Cultural Intelligence as the Key Cross-Cultural Construct - Lenovo - Case Study Example

Cultural intelligence as the key cross-cultural construct in the case This essay is based on a cross-cultural construct emerging from the case study of how Lenovo handled its transition from a local Chinese company to a global company following its merger with IBM. Although there are several issues in relation to culture that can be seen from the case study, one important thing that is addressed in detail in this essay is the issue of cultural intelligence in general and how it affected the process of transition of the company following the merger with IBM. This issue is addressed under three subheadings in this essay as follows. In the first section, an outline of its emergence as well as further developments based on research is presented. This is followed by analysis of the different ways in which cultural intelligence is applicable to contemporary global organisations. Lastly, a brief outline of the criticism that the construct has encountered from researchers and practitioners alike is presented. Throughout the essay, it is argued that cultural intelligence in general and differences in norms and values between different cultures in particular played a key role in causing the difficulties experienced by the company, worsening the extent of the aftermath and thereafter, determining how well the company managed to recover from the negative effects following the merger. Emergence of the construct of cultural intelligence In essence, cultural intelligence can be defined as a system that is composed of knowledge and skills which are linked by cultural meta-cognition that help people understand, adapt to and shape different aspects of culture that belongs to others (Earley 2002, p. 273). Therefore, cultural intelligence is seen as the capacity to collect and use information, draw conclusions from the gathered information and initiate actions based on the conclusions drawn within the context of interacting with people from different cultural backgrounds (Rahim & Golembiewski 2005, p. 222). Essentially, cultural intelligence can be seen in terms of three key elements: cultural knowledge, cultural skills and cultural meta-cognition (Thomas et al. 2012, p. 157). These are described as follows. To begin with, cultural knowledge, which refers to the ability to recognise, understand and appreciate differences between cultures, is the core element of the construct of cultural intelligence. This is because it helps individuals to understand and evaluate the behaviour of others (Thomas et al. 2012, p. 158). There are basically two forms of knowledge that make up the element of cultural knowledge. Knowledge that is gathered by individuals about cultures, interactions among individuals in the society and overall history differs from procedural knowledge which essentially entails knowledge that one accumulates as a result of response to the effects of the culture upon individuals. The second element of cultural intelligence that has emerged in the course of research is cultural skills. There have been several different dimensions as to how cultural skills help individuals appreciate their own culture as well as that of others. One dimension has been based on the idea that individual characteristics determine the ability of people to acquire cultural intelligence as a whole (McRae 2012, p. 3). This implies that the personality traits of individuals play a key role in determining what aspects of culture the individuals learn, understand and appreciate. The second dimension is based on the importance of two factors: information gathering and relationship skills, as being the most important factors that determine the how individuals develop cultural skills (Thomas et al. 2012, p. 167). Thirdly, cultural intelligence is made up of cultural meta-cognition as an element. In general meta-cognition can be defined as the ability of an individual to be aware of and have control over the process of learning (McRae 2012, p. 2). When applied to the construct of cultural intelligence, cultural meta-cognition can be understood as control over learning activities and processes within the context of a specific culture. This means that cultural meta-cognition is made up of several interrelated processes which include problem recognition, defining the nature of the problem, developing a problem-solving strategy, initiating actual solutions to the problem and monitoring the progress of the implemented solutions (Earley 2002, p. 274). In the case study, it can be seen that cultural intelligence influenced and determined the outcome of several issues. For instance, elements such as knowledge of other cultures and learning processes were important factors that created the early difficulties that managers of the new company encountered after the merger. This was because of differences not only in the types of corporate cultures at Lenovo and IBM but also in the cultures of the regions in which the two companies were based before. Cultural intelligence in contemporary global organisations There are several ways in which cultural intelligence is applicable to contemporary global organisations. To begin with, the need for organisations to exhibit cultural intelligence automatically arises when organisations begin to expand beyond their domestic markets into the international one. As many businesses seek