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Within the ever-evolving scene of international business, the birth of the new economic age around 1970, also called ‘Digital Age’ due to the new management principles and the exponentially new technologies, has significantly influenced how businesses interact globally.

I would like to explore Cultural Intelligence as a management principle, and Artificial Intelligence (AI) as a rather new technology. How Culturally Intelligent is Artificial Intelligence?

New management principles

According to InStride (Feb 2023) there are tangible benefits to cross-cultural working. For example, diverse and inclusive teams are 35% more likely to outperform competitors, diverse companies are 80% more likely to capture new markets and diverse teams are 87% better at making decisions.

INSTEAD Business School explains that one of today’s most pressing business issues is how to lead in a complex, cross-border, multicultural environment. This emphasises the importance of understanding cultural differences for organisations’ global competitive advantage. It appears that the field of Cross-cultural management has become a primary catalyst for success.

Over the past decades we learned that organisations require professionals who have a sense of Cultural Intelligence (CQ) to overcome cultural barriers and to reap benefits in order to gain a cultural competitive advantage.

Cultural Intelligence, also known as Cultural Quotient – CQ – derived from IQ (Earley and Soon 2003) refers to an individual’s capability to function effectively in situations characterised by cultural diversity. Professionals with high CQ thrive in culturally diverse settings: they work effectively while crossing boundaries and prosper in multiple cultures.

CQ can be measured by looking at four dimensions:

• Motivation (CQ drive)
  The enthusiasm and interest to acquire knowledge about new cultures.
• Understanding cultural differences (CQ know-how)
  The learning aspect of a nation and its habits, beliefs, behaviours, and values.
• Adapting behaviour (CQ action)
  The ability to adapt and act appropriately in multicultural contexts.
• Planning and awareness (CQ strategy)
  Considers lessons learned about the new culture, factoring them into new (multiple) perspectives.

New technologies

This digital age brought organisations technology to, for example, gather and analyse information online and to meet, train and educate people virtually and played a crucial role in shaping cross-cultural communication dynamics by facilitating advanced intercultural exchanges globally.

During the global pandemic that kicked off in 2019, technology played a hugely important role for organisations to connect with staff, partners and clients. The number of video meeting platforms accelerated, and these were used by a much wider audience. It brought enhanced quality and productivity due to improved functionality.

A rather new development has now arrived in full force: Artificial Intelligence (AI).

I took to ChatGPT to find out more: Is AI a technological tool?

AI is fundamentally a technological tool and refers to the development of computer systems that can perform tasks such as learning, reasoning, problem-solving, perception, and language understanding that typically require human intelligence.

I also asked: What does AI offer to organisations?

Artificial Intelligence (AI) offers numerous benefits to organizations for enhancing various aspects of their operations, decision-making processes and overall efficiency. By leveraging AI, organizations can enhance their operational efficiency, make more informed decisions, and stay competitive in an increasingly digital landscape.

I was triggered by Terrence Jackson, the editor of Intercultural Journal of Cross-cultural Management who reasons in a recent editorial ‘AI is becoming a major tool in management and business operating on a global scale and across cultural context’. He then goes on to query whether Artificial Intelligence (AI) is Culturally Intelligent.

How Culturally Intelligent is Artificial Intelligence

Jackson reasons ‘The question of whether or not AI is Culturally Intelligent necessitates addressing a number of connected issues:

(1) who creates and controls AI
(2) who creates the narratives around AI and how is it represented
(3) whether AI can think for itself, and
(4) whether AI has values’.

Digital Disruption

Are we talking here about Digital Disruption, the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services, which also affects cross-cultural management and developing CQ? Should we be aware that cross cultural management and CQ can be replaced by AI?

Of course I had to check with ChatGPT: Is AI Culturally Intelligent?

Artificial Intelligence (AI) has the potential to exhibit aspects of cultural intelligence, but its capabilities and limitations differ from those of humans.

Okay, so there seem to be capabilities (strengths) and limitations according to ChatGPT:

Strengths: it can provide data-driven understanding, leveraging extensive training data to understand and respect cultural differences.

Limitations: It lacks intrinsic understanding due to absence of personal experience, its dependence on data quality, ethical and sensitivity concerns, and lack of real-time ability to update its knowledge and behaviours dynamically.

I asked ChatGPT: What are the CQ limitations for the four CQ dimension?

CQ Drive: AI doesn’t possess personal motivation or interest; it responds based on its training data and algorithms.

CQ Knowledge: AI’s knowledge is limited to what was included in its training data and may not include all cultural nuances or the latest cultural developments.

CQ Strategy: AI doesn’t have personal awareness or the ability to plan proactively; it generates responses based on user input and its training.

CQ Action: AI doesn’t adapt behaviour in real-time or learn from interactions in a human-like manner. Its adaptability is pre-programmed and based on patterns in its training data.

ChatGPT summarises:

While ChatGPT can simulate aspects of cultural intelligence, it is important to remember that it operates within the constraints of Artificial Intelligence and lacks the intrinsic human qualities that fully embody cultural intelligence.

Jackson concludes in the editorial that ‘AI is not likely to be capable of ‘understanding’ the vested interests in society that it represents, nor acting independently upon such knowledge unless values related to this are inculcated by those who control it.’

He continues ‘AI doesn’t appear to be culturally sensitive, nor capable of understanding and making value judgements, and not likely to be culturally intelligent’. Jackson finally warns ‘The way it is used, and the impact it has across cultural contexts and different societal groups should be a concern to cross cultural management scholars.’

Finally, I asked ChatGPT: How can AI overcome the CQ limitations?

For AI to approach true CQ, it requires diverse and inclusive training, ongoing human oversight, and a strong focus on ethical development practices.

Indeed, it seems that we are not talking about an act of Digital Disruption; I think there is truth in the fact that AI is not culturally intelligent enough to be able to replace human cultural intelligence.

This year marks our 25 years in cross-cultural management training: an exciting, demanding, energising, and never dull process due to ongoing new management principles and new technologies.

Based on Jacksons’ editorial, my ChatGPT research on CQ of AI, and our experience in cross cultural management, I strongly suggest to keep developing professionals and global talents‘ Cultural Intelligence.

This allows for cultural sensitivity, cultural understanding to make value judgements, evaluating bias and the ethical impact of decisions in those areas where AI cannot. Only then can we effectively navigate and adapt to diverse cultural environments, collaborate effectively with people from diverse cultural backgrounds and achieve a global competitive advantage.

Sources:
Earley, C and Ang, S (2003) Cultural Intelligence: Individual Interactions Across Cultures.

Jackson, T. (2024) Is artificial intelligence culturally intelligent? International Journal of Cross Cultural Management 2024, Vol. 24(2) 209–214

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Joost Thissen, Partner & Interculturalist
joost@cultureresourcecentre.com.au
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