Organizational Cross-Cultural Competence

Abstract

The present study was designed to assess the viability of developing quantitative measures of cross-cultural competence as an emergent organizational-level construct using samples of military organizations. Cross-cultural competence has predominantly been discussed as an individual-level construct but has not been extensively assessed as an organizational-level phenomenon. A synthesis of the cross-cultural competence, organizational intelligence, and multilevel analysis literatures was used to construct a theoretical basis for organizational cross-cultural competence and the development of quantitative measures of the construct. Based on this synthesis, three strategies were identified for assessing cross-cultural competence at the organizational level of analysis. Three studies were conducted to test these three strategies, each of which was supported empirically through the successful generation of interpretable organization-level scales and subscales. In a fourth study, each of the organization-level measures developed in Studies 1, 2, and 3 was found to be related to organization-level indices of organizational climate, perceived organization effectiveness, and cohesion.

Keywords

cross-cultural competency aggregation military structural isomorphism

Cross-cultural competence has been treated traditionally as an individual-level characteristic that is assessed, trained, or incorporated in models of overseas adjustment and performance using measures and techniques similar to other individual difference constructs such as leadership or emotional intelligence (e.g., Black, Gregersen, & Mendenhall, 1992). However, cross-cultural competence as exhibited by organizations at a “meso-level” level of analysis has received little attention in the literature (e.g., Gröschke, 2010; Janssens & Brett, 2006; Moon, 2010). A rapidly developing body of research identifies attitudinal attributes, knowledge, and skills that facilitate individuals’ successful adaptation to and performance in novel cultural settings (e.g., Abe & Wiseman, 1983; Ang, Van Dyne, Koh, & Ng, 2004; Black et al., 1992; Clement, 1988; Guzzo, 1996; Mol, Born, Willemsen, & Van der Molen, 2005; Ruben & Kealey, 1979; Sussman, 2000; Thomas & Fitzsimmons, 2008), but little research has examined how these and other constructs accrue to organizations and contribute to organizational-level competence. The present study was designed to develop and assess quantitative measures of cross-cultural competence as an organizational-level construct.

Analogous to cross-cultural competence in individuals, cross-cultural competence may also be observed at the organizational level, particularly in multicultural and multinational contexts. Operating across cultural boundaries requires organizations to adapt in order to be successful (e.g., Aycan, 2000; Hofstede, 2001; Javidan & House, 2002). Organizations must often make decisions about which practices to standardize across international units and which to localize in order to remain successful (Ang & Massingham, 2007). Additionally, organizations must adapt to environmental influences such as host nations’ socioeconomic conditions (i.e., economic philosophy, laws, regulations) and sociocultural characteristics (i.e., values, beliefs, assumptions, norms) in order to remain successful (Aycan, 2000). Organizations operating in multiple cultural settings must adapt to each of many cultural contexts; when cross-cultural competence is absent, challenges and potential failure may result (Egge, 1999; Fitz-Gerald, 2003).

Conceptualizing Organizational-Level Cross-Cultural Competence

Organizational cross-cultural competence is an intuitively appealing concept and well supported anecdotally. Although there is a long history and well-developed methods and models for conceptualizing individual-level cross-cultural competence, conceptualizing and empirically observing cross-cultural competence as an organizational phenomenon is a challenging proposition. Despite this challenge, a number of frameworks for conceptualizing organizational cross-cultural competence are available.

Ang and Inkpen (2008) contend that organizations can enhance cultural intelligence (CQ) by recruiting culturally astute top managers, developing processes and routines that allow a firm to leverage its competitive assets in different cultural settings, and being appropriately organized to cope with the vagaries of intercultural demands placed on organizations when working internationally. Similarly, according to Moon (2010), organizations may exhibit CQ as a “dynamic capability,” which enables organizations to use existing resources to adapt and meet environmental challenges (Teece, 2007; Teece, Pisano, & Shuen, 1997). Gröschke (2010) follows a similar logic in suggesting that groups can exhibit cultural competence by leveraging individual-level as well as group-level competencies.

The theorizing of Ang and Inkpen (2008), Moon (2010), and Gröschke (2010) represents an advance in the conceptualization of cross-cultural competence at the organizational level. However, only Gröschke (2010) offers insights regarding the measurement of organizational-level cross-cultural competence. To this end, the current program of research was undertaken to assess the appropriateness of several approaches to the measurement of cross-cultural competence at the organizational level of analysis.

From a measurement perspective, a fundamental issue that must be addressed is the levels of analysis problem, which is defined as the shift in meaning when a construct developed at one level of analysis is applied to another (Marsella, Dubanowski, Hamada, & Morse, 2000). Much attention has been paid recently to understanding how this meaning shift can be understood (for reviews, refer to Bliese & Jex, 2002; Chan, 1998; Fontaine, 2008; Klein & Kozlowski, 2000; Susser, 1994; Van de Vijver & Fischer, 2009). These changes in meaning must be understood from a conceptual as well as an empirical perspective in order to understand cross-cultural competence at the organization level of analysis. The following section briefly introduces three avenues for doing so. Each approach constitutes the basis for a theoretical research question addressed in this inquiry.

Aggregating Individual-Level Data

One approach to developing a higher level construct from an individual-level construct is the common practice of aggregation. Fundamentally, this is a “bottom up” approach in the sense that attributes and contributions of individuals are aggregated in order to describe an emergent property of a larger group. Aggregating individual-level data to a higher level of analysis has a long history in cross-cultural psychology. Dimensional research using country-level data aggregated from individuals, such as the major values research programs (e.g., Bardi & Schwartz, 2003; Hofstede, 2001; House, Hanges, Javidan, Dorfman, & Gupta, 2004; Schwartz, 1994, 2006) has identified meaningful national-level dimensions as well as within-culture individual-level similarity (e.g., Fischer & Schwartz, 2011). In this approach, cross-cultural competence data obtained through individual-level assessment are aggregated, and an analytic procedure is employed to determine if the data reflect a meaningful phenomenon at the organizational level. Fischer (2009) describes the necessary criteria for identifying emergent, collective phenomena from individual-level data. Emergent dimensions are identified by analyzing the interrelationships of aggregated variables at a higher level of analysis, the process Hofstede (2001) and others refer to as “ecocultural analysis” or “ecologic.”

Any foray into emergent, organization-level phenomena must be undertaken with caution, however. Although organizational theorists such as Klein and Kozlowski (e.g., Klein & Kozlowski, 2000) readily accept the presence of emergent qualities in organizations and teams, social scientists, philosophers, and systems theorists have long argued the issue of group emergence (e.g., Bedau & Humphreys, 2008). Marsella et al. (2000) warn against committing an anthropomorphic fallacy in attributing human characteristics to organizations. It is tempting to observe the many analogs between individual- and organization-level qualities and commit a reverse ecological fallacy of generalizing from individuals to organizations. For example, Fischer (2012) found isomorphism between individual- and country-level values, although not in the strict sense of identical item positions on dimensions. In distinct contrast to an anthropomorphized explanation of individual and emergent isomorphism, he argued that the value dimensions have different social and psychological functions at the individual and collective levels. Thus, although concepts may be similar at individual and organizational levels of analysis, they are distinct in their functioning and manifestation. Leadership, for example, is a concept that represents different yet related phenomena at the individual and organizational level of analysis (Dansereau & Yammarino, 1998; Klein & Kozlowski, 2000).

