Cultural intelligence as an enabler of cross-cultural adjustment in the context of intra-national diversity

Abstract

Job transfers within the country can lead to adjustment issues, similar to what expatriates face, especially in the case of highly diverse countries, where a host of sub-cultures exist with distinct cultural practices within a single national culture. Intra-national variations in terms of language, ethnicity, food, clothing, economic development, geographic regions or urban-rural differences can be as significant as cross-cultural differences and cause barriers to social integration. Thus, it becomes important to equip employees with cross-cultural capabilities when they are deployed to a culturally distinct part of the country. The purpose of this study is to investigate the role of cultural intelligence (CQ) as a critical capability that can enable the cross-cultural adjustment (CCA) of employees in a domestic context. Participants of this study consisted of employees from the information technology sector of India, who were transferred to a different state within the country in the past 1-month. They were further categorized into those working in culturally homogenous versus heterogeneous environments. Data were gathered using a structured questionnaire. The hypotheses under study were tested using structural equation modeling. The results indicated that CQ enabled the adjustment of employees within the domestic context. Furthermore, the CQ-CCA relationship was found to be positively moderated by intra-national diversity. While the ability of CQ to predict outcomes in cross-cultural scenarios has already been explored in employee mobility literature, this paper addresses the issues of intra-national diversity and domestic adjustment within the CQ framework, and establishes the usefulness of CQ to overcome the challenges put forth by intra-national differences and within-country cultural variations.

Keywords

Cultural intelligence cross-cultural adjustment domestic adjustment intra-national diversity

Introduction

Mobility and expatriate literature extensively discusses the significance of cross-cultural adjustment (CCA) as an important precursor for a successful overseas assignment. Hence research in CCA focuses predominantly on understanding the drivers of CCA that can enable expatriates to effectively adjust to a new environment. The underlying assumption of such research is that two countries differ on national values, and an expatriate needs to be able to adjust to these differences in order to be successful in intercultural encounters. These studies focusing on culture and expatriates tend to use the national value orientations proposed by different scholars such as Hofstede (1980) to establish cultural differences. Though the seminal work of Hofstede (1980) gave a major boost to cross-cultural organizational behavior research, these models of culture using ‘nation’ as a unit of analysis have often been challenged on various grounds. One, which particularly stands true for countries having a high level of intra-national diversity, is that of cultural homogeneity i.e. the assumption that values are similar throughout the country, while overlooking the sub-cultures that might exist within the nation. Cohen (2007) pointed out that in some countries, several different sub-cultures co-exist together, each with its own norms, religion or practices, and combining them into one group could result in a “faulty representation of the nature of the culture of a given country” (p. 274). Also, Schwartz (1999) argued that national boundaries need not necessarily correspond to the boundaries of a homogeneous society with a common culture. Intra-national variations can be as important and as challenging as cross-cultural differences, and thus it becomes important to understand the drivers of CCA in such situations. In literature, intra-national diversity has been conceptualized differently by researchers worldwide such as linguistic (Tung, 2008), ethnic (Zaheer et al., 2009), generational (Egri and Ralston, 2004), regional (Sasaki and Yoshikawa, 2014), demographic (urban-rural) (Chabowski et al., 2010) and levels of economic development (Gamble and Tian, 2015). For the purpose of this study, we conceptualize intra-national diversity as regional differences within a country and investigate what competencies enable the domestic adjustment of individuals within a country.

To examine the domestic context, this study is set in India, a country that is highly diverse in terms of different factors such as race, religion, caste, language and food habits. Though the underlying values and beliefs may be similar across India, the aspects of culture visible to the naked eye such as language, food, dressing, rituals, ceremonies or music and dance vary extensively as one moves across the length and breadth of the country. Furthermore, the geographical and climatic conditions also vary from one part of the country to the other. A variety of religions are followed in India right from Hinduism, Christianity, Islam, Buddhism, Sikhism, and Jainism to many other indigenous faiths. The Constitution of India recognizes 22 official languages but innumerable dialects are spoken across the country. The border states of India tend to share a common culture with the neighboring nations such as Bhutan, Nepal or Bangladesh rather than states within the country. We thus conceptualize intra-national diversity as the six different regions in which India is geographically divided, namely, the north, south, east, west, middle and north-eastern regions of India. The states within each of these six regions have almost similar cultural environments as compared to states from other parts of the country. For example, though individuals from any two states within south of India may speak different languages, their food habits, the dressing style, the climatic conditions or celebrations are very similar. But when individuals move from one part of the country to the other, they are exposed to a different cultural environment.

