Negotiating Culturally Intelligent: The Impact of Cultural Intelligence on Intercultural Negotiations

Abstract

As globalization continues to advance, the business world is constantly changing. Compared to today, business managers that were in charge approximately thirty years ago had to negotiate much less frequently with partners from different cultural backgrounds over the course of their careers. Nowadays, in contrast, business managers usually negotiate much more often with managers from different cultures. This means that the ability to interact effectively across cultures is becoming increasingly important for modern and globally-acting managers. At the beginning of the twenty-first century, this ability was labelled as ‘cultural intelligence’ and consolidated through a range of theoretical constructs and studies by the scientific community. However, even though cultural intelligence has been studied across a broad spectrum of different fields, the research in the context of intercultural negotiations is still remarkably sparse. In other words, in the existing literature,there are very few insights about the effects of cultural intelligence on cross-cultural negotiations. Thus, in this thesis, the interrelationship between the cultural intelligence level of individuals and a preselected series of factors that impact negotiations (strategic orientation, cooperativeness, relationship and trust building ability, emotional intelligence, and cognitive ability) was examined in order to construct a theoretical framework that gives theorists, practitioners, and managers an alternative and holistic view concerning the influence of cultural intelligence on the negotiation process and outcome. For this purpose, a study was carried out with 105 graduate students on the basis of an extensive survey. The findings have shown that individuals with a higher level of cultural intelligence tend to use integrative negotiating strategies or tactics and generally behave more cooperatively in negotiations. Moreover, the insights gained also suggest that cultural intelligence has an impact on the ability of individuals to build trustful business relationships. This effect is attributed to the fact that a positive correlation between cultural intelligence and (interpersonal and intercultural) communication competence could be demonstrated. Further, it was also found that cultural intelligence has a positive impact on a person’s abilities to process and use information accurately, as well as manage one’s own and others’ emotions to their own benefit. Finally, the existing literature shows that all of these conditions lead to better negotiation results regarding both aspects – economically (e.g. higher mutual gains) and socially (e.g. promotion of long-term business partnerships).