In the present set of studies, we approach the question of emergence of culture competency at the organizational level from an empirical perspective. Our primary questions in the studies reported in this article are whether or not we can identify organization-level cross-cultural competence and whether it is best measured using individual-level data. Following this approach, our first research question is the following:

Research Question 1: Do aggregated individual-level cross-cultural competencies reflect organization-level cross-cultural competence?

An Ethnographic Approach

The cross-cultural competence of organizations may also be identified through an ethnographic, respondent-focused methodology that begins with reports by organization members describing the overt characteristics, as well as shared representations, of organizations that are successful in cross-cultural or multicultural activities or enterprises (Bliese & Jex, 2002; Chan, 1998; Susser, 1994). Klein and Kozlowski (2000) describe “global” and “shared team” properties of organizations that are useful in understanding cross-cultural competence. Global properties are characterized as easily observable, descriptive properties of groups such as a team’s type of functioning that are observable by its individuals (Klein & Kozlowski, 2000). In contrast to global properties, shared team properties “originate [from] the experiences, attitudes, perceptions, values, or behaviors that are held in common by the members of a team” (Klein & Kozlowski, 2000, p. 215) but are compositional emergent qualities of the team. It is likely that the global property model may be useful if organizational cross-cultural competence is conceptualized in terms of easily observed organizational attributes such as cultural training (Guzzo, 1996; Lueke & Svyantek, 2000) that can enhance performance in culturally diverse contexts. The second research question we seek to address in this inquiry is therefore the following:

Research Question 2: Can organizational attributes that contribute to cross-cultural functioning be assessed empirically using organization members’ reports?

A Performance Approach

The shared team model may prove more useful if cross-cultural competence is conceptualized in terms of performance. Although individuals may differ in their own performance and in their perception of organizational performance, depending on their jobs and other situational factors, performance that is widespread or frequent within an organization will likely be observed by many of its members. The performance of the organization as a unit, while related to individual members’ performance, is an observable, emergent quality of the organization. Thus, the extent to which performance observations or judgments are shared can be used as an indicator of the pervasiveness of organizational performance, including cross-cultural competence. Accordingly, the third research question we address in this inquiry is:

Research Question 3: Can organizational cross-cultural competence be assessed via observations regarding cross-cultural functioning of organizations?

This article reports four exploratory studies that were performed to attempt to answer the aforementioned research questions concerning the identification and measurement of organizational cross-cultural competence. Each of the three approaches described in previous sections was employed in this pursuit. Our goal is to provide the cross-cultural competence research community with several starting points from which to further explore organization-level cross-cultural competence.

Linking Organizational Cross-Cultural Competence to Diversity Outcomes

Several characteristics of modern business practices blur the distinction between “cross-cultural” and “diversity” concerns in organizations, such as expatriate managers and professionals, immigrant organization members, as well as virtual multicultural teams. Thus, an organization’s competency in meeting the demands of intercultural or globalized business environment and the highly diverse societies in many nations may converge in several domains. To the extent that measures of competency in one area are related to those in the other, the validity of the measures is enhanced.

To the extent that cross-cultural and diversity competencies have a common core, possessing organizational cross-cultural competence may aid organizations in attaining positive diversity-related outcomes. As such, the fourth research question we propose to address in this inquiry is the following:

Research Question 4: Is there a relationship between organizational cross-cultural competence relate and diversity outcomes in organizations?

Study 1

The first study was performed in order to address Research Question 1 concerning the use of aggregation to identify organization-level cross-cultural competence. The Cultural Intelligence Scale (CQS; Van Dyne, Ang, & Koh, 2008) was employed as a familiar measure related to individual-level cross-cultural competence.

Earley and Ang (2003) argue that cultural intelligence (CQ) is comprised of four related components: knowledge, metacognition, motivation, and behavior. The knowledge component of CQ includes knowledge of specific norms, practices, and conventions in new cultural settings (Ward & Fischer, 2008) or knowledge of the processes through which culture influences behavior (Thomas, 2006). Meta-cognitive CQ involves the strategies of awareness, planning, checking knowledge, and development of coping strategies to cope with cultural challenges (Ng & Earley, 2006). Earley and Ang define the motivation component of CQ as “one’s propensity and commitment to act on the cognitive facet [of CQ] as well as persevere acquiring knowledge and understanding a new culture and overcome stumbling blocks or failure” (Early & Ang, 2003, p. 91). Behavioral CQ is “the capability of a person to enact his or her desired intended actions to a given cultural situation” (Earley & Ang, 2003, p. 91).

The individual-level conceptualization of CQ can be extended to organizations. This application of CQ to organizations is analogous to similar attempts to apply more general concepts such as intelligence to organizations (Akgün, Byrne, & Keskin, 2007; Albrecht, 2003; Glynn, 1996; Stalinski, 2004). These authors have argued that phenomena such as organizational culture, policies, and harnessing the interactions among individuals within organizations represent intelligence in organizations.

As measured by the CQS, CQ has received much scrutiny, with studies yielding disparate evidence for its construct and criterion validity (e.g., Gabrenya, Van Driel, Culhane, Turner, Pathak, & Peterson, 2011; Templer, Tay, & Chandrasekar, 2006; Ward & Fischer, 2008). High scores on the CQS often predict success in cross-cultural settings. However, no empirical evidence is available to indicate whether the individual-level factor structure of the CQS can be replicated at the organizational level of analysis.

Fontaine (2008) notes that there are at least three ways in which the meaning of constructs may be related at the individual and organizational levels of analysis when the construct is operationalized using individual-level data such as individual-level CQS scores. Constructs may exhibit isomorphism, having the same meaning at both levels of analysis, which is a common finding in personality research (e.g., McCrae, 2001; McCrae & Terracciano, 2005; McCrae, Zonderman, Costa, & Bond, 1996). Constructs may also exhibit nonisomorphism, having different meaning at the aggregate and individual levels of analysis, which is often observed in values research (e.g., Bardi & Schwartz, 2003; Schwartz & Bilsky, 1990) and social axioms research (e.g., Cheung, Leung, & Au, 2006). Alternately, constructs may also be the product of a systemic interaction between group-level and individual-level attributes (Fontaine, 2008).

Study 1 applied this line of reasoning to the assessment of CQ, examining its isomorphism across the individual and organizational levels of analysis. Consequently, we hypothesized the following:

Hypothesis 1: CQ as measured by the CQS will have a stable structure with an interpretable meaning at the organizational level of analysis similar to that obtained at the individual level of analysis.

Method

The CQS was included as a set of additional research items alongside the U.S. Department of Defense’s (DoD) standard organizational climate measurement instrument, the Defense Equal Opportunity Management Institute Organizational Climate survey (DEOCS). The DEOCS is administered online at the request of military commanders to assess the equal opportunity (EO) climate in their organizations, including both military units and civilian employees. Organization members receive an email invitation to complete the survey online. At the conclusion of the DEOCS, the research items of interest to the present study were presented.

Data were obtained from DoD employees (N = 5,457) representing 76 organizations with a minimum membership of 20 members. The average group size was 71.78, ranging from 20 to 204 members. Of these respondents, 4,536 were male and 921 were female. Most had cross-cultural experience: 1,110 were deployed abroad in combat and noncombat arenas at the time of the survey, 861 had returned from such areas within the previous 6 months, and 3,172 had returned from such arenas more than 6 months prior to completing the survey.

