supporting cross cultural and international management ⦁ Examine the nature of differing theories to support cross cultural and international management and the impacts that these have for businesses and business managers. ⦁ Consider the opportunities from study of cross cultural and international management practice to frame new opportunities and capabilities for a business. ⦁ Apply knowledge and skills gained from this unit towards resolving business challenges and issues, with particular relevance to cross cultural and international management practice for improved or breakthrough outcomes for the firm. ⦁ The Nature of Cross Cultural and International Management What Is Culture? Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living. The fundamental building blocks of culture are values (abstract ideas about what a group believes to be good, right, and desirable) and norms (the social rules and guidelines that prescribe appropriate behavior in particular situations). The term society refers to a group of people who share a common set of values and norms. Value and Norms Values provide the context within which a society’s norms are established and justified and form the bedrock of a culture. Norms are the social rules that govern the actions of people toward one another. Norms can be further subdivided into folkways (the routine conventions of everyday life) and mores (norms that are seen as central to the functioning of a society and to its social life). Culture, Society, and the Nation-State A society can be defined as a group of people that share a common set of values and norms; that is, a group bound together by a common culture. But there is not a strict one-to-one correspondence between a society and a nation-state. Nation-states are political creations. They may contain a single culture or several distinct cultures. The Determinants of Culture The values and norms of a culture do not emerge fully formed. They are the evolutionary product of a number of factors including prevailing political and economic philosophies, the social structure of a society, and the dominant religion, language, and education. Social Structure A society's social structure refers to its basic social organization. Two dimensions stand out when explaining differences between cultures. The first is the degree to which the basic unit of social organization is the individual, as opposed to the group. The second dimension is the degree to which a society is stratified into classes or castes. ⦁ ⦁ ⦁ Individuals and Groups within Culture The Individual A focus on the individual and individual achievement is common in many Western societies. An emphasis on individual achievement has positive and negative implications. On the positive side, the dynamism of many developed country economies owes much to the philosophy of individualism. On the other hand, individualism can lead to a lack of organization loyalty and failure to gain organization specific knowledge, competition between individuals in an organization rather than team building, and can limit people's ability to develop a strong network of contacts within an organization. The Group In sharp contrast to the Western emphasis on the individual, in many Asian societies the group (an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behavior) is the primary unit of social organization. While in earlier times the group was usually the family or the village, today the group may be a work team or business organization. When meeting someone she may say she works for Sony rather than say she is an engineer that designs disk drives. The worth of an individual is more linked to the success of the group than individual achievement. This emphasis on the group may discourage job switching between organizations, encourage lifetime employment systems, and lead to cooperation in solving business problems. On the other hand, individual creativity and initiative is suppressed. Social Stratification All societies are stratified on a hierarchical basis into social categories, or social strata. Social Mobility Social mobility refers to the extent to which individuals can move out of the strata into which they are born. A caste system is a form closed system of stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime whereas a class system is a form of open social stratification in which the position a person has by birth can be changed through his or her achievement or luck. Significance A country’s social strata can have important implications for the management and organization of businesses. In cultures where there is a great deal of consciousness over the class of others, the way individuals from different classes work together (i.e. management and labour) may be very prescribed and strained in some cultures (i.e. Britain), or have almost no significance in others (i.e. Japan). Class consciousness refers to a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others. Religious and Ethical Systems Religion can be defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred. Ethical systems refer to a set of moral principles, or values, that are used to guide and shape behavior. The ethical practices of individuals within a culture are often closely intertwined with their religion. While there are literally thousands of religions worldwide, four that have the largest following are Christianity, Islam, Hinduism, and Buddhism. Confucianism, while not a religion, influences behavior and shapes culture in many parts of Asia. Christianity Christianity is the largest religion and is common throughout Europe, the Americas, and other countries settled by Europeans. About 20 percent of the world’s population is