Examining Cultural Intelligence and Cross-Cultural Negotiation Effectiveness

Abstract

International negotiation failures are often linked to deficiencies in negotiator cross-cultural capabilities, including limited understanding of the cultures engaged in the transaction, an inability to communicate with persons from different cultural backgrounds, and limited behavioral flexibility to adapt to culturally unfamiliar contexts. Although management educators are concerned about developing students’ cross-cultural capabilities, there exists very little empirical research demonstrating the impact of such abilities on negotiation performance. To address this limitation while advancing research on the development of cross-cultural capabilities, we examined the impact of cultural intelligence (CQ) on cross-cultural negotiation performance. Using assessment center and consensus rating methodologies, 113 fully employed MBA students participated in a negotiation exercise designed to underscore key cultural differences with respect to both negotiation style and substantive issues. Controlling for prior negotiation and international experiences, personality (openness to change and extraversion), and emotional intelligence, our results demonstrated that CQ predicted negotiation performance while interest-based negotiation behaviors partially mediated the CQ–negotiation performance relationship. CQ capabilities facilitated negotiators’ ability to demonstrate cooperative, interest-based negotiation behaviors in a negotiation context that demanded behavioral adaptation. We conclude by discussing a series of practical implications for management educators and suggestions for future CQ research.