Aggregation Statistics and Analysis

The four-factor structure of the CQS was supported with a confirmatory factor analysis conducted with Mplus Version 5.21 (CFI = .96, TLI = .95; RMSEA = .06, SRMR = .04). Descriptive and reliability statistics, ICC(1), ICC(2), r_wg(j), and scale intercorrelations (displayed in Table 1) were calculated for each of the CQS subscales. The CQS subscales exhibited high internal consistency reliability, alphas > .90, and high interitem correlations that were congruent with previous findings such as those of Ang et al. (2007).

Table 1.

Descriptive Statistics and Aggregation Indicators.

									Correlations
	i	σi	g	σg	ICC(1)	ICC (2)	Mean rwg(j)	α	2	3	4
1. Meta-cognitive CQ	3.98	.83	3.97	.18	.03	.69	.93	.91	.41 (.39)	.61(.75)	.51(.76)
2. Cognitive CQ	3.21	.82	3.20	.16	.02	.54	.93	.90	—	.41** (.22)	.35 (.48)
3. Motivational CQ	3.94	.80	3.94	.20	.04	.76	.94	.89		—	.48 (.64)
4. Behavioral CQ	3.53	.85	3.53	.19	.03	.68	.92	.91			—
1. Organi-zational knowledge	—	—	3.56	.78	.06	.83	.69	.91	(.73**)	—	—
2. Organiza-tional action	—	—	3.33	.73	.09	.88	.74	.96	—	—	—
Performance	—	—	3.60	.38	.15	.63	.94	.93	—	—	—

Note: ${\bar{X}}_{i}$ and σ_i are at the individual level of analysis, while ${\bar{X}}_{g}$ and σ_g are at the organizational level of analysis. Organizational-level correlations are provided in parentheses.

p ≤ .01.

Mixed support, however, was available for aggregating the CQS subscales to the organizational level. ICC(1) values for CQS subscales ranged from .02 to .04. These values do not exceed the critical value of .05 suggested as a prerequisite for group-level aggregation (Van de Vijver & Poortinga, 2002). However, these values do indicate that some variance obtained for CQS scales can be attributed to group membership of individual respondents. The r_wg(j) values obtained for each of the CQS subscales ranged between .92 and .94, indicating high within-group agreement and thereby exceeding the critical values as specified by LeBreton and Senter (2008) to justify aggregation.

Multilevel Analyses

An analysis of structural isomorphism using exploratory factor analysis was performed following the procedure described by Van de Vijver and Fischer (2009). First, the pooled within-group matrix of the CQS items was computed and subjected to a principal components analysis (PCA) with varimax rotation. The results of this analysis revealed that all items had loadings that were congruent with the proposed structure of the CQS. Subsequently, items were aggregated to the organizational level of analysis. Two PCA analyses were performed to assess the structure of the CQS at the organizational level of analysis. In the first analysis, no factor structure was specified, while in the second analysis, a four-factor structure was specified a priori. The results from these analyses are displayed in Table 2 under the headings of “Analysis 1” and Analysis 2.” Neither analysis indicated an isomorphic structure at the organizational level. Only three components, reflecting the individual-level motivational, behavioral, and cognitive components of the CQS, had eigenvalues in excess of 1.00. These preliminary results indicated that the CQS does not have an isomorphic structure at the individual and organizational level of analysis.

Table 2.

Study 1 Component Loadings to Evaluate Isomorphism.

	Analysis 1			Analysis 2
Items	Motivational CQ	Behavioral CQ	Cognitive CQ	Motivational CQ	Cognitive CQ	Behavioral CQ	Meta-Cognitive CQ
1	0.69	0.43	0.18	0.43	0.16	0.28	0.77
2	0.6	0.64	0.16	0.38	0.14	0.52	0.66
3	0.69	0.55	0.18	0.46	0.16	0.42	0.72
4	0.67	0.52	0.28	0.45	0.26	0.4	0.67
5	0.01	0.21	0.79	−0.07	0.78	0.16	0.22
6	−0.05	0.18	0.88	−0.04	0.88	0.19	−0.02
7	0.37	0.23	0.79	0.32	0.79	0.22	0.2
8	0.08	0.04	0.88	0.06	0.88	0.04	0.06
9	0.21	0.16	0.81	0.24	0.81	0.19	0
10	0	0.27	0.88	−0.05	0.87	0.24	0.14
11	0.91	0.27	−0.09	0.84	−0.09	0.26	0.36
12	0.87	0.19	0.2	0.82	0.2	0.19	0.31
13	0.92	0.21	0.07	0.85	0.07	0.2	0.35
14	0.76	0.28	0.06	0.81	0.07	0.35	0.05
15	0.85	0.28	0.03	0.85	0.03	0.31	0.2
16	0.34	0.83	0.24	0.31	0.24	0.83	0.21
17	0.31	0.83	0.33	0.28	0.33	0.83	0.2
18	0.44	0.8	0.17	0.4	0.17	0.8	0.25
19	0.47	0.8	0.23	0.4	0.22	0.79	0.3
20	0.23	0.86	0.25	0.16	0.24	0.84	0.24
Eigenvalue	4.03	3.78	3.38	4.93	4.73	4.61	2.81
% of variance	20.15	18.88	16.92	24.63	23.65	23.07	14.04

Discussion

The results of Study 1 support the four-component structure of the CQS at the individual level of analysis. However, when aggregated, the majority of the evidence suggests a nonisomorphism. Evidence for an interpretable three-component structure (behavioral, cognitive, and motivational) did emerge at the organizational level of analysis, providing partial support for Hypothesis 1. These results were, however, tempered by the mixed aggregation statistics that were observed. Van de Vijver and Fischer (2009) point out that while ICC(1) values larger than 0.05 are needed to justify aggregation (we obtained values in the .02 to .04 range), values as small as .001 indicate some degree of nonindependence, or grouping effect in the data, and may therefore also be used as justification for aggregation.

The absence of the metacognitive component at the organizational level may be due to its poor ICC(1) value (see Table 1), suggesting that it is a fundamentally individual-level component. The metacognitive component requires self-assessments of complex skills (e.g., “I adjust my cultural knowledge as I interact with people from a culture that is unfamiliar to me”). Gabrenya et al. (2011) have argued that this component is poorly assessed by the CQS because responses are sensitive to extraneous variables irrelevant to the construct such as self-efficacy or overconfidence. Therefore, measurement error in the CQS may contribute to the failure of the component at the organizational level. Operationalization issues aside, the metacognitive component of CQ may not be amenable to emergent properties, and a different conceptualization of metacognition-like competencies at the organizational level of analysis may be warranted.

Study 2

A second study was performed in which cultural intelligence was operationalized as a purely organizational-level phenomenon. This study was informed by theory obtained predominantly from the organizational intelligence (e.g., Glynn, 1996) and knowledge management (e.g., Ang & Massingham, 2007) literatures.

