Cross-border mergers and acquisitions totaled $1.3 trillion in 2014, accounting for 37 percent of all global business transactions. Up to 60 percent of these dealings will fail. Research suggests misunderstanding cultural differences is a critical factor causing global mergers and acquisitions to collapse. As companies continue to outsource services and operations abroad, effective cross-cultural interactions become increasingly imperative to the survival of global businesses.
The complexity of the global market demands culturally knowledgeable people who are able to effectively achieve organizational goals while working with people from diverse cultures. This illustrates the necessity for developing what researcher P. Christopher Early and Soon Ang call the construct of cultural intelligence (CQ), a set of cognitive, motivational and behavioral facets needed to effectively deal with cultural factors.
The construct of CQ encompasses three aspects: 1) cognitive, i.e. knowledge processes, knowledge structures and pattern recognition; 2) motivational, i.e. energy direction, persistence, values; and 3) behavioral, i.e. practices, actions, rituals, habits.
When viewed in terms of the human body, the CQ components become: 1) the Head representing cognition, knowledge, meta-cognition and strategy; 2) the Heart, for motivation, drive and mindfulness; and 3) Hands for the behavior and action.
This metaphor encourages international business people to use their heads, hearts and hands to successfully achieve personal and professional objectives when facing cross-cultural assignments and attitudes. To think and learn using the best strategy, to direct the energy and the best emotional state toward the achievement of the planned goals, and to take the right actions to produce the best level of results in any cross-cultural setting.
When we examine how CQ is acquired, activities such as learning design, teaching strategy and program development are crucial to the success of cross-cultural training experiences. Leaders and managers should begin planning, designing, conducting and managing educational and training initiatives for their overseas workforces and the local team members dealing with multiculturalism and diversity.
To allow international business people to develop cultural intelligence, training and development initiatives need to be grounded in experiences drawn from those who have worked in multi-cultu-ral environments and use their expectations, needs and desires to make more effective learning experiences.
This will generate a culturally intelligent workforce, capable of using their Heads, Hearts and Hands to bridge cultural gaps and effectively navigate cross-border business interactions.
