transnational leadership development, and implementation of support structures
for transnational team members, to assist when conXicts may arise.
- 4 Cultural Intelligence
One area of emerging research that may provide useful ways to address the
challenges of managing cultural diversity is the research led by Earley ( 2002 ;Ng
and Earley 2006 ) exploring the concept of ‘cultural intelligence.’ This concept
refers to ‘an outsider’s seemingly natural ability to interpret someone’s unfamiliar
and ambiguous gestures the way that person’s compatriots should’ (Earley and
Mosakowski 2004 : 139 ). Cultural intelligence includes cognitive, behavioral, and
motivational elements (Earley 2002 ): understanding this concept should help
individuals to manage cultural diversity in more eVective ways.
The concept of cultural intelligence can be usefully applied to transnational
teams. For example, team members with higher cultural intelligence should be able
to achieve more eVective team interactions, such as knowledge-sharing, leading to
superior team outcomes (Earley 2002 ). Cultural intelligence also contributes to the
eVectiveness of international work. Successful expatriation relies to some extent on
the cultural intelligence of the individual expatriate and those around him or her,
such as host-country colleagues. An expatriate with high cultural intelligence
should be able to adapt eVectively to the host culture and to select those features
of the local cultural context that will be most likely to help the expatriate spouse
and family to adjust to the foreign assignment (Earley 2002 ). Although research
related to cultural intelligence is embryonic, it is suggested that there is potential
for HR managers to design and implement employee selection, development, and
performance management processes to assess and enhance cultural intelligence
(Earley and Mosakowski 2004 ; Ng and Earley 2006 ).
25.6 Practical Applications:
Managing Cultural Diversity
in Transnational Firms
.........................................................................................................................................................................................
Theoretical and empirical developments regarding cultural diversity have informed
and been informed by management in transnationalWrms. Many transnational
Wrms have recognized that managing cultural diversity is a critical part of strategic
management. It is particularly important for managers in transnationalWrms to
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