Glynn (1996) conceptualizes organizational intelligence as a phenomenon that is fundamentally rooted in the processing of environmental information in a manner that allows organizations to adapt successfully. Glynn’s (1996) approach to organizational intelligence can easily be applied to the cultural realm by viewing organizational intelligence as the actions taken by organizations to attend to and process environmental stimuli in order to adjust their functioning in nonnative cultural contexts. Every culture presents an environment or “eco-social niche” to which an organization may opt to adapt. In order to achieve this adaptation successfully, it is critical for organizations to gather, process, and implement cultural information in a purposeful and goal-directed manner. Glynn contends that these actions occur as a result of “cross-level effects,” her term for the practices that organizations use to interpret, diffuse, and implement relevant knowledge in a manner that helps achieve and shape organizational goals. Such effects are “bottom up” in that they occur when individual intelligence is transformed and codified to become organizational intelligence.

This conceptualization of organizational intelligence is congruent with Hinz, Tindale, and Vollrath’s (1997) description of group-level information processing. Accordingly, groups of individuals can attend to environmental cues in a purposeful manner, process the information gained by attending to such cues, as well as encode information for storage and retrieval. All information that is captured in this manner allows groups to form responses to environmental stimuli. Outcomes of such responses provide the group with feedback and inform future information-processing objectives. By leveraging this conceptualization of organizational intelligence, it is possible to describe phenomena that are analogous to individual-level CQ at the organization level of analysis.

Organizational Cultural Knowledge

Knowledge has frequently been discussed as an individual-level phenomenon, such as in the CQ literature, but it is not restricted to the individual level of analysis. Organizational knowledge is a collective asset that develops from the accumulation of experience across all members of an organization. This knowledge is represented by the written documents, procedures, heuristics, and practices within organizations. Consequently, organizational knowledge survives beyond the tenure of individuals within organizations (Wenger, McDermott, & Snyder, 2002).

Knowledge is “a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information” (Davenport & Prusak, 1998, p. 5). Thus, knowledge is created by giving meaning to environmental phenomena and stimuli through interpretation and insight. To create knowledge, organizations have to obtain information from the environment in which they operate and then process this information to convert it into knowledge. From an organizational intelligence perspective, the information available from the environment constitutes the input for the processes that comprise organizational intelligence. Nonaka and Toyama (2003) argue that organizational intelligence would not be feasible without this input. This observation implies that organizational CQ will not be feasible without information specific to the cultural contexts in which organizations opt to operate.

Extending their ideas further into the organizational CQ domain, it can also be argued that, without having information regarding themselves and their functioning, organizations will have difficulty in giving meaning to cultural information that is relevant to their own functioning and operations. An organization that is culturally intelligent will likely have constantly updated knowledge available that is relevant to its functioning in different cultural contexts. Higher levels of this type of knowledge will be indicative of higher levels of organizational CQ.

Strategies to Monitor Organizational Cultural Knowledge

Metacognition involves the processes that individuals utilize to both acquire and understand cultural information (Ang et al., 2007), including the strategies of awareness, planning, checking knowledge, and the development of coping strategies to manage cultural challenges (Ng & Earley, 2006). Organizations can implement analogous strategies to remain aware of changes in their operating environments as well as ensure they have the right knowledge available to help solve culture-related problems. Such strategies may be indicative of organizational CQ.

Motivation to Acquire and Implement Cultural Knowledge

Organizational motivation is reflected in the goals and incentives that lead organizations to perform (Ang & Massingham, 2007; Dulaimi, Ling, & Bajracharya, 2003). One school of thought regarding motivation as an organizational-level phenomenon views goal orientation or expectancies to attain goals as the main driver of organizations to innovate (Dulaimi et al., 2003). Goal attainment and the expectancy of achieving goals have been noted to form the basis of organizational strategies such as decision making, adaptive learning, and strategic planning (Dulaimi et al., 2003; March & Simon, 1958, Van de Ven & Poole, 1995). Another school of thought views it as a cyclical phenomenon that stems from effort that leads to performance, which in turn leads to more effort being exerted to attain higher levels of performance (Dulaimi et al., 2003). This is in essence a positive feedback loop in which effort results in higher levels of performance that subsequently inspires higher levels of effort and so on.

Organizational motivation can also be exacted from the fulfillment of organizational expectations. Organizations can exert normative pressure to approach and utilize knowledge in certain ways (Hinz et al., 1997; Quigley, Tesluk, Locke, & Bartol, 2007). By experiencing such pressures, organizational members come to share a social reality or formulate a common frame of reference that is informed by the goals of an organization, such that the individual and organization motivation are aligned (Bettenhausen & Murnighan, 1991; Festinger, 1950; Sherif, 1935; Tindale, Sheffey, & Scott, 1993).

An organization that is focused on succeeding in any given cultural environment would be expected to be motivated to acquire and process information about that environment and act on it in a manner that is both culturally suitable and congruent with the organization’s goals. Organizations that view the attainment of cultural knowledge as an important task and explicitly link cultural knowledge to its operational success will likely have higher organizational CQ than organizations that do not.

Exhibiting Planned Actions

The behavioral component of CQ may be reflected at the organization level of analysis as an organization’s ability to harness and implement cultural knowledge in a flexible manner that would allow for the achievement of organizational goals in a particular cultural setting.

Ang and Massingham (2007) offer insights regarding how organizations may respond to the challenges of managing the efforts of an organization in different cultural contexts. They note that organizations often have to adapt their management practices in ways that are both pragmatic and culturally sensitive. According to their views, organizations should balance overcoming culture-specific challenges to management with overcoming international managerial challenges. In some instances, it may be more beneficial to use standardized managerial practices regardless of the cultural context, but in others adapting managerial practices to the cultural context can be imperative. Thus, the behavioral component of cultural intelligence may be observed at the organizational level when organizations implement planned, culturally appropriate practices and processes that allow them to achieve their long-term goals.

Empirically Assessing Organizational CQ

Cultural intelligence at the organizational level can be assessed using several research strategies, including extensive qualitative research by observers or participant observers and quantitative research that relies on judgments of outside experts or insider participants. Glynn’s (1996) discussion of organizational intelligence as cross-level effects, in which the characteristics of the organization are an emergent property of the analogous characteristics of individuals, suggests that members of organizations have accurate knowledge of the practices within their organizations that would contribute to the four components of cultural intelligence (Carillo, 2004; Lee, Lee, & Kang, 2004; Liebowitz & Chen, 2001). Glynn’s conceptualization of organizational intelligence as cross-level effects is congruent with a theoretical model by which individual-level data may be aggregated to describe attributes of organizations known as the referent shift consensus model (Chan, 1998). This model, commonly applied in organizational climate research, holds that organization-level conceptions require a high degree of consensus among members to be viable (Chan, 1998). The present study adopted a quantitative strategy in assessing organization-level CQ based on this cross-level/referent shift conceptualization. Our analysis of organizational-level CQ in terms of the four individual-level CQ components suggests that organization-level CQ may exhibit a four-component structure as well. These observations warrant the following hypothesis:

Hypothesis 2: Organizational CQ, measured in terms of cross-level effects, will have a stable, interpretable four-factor structure at the organizational level of analysis.

Method

Organizational CQ (OCQ) items were generated by the first author based on the previous theoretical discussion of the characteristics of CQ at the organizational level. A pilot test of the items was performed in which subject matter experts (SMEs; Department of Defense employees) were asked to review the questions in order to assist in the identification of the most suitable items to assess the theoretical constructs of interest. Items that the SMEs indicated were not relevant to organizational concerns in their units were omitted. The final OCQ included 25 items, 6 to7 items for each CQ component.