Black (1990) defined CCA as “the degree of psychological comfort and familiarity an individual has for the new environment” (p. 122). While research on CCA keeps expanding, limited attention has been paid to domestic adjustment within a country that accounts for the intra-country variations (Black et al., 1991), which can be as challenging as CCA. A high level of intra-national diversity could also lead to a host of adjustment issues similar to what expatriates face. What happens when an individual is transferred within the country to a different town, city or region that is very culturally dissimilar than their place of origin? How can individuals learn to adjust to these different sub-cultures? Black et al. (1991) suggested the need to incorporate domestic adjustment literature to enable further understanding of CCA, as individuals undergo a similar adjustment process when they face a sub-culture other than their own. Furthermore, the problems associated with cultural diversity, which have been less recognized within a single country, need to be explored in detail (Stahl et al., 2010; Tung, 1993). Addressing these calls for research, we endeavor to study CCA in the context of intra-national diversity and propose cultural intelligence (CQ) as an enabler of domestic adjustment of employees. Earley and Ang (2003) defined CQ as the ability to function effectively in cross-cultural situations. So will CQ, which is an established antecedent of CCA in cross-national scenarios, be effective in enabling domestic adjustment? Extant research has proven the ability of CQ to explain cross-cultural variations, but in this study we investigate whether CQ can enable one to understand the intra-cultural variations and overcome the challenges posited by such within-country cultural variations. Thus, the first objective of this study if to investigate whether CQ can address intra-country cultural competence and if it enables an individual’s domestic adjustment when transferred to a culturally different part of the country.

Furthermore, Ang and Van Dyne (2008) first discussed the importance of contextual moderators in the nomological network of CQ, stating that the relationship between CQ and its outcomes will depend upon the strength of the situation. In case of strong situations, the task environment is well structured and individuals rely less on CQ to guide them, whereas in weak situations, which are typically characterized by vagueness and uncertainty, individuals would rely more on CQ to make sense of the environment and guide their actions. In recent times, Ott and Michailova (2016) reiterated this need to consider the contextual boundaries of CQ in order to better understand how the cultural context could make adaptation difficult, even for high-CQ individuals. Drawing upon the trait activation theory (Tett and Burnett, 2003; Tett and Guterman, 2000), we attempt to examine the contextual influence of intra-national diversity on the relationship between CQ and CCA. Situations in which intra-national diversity is higher, individuals will utilize CQ to understand and adjust to the differences. Conversely, when the degree of intra-national diversity is low, individuals are in a sub-culture that is quite similar to their own and CQ plays a more reduced role, as opposed to when individuals find themselves in drastically different cultural environments and rely more on CQ to make sense of the environment. Given the context, the second objective of this study is to examine the moderating effect of intra-national diversity on the CQ-CCA relationship. The rest of the paper is organized as follows. We first present a literature review of CQ, CCA and cultural diversity. Next, we present our conceptual framework and discuss the theoretical basis of the same. We present our hypotheses from the conceptual framework and test them. Finally, we present our analysis and end it with a discussion on the theoretical and practical implications of this study.

