Cultural intelligence and managerial relational performance: a resource advantage perspective
| DOI | https://doi.org/10.1108/JIC-07-2020-0243 |
| Published date | 29 December 2020 |
| Date | 29 December 2020 |
| Pages | 617-638 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Arthur Egwuonwu,David Sarpong,Chima Mordi |
Cultural intelligence and
managerial relational
performance: a resource
advantage perspective
Arthur Egwuonwu
Brunel Business School, Brunel University, London, UK
David Sarpong
Brunel Business School, Brunel University, London, UK and
Higher School of Economics, National Research University,
Moscow, Russian Federation, and
Chima Mordi
Brunel Business School, Brunel University, London, UK
Abstract
Purpose –Drawing on the resource-advantage theory, the authors examine the effect of import managers’
cultural intelligence (CQ) on their foreign counterpart’s psychic distance and relational performance.
Design/methodology/approach –Survey data collected from 228 Nigerian automobile import managers
wereanalyzed using structuralequation modelling(SEM) to examine therelationship among thestudy variables.
Themeasure of CQ in this studycomprises metacognitiveand motivationalCQs to examine the relationsbetween
metacognitiveand motivational CQs on psychic distanceand their ultimate effect on relationalperformance.
Findings –This study suggests that metacognitive CQ reduces the effect of psychic distance in buyer–seller
exchange relationships, and in the presence of a low-level psychic distance, relational performance increases.
Confirming the intervening role of CQ on performance relationship, the study highlights the role of CQ and its
influence on psychic distance in facilitating (or impeding) relational exchanges in international buyer–seller
transactions.
Originality/value –The authors present the concept of CQ as a human capital that has the potential to
improve managerial relational performance. The authors go further to advance the potential significance and
relevance of CQ in improving international buyer–seller exchanges.
Keywords Cultural intelligence, Psychic distance, Relational performance, Human capital, Buyer–seller
relationship
Paper type Research paper
1. Introduction
The management of the exchange relationship between buyers and sellers remains a pillar of
marketing theory and international business practice. The underlying assumption of
exchange relationship is that a cordial buyer–seller relationship is important for value
creation and capture (Leonidas et al., 2019;Cabrilo and Dahms, 2018;Theodosiou and
Katsikeas, 2013). In this regard, the existing research suggests that the perceptions of agents,
in the form of psychic distance, about their trading counterparts tend to influence their
decision-making and execution during exchanges (Evans et al., 2008;Johnston et al., 2012).
Managerial
relational
performance
617
The authors also assessed the model using partial least squares SEM and ordinary least squares
regression. The alternative model yielded qualitatively identical results, increasing the robustness of the
authors’findings.
David Sarpong’s contribution to the article is based on the study funded by the Basic Research
Program of the National Research University Higher School of Economics (HSE) and by the Russian
Academic Excellence Project ‘5-100’.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 19 July 2020
Revised 27 October 2020
Accepted 16 November 2020
Journal of Intellectual Capital
Vol. 23 No. 3, 2022
pp. 617-638
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-07-2020-0243
We define psychic distance as an agent’s perception of differences among the operating
environment of a foreign export counterpart (Klein and Roth, 1990;Bello and Gilliland, 1997).
Psychic distance has been found to influence organizational decisions related to entry and
establishment mode choice (Swoboda and Elsner, 2013;Evans et al., 2008), joint and strategic
partnership (Johnston et al., 2012) and partner/market selection (Whitelock and Jobber, 2004).
Nevertheless, the extant theory has repeatedly emphasized the downside of psychic distance
in organizing a wide gap between perception and reality (Hutzschenreuter et al., 2014;
Sachdev and Bello, 2014). Following Brewer (2007), we argue that the bridging of psychic
distance in buyer–seller relationship, for example, can only be facilitated by cultural
knowledge, skills and capabilities or what has come to be known broadly as cultural
intelligence (Dow and Karunaratna, 2006). Granting an extensive scope of what could be
labelled as CQ in organizing, Ang et al. (2007) unpack it as a specific type of intelligence aimed
at understanding, reasoning and acting effectively in multicultural scenarios. Thus, CQ helps
agents to see beyond their context of socialization to exploit cross-cultural experiences in
managing exchanges with others (Anderson and Gatignon, 1986), in ways that minimize
perceived psychic distance and in turn improving relational performance (Sharma, 2019).
Yet, we know very little about how CQ affects the perception of distance of those at the
coalface of organizing impact on their relational performance. Rockstuhl and Van Dyne
(2018), for example, have called on scholars to examine the dynamic effects of CQ and its
critical role in managing global exchange relations (Magnusson et al., 2013;Sharma, 2019).
Contributing to this call, we draw on the resource advantage theory to examine the influence
of CQ on relational performance. Following Hunt and Morgan (1995), we argue that human
capital may contribute to competitive advantages if the skills and abilities of agents are
essential for value creation and capture and difficult to imitate. Specifically, we examined the
role of import managers’CQ on their perception of their foreign export counterparts’psychic
distance and ultimately their relational performance. Developing our contribution within the
context of the Nigerian automobile import industry, two fundamental research objectives
drove our empirical enquiry. First, we examine the relationship between CQ and psychic
distance of importing managers. The second focused on investigating the effect of psychic
distance on the relational performance of these managers.
Our research makes several contributions to the literature. First, by demonstrating that
the import manager’s CQ weakens their perception of their foreign export counterparts’
psychic distance and ultimately leading to enhanced relational performance. Second, the
study introduces the concept of CQ as a human capital capable of improving managerial
relational performance and also advances the theoretical understanding of the concept’s
significance and application in the international buyer–seller relationship. Third, the study
contributes to the emerging economies’literature by providing an understanding of how
Nigerian import managers utilize CQ to achieve international business success while
operating in an advanced economy. Finally, this study offers significant guidance to
managers as they attempt to advance effective international business strategies and provides
practical implications for businesses seeking to recruit and develop active import managers.
The remainder of the paper is organized as follows. The next section reviews the literature
and is followed by a section on hypothesis development. Then, we illustrate research methods
and data collection. The following section presents the results. The last section concludes the
paper and presents the study implications and limitations.
2. Literature review
2.1 The import manager as a human capital advantage
Our focus on the importmanager’s CQ is rooted in the resourceadvantage theory of Hunt and
Morgan (1995), which views the organization as a bundle of heterogeneous and imperfectly
mobile capital. The resource advantage theory builds on the resource-based view of the firm
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