All items were framed in terms of what individuals have observed of their organizations’ functioning. Respondents were asked to indicate the extent to which the items accurately described their organizations on a 5-point Likert-type scale (1 = strongly disagree, 5 = strongly agree). Examples of items include the following:

Knowledge:

“My organization has knowledge of the cultural norms and values of other cultures.”

Metacognition:

“My organization has a strategy for obtaining knowledge about other cultures.”

Motivation:

“My organization views learning about other cultures as important.”

Behavior:

“My organization changes its practices as required in other cultural settings.”

As in Study 1, the items were attached to the online DEOCS. Data were obtained from DoD employees (N = 8,735) representing 113 organizations. Organizations had an average of 77.3 members, ranging from 21 to 321 members. As in Study 1, males (N = 7,079) outnumbered females (N = 1,656), and most respondents had been deployed overseas, including 1,347 at the time of the study, 813 within 6 months of the study, and 5,669 more than 6 months prior to completing the survey.

Analysis

To provide an initial assessment of the characteristics of the organizational CQ measure, ICC(1), ICC(2), and r_wg(j) statistics for each of the its four subscales were computed. These statistics were within acceptable parameters as prescribed by Van de Vijver and Poortinga (2002) as well as LeBreton and Senter (2008). Data were aggregated to the organization level of analysis and subjected to a series of PCAs. The results from the initial PCA (Table 3) indicated that the proposed theory-based four-component model is not tenable at the organizational level of analysis. Informed by these initial results, cross-loaded items were removed following established protocols (Costello & Osborne, 2005; Devellis, 1991; Tabachnick & Fidell, 2007), and the structure was reassessed with a new PCA (Table 3), which produced support for a two-component solution. The first component represented actions undertaken by organizations, such as the Metacognition and Behavior examples provided above, and the second component represented cultural knowledge of the organization, illustrated by the Knowledge item example. Aggregation indicators (Table 1) suggest that these scales can be aggregated to the organizational level of analysis.

Table 3.

Study 2 Principal Components Analysis Organizational-Level Component Loadings.

	Analysis 1		Analysis 2
Items	Component 1	Component 2	Component 1	Component 2
1		.87	.19	.86
2	.54	.74	.51	.80
3	.45	.78	.41	.84
4	.64	.58
5	.57	.71	.55	.72
6	.57	.70	.55	.74
7	.63	.65
8	.79	.42
9	.83	.23	.83	.22
10	.23	.75
11	.76	.52	.77	.50
12	.87	.37	.85	.40
13	.78	.48	.77	.49
14	.73	.56	.73	.56
15	.73	.55	.74	.54
16	.80	.53	.81	.52
17	.80	.50	.81	.51
18	.82	.50	.83	.50
19	.86	.39	.86	.40
20	.86	.36	.86	.36
21	.52	.69
22	.61	.67
23	.83	.45	.82	.45
24	.86	.30	.86	.31
25	.77	.50	.78	.49
Eigenvalue	12.48	8.24	7.94	4.79
% of variance	49.92	33	41.8	25.21

The two scales were highly related at the organizational level of analysis (r = .73, p ≤ .001), suggesting that they may be assessing largely overlapping domains. However, as indicated by the results of the second PCA analysis, the first factor accounts for less than 50% of the variance, while the second factor accounts for approximately 25% of the variance, indicating that the two factors extracted are relatively distinct.

Discussion

In Study 2, we identified two correlated components at the organizational level of analysis after removing several items. The first of these components included all items that referenced organizational cultural knowledge, while the second component referenced actions performed by organizations to obtain, manage, and use cultural knowledge. These results provided only partial support for the four-component structure specified in Hypothesis 2.

A limitation to this study is that the OCQ was not validated prior to our use. Therefore, the two-component solution observed may reflect shortcomings in the OCQ rather than characteristics of organizational CQ. However, the two-factor outcome suggests that content and process (i.e., knowledge and its acquisition) are distinguishable emergent qualities of organizations and these qualities are not isomorphic with the four-component individual-level CQ concept. A substantive quality of organizational-level cross-cultural competency may be the seeking, developing, and managing of culture knowledge and the extent to which the organization currently possesses such knowledge. This distinction parallels theory regarding corporate cultures exemplifying “learning organizations” (e.g., Kumar, 2005; O’Dell & Jackson Grayson, 1998; Prokesch, 1997) and may illustrate the most critical aspect of culture competence at both levels of analysis. In the DoD, acquisition and possession of knowledge is foremost among the competencies thought to contribute to cross-cultural competency (e.g., Johnston, Paris, McCoy, Severe, & Hughes, 2010). The high relationship between these two competencies may reflect the developmental nature of culture competency, relating acquisition efforts and received knowledge. Future research should attempt to identify correlates of these two organization-level constructs and their implications for performance under various contextual conditions.

Study 3

The third study was conducted to determine whether organizational cross-cultural competence can be assessed as a performance-related construct using the referent shift, consensus approach. Study 1 and Study 2 focused on the cross-cultural competence attributes of organizations using individual-level attributes as starting points, rather than the expression of these attributes in outcomes (i.e., performance). In these studies, as in much of the literature, cross-cultural competence is viewed as an antecedent to performance rather than actual performance.

The distinction between cross-cultural competence as an attribute that is antecedent to performance and cross-cultural competence as performance in itself is critical given the oft-cited observation that the factors that determine performance do not constitute performance. Campbell, Gasser, and Oswald (1996) propose that for individuals, performance is synonymous with behavior. It is something that people do, and it can be observed. Campbell et al. (1996) argue that individual performance is determined by individual attributes such as declarative knowledge, procedural knowledge, skills, and motivation, as well as responses to organizational attributes such as reward systems and management practices. Most definitions and models of individual-level cross-cultural competence propose a causal relationship between antecedents such as person attributes and performance. For instance, Fantini (2006) defines cross-cultural competence as “a complex of abilities needed to perform effectively and appropriately when interacting with others who are linguistically and culturally different from oneself” (p. 12). This definition implicitly distinguishes antecedents of successful cross-cultural interaction from successful cross-cultural interaction.

Study 3 was designed to explore the feasibility of creating a measure of organization-level cross-cultural performance using a self-report method. Following an “ethnographic” approach, it attempted to identify consensually accepted attributes of organizational performance that individuals are able to know and report. The following hypothesis was proposed:

Hypothesis 3: Self-reports of organization-level performance can be used to create a performance-oriented measure of organizational cross-cultural competence that shows statistical evidence of aggregability at the organizational level.

Method

Qualitative inquiry

This study was conducted in four phases. The aim of the first phase was to obtain information from organization members about actions in their organizations that exemplify cross-cultural competence. The information obtained from these SMEs was then used to develop items to empirically assess organizational cross-cultural competence.

To develop items, information about organizational cross-cultural performance was obtained from transcripts of focus groups that were conducted to identify cross-cultural competence-related needs and strengths of military personnel. All individuals included in focus groups were SMEs with extensive experience working in cross-cultural contexts. Clear examples of effective organizational cross-cultural performance of military organizations were found in the transcripts. The most notable themes that emerged were related to the acquisition and use of cultural knowledge, the adaptation of units to overcome cultural challenges, the use and management of interpreters, and building rapport with members of the host culture.

