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MSc Computational Finance w w w .essex.ac.uk/ccfea/

Vocationally focused MSc course in com putational finance.

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Emotional Intelligence for Effective Cross Cultural Managementwritten by: Vikas Vij edited by: Ginny Edwards updated: 9/12/2011

Managing business in an increasingly borderless global village? Look for the vital links between emotional intelligenceand human resource

management.

Emotional Quotient and Managing Cultural Diversity

The global business environment has become increasingly interdependent due to an increased global flow of investments

and trade in recent decades. No economy today can afford to survive in isolation of other economies. The international

economic borders have become increasingly open, resulting not only in a global exchange of goods and services, but also

an equally important exchange of human resources. Technological advancements in the field of information technology and

communication have also contributed substantially to this rising trend of interconnected businesses and the spectacular

growth of the multinational and transnational corporations. But this changed scenario has also created a serious need to

utilize the natural linkage between emotional intelligence and cross cultural management.

Recognizing Cultural Differences

It has become critically important for the global corporations of today to recognize cultural gaps wi thin the organization.

People belonging to diverse nationalities, diverse cultures, diverse religions and diverse linguistic backgrounds are working together under a single roof.

Even in terms of corporate communication between employees based in different geographical locations, or with international clients, vendors, investors

or other global business associates, there is a need to understand the sensitivities of cultural differences. As the companies increasingly recognize the

fact of cultural diversity within their immediate environments, they will be able to put in place firm human resource management policies and systems

that ensure the successful adaptation of the organization to the new emerging global culture.

Link between EQ and Cultural

Management

Peoples behavior is influenced to a great

extent by their cultural background.

Therefore, human resource managers as

well as the companys leaders have to make use of the emotional quotient in order to run global organizations successfully as a unified entity.

Emotional understanding is needed by business leadersand HR managers to determine how to choose the right personnel for different country offices

and how to customize their business approach and business policies in accordance wi th the cultural needs of the particular market. For instance,

some countries have a culture of team work or collective management where as in some other countries individual performance and personal

excellence is more important. Therefore, rewards, incentives and other motivational tools must be designed in view of the cultural ethos of the particular

geographical territory.

Integrating Cultures Using Empathy and Understanding

Empathy is probably the most important attribute that an effectivemanager or leader must possess. The success of a business organization operating

in multi-cultural environments depends upon how smoothly the leaders manage to integrate different cultureswith their own leadership styles. For

instance, when a western manager operates in a culturally diverse setting such as China or Hong Kong, it is important to communicate w ith the localstaff and local customers in a simple language and a personalized manner in order to wi n their cooperation and understanding. Similarly, there are

certain cultures in Western Europe where punctuality and time consciousness is not regarded as highly as it is in the American culture. So having a

high tolerance level and awareness about the local cultural conditions helps in running the business in a smooth and effective manner.

Reference:

Reilly, Anne H. and Karounos, Tony J. Exploring the Link between Emotional Intelligence and Cross-Cultural Leadership Effectiveness. Journal of

International Business and Cultural Studies. http://www.aabri.com/manuscripts/08134.pdf

Photo Credit: www.sxc.huRbut under licensing agreement.

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