Theoretical background

Cultural intelligence

Earley and Ang (2003) defined CQ as an individual’s competence to successfully work with people from different national cultures at home or abroad. They conceptualized CQ as a general ability to meet the demands of novel cultural environments and perform effectively. CQ “allows people to adapt to, select, and shape the cultural aspects of their environment” (Thomas et al., 2008: 127). CQ is not an ability that is residing inside a person, but a capability that can be acquired through different interventions. CQ was conceptualized as a multidimensional construct where metacognition, cognition and motivation are the mental capabilities that reside within the ‘head’ of a person, whereas behavioral capabilities are the explicit actions that a person displays (Ang et al., 2007). Metacognitive CQ refers to the higher level processes that individuals use to acquire and comprehend knowledge of culture and the control they have over these thought processes (Ang et al., 2007). Cognitive CQ on the other hand refers to the knowledge structures, i.e. the actual knowledge and know-how one has about different cultures and its elements; for example, knowledge of the economic, legal, and social systems of a culture (Ang et al., 2007). Motivational CQ refers to the intrinsic and extrinsic motivation one has to participate and succeed in cross-cultural encounters (Ang et al., 2015). Finally, behavioral CQ is the ability to modify one’s verbal and nonverbal behaviors as appropriate within cultures (Earley and Ang, 2003). CQ was theorized as a malleable quality that evolves over time by exposure to different cultures and through various interventions. Prior research has identified intercultural adjustment (Ang et al., 2007), leadership effectiveness (Groves and Feyerherm, 2011), and psychological well-being (Ward et al., 2011) as some of the individual-level outcomes of CQ. Some of the team level outcomes include team trust and cohesion (Moynihan et al., 2006) and knowledge sharing (Chen et al., 2011), whereas organizational-level outcomes include enhanced firm performance (e.g. Ang and Inkpen, 2008; Chen et al., 2012).

Cross-cultural adjustment

CCA can be defined as the level of comfort and confidence an expatriate in their ability to adjust to the cultural environment of a host country. An expatriate’s inability to adjust to the host-country environment can lead to stress and uncertainty, which could affect job performance and even lead to repatriation. As Black and Gregersen (1991) state “the basic CCA process is the reduction of uncertainty by learning which behaviors are appropriate in the new culture and which ones are not” (p. 463). CCA was conceptualized as consisting of three dimensions, namely, general adjustment which is adjustment to the host culture and general living conditions, facilities, climate or transportation in the host society; interaction adjustment which is the ability to engage in interpersonal relations and socialize comfortably with host-country nationals; and work adjustment is the degree to which one is comfortable with and fits into the work culture, norms, rules and regulations of the foreign facility (Black, 1988; Black and Stephens, 1989). It is only when an expatriate is able to adjust on these three dimensions, the success of an overseas assignment will be assured. The fact that a successful overseas assignment is important not only for the individual but also for the company, gave an impetus to research investigating the various antecedents of CCA. Prior research has identified different individual and organizational-level predictors of CCA such as personality (Caligiuri, 2000), cross-cultural training (Caligiuri et al., 2001), self-monitoring, self-efficacy, expatriate supporting practices (Hechanova et al., 2003), social support (Kraimer et al., 2001), language ability (Selmer and Lauring, 2015), role clarity of job (Shaffer et al., 1999), pre-departure activities & attitude (Simeon and Fujiu, 2000) and work engagement (Selmer and Lauring, 2016). Also, being able to adjust to a host country can have numerous positive consequences like job satisfaction (Takeuchi et al., 2002), completion of foreign assignment & intent to stay (Black and Stephens, 1989) and performance (Kim and Slocum, 2008). Extant research has proven CCA to be a valid construct for predicting adjustment in a new cultural environment.

Cultural diversity

While studying the similarities and differences in managing diversity in cross-national and intra-national contexts, Tung (1993) found that the dynamics were similar to the acculturation process and communication styles & patterns. Citing the misleading assumptions of cultural homogeneity and cultural stability, Tung (2008) discussed how differences due to intra-national diversity can be as substantial as differences due to cross-national diversity. The author further stated the need to be “aware of the paradoxes inherent within any given society” (Tung, 2008: 41) to improve the quality of cross-cultural research. On similar lines, Stahl and colleagues (2010) stated “cultural differences create greater barriers to social integration in the domestic than in cross-border combinations, because managers and employees pay less attention to cultural differences at the corporate level than at the national level, and thus tend to underestimate the importance of cultural factors” (p. 5). Cultural diversity at the workplace has proved beneficial on several aspects such as gaining competitive advantage in creativity, problem solving, and flexible adaptation to change (Cox and Blake, 1991). Contrarily, research has also indicated that diversity may produce more conflicts and lead to employee turnover (Jehn et al., 1999). A study by Ng and Tung (1998) reported that the firm’s culturally heterogeneous branches experienced lower levels of absenteeism and achieved higher productivity and financial profitability despite their lower scores on job satisfaction and higher rates of turnover. A meta-analysis by Stahl et al. (2010) revealed that cultural diversity led to increased creativity and satisfaction in multicultural workgroups but resulted in decreased social integration. Richard (2000) urged researchers to continue to explore the effects of a culturally diverse workforce on organizational performance, and within a proper context, cultural diversity can add value and contribute to a firm’s competitive advantage. Cultural diversity can also result in value creation if employees are able to understand and navigate the challenges put forth by cultural diversity. It is widely assumed that the effects of cultural diversity will be greater among individuals from different countries as compared to those from the same country.