Item generation

The information gleaned from the qualitative data was used to generate 59 items that described aspects of competent organizational cross-cultural functioning. The items were divided into two sets and administered to military service members alongside the DEOCS. Respondents were asked to indicate the extent to which they agreed that the attributes and actions described in the items were critical to their unit during its most recent deployment abroad. To emphasize the desired unit-level (vs. person-level) frame of reference, each item was preceded with the item stem “During my unit’s last deployment abroad…”. Sample items are “my unit effectively built rapport with people in the target region” and “my unit continually obtained cultural information relevant to completing the mission.” Responses were obtained on a 5-point Likert-type scale (1 = strongly disagree, 5 = strongly agree).

Responses were obtained from 1,032 and 1,179 military service members for the first and the second item sets, respectively. All respondents had had experience working abroad. The samples were demographically similar: 89% male and 63% currently or recently (within 6 months) serving in a combat zone.

Item selection

Two a priori decision rules were established to identify which items to retain using the criticality ratings (i.e., to ensure that items followed the requisites of a consensus model). First, items were retained if the majority of respondents indicated agreement or strong agreement (i.e., 4 or 5 on the 5-point scale). Second, in the event of a limited number of items meeting the first rule, items were retained for which 80% or more of the respondents did not strongly disagree or disagree (i.e., 1 or 2 on the 5-point scale), and 40% or more indicated agreement or strong agreement. Based on these decision rules, 13 items were retained for inclusion in the final scale.

Main study

As in Studies 1 and 2, the final scale was deployed as additional research questions alongside the DEOCS. Data were obtained from 3,366 service members. The case selection criteria used in Study 1 were employed in creating this sample. In addition, only respondents representing units with five or more members were retained. Using these criteria, responses from 474 service members representing 50 units were included in the sample. The average unit size was M = 9.22, σ² = 6.08. Seventy-three percent of the units had been deployed in combat areas, while 2% of the units had been deployed to noncombat areas.

Analysis

Using data aggregated to the unit level, PCAs were performed to determine whether a single latent factor could account for the shared variance. Two factors with eigenvalues greater than 1 could be identified in the PCA (see Table 4), accounting for 65.0% and 8.4% of the variance, respectively, suggesting the possibility of a unifactorial solution. The structure matrix revealed that all of the items included in the analysis had high loadings on one or both of these factors.

Table 4.

Study 3 Principal Components Analysis Component Loadings.

	Rotated Component Matrix		Component Matrix
	Component		Component
Item	1	2	1
1	.68	.36
2	.78	.15
3	.78	−.03
4	.81	−.12	.79
5	.81	.26	.82
6	.91	.01	.91
7	.92	−.03	.91
8	.90	−.07	.90
9	.87	.15	.88
10	.92	.07	.94
11	.87	.18	.90
12	.90	−.02	.92
13	.63	.06	.66
14	.02	−.97
Eigenvalue	9.10	1.17	7.51
% of Variance	65.02	8.35	75.06

Using established cutoffs (Costello & Osborne, 2005; Devellis, 1991; Tabachnick & Fidell, 2007), cross-loaded items were removed and the remaining items were submitted to another PCA (Table 4). This final set of 10 items exhibited a unifactorial structure, with one factor accounting for 75.1% of the variance. The final scale had aggregation statistics that well exceeded established critical values that justify aggregation, ICC(1) = .15, ICC(2) = .63, and r_wg(j) = .94.

Discussion

In Study 3, SMEs were employed to develop a short self-report measure of unit-level cross-cultural performance. The measure was shown to have organization-level qualities based on the aggregation statistics, thereby supporting Hypothesis 3. These findings are in line with Klein and Kozlowski’s (2000) shared team model.

Study 3 had limited goals and serves as the first step in a larger project that includes validation of the measure. The use of a self-report method in this study provides considerable efficiency of measurement but at the same time suffers from the shortcomings of self-reports relative to more objective performance measures. At the individual level of analysis, self-reports of cross-cultural performance such as the Black scale (Black, 1988) are frequently used (e.g., Hechanova, Beehr, & Christiansen, 2003), but other performance measures are preferred (e.g., Mol et al., 2005; Thomas & Lazarova, 2006). At the organizational level of analysis, the success or failure of the organization can be used as a measure of performance, providing such data can be obtained. For example, Kung, Hu, Zhang, and Hu (2010) discovered that culture distance between Chinese culture and the nations of origin of 92 foreign firms that acquired or merged with Chinese firms from 1985 through 2005 was negatively related to growth in percentage of return on both equity and assets. However, the level of success of deployed military units is complex and multiply determined, particularly in nation-building or peace-keeping missions, suggesting that a self-report approach to assessing success in the specific intercultural encounters experienced by the units is more appropriate than a more general, objective measure of overall mission outcomes.

Study 4

The aim of Study 4 was to garner evidence for the validity of the measures of organizational cross-cultural competence developed in Studies 1, 2, and 3 using a competence measure involving diversity-related outcomes within organizations.

Diversity Management

Theoretical support for linking organizational cross-cultural competence to diversity-related outcomes can be found in several sources. It has been argued, for instance, that cross-cultural competence constitutes an important organizational asset in terms of the successful management of diversity. Earley et al. (2006), as well as Bucher (2008), noted that cross-cultural competence can be used to harness diversity and build successful international teams and organizations. Bucher (2008) proposed that cultural diversity as well as cultural context has a tremendous impact on the functioning of organizations and teams. Cultural diversity, defined by Bucher (2008) in terms of cultural, religious and ethnic background, may even impact workplace issues such as scheduling meeting times, the type of food to serve at meetings, and what to wear. Similarly, the cultural context, defined by values and belief systems, may have a profound impact on interactions among individuals (Bucher, 2008).

Hostile Work Environment

Many indicators of successful diversity management reflect organizational cross-cultural competence more generally. One such indicator is the perception of a hostile work environment, a work context in which verbal or physical behavior is pervasive enough to create an abusive climate that interferes with work performance (Bell, McLaughlin, & Sequiera, 2002). Coworker or manager behaviors that are violent, offensive, or discriminatory can contribute to perception of a hostile work environment regardless of whether one is the target of such behaviors (Hulin, Fitzgerald, & Drasgow, 1996; Sorenson, Mangione-Lambie, & Luzio, 1998). Perceptions of poor organizational diversity and equal opportunity climate can suggest the presence of a hostile work environment (Naff & Thompson, 2000).

Diversity climate is conceptualized as “perceptions about the organization’s diversity-related formal structure characteristics and informal values” (Gonzalez & DeNisi, 2009, p. 24), in contrast to the more commonly recognized equal opportunity (EO) climate, which involves perceptions of the opportunities and potential favoritism afforded to certain groups of employees (Dansby & Landis, 1991).

We propose that organizational cross-cultural competence should have an impact on an important component of the diversity climate of organizations, hostile work environment, and therefore hypothesize the following:

Hypothesis 4: Higher levels of organizational cross-cultural competence should be associated with lower levels of hostile work environment perceptions.

