The Role of Cultural Intelligence in Expatriate Cross-cultural Adjustment: The Moderating Effects of Cultural Distance and International Experience

Astrid Ulv Thomsen

Student thesis: Master thesis

Abstract

In today’s globalized world, an increasing number of people take on international assignments in other countries, defined as expatriates. Companies that employ expatriates generally see increased prosperity and export opportunities. Furthermore, a diverse team of employees can be a competitive advantage for companies as it can increase creativity and bring in new perspectives. In fact, team diversity has been shown to increase desirable outcomes such as higher job performance (Watson et al., 1998). In order for companies to enjoy these benefits, expatriates must adjust to their surroundings. Poorly adjusted expatriates generally do not perform as well. In fact, poor adjustment is one of the leading reasons companies terminate a contract early. Cross-cultural adjustment ensures fruitful intercultural exchanges, by minimizing culturally based misunderstandings and facilitating collaborations. One theoretical concept that has been linked to expatriate cross-cultural adjustment is Cultural Intelligence. Cultural Intelligence is a person’s higher order cognitive processes, cultural knowledge, motivation and appropriate behavior relative to the culture they find themselves in. Different organizational and individual factors might influence the effect of Cultural Intelligence, impacting how management best can facilitate adjustment and work performance. This thesis explores the role of Cultural Intelligence in expatriate cross-cultural adjustment with the moderating effects of cultural distance and international experience. Primary qualitative data has been collected from 94 expatriates from various countries and analyzed via multivariate regression analysis. The analysis revealed that different facets of Cultural Intelligence affects the three kinds of adjustment differently. Furthermore, the relationship between Cultural Intelligence and crosscultural adjustment is positively moderated by cultural distance and international experience. Finally, financial incentive positively affects cognitive Cultural Intelligence. Implications for management is to take a contingency approach to expatriates, screening for Cultural Intelligence in situations where an expatriate has high cultural distance and more international experience. Managers can also engage in supporting activities that strengthen Cultural Intelligence in order to help their expatriates adjust better.

Educations, (Graduate Programme) Final ThesisMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2021
Number of pages83
SupervisorsAd de Jong