Christian. Within Christianity there are three major branches: Protestant, Roman Catholic, and Eastern Orthodox. Economic Implications of Christianity: The Protestant Work Ethic At the turn of the 19th century, Weber suggested that is was the "Protestant work ethic" that was the driving force of capitalism. This focus on hard work, wealth creation, and frugality encouraged capitalism while the Catholic promise of salvation in the next world did not foster the same kind of work ethic. The Protestant emphasis was on individual religious freedom, in contrast to the hierarchical Catholic Church. Islam Islam has the same underlying roots of Christianity (Christ is viewed as a prophet), and suggests many of the same underlying societal mores. Islam extends this to more of an all-embracing way of life that governs one's being. It also prescribes many more requirements on how people should act and live. Islamic Fundamentalism The past three decades have witnessed the growth of a social movement often referred to as “Islamic fundamentalism.” Islamic fundamentalism is associated in the media with militants, terrorists, and violent upheavals. However, this characterization is misleading and the vast majority of Muslims point out that Islam teaches peace, justice, and tolerance. Fundamentalists exist in every religion. They demand a rigid commitment to traditional religious beliefs and rituals. Fundamentalists have gained political power in some countries – a theocratic government. Economic Implications of Islam In Islam people do not own property, but only act as stewards for God and thus must take care of that which they have been entrusted with. They must use property in a righteous, socially beneficial, and prudent manner; not exploit others for their own benefit; and they have obligations to help the disadvantaged. Thus Islam is supportive of international business as long as it is carried out in a way that reflects basic Islamic values. Hinduism Hinduism, practiced primarily on the Indian sub-continent, focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial. Economic Implications of Hinduism Since Hindus are valued by their spiritual rather than material achievements, there is not the same work ethic or focus on entrepreneurship found in some other religions. Likewise, promotion and adding new responsibilities may not be the goal of an employee, or may be infeasible due to the employee's caste. Buddhism Buddhists also stress spiritual growth and the afterlife, rather than achievement while in this world. Buddhism, practiced mainly in South East Asia, does not support the caste system, so individuals do have job mobility not found in Hinduism and can work with individuals from different classes. Economic Implications of Buddhism Because Buddhists do not support the caste system, and do not practice the extreme ascetic behavior of Hinduism, entrepreneurial activity is possible. Confucianism Confucianism, practiced mainly in China, teaches the importance of attaining personal salvation through right action. Unlike religions, Confucianism is not concerned with the supernatural and has little to say about the concept of a supreme being or an afterlife. The need for high moral and ethical conduct and loyalty to others is central in Confucianism. Economic Implications of Confucianism Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies. The close ties between Japanese auto companies and their suppliers, which has been an important ingredient in the Japanese success in the auto industry, are facilitated by loyalty, reciprocal obligations, and honesty. In countries where these relationships are more adversarial and not bound by these same values, the costs of doing business are probably higher. Reference: http://www.duke.edu/religion/main/links.html Language One obvious way in which countries differ is language. By language is meant both the spoken and the unspoken means of communication. Language is one of the defining characteristics of culture. It not only allows a society to communicate, but also directs the attention of people towards certain features of the world and human interactions. Reference: http://www.june29.com/HLP/ is a comprehensive catalogue of language-related Internet resources. There are more than 2,400 links available at this site including links to other Internet sites that focus on online language lessons, translating dictionaries, native literature, translation services, software, and language schools. Spoken Language While English is the language of international business, knowing at least some of the local language can greatly help when working in another country. In some situations, knowing the local language can be critical for business success. Unspoken Language Unspoken language can be just as important for communication. The fact that these can have different interpretations in different cultures, and that many of these actions may be automatic or reflexive, obviously complicates international communication. Not only may the person you are dealing with be unintentionally sending non-verbal signals that you do not comprehend, or are misunderstanding, you may be unconsciously sending your own signals. Education Formal education plays a key role in a society. Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society. The knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business. In nations that have a ready trained workforce for particular types of jobs, it is easier to start operations than in nations where an investor will also have to undertake time-consuming and costly training. Cultural Dimensions Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. He defines culture as “the collective programming of the mind distinguishing the members of one group or category of people from others”. There are six dimensions of national culture are based on extensive research done by Professor Geert Hofstede, Gert Jan Hofstede, Michael Minkov and their research teams. The six dimensions are: Power Distance, Individualism versus Collectivism, Masculinity versus Femininity, Uncertainty Avoidance, Long Term Orientation versus Short Term Orientation and Indulgence versus Restraint. Figure 1 below indicates how comparisons between countries in relation to these cultural dimensions can be performed. A comparison allows international managers insights into the degree of difference between countries along key behavioral attributes that impact on interpersonal interactions such as communication and processing information and decision making approaches. These insights to degree and nature of cross cultural difference provide international managers with some degree of foresight to plan for intercultural training and development and processes and systems of cross cultural communication support. Figure 1: Table illustrating a two country comparison of dimensions of national culture According to Hofstede et al (2010) the model of national culture consists of six dimensions. The cultural dimensions represent independent preferences for one state of affairs over another that distinguish countries (rather than individuals) from each other. The country scores on the dimensions are relative, as we are all human and simultaneously we are all unique. In other words, culture can be only used meaningfully by comparison. The model consists of the following dimensions: Power Distance Index (PDI): This dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally. The fundamental issue here is how a society handles inequalities among people. People in societies exhibiting a large degree of Power Distance accept a hierarchical order in which everybody has a place and which needs no further justification. In societies with low Power Distance, people strive to equalize the distribution of power and demand justification for inequalities of power. Individualism versus Collectivism (IDV): The high side of this dimension, called individualism, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families. Its opposite, collectivism, represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty. A society's position on this dimension is reflected in whether people’s self-image is defined in terms of “I” or “we.” Masculinity versus Femininity (MAS): The Masculinity side of this dimension represents a preference in society for achievement, heroism, assertiveness and material rewards for success. Society at large is more competitive. Its opposite, femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented. In the business context Masculinity versus Femininity is sometimes also related to as "tough versus tender" cultures. Uncertainty Avoidance Index (UAI): The Uncertainty Avoidance dimension indicates the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. The fundamental issue here is how a society deals with the fact that the future can never be known. The critical question becomes should we try to control the future or just let it happen? Countries exhibiting strong UAI maintain rigid codes of belief and behavior and are intolerant of unorthodox behaviors and ideas. Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles. Long Term Orientation versus Short Term Orientation (LTO): Every society has to maintain some links with its own past while dealing with the challenges of the present and the future. Societies prioritize these two existential goals differently. Societies who score low on this dimension, for example, prefer to maintain time-honored traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future. In the business context this dimension is related to as "(short term) normative versus (long term) pragmatic" (PRA). Indulgence versus Restraint (IND): Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms. This information stems from the cross cultural lessons in leadership from Project GLOBE - Global Leadership and Organizational Behavior Effectiveness, (Javidan, et al. 2006). Culture exists by comparison The country scores on the dimensions are relative, as we are all human and simultaneously we are all unique. In other words, culture can be only used meaningfully by comparison. These relative scores have been proven to be quite stable over time. The forces that cause cultures to shift tend to be global or continent-wide. This means that they affect many countries at the same time, so if their cultures shift, they shift together and their relative positions remain the same. Exceptions to this rule are failed states and societies in which the levels of wealth and education increase very rapidly, comparatively speaking. Yet, in such cases, the relative positions will also only change very slowly. The country culture scores on The Hofstede Dimensions correlate with other data regarding the countries concerned. Power Distance, for example, is correlated with income inequality, and individualism is correlated with national wealth. In addition, Masculinity is related negatively with the percentage of national income spent on social security. Furthermore, Uncertainty Avoidance is associated with the legal obligation in developed countries for citizens to carry identity cards, and long term orientation (LTO) is connected to school mathematics results in international comparisons Culture and the Workplace For an international business with operations in different countries, both the original research undertaken by Hofstede in the 1970’s and the continuing