to access the international markets, they are made to do business with people and other organisations from different cultural backgrounds represented by different nationalities and regions. This process creates organisations that are truly global in nature in that they do businesses with individuals from different cultural backgrounds across the world. According to Sims (2004, p. 386), the global nature of many organisations in the current times has made it necessary for managers and business leaders in general to do three things: fully understand the cultural values of their home countries, understand the values and norms of the markets in which the business operates, and lastly, appreciate how differences in norms and values among different cultures affect the operations of the business. The significance of this point is that when businesses expand in their operations, it becomes necessary for their managers to develop a sense of cultural intelligence and infuse it into the way the businesses conduct their activities as global organisations. One important way in which the construct of cultural intelligence is applicable to global business organisations is in the area of decision-making. From the case study, it can be seen that Lenovo faced a major challenge with regard to whether or not to drop the IBM logo following the merger. Although it was certain that the new company would definitely drop the IBM brand name in the course of time, the timing of the decision was of great importance to the success of the new company, particularly with regard to the market in the United States (Stahl & Lengyel 2012, p. 6). This was so because of the importance that the consumers in the United States market attached to the IBM brand name prior to the entry of Lenovo. According to Triandis (2006, p. 20), business managers need to have a high degree of cultural intelligence particularly when making decisions about operations in a global environment. This is due to the point that global firms have different employees whose values differ from those of the others and, as a result, managers need to take into consideration different perspectives from the different employees before making decisions. Further, the need for cultural intelligence in helping global business organisations to make decisions arises from the observation that under such a global environment, there is need for decision-makers to gather a lot of contradictory information before making plausible decisions (Triandis 2006, p. 21). This denotes that since individuals living in different cultures have different sensibilities defined by their cultural backgrounds as well as individual variations arising from their unique personalities, business organisations require a high sense of cultural intelligence so that they can be able to collect a lot of information about markets and make the right decisions on how to handle such markets. Apart from the way decisions are made, the need for cultural intelligence within business organisations operating in a global environment is seen in the way negotiations are carried out. In general, differences between different cultures play a key role in influencing the way teams carry out negotiations in business. One way in which this aspect is evident within organisations is in the form of whether the teams carrying out the negotiations are based on individualism or collectivism as developed under Hofstede’s cross-cultural dimensions framework (Saee 2007, p. 100). For individuals coming from cultures that are based on collectivism, their approach to the negotiations will be heavily influenced by this attribute, and the same is seen for individuals coming from cultures that are predominantly based on individualism. Therefore, when business organisations are carrying out negotiations, it is important that the members of the teams have a high degree of cultural intelligence so that they can understand not only how their own cultures influence their approach to the negotiations but also the cultural dimensions shaping the approach taken by the others. Lastly, the applicability of cultural intelligence within global organisations is seen in the manner in which the employees of such organisations interact with each other. Since such organisations have employees who are from different cultural settings, the need for cultural intelligence among the employees is important. In the case study, this was seen in the manner in which different CEOs approached the management of the new organisation based on whether they were from a Chinese or American background. Tsui, Song and Yang (2007, p. 33) point out that interpersonal relationship among employees is one of the key factors that determine how successful an organisation is. Since cultural intelligence is essential for individuals to appreciate and interact with each other successfully as well as for managers to successfully handle a multicultural workforce (Inkson & Thomas 2011, p. 164), the success of global organisations in keeping employees from different cultures together depends on how well the employees exhibit cultural intelligence. Criticism against the construct of cultural intelligence Although it has been pointed out that cultural intelligence is of great importance because many organisations are using it as a way of gaining competitive advantage in many of their different processes (Earley, Ang & Tan 2006, p. 9), the concept