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Cultural Intelligence and Global Business

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The improvement of cultural IQ between employees will be complicated, time-consuming, and expensive. Still, some argue that it is worth this investment because it promotes corporate reputation, achieves better outcomes in cross-cultural organizations, and allows the organization to adapt rapidly to other environments. The Chartered Association of Organization and Growth (CIPD) and the World of Human Resource Organization (SHRM) conducted a study in 2012 to discover what was the greatest method to enhance cultural intelligence within organizations and businesses. The conclusion said that customized programs were the highest ranked method which thought that the best way was developing the system specific to the individual organization’s needs and knowledge gaps. Likewise, companies are now searching for individuals and employees with higher competencies when it comes to social IQ. It is crucial for businesses to realize how well you act and interact with people other than yourself.

We’ve been hearing the words “Cultural Intelligence” everywhere we go lately. So what is cultural intelligence and why is it so important to global businesses? Cultural intelligence is the ability for people, organizations, and businesses to relate to culturally diverse situations and work effectively in them. It is a vital aspect to international businesses because every country they are based in requires a different cultural approach and the ability to get well with the consumers you are working with. Global collaboration has become a significant aspect for the success of businesses and this cannot occur if businesses do not have the resources, knowledge, and talents of cultural IQ. The development of cultural IQ between employees can be complicated, time-consuming, and costly. However, many argue that it is worth the investment because it boosts corporate reputation, achieves better results in cross-cultural organizations, and allows the company to adapt quickly to different environments. The Chartered Institute of Personnel and Development (CIPD) and the Society of Human Resource Management (SHRM) carried a survey in 2012 to find out what was the best method to enhance cultural intelligence within organizations and businesses. The result stated that customized programs were the highest ranked method which meant that the best approach was developing a program specific to an individual company’s needs and knowledge gaps. Also, companies are now looking for leaders and employees with high competencies when it comes to cultural IQ. For example, Coca-Cola’s high potential leader program requires that every participant is tested for cultural intelligence through the Cultural Intelligence Centre. It is important for businesses to know how well you interact and communicate with people different than yourself. With the increase of merging markets, businesses are being forced to make their international products adaptable to different local cultures in which they are sold. This process is called “glocalization” and in order to implement this, it is necessary that businesses have cultural intelligence. McDonald’s Corp. is the world’s largest restaurant chain and it operates in 119 different countries. That being said, McDonald’s implements different menus depending on the country it is operating in. For example, the restaurants operating in India have an extensive vegetarian menu. Also, America is one of the countries being faced with a rapid rise of Asian, Hispanic, and African-American populations which is making companies more aware of the importance to act and innovate differently depending on these multicultural groups. Companies are becoming more and more aware of the importance of cultural intelligence and are still figuring out the right ways to implement this. Supporting diversity associations, donating to non-profit service groups, and increasing their advertising to target customers are not authentic ways of implementing cultural intelligence.

The importance of cultural intelligence within a global organization. Cultural intelligence is becoming an increasingly significant aspect of global business, offering a host of benefits to companies that work to enhance it. With increased connectivity across all companies and individuals, and with global collaboration becoming increasingly instrumental for business success, cultural intelligence – or cultural quotient – (CQ) has taken on a new significance. This is a positive change for all companies, as it means greater access to more resources, knowledge and talent, offering a dynamic working approach that isn’t relegated to a single location. However, this also means that knowledge gaps in terms of different cultures and customs are now being exposed a lot more regularly. This can lead to divides that affect staff morale, work environment, working relationships and other aspects of business, all of which impact the quality of work being produced. This is why it is important to foster CQ within a global organization. What is cultural intelligence? Cultural intelligence is more than just cultural awareness and sensitivity, which are also vital within a corporation; it is the ability to relate to culturally diverse situations, as well as work effectively in them. Individuals with high levels of CQ are better able to accomplish goals in a respectful and effective way no matter what the cultural context. No matter how culturally diverse a workplace environment is, people can still forget that not all experiences, perceptions and perspectives are the same, which can lead to issues with the work being done and relationships, as well as causing friction in the workplace. CQ allows individuals to gain a better understanding of cultures enabling them to work in a positive and compassionate way with people from various cultures. In essence, therefore, CQ is developing a more advanced knowledge of traditions, nationalities, corporate cultures and disciplines that could have an impact on a business. The process of gaining CQ means increasing insight into the ways that different cultures function within business so as to develop language and behaviors in a professional setting that allow for better problem-solving.