Cohesion

Another indicator of successful diversity management is organizational cohesion. Festinger (1950) described cohesion as the total field of forces that act on members to remain in an organizational unit. Similar definitions suggest that cohesion is the extent to which organizational units are unified, coherent, and organized (Lickel et al., 2000) and the extent to which organizational unit members are attracted to the unit and the task, are bonded to one another, and desire to retain unit membership (e.g., Festinger, Schachter, & Back, 1950; Mullen & Copper, 1994).

Unit cohesion has positive effects on an individual’s contribution to a unit via motivation (Carron, Colman, Wheeler, & Stevens, 2002); that is, cohesion reflects group identity—an attachment to the unit and its members that creates a desire to exert effort to promote the well-being of the unit (Sluss, van Dick, & Thompson, 2011; van Knippenberg, 2000). Cohesion also yields adherence behavior (Prapavessis & Carron, 1997), assuming responsibility for negative outcomes (e.g., Brawley, Carron, & Widmeyer, 1987), collective efficacy (e.g., Paskevich, Brawley, Dorsch, & Widmeyer, 1999), conformity to unit norms (e.g., Shields, Bredemeier, Gardner, & Boston, 1995), tolerance of the negative impact of disruptive events (e.g., Brawley, Carron, & Widmeyer, 1988), and training intensity (Prapavessis & Carron, 1997). Work group diversity was found to be negatively related to social integration (cohesion, trust, morale, satisfaction, and attraction) in a meta-analysis reported by Stahl, Maznevski, Voigt, and Jonsen (2010), and this relationships was moderated by geographical dispersion of the team (collocated teams are less socially integrated). Perhaps organizations that possess cross-cultural competence may be able to lessen the negative effects of diversity on cohesion.

The many positive outcomes of cohesion for organizational performance suggest that, in organizations characterized by a high degree of diversity, organizational cross-cultural competence should be related to cohesion. Therefore, we hypothesize the following:

Hypothesis 5: Organizational cross-cultural competence will be positively related to perceptions of work group cohesion.

Work Group Effectiveness

Earley et al. (2006) and Bucher (2008) argued that cross-cultural competence has strong effects on organizational performance. These authors view cross-cultural competence, at the individual level of analysis, as a critical component to long-term organizational performance in different cultural settings. Earley et al. (2006) point out that cross-cultural competence is the cornerstone of the international success of any organization. Organizational-level competence, performance, and success are a consequence of the collective activities of the organizations’ individual members, and these members in turn may judge the effectiveness of their work groups as a function of their perception of organization-level outcomes. Research on the relationship between diversity and organizational performance is equivocal. The meta-analysis reported by Stahl et al. (2010) showed no overall relationship between diversity and performance. However, variables such as cross-cultural competence were not included as moderators in their meta-analysis. Hence, we expect that measures of organization-level cross-cultural competence will be related to perceptions of work group effectiveness in highly diverse organizations. Consequently, the following hypothesis was examined:

Hypothesis 6: Organizational cross-cultural competence will be positively related to perceptions of work group effectiveness.

Method

Data for Study 4 were obtained as part of Studies 1, 2, and 3. Because the organizational cross-cultural competence measures used in these studies were attached to an organizational climate survey, the DEOCS, the DEOCS data were also available to the researchers and could be used to test Hypotheses 4, 5, and 6. Three measures were calculated from items that are included in the DEOCS instrument.

Cohesion

We measured cohesion with the four-item Landis, Dansby, and Faley (1993) unit cohesion scale that focuses on both task and interpersonal dimensions of cohesion. The response scale ranged from 1 = totally agree with the statement to 5 = totally disagree with the statement. High scores reflect high levels of work group cohesion.

Hostile work environment

Following Landis et al. (1993), we measured hostile work environment with five items (e.g., “Someone made sexually suggestive remarks about another person”). The response scale ranged from 1 = there is a very high chance that the action occurred to 5 = there is a very low chance that the action occurred. High scores reflect high levels of a hostile work environment.

Work group effectiveness

Perceptions of work group effectiveness were measured with four items (e.g., “The quality of output of my work group is very high”). The response scale ranged from 1 = totally agree with the statement to 5 = totally disagree with the statement. High scores reflect high levels of perceived work group effectiveness.

Analysis

The cohesion, hostile work environment, and work group effectiveness measures were aggregated to the unit level in each of the samples collected for Studies 1, 2, and 3. For each sample, correlations were calculated at the organizational level between the measures developed in each of the preceding studies and the three DEOCS measures of interest.

Study 1—Aggregated CQS

Scales assessing hostile work environment, work group effectiveness, and work group cohesion exceeded established critical values to justify aggregation, ICC(1)s ≥ .06, ICC(2)s ≥ .82, r_wg(j)s ≥ .90. Common method bias was assessed using Harmann’s single factor test (Harmann, 1976) using Mplus Version 5.21. Only 1.40% of shared variance could be attributed to a common method factor. The three isomorphic CQS scales developed in Study 1 were used in this analysis. The motivational and behavioral components of the CQS were significantly related to all of the diversity-related outcomes (Table 5). The cognitive component of the CQS was not related to these outcomes. Thus, using the aggregated CQS data, partial support is available for Hypotheses 4, 5, and 6.

Table 5.

Study 4 Correlations Between Organizational Cross-Cultural Competence Factors and Equal Opportunity Climate Measures.

									Correlations With Organization-Level Cultural Competence Measures
Study 1	${\bar{X}}_{i}$	σ_i	${\bar{X}}_{g}$	σ_g	ICC(1)	ICC (2)	Mean r_wg(j)	A	Metacognitive CQ	Cognitive CQ	Motivational CQ	Behavioral CQ
Cohesion	3.83	.95	3.83	.29	.06	.82	.90	.90	.35**	−.01	.51**	.35**
Hostile Work Environment	1.85	.86	1.87	.31	.08	.86	.93	.80	−.34**	.05	−.45**	−.24*
Work Group Effectiveness	4.06	.85	4.05	.25	.06	.82	.93	.87	.33**	−.16	.41**	.29*
Study 2									Organizational Knowledge	Organizational Action
Cohesion	3.92	.91	3.91	.27	.06	.84	.91	.90	.21*	−.07
Hostile Work Environment	1.79	.79	1.78	.24	.07	.85	.94	.78	−.21*	.02
Work Group Effectiveness	4.13	.81	4.12	.27	.09	.89	.94	.88	.12	−.18
Study 3									Cross Cultural Competence as Performance
Cohesion	2.10	.95	2.1	.95	.09	.49	.73	.89	.39**
Hostile Work Environment	4.12	.82	4.13	.82	.08	.47	.92	.74	−.41**
Work Group Effectiveness	1.93	.87	1.93	.87	.10	.53	.89	.87	.48**

Note: Study 1: N = 5,433; average group size = 72. Study 2: N = 8,735; average group size = 77. Study 3: N = 474; average group size = 10.

p = .05. **p = .01.

Study 2—SME-generated OCQ scale

All DEOCS scales met criteria to justify aggregation, ICC(1)s ≥ .06, ICC(2)s ≥ .84, r_wg(j)s ≥ .91. Using Harmann’s single factor test (Harmann, 1976), only 1.00% of shared variance could be attributed to a common method factor. The knowledge but not the practice-related component of the OCQ measure was significantly correlated in the expected direction with perceptions of hostile work environment and work group cohesion DEOCS scales (Table 5). Thus, partial support was available for Hypotheses 4 and 5.