has not been without criticism. The criticism against the construct of cultural intelligence has been varied over time. However, one important criticism has been based on the knowledge that culture, as described in the construct, is actually relative in nature rather than being ethnocentric. It is observed that different cultures differ from one another and therefore, it is generally impossible to describe culture as either superior or inferior as done in the construct (Keung 2011, p. 33). In addition to this, the construct of cultural intelligence has been criticised because of the way it seeks to study and categorise different cultures. It has been argued that such an attempt is based on stereotypes about cultures and cannot be said to be based on actual and verifiable characteristics (Keung 2011, p. 34). This connotes that much as cultural intelligence seeks to describe different cultures based on particular characteristics, there may be a lot of variations among individuals within a culture. Another criticism developed against the construct of cultural intelligence is based on its relationship with the concept of cross-cultural competence. Generally, cross-cultural competence is made up of elements such as intercultural knowledge, motivation and skilled action (Van Den Bergh 2008, p. 29). Similarly, cultural competence comprises elements such as knowledge, mindfulness and adaptive behaviour. It has therefore been pointed out that the overlapping of the components of both concepts does not indicate whether the two are similar or different (Van Den Bergh 2008, p. 31). Conclusion In this essay, the role of cultural intelligence as a key construct in the case study of how Lenovo handled the aftermath of its merger with IBM has been discussed. It has been argued that in general, lack of a high level of cultural intelligence among the members of the senior management of the company was responsible for the failure to tackle the problems that the company faced immediately after the merger. It has been observed that cultural intelligence has several important aspects which include the following: the ability to recognise different cultural values, the ability to adapt to new cultures, and the ability to practice the habits of a new culture. It has also been pointed out that all the components of cultural intelligence are applicable to global organisations in several ways. These include the following areas: employee interaction, intercultural negotiations and decision-making processes. When applied in all these areas, it has been seen that global organisations are able to use cultural intelligence to gain a competitive advantage in activities such as marketing and product development. Lastly, a brief outline of criticism against the construct of cultural intelligence has been presented. It has been pointed out that much criticism has been based on the knowledge that cultures are relative rather than ethnocentric and that the categorisation of cultures under the concept is based on stereotypes and generalisations. References Earley, P C 2002, ‘Redefining interactions across cultures and organisations: moving forward with cultural intelligence’, in B Staw & R M Kramer (eds), Research in organisational behaviour, Elsevier, New York, pp. 271-300. Earley, P C, Ang, S & Tan, J S 2006, CQ: Developing cultural intelligence at work, Stanford University Press, Stanford. Inkson, K & Thomas, D 2011, Cultural intelligence: living and working globally, Berret-Koehler, San Francisco. Keung, E K 2011, ‘What factors of cultural intelligence predict transformational leadership: a study of international school leaders.’ PhD Dissertation, Liberty University, Lynchburg, Virginia, viewed 22 August 2014, McRae N 2012, ‘Enhancing Cultural Intelligence through International Work Integrated Learning’, viewed 22 August 2014, Rahim, M & Golembiewski, R 2005, Current topics in management, Transaction Publishers, New York. Saee, J 2007, ‘Effective global negotiation strategies for corporate managers and leaders in the third millennium’, in J Saee (ed), Contemporary corporate strategy: global perspectives, Psychology Press, New York, pp. 98-112. Stahl G K & Lengyel A 2012, ‘Lenovo-IBM: Bridging cultures, languages and time zones – becoming a global player.’ Case Study Written for the Vienna University of Economics and Business. Sims, R R 2004, ‘Restoring ethics consciousness to organisations and the workplace: every contemporary leader’s challenge’, in R R Sims & S A Quatro (eds), Leadership: succeeding in the private, public and not-for-profit sectors, M. E. Sharpe, New York, pp. 386-409. Thomas, D C, Stahl, G, Ravlin E C, Poelmans S, Pekerti A, Maznevski M, Lazarova M B, Elron, E, Ekelund, B Z, Cerdin J, Brislin R, Aycan Z & Au, K 2012, ‘Cultural intelligence assessment’, in W H Mobley, M Li & Y Wang (eds), Advances in global leadership, Emerald, New York, pp. 15-175. Triandis, H C 2006, ‘Cultural intelligence in organisations’, Group & Organisation Management, vol. 31, no. 1, pp. 20-26. Tsui, A S, Song, L J & Yang, J Y 2007, ‘Organisational culture and employee responses in Hong Kong schools’, in L L Neider & Schrieshem, C (eds), International management, Routledge, New York, pp. 28-41. Van Den Bergh, R 2008, ‘Cultural intelligence: a comparison between managers in South Africa and the Netherlands’, Bachelor Thesis, University of Pretoria, Pretoria, viewed 22 August 2014, Read More