Cultural intelligence (CQ) refers to an individual’s capability to function effectively in situations characterized by cultural diversity. Unlike many cultural competency models that are developed inductively, CQ offers a theoretically derived and comprehensive framework based on the theory of multiple loci of intelligence. CQ comprises four factors – metacognitive, cognitive, motivational, and behavioral CQ. Since our review in 2011, there has been much theoretical and methodological advancement. In this chapter, we provide a comprehensive and up-to-date review of research on CQ, with a focus on these recent developments. They include an expanded conceptualization of CQ with more granular subdimensions; a new performance-based measure of CQ to complement report-based assessments; and a broader nomological network at the individual, dyadic, team, and firm level of analyses. We conclude with ideas for future research, and suggest ways to leverage on emerging technologies to advance the conceptualization, measurement, and applications of CQ.

The focus on national culture as a major variable in global management research has been primarily guided and inspired by the now classic work of Hofstede (1980), although there is already a vibrant literature on culture and organizational behavior prior to the popularity of cultural dimensions (for a review, see Bhagat and McQuaid, 1982). Hofstede identified four major dimensions of culture in his framework: individualism-collectivism; power distance; uncertainty avoidance; and masculinity-femininity. Numerous studies have employed his framework to examine diverse organizational issues (for a review, see Kirkman, Lowe, and gibson, 2006), ranging from the choice of entry mode (e.g., Kogut and Singh, 1988), cultural differences in the popularity of internet shopping (Lim, Leung, Sia, and Lee, 2004), the popularity of employee assistance programs (Bhagat, Steverson, and Segovis, 2007), intercultural negotiation (Brett and Okumura, 1998) to foreign-local employee relationships (Ang, van dyne, and Begley, 2003).

While Hofstede's framework is obviously important and influential, there are constant pleas for the development of novel constructs to advance our understanding of culture and international business (e.g., Leung, Bhagat, Buchan, Erez, and gibson, 2005). The objective of our chapter is to review the development of cultural frameworks in the arena of global management since Hofstede's (1980) monumental work, explore how the cultural perspective can augment the institutional perspective, a popular approach for understanding firm differences across cultures, and identify fruitful directions for future research on culture and global management.

Research on cultural dimensions

Major dimensions of culture

Perhaps because Hofstede's (1980) work is based on work values, the bulk of research on culture in the last two decades is concerned with shared values of members of different societies.