research that has been added into the current Cultural Dimensions model provide important insights for managing the international workplace. The issues that the Hofstede et al (2010) cultural dimensions model raise an important requirement for effective international management and insights into advantages o be gained through globalization need to vary management process and practices, and to take different culturally determined work-related values into account. Cultural Change Culture evolves over time, although changes in value systems can be slow and painful for a society. Social turmoil is an inevitable outcome of culture change. As countries become economically stronger and increase in the globalization of products bought and sold, cultural change is particularly common. Focus on Managerial Implications Culture has three important implications for international business. First, there is a need to develop cross-cultural literacy. Second, there is a connection between culture and national competitive advantage. Third, there is a connection between culture and ethics in decision making. Cross-Cultural Literacy Individuals and firms must develop cross-cultural literacy. International businesses that are ill informed about the practices of another culture are unlikely to succeed in that culture. One way to develop cross-cultural literacy is to regularly rotate and transfer people internationally. Ethnocentrism One must also beware of ethnocentrism, or a belief in the superiority of one's own culture. Individuals who are ethnocentric frequently demonstrate disregard for other cultures. Reference: http://www.edupass.org/culture/ Culture and Competitive Advantage For the international business, the connection between culture and competitive advantage is important for two reasons. First, the connection suggests which countries are likely to produce the most viable competitors. Second, the connection between culture and competitive advantage has important implications for the choice of countries in which to locate production facilities and do business. Reference: http://www.executiveplanet.com/index.php?title=Main_Page International approaches to Human Resource Management According to Hill (2009) the strategic role of HRM is challenging enough in a purely domestic firm, but it is more complex in an international business, where profound differences between countries in labor markets, culture, legal systems, economic systems, and the like complicate staffing, management development, performance evaluation, and compensation approaches. For example: ⦁ Compensation practices may vary from country to country, depending on prevailing management customs. ⦁ Labor laws may prohibit union organization in one country and mandate it in another. ⦁ Equal employment legislation may be strongly pursued in one country and not in another. If it is to build a team of managers capable of managing a multinational firm, the HRM function must deal with a host of issues. It must decide how to staff key management posts in the company, how to develop managers so they are familiar with the subtleties of doing business in different countries, how to compensate people in different nations, and how to evaluate the performance of managers based in different countries. HRM must also deal with a host of issues related to expatriate managers. (An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.) It must decide when to use expatriates, determine whom to send on expatriate postings, be clear about why the firm is pursuing this approach, compensate expatriates appropriately, and ensure that these managers are adequately debriefed and reoriented once they return home. Global firm Staffing Policies According to Hill (2009), research has identified three types of staffing policies in international businesses. These are the Ethnocentric approach, the Polycentric approach, and the Geocentric approach. An Ethnocentric approach to staffing policy fills all key management positions in an international business with parent-country nationals. The policy is congruent with an international strategy (Hill, 2009). Firms pursue an ethnocentric staffing policy for three reasons. First, the firm may believe the host country lacks qualified individuals to fill senior management positions. This argument is heard most often when the firm has operations in less-developed countries. Second, the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate culture. Third, if the firm is trying to create value by transferring core competencies to a foreign operation. Firms pursuing an international strategy may believe that the best way to accomplish this goal is to transfer parent-country nationals who have knowledge of that competency to the foreign operation. Hill (2009) points out that Despite the rationale for pursuing an ethnocentric staffing policy, the policy is now on the decline in most international businesses for two reasons. Firstly, an ethnocentric staffing policy limits advancement opportunities for host-country nationals. This can lead to resentment, lower productivity, and increased turnover among that group. Resentment can be greater still if, as often occurs, expatriate managers are paid significantly more than home-country nationals. Secondly, an ethnocentric policy can lead to cultural myopia, the firm's failure to understand host-country cultural differences that require different approaches to marketing and management. The adaptation of expatriate managers can take a long time, during which they may make major mistakes. For example, expatriate managers may fail to appreciate how product attributes, distribution strategy, communications strategy, and pricing