Conceptual framework and hypotheses development

Considering the uncertainty of cross-cultural situations, Bucker and Korzilius (2015) state that not having complete information and unfamiliar cultural codes can create feelings of anxiety in individuals. CQ enables individuals to overcome these feelings of uncertainty and anxiety through appropriate knowledge and skills. The main focus of this paper is to develop a conceptual model to highlight the role of CQ in the domestic adjustment process. We posit that CQ of an individual will enable their adjustment to a culturally different part within a country. Furthermore, drawing on the trait activation theory, we aim to study the effects of intra-national diversity on the relationship between CQ and CCA. The conceptual model of our study is presented in Figure 1.

Figure 1.

Conceptual model.

Impact of CQ on CCA

Among the different predictors of CCA that have been studied by researchers worldwide, CQ is one of the antecedents that has been explored in recent times. It is understood that culturally intelligent individuals are able to easily understand the host culture and adapt their thoughts & behavior to adjust to that culture. Expatriates are more likely to be effective workers in a host country when they are able to apply their CQ to identify, recognize and reconcile the cultural differences (Earley et al., 2006). Metacognitive CQ is the high order mental ability that would enable individuals to make sense of the culturally different situations, adjust their thought processes and be aware of the cultural preferences of others. Cognitive CQ would enable individuals to reduce the cultural gaffe as they have exact knowledge about the different elements of the host culture. Motivational CQ would enable individuals to seek out new intercultural experiences, which would result in contributing to their knowledge of the host culture. Behavioral CQ would help minimize cultural faux pas, as individuals are capable of displaying culturally appropriate behavior. The work adjustment component of CCA involves being able to adapt to the new work environment comprising of job tasks, roles and responsibilities or job expectations (Black, 1988). Individuals with high CQ have knowledge about the host culture and are able to understand and correctly interpret what is expected of them in the work environment. The general adjustment component of CCA involves adaptation to the general living conditions of a foreign culture (Black, 1988). Since individuals with high CQ are equipped with cultural knowledge and an intrinsic motivation to succeed in the host country, they direct their energies and efforts to learn about and adapt to the novel cultural settings. It enables greater adjustment than those with lower CQ. Interaction adjustment involves the comfort achieved in interacting with host nationals in work and nonwork situations (Black, 1988). Individuals with high CQ are adept at modifying their verbal and nonverbal behaviors to match those of the host country and this gives them a basic sense of confidence to interact with host-country nationals.

Earley and Ang (2003) considered CQ to be an important factor that enables the adjustment of expatriates. Templer et al. (2006) first tested this hypothesis in their study of global professionals in Singapore. The results indicated that motivational CQ has a significant impact on cross-cultural adjustment. In a study of expatriates of Taiwanese MNC firms, Lee and Sukoco (2010) found that CQ had a positive impact on CCA, and the expatriates’ prior international working & travel experiences further moderated this relationship. Chen et al. (2010) studied expatriates from a U.S. based MNC, and their findings suggested that the motivational component of CQ was positively related to the work component of CCA. Another study on expatriates in Singapore by Wu and Ag (2011) indicated that metacognitive and cognitive CQ negatively moderated the links between expatriate supporting practices and CCA, while motivational CQ had a positive moderating effect. Lin et al. (2012) studied the effects of CQ and emotional intelligence on an individual’s adjustment. Their study established a positive relationship between CQ and CCA after controlling for previous overseas experience and host-country language ability. The mediating effect of CQ was tested in a study of Korean expatriates by Moon et al. (2012). The results indicated that CQ mediated the influences of previous international experience (work and nonwork) and pre-departure cross-cultural training on CCA. The impact of CQ on the general adjustment component of CCA was tested in a study of English speaking expatriates living in Japan by Huff (2013). The results indicated that motivational CQ strongly predicted CCA among the expatriates. The results of a study by Malek and Budhwar (2013) confirmed the findings of the previous literature. Their study of expatriates in Malaysia indicated that expatriates’ CQ had a positive impact on general, interaction and work adjustments. Chen et al. (2014) found that CQ had a positive relationship with both general adjustment and interaction adjustment after controlling for age, length of residence in the local country, previous international experience and English & Chinese language ability.

