Cultural Intelligence

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Cultural Intelligence
2012
Work Group C
Organizational Behavior
11/2/2012

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Success in the today’s increasingly integrated economy requires the ability to adapt to different cultures. The specific set of skills needed to succeed in unfamiliar cultures make up an individual’s Cultural Intelligence (CQ). The aim of this paper is to illustrate the concept of CQ through the analysis and evaluation of the case of the merger between Kraft and Cadbury.

Contents
CQ: Cultural Intelligence1
Components of Cultural Intelligence1
Cultural Intelligence in Mergers and Acquisitions2
Kraft Takes Over Cadbury2
Cadbury2
Kraft Foods2
Pitfalls of Poor Cultural Intelligence3
Evaluation3
Summary4
Exhibit 15
Exhibit 26
Bibliography7

CQ: Cultural Intelligence
CQ is an individual’s ability to understand cultural and organizational differences, and interact successfully with people in any environment. The concept of CQ, developed by Earley & Ang in 2003 as a theory within business and organizational psychology, has steadily gained importance in the management world. With the growing globalization, corporations are expanding across national borders and encountering new customs and cultures but are often unable to adapt to the new cultural context. The case of Kraft/Cadbury that will be analyzed throughout this report is an example of organizational (as opposed to individual) culture clash. Culture conflict is a major cause when mergers and acquisitions (M&A) fail. CQ and Emotional Intelligence complement each other. While the former identifies the human traits and the unique characteristics of individuals, the latter isolates these characteristics and adapts to them. Components of Cultural Intelligence

Earley & Mosakowski identify three components for CQ: the cognitive, physical and emotional/motivational. The sources of these three components are the mind, body and heart respectively. (Early & Mosakowski, 2004) The cognitive component is what the authors refer to as ‘learning strategies’. Adopting a process, specifically thought out to notice clues about a culture’s shared understanding, will identify the most important elements of the culture in question. Imagine a small town British man who recently accepted a job in a large foreign company. He decides to observe his colleague’s behavior to gain insight in the company’s way of operating. Since all his colleagues dress formally, keep their private life separate and address each other in a polite manner, he draws the conclusion that the company has a formal culture. However, understanding the fundamentals of a culture is not enough. The physical component of CQ is the aspect through which an individual demonstrates to understand the culture by using body language and adopting the manners common to that culture. This category comprises gestures, greetings and physical space. Mirroring habits and body language will allow a person to blend in the new culture. When the British man realizes that at his new job people are accustomed to exude confidence through body language (hand movements, stance, etc.) he quickly begins to adopt the same mannerisms. The motivational/emotional element requires a person to be motivated to overcome cultural obstacles. Only by believing in one’s abilities can a person succeed in adapting to another culture. The English man at his new job feels a sense of personal reward when others recognize his efforts and accept him, which gives him confidence to persevere in an alien environment. The higher an individual’s CQ, the more likely that person will understand the impact of individuals’ cultural backgrounds and adapt one’s behavior to suit the environment. With growing globalization, CQ is essential in business. Ideally, managers should have high scores in all three components of CQ. Earley & Mosakowski identify 6 CQ profiles that managers fit into and...
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