strategy should be adapted to host-country conditions. A Polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters (Hill, 2009). In many respects, a polycentric approach is a response to the shortcomings of an ethnocentric approach. One advantage of adopting a polycentric approach is that the firm is less likely to suffer from cultural myopia. Host-country managers are unlikely to make the mistakes arising from cultural misunderstandings to which expatriate managers are vulnerable. A second advantage is that a polycentric approach may be less expensive to implement, reducing the costs of value creation. Expatriate managers can be expensive to maintain. A polycentric approach also has its drawbacks. Host-country nationals have limited opportunities to gain experience outside their own country and thus cannot progress beyond senior positions in their own subsidiary. As in the case of an ethnocentric policy, this may cause resentment. Perhaps the major drawback with a polycentric approach, however, is the gap that can form between host-country managers and parent-country managers. Language barriers, national loyalties, and a range of cultural differences may isolate the corporate headquarters staff from the various foreign subsidiaries. The lack of management transfers from home to host countries, and vice versa, can exacerbate this isolation and lead to a lack of integration between corporate headquarters and foreign subsidiaries. The result can be a “federation” of largely independent national units with only nominal links to the corporate headquarters. A Regio-centric staffing policy attempts to seek out the pest people for key roles within the region in which the host country is located (Hill, 2009). For example, a firm operating in the European Union (EU) zone would consider the role capabilities and inter country awareness of key European nations of importance to the home country headquartered firm. Similarly, a region-centric approach may be useful in Spanish speaking country in South America in seeking the best candidate with a wide business network across a number of South American countries. It is entirely dependent upon the nature of the firm’s strategic needs for the roles in the host country and the region. The advantages of pursuing a region-centric policy to staffing are widening the pool of potential candidates in relation to a high level performer, Securing the capacity of that region-centric appointment’s network capabilities and network connections in the region. Ensuring staff rotation between country operations within a region as need requires. The downside with a region-centric solution may include cross cultural sensitivities across regional countries. There may be long standing differences and mistrusts which actually outweigh the imposition of an ethnocentric approach applying expatriate managers and other key staff from the home country firm. A Geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of their nationality (Hill, 2009). This approach is consistent with building a strong unifying culture and informal management network and is well suited to both global standardization and transnational strategies. This policy has a number of advantages. First, it enables the firm to make the best use of its human resources. Second, and perhaps more important, a geocentric policy enables the firm to build a team of international executives who feel at home working in a number of cultures. Creation of such a team may be a critical first step toward building a strong unifying corporate culture and an informal management network, both of which are required for global standardization and transnational strategies. According to Hill (2009), firms pursuing a geocentric staffing policy may be better able to create value from the pursuit of experience curve and location economies and from the multidirectional transfer of core competencies than firms pursuing other staffing policies. In addition, the multinational composition of the management team that results from geocentric staffing tends to reduce cultural myopia and to enhance local responsiveness. Thus, other things being equal, a geocentric staffing policy seems the most attractive. A number of problems limit the firm's ability to pursue a geocentric policy. Many countries want foreign subsidiaries to employ their citizens. To achieve this goal, they use immigration laws to require the employment of host-country nationals if they are available in adequate numbers and have the necessary skills. Most countries, including the United States, require firms to provide extensive documentation if they wish to hire a foreign national instead of a local national. This documentation can be time consuming, expensive, and at times futile. A geocentric staffing policy also can be expensive to implement. Training and relocation costs increase when transferring managers from country to country (Hill, 2009). Table 1: Staffing Approaches for International Business – Advantages & Disadvantages Staffing Approach Strategic Appropriateness Advantages Disadvantages Ethnocentric International ⦁ Overcomes lack of qualified managers in host country ⦁ Unified Culture ⦁ Assist in transferring Core Competencies ⦁ Produces resentment in host country ⦁ Can lead to cultural myopia Polycentric Localization ⦁ Alleviates cultural myopia ⦁ Inexpensive to implement ⦁ Limits career mobility ⦁ Isolates headquarters from foreign subsidiaries Regio-centric Regional Network ⦁ Alleviates cultural myopia ⦁ Inexpensive to implement ⦁ Builds potential regional networking ⦁ Builds cross cultural exchanges within region and career mobility ⦁ May surface cross- cultural sensitivities across regional