Though the CQ-CCA relationship has been studied extensively within the context of international adjustment, we hypothesize that similar arguments will be applicable for domestic adjustment as well. Black et al. (1991) state, “the domestic and international adjustment literatures have at least one common underlying thread: in both settings, an individual leaves a familiar setting and enters an unfamiliar one” (p. 301). Since the new environment is unknown and unfamiliar, it upsets old routines and leads to psychological uncertainty. In such cases, individuals work toward reducing this uncertainty of the new settings, especially focusing on behaviors that are needed or expected in a new environment, and where old behaviors become irrelevant and are no more acceptable (Black et al, 1991). Furthermore, “although the fundamental process of uncertainty reduction is a common theoretical thread between domestic and international adjustment, there are sufficient contextual differences that some antecedent variables move from figure to ground and vice versa in each type of adjustment” (Black et al., 1991: 315). This means that though the antecedents of adjustment may differ in domestic and international adjustment, the basic process of uncertainty reduction remains the same. Extant research has proven that CQ enables uncertainty reduction in a new environment (e.g. Presbitero and Attar, 2018). Hence, it would be safe to say that CQ would be an antecedent in both international as well as domestic adjustment. Based on the above discussion, we propose the following hypothesis:

Hypothesis 1 (H1): CQ will have a positive impact on CCA

Moderating effect of intra-national diversity

The seminal work of Cox and Blake (1991) first brought into prominence the effect of cultural diversity on organizational competiveness. They highlighted the positive effect of cultural diversity on various aspects of the organization, such as attracting human resources, creativity and innovation, marketing success or problem solving. With diverse employees, come diverse ideas and diverse solutions. Extant research has proven that cultural diversity has an influencing effect on the working of organizations. Voicing similar thoughts, we build upon the trait activation theory and posit that intra-national diversity existing around the individual will positively moderate the relationship between CQ and CCA. According to this theory, individuals express their traits when presented with trait-relevant situational cues (Tett and Burnett, 2003). These situational cues may be acting at task, social, and organizational level and can be job demands, distracters, constraints, releasers, or facilitators that “press” individuals to behave in trait-related ways (Tett and Burnett, 2003). This theory provides a useful foundation for understanding how certain contexts or situations can lead to employees’ traits being translated into positive work behaviors. A multiethnic workplace or social environment provides individuals with complex cross-cultural situations, and to overcome these contextual challenges, individuals will rely on their CQ. A culturally diverse workplace triggers the CQ capabilities of individuals and helps them achieve meaningful work and nonwork experiences. Furthermore, trait activation theory also stresses that the functioning of an individual’s trait is strengthened when the organizational context is amenable to that trait. Thus, a culturally diverse workplace provides a perfect opportunity for individuals to exercise their cross-cultural competencies. Building upon the trait activation theory, we argue below that intra-national diversity existing in an individual’s work environment will act as a contextual cue, which will bring forth the CQ capability of that individual. An organization that is characterized by intra-national diversity expects its employees to develop intercultural competence. This competence helps them adjust to the work environment of the company. Employees thus make efforts to apply their cross-cultural competencies to navigate the workplace diversity and are able to better adjust to their workplaces. This process gets transferred to their nonwork life also and enables their general adjustment outside the workplace. Based on the above discussion, we derive our next hypothesis.

