The contribution of cultural intelligence to cross-cultural adjustment and leadership effectiveness of Chinese expatriates in Thailand

Abstract

Since a large number of multinational corporations have entered international markets to maintain competitive advantages, the effectiveness of expatriates who handle the overseas tasks has been one of the key factors that affect the international business of multinational corporations. As the largest developing country, China has entered the global market in a rapid pace in recent years. Along with the new strategy known as one belt one road, Thailand is among the key strategic countries in South-East Asian region that has been chosen by Chinese multinational firms for trade and investment expansion. At the same time, there is a growing number of Chinese expatriates assigned to Thailand to supervise the overseas business. Despite this market expansion opportunity, expatriates inevitably face tremendous challenges caused by cultural differences when they work in a foreign country. Thus, it is crucial for expatriates to hold some cross-cultural competencies to adapt their managerial practices to local context. This issue tends to be common for Chinese expatriates who are assigned to manage business in Thailand, particularly when they have to work with Thai subordinates whose culture is quite different from the Chinese culture. Therefore, it is important to study the contribution of cross-cultural competence to the ability of Chinese expatriates to effectively manage employees in Thailand. Among various conceptualizations of cross-cultural competence documented in international business research, the concept of cultural intelligence (CQ) is regarded as the type of cross-cultural competence that has gained more popularity recently. This study investigates the contribution of CQ to cross-cultural adjustment and leadership effectiveness of Chinese expatriates in Thailand. In particular, the objective of this research is to analyze whether CQ of Chinese expatriates could affect (1) their ability to make effective cross-cultural management, (2) their tendency to demonstrate supportive behaviors to Thai subordinates, (3) their potential to be perceived as effective leader by Thai subordinates, and (4) their potential to gain commitment from Thai subordinates. The survey data were collected from 169 pairs of Chinese expatriate and Thai subordinate from subsidiaries of Chinese companies in Thailand. In order to avoid the common method bias from single-source data collection, the data of CQ and cross-cultural adjustment were collected from Chinese expatriates, whereas the data of leadership effectiveness, perceived supervisor support and commitment to supervisor were collected from Thai subordinates who worked for Chinese expatriates. The survey data were analyzed by using Partial Least Squares Structural Equation Modeling (PLS-SEM) showing that Chinese expatriates with high CQ tend to display a higher level of cross-cultural adjustment and are likely to be evaluated more favorably by Thai subordinates regarding perceived supervisor support. However, the results did not significantly support the contribution of CQ to leadership effectiveness and commitment to supervisor. It could be possible that CQ may determine leadership effectiveness and commitment to supervisor indirectly through the role of perceived supervisor support. The results of this study provide some suggestions for multinational corporations to manage local employees in culturally diverse workforce. This study suggests that Chinese companies should provide CQ training programs for expatriates to understand Thai culture so that they can adjust their working styles in order to support the cultural nature of Thai subordinates. CQ training programs should provide cultural knowledge and guidance for Chinese expatriates showing how to interact with foreign subordinates in appropriate manners. Furthermore, the training programs should allow Chinese expatriates to know how to adjust management styles across-cultures. The CQ training is expected to help Chinese expatriates to display supportive and appropriate behaviors when managing employees in Thailand, which contributes to their cross-cultural leadership effectiveness and successful management in the overseas businesses.