countries ⦁ National Immigration policies may limit implementation Geocentric Global Standardization ⦁ Uses Human Resource efficiently and effectively ⦁ Assists in building firm culture and informal management networks ⦁ National Immigration policies may limit implementation ⦁ Expensive Adapted from Hill (2009) Expatriate Management A prominent issue in the international staffing literature is expatriate failure, defined as the premature return of an expatriate manager to his or her home country. The costs of expatriate failure can be substantial for an international firm. Expatriate failure can be reduced by selection procedures that screen out inappropriate candidates. The most successful expatriates seem to be those who have high self-esteem and self-confidence, can get along well with others, are willing to attempt to communicate in a foreign language, and can empathize with people of other cultures. Training can lower the probability of expatriate failure. It should include cultural training, language training, and practical training, and it should be provided to both the expatriate manager and the spouse. Research has indicated that the failure to adapt to the new culture and environment of a host country posting by the expatriate manager’s family members is a key reason for premature termination of overseas postings. Cultural Intelligence (CQ) According to Van Dyne, et al (2012) CQ is an individual’s capability to detect, assimilate, reason, and act upon cultural cues appropriately in situations characterized by cultural diversity. Thus, it is domain-specific and has special relevance to multicultural settings and global contexts (Earley & Ang, 2003). By definition, CQ is a flexible capability that can be enhanced by active involvement in cross-culturally related education, travel, international assignments, and other intercultural experiences (Ang & Van Dyne, 2008; Ng, Van Dyne, & Ang, 2009). The Four Factors of CQ Metacognitive CQ (CQ Strategy) refers to an individual’s level of conscious cultural awareness and executive processing during cross-cultural interactions (Ang & Van Dyne, 2008). It is based on high-level cognitive strategies and deep information processing that allow individuals to develop discovery processes for social interaction across cultural contexts (Brinol & DeMarree, 2011). Cognitive CQ (CQ Knowledge) refers to an individual’s knowledge structures about cultural institutions, norms, practices and conventions in different cultural settings. Comprehending the elements that comprise the cultural environment helps individuals appreciate how the systems shape and cause patterns of behaviors and interactions within a culture, and why behaviors and interactions differ across alternate cultural environments (Ang & Van Dyne, 2008). Motivational CQ (CQ Drive) refers to an individual’s capacity to direct attention and energy toward learning about and functioning in situations characterized by cultural differences (Ang & Van Dyne, 2008). Behavioral CQ (CQ Action) refers to an individual’s capability to enact a wide repertoire of verbal and nonverbal actions when interacting with people from different cultures (Ang & Van Dyne, 2008). Behavioral CQ allows people to manage and regulate social behaviors in intercultural encounters so there is minimal misperception and misattribution The CQ Wheel (LivingInstitute, 2013) Required Reading References: Ang, S., & Van Dyne, L. 2008. ‘Conceptualization of cultural intelligence: Definition, distinctiveness, and nomological network.’ In S. Ang & L. Van Dyne (Eds.), Handbook of Cultural Intelligence: Theory, Measurement, and Applications, pp. 3–15. M. E. Sharpe, Armonk, NY. Brinol, P., & DeMarree, K. G. Eds. 2011. Social Metacognition, Psychology Press, New York, NY. Earley, P.C., & Ang, S. 2003. Cultural Intelligence: Individual Interactions Across Cultures. Stanford University Press, Palo Alto, CA. Earley, P.C. & Mosakowski, E. 2004. ‘Cultural Intelligence’, Harvard Business Review, October, pp. 1 – 8. Hill, C.W. 2009. International Business: Competing on the Global Market Place, McGraw-Hill, Boston, MA. Hofstede, G. 2016. National Culture, from geert-hofstede website at https://www.geert-hofstede.com/national-culture.html accessed 26 August 2016. Hofstede, G. 2001. Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations. 2nd Edn. Sage Publications, Thousand Oaks, CA. Hofstede, G. 1983 Cultural Constraints in Management, Academy of Management Executive, Vol. 7. No. 1., pp. 81-94. At, http://users.ipfw.edu/todorovz/teaching/401/readings/Cultural%20constraints%20in%20mgmt%20theories%20Hofstede.pdf accessed @4 August 2016. Hofstede, G., Hofstede, G.J. & Minkov, M. 2010. Cultures and Organizations: Software of the Mind, 3rd Edn. McGraw-Hill, New York, NY, U.S.A. Javidan, M., Dorfman, P.W., de Luque, M.S., & House, R.J. 2006. In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE, Academy of Management Perspectives, Vol. 20, No. 1, pp. 67-90. At, https://business2.fiu.edu/1315548/mydocs/globe_leadership_amp.pdf accessed 24 August 2016. Ng, K.Y., Van Dyne, L., & Ang, S. 2009. From experience to experiential learning: Cultural intelligence as a learning capability for global leader development. Academy of Management Learning and Education, Vol. 8, pp. 511–526. Van Dyne, L., Ang, S., Ng, K. Y., Rockstuhl, T., Tan, M.L., & Koh, C. 2012. ‘Sub-Dimensions of the Four Factor Model of Cultural Intelligence: Expanding the Conceptualization and Measurement of Cultural Intelligence’, Social and Personality Psychology Compass, Vol. 6, Iss. 4, pp. 295–313. At, http://www.linnvandyne.com/papers/Compass%202012%20Van%20Dyne%20et%20al%20Sub-dimensions%20of%20CQ.pdf accessed 24 August 2016.