Benefits of cultural intelligence: Being able to deal with differences in working methods and behavior that come about through a mix of cultures operating together within one organization can bring a number of benefits to your business. One of the most important of these is the fact that it adds a competitive edge to a business, as CQ improves communication, cooperation, teamwork and performance. In fact, according to David Livermore, the president of the Cultural Intelligence Center in Michigan, US, 90 per cent of leading executives from 68 countries have said that cross-cultural skills are one of the most vital capabilities in order to remain competitive. This highlights the importance of CQ not just for business, but for individuals within it. Mr Livermore goes on to explain that teams with low CQ underperform compared to those with high levels when it comes to innovation, engagement, profitability and other key factors. This suggests that CQ is vital for worker efficiency, the quality of service and creating beneficial interpersonal connections between employees, as well as between the business and clients. One of the reasons CQ improves these aspects of business is the fact that it allows for access to a broader range of tools and resources than a company with low CQ would have. This ensures faster problem solving, as well as understanding of various cultural experiences, which could help to better shape a product or service. Enhancing cultural intelligence Working to enhance CQ within a company, both broadly and individually, will help to ensure the business makes the most of all benefits on offer. The development of CQ takes time but it is a process that is well worth the investment, not only because it increases compassion between colleagues, but because it can boost corporate reputation. According to a survey carried out by the Chartered Institute of Personnel and Development (CIPD) and the Society of Human Resource Management (SHRM), one of the highest ranked methods of enhancing CQ within organizations is customized programs. Rather than unchanging and boilerplate presentation, the findings recommend an approach that meets the needs and knowledge gaps of individual companies by starting the process with an assessment. Understanding how CQ could improve the day-to-day activities of a business or department will enable a tailored training approach that closely ties with workers’ regular experience. This will help with closer learning, which allows employees to adopt behaviors and attitudes that lead to improved CQ. However, those in leadership roles can benefit from attending external events that allow them to develop their CQ in an environment that enables them to interact with different people from various cultures. This can inform in-house training programs and provide them with a basis for individual coaching. While e-learning is fast becoming a go-to option for businesses, the CIPD and SHRM’s study revealed that levels of completion among staff when it came to CQ training were low, suggesting that a more interactive approach is the best option. This ensures higher levels of engagement, completion and examples that are relevant to individual office locations. tags talent management , workplace culture , employee satisfaction , article share Facebook LinkedIn Twitter related articles why internal HR and recruiters make a dream team what if the most experienced candidate isn’t the best option? creating a resilient workforce: how to ensure your competitiveness the 5 biggest talent management challenges for HR in 2017 identifying team players – science or art?

Whether you are leading people in a small startup or managing and supporting talent across a multinational corporation, cultural intelligence is an essential skill set, I would say, is more necessary these days as an employee. CQ helps minimize conflict and maximize the broad perspectives of a diverse workforce, allowing your organization’s leadership and staff to pursue your mission across a variety of cultural and social contexts. Creating a strategy for measuring and developing cultural intelligence is more important than ever. A growing number of leaders in business, government and nonprofits are integrating cultural intelligence assessments and training. From longtime multinationals like IBM, Coca-Cola and Novartis to tech giants like Google and Alibaba to universities like Harvard Business School and Nanyang Business School to hundreds of small and midsize organizations, business leaders around the world are adopting cultural intelligence as a critical way to more effectively respond to the demands and opportunities of the 21st century world. CQ is more than just a “nice-to-have” or a “decent” set of capabilities. It has become a critical differentiator between employees working hard and employees working smart. And best of all, as you prioritize the development of cultural intelligence, you not only improve performance at your own organization, you create a group of culturally aware individuals, who, in turn, will make the world a better place for us all.  

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