Study 3—Performance-based scale

Mixed evidence was available to justify aggregation of the diversity-related scales in this inquiry. ICC(1) and r_wg(j) values exceeded criteria to justify aggregation, ICC(1)s ≥ .08, r_wg(j)s ≥ .73, but ICC(2) values were below accepted cutoffs, ICC(2) = .49, .47, and .53 for cohesion, hostile work environment, and work group effectiveness, respectively. This outcome is not altogether surprising due to the smaller average group size used in this sample compared to the samples obtained for Studies 1 and 2. Snijders and Bosker (1999) indicate that ICC(2) values increase with average group size. Nonetheless, the ICC(2) values were substantially different from zero, which can be taken as an indicator of emergent properties in data (Bliese & Jex, 2002). Using Harmann’s single factor test (Harmann, 1976), only 0.30% of shared variance could be attributed to a common method factor. All DEOCS scales were significantly correlated in the expected directions with the cross-cultural performance scale (Table 5), thereby lending support for Hypotheses 4, 5, and 6.

Discussion

The results of Study 4 revealed that most of the organizational-level cross-cultural competency measures developed in Studies 1, 2, and 3 were related to the three organization-level diversity climate measures that were derived from the DEOCS. These findings indicate competency, assessed in several ways, predicts diversity perceptions at the organizational level of analysis.

Common method bias had little impact in terms of explaining the competency–diversity relationships. Even present at higher levels than those found, unlike common method bias at the individual level, at the aggregated, organizational level such a bias indicates that military units that showed positivity, scale use, acquiescence, social desirability, or other biases on one set of items also did so on other sets of items, indicating something about the collectivity of individuals in the units. A large number of extraneous or theoretically interesting variables could account for such unit-level biases and common method bias. Additional research that carefully investigates these variables is needed to identify spurious correlations in these data. Finding methods other than self-report measures should be the immediate goal of researchers interested in understanding relationships among the constructs of interest in the present study. Non-self-report measures of the three diversity climate constructs are conceptually possible, albeit not necessarily practical in some organizational contexts.

General Discussion

We conducted three studies to investigate the feasibility of measuring cross-cultural competence as an organizational-level phenomenon using different conceptions of organization-level competence and different strategies of scale development. In each study, we were able to demonstrate that meaningful organization-level measures could be developed. In a fourth study, we showed that these measures are related to organization-level measures of diversity climate in the U.S. military. Each of these studies used individual-level data to derive organizational-level indicators of organizational cross-cultural competence. In the first study, we examined the appropriateness of aggregating individual-level competencies to reflect organizational-level competency (Research Question 1). In the second study, we conceptualized cross-cultural competency in terms of shared perceptions of organizational attributes (Research Question 2). In the third study, we examined organizational cross-cultural competence as a performance-based construct (Research Question 3). In the fourth study, we performed a validation of these methods for measuring organizational cross-cultural competency by relating the measures that were developed to organizational diversity outcomes (Research Question 4).

Although each of these studies provides evidence for the meso-level viability of the scales that were developed, in the limited sense that organization-level measures can be created with suitable aggregability indices, additional construct and criterion-related validation efforts are required. Furthermore, the generalizability of each of the measures should be examined outside military samples. The present research cannot rule out the possibility that military units differ from civilian business organizations in important ways. First, unit cohesiveness is of utmost importance in the military, the outcome of explicit training, very high levels of interpersonal interaction, shared goals, and shared adversity. Military units that are deployed to perform combat, peacekeeping, or security-related missions often do so under difficult circumstances in which cohesion is required for existential survival. Such cohesiveness may contribute to a higher degree of shared attitudes and beliefs that are manifested in greater aggregability than we might find in the civilian sector. Second, although overseas military deployments vary, they are qualitatively different from overseas work assignments experienced by expatriates in several ways besides physical danger and psychological stress. Third, although our data did not permit the appropriate analyses, most members of the U.S. military, a volunteer service, differ demographically in race, educational attainment, age, and perhaps region or origin (but not necessarily in gender) from the typical overseas expatriate worker. A considerable amount of research and some additional theorizing would be needed to understand the relationships between these variables and feasibility of organizational-level instrument development efforts.

From a validation perspective, although the DEOCS has been the object of considerable psychometric attention in its use and its diagnostic capability for addressing organizational diversity outcomes, it also has some shortcomings. The DEOCS tends to exhibit elevated responses from respondents (e.g., Walsh, Matthews, Tuller, Parks, & McDonald, 2010). These attributes can be indicative of good climate perceptions, a floor effect, or social desirability biases. Additionally, attaining consensus among respondents within a unit is challenging. Climate perceptions are related to personal experiences, demographic factors, and individuals’ perceptions of organizational processes (Watson, Van Driel, & McDonald, 2011), all of which can limit the ability to aggregate data to the organizational level of analysis. Beyond these psychometric attributes, organizational climate surveys such as the DEOCS address sensitive topics of a highly personal nature. Responding to items that refer to experiences of discrimination and perceptions of fairness and equity within organizations may have an impact on research questions that are included alongside surveys of this nature, such as the items employed in Studies 1, 2, and 3. Given these observations, future attempts to measure and validate organizational cross-cultural competence should be pursued in other measurement contexts.

While the results of this collection of studies suggest that the creation of organization-level cross-cultural competence measures is a viable direction for future research, additional work is required to further refine the conceptualization of this construct at higher levels of analysis. Particularly, additional research should be performed that focuses on purely organizational-level indicators of cross-cultural competence rather than relying on the aggregation of individual-level data.

Although the present research may be the first such inquiry of this kind, it suggests that assessing the cross-cultural competence of organizations holds some value for organizations and their leaders. Such measures are useful to determine organizational strengths and developmental needs prior to operating in cross-cultural settings. Furthermore, measures of organizational cross-cultural competence may also be useful to predict organizational outcomes such as climate perceptions and performance both in domestic and international settings.

In the present article, we followed current thinking on cross-cultural competence in proposing that its manifestation at the meso level is functional for organizations working across cultures and within cultures different than their place of origin. However, a seemingly alternate way of looking at cross-cultural competence, and to organizational cultural intelligence in particular, is “context-sensitive organizational intelligence” or “contextual intelligence.”¹ Contextual intelligence (Terenzini, 1999) refers to understanding the cultural context in its various forms, from history to practices and norms, and to organizational “savvy and wisdom” (p. 25). Although Terenzini was writing about university-level institutional research, his concept generalizes more broadly. Contextual intelligence appears to encompass the cultural intelligence components of knowledge and metacognition or mindfulness. Our research (Study 1) identified a cognitive CQ factor at the organizational level, consistent with a contextual intelligence capability, but did not find evidence for a metacognitive component. Future research is needed to adequately ascertain the emergent quality of metacognition, however on rational grounds, it appears that cross-cultural competence can be thought of as a superset of qualities that encompasses contextual intelligence.

Footnotes

Acknowledgements

Studies 1 and 2 reported in this article were performed as part of a dissertation completed by the first author at the Florida Institute of Technology. The authors would like to thank Daniel McDonald, Jerry Scarpate, and Loring Crepeau at the Defense Equal Opportunity Management Institute for their unwavering support and assistance with the work described in this article.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Notes

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