Hypothesis 2 (H2): Intra-national diversity will positively moderate the relationship between CQ and CCA

Method

Sampling and data collection

Data were gathered from 315 individuals working in the information technology (IT) sector of India who were recently transferred, either to a similar or different region of the country within the past 1-month. We chose employees within the first month of their transfer because that is the time when they experience a culture shock. Pedersen (1995) defined culture shock as the process of initial adjustment to a new cultural environment. It is the stress associated with moving to an unknown and unfamiliar environment. Culture shock can either reduce or lengthen the adjustment period of an individual in their new cultural environment. Presbitero (2016) states, “many times, those who experience culture shock are overwhelmed by their new cultural environment, thus limiting their engagement and participation” (p. 38). Secondly, a combination of convenience and purposive sampling was employed to identify such respondents and achieve a more representative sample. When new projects start, transfers happen across the country to make sure that at least some members of the team are based on client site. These transfers may not be permanent but for a limited period of time till the project completion. Members of such project teams were identified, who moved across the country for new project implementations, to serve as respondents for this study.

A structured questionnaire was designed to gather data for the purpose of this study. The questionnaire consisted of self-report measures of CQ, CCA and the demographic characteristics of respondents. The questionnaires were administered via email and two reminders were set over a period of 3 months for gathering data. Out of the total 350 questionnaires administered, a total of 315 were returned. The others chose either not to respond or sent incomplete questionnaires. A total of 97 participants responded within a week after the questionnaire was handed over to them. The remaining 72 and 146 participants responded after the first and second reminder respectively. No significant difference was found between the early and late respondents. Out of the 315 respondents, 214 were males whereas remaining 101 were females. Further the respondents consisted of individuals from various age groups, namely, 21 to 30 years (145), 31 to 40 years (107), 41 to 50 years (52) and 51 to 60 years (11). Though all the respondents of this study were working in the IT industry, they worked across different departments such as sales & marketing (27), finance (33), software development (153), delivery & support (78) and human resources (24).

Measures

Cultural intelligence

The 20-item Cultural Intelligence Scale (CQS) developed by Ang et al. (2007) was used to measure CQ level of the individual. The scale contains four items for measuring metacognitive CQ, six items for cognitive CQ, five items for motivational CQ and five items for behavioral CQ. The CQS has been validated across multiple countries and is found to have good reliability and validity (Ang et al., 2015). Participants are expected to respond how much they agreed with each question on a five-point Likert scale (1 = strongly disagree, 5 = strongly agree).

Cross-cultural adjustment

CCA was measured using a 14-item scale developed by Black and Stephens (1989). Respondents were asked to rate the extent of their work adjustment (three items), general adjustment (seven items), and interaction adjustment (four items) on a five-point Likert scale (1 = strongly disagree; 5 = strongly agree).

Intra-national diversity

Intra-national diversity was defined and coded using a dummy variable representing a culturally homogeneous (0) or culturally diverse (1) work environment. Those in homogeneous work environments were transferred to a different state but within the same region of the country, whereas those in heterogeneous work environments were transferred to a state within a different region of the country

Control variables

We included four control variables to improve the robustness of our conceptual model. We controlled for age, gender, number of languages known and total job tenure.

Social desirability bias

The questionnaires shared were anonymous and did not collect any personal data that could identify the respondent. Also, the questionnaires were self-administered and the respondents could complete them in their own time and convenience. This helped us control for social desirability bias.

Analysis and findings

Common method bias

Before venturing into data analysis, we checked whether the data were affected by common method bias. “Common method bias refers to the amount of spurious covariance shared between independent and dependent variables that are measured at the same point in time, such as in a cross-sectional survey, using the same instrument, such as a questionnaire” (Bhattacherjee, 2012: 82). This is because of the usage of a common scale for deriving responses from a single data source. The common method bias was assessed using Harman’s one factor test, by performing an exploratory factor analysis in which all the items of all the latent variables are constrained to load on one factor with no rotation. If the total variance for a single factor is less than 50 percent, it suggests that the study is not affected by common method bias (Podsakoff et al., 2003). The test produced seven factors with the first factor showing only 24.17 percent (<50%) of variance (Podsakoff et al., 2003). These findings confirm that common method bias does not have any serious impact on our study.

We also performed a full collinearity test suggested by Kock (2015) in SmartPLS. “In this traditional perspective, when two or more predictors measure the same underlying construct, or a facet of such construct, they are said to be collinear” (Kock, 2015: 7). The highest variance inflation factor (VIF) obtained in this test was 2.39, which is below the threshold value of 3.30. If VIF values are greater than 3.30, it indicates a pathological collinearity and the fact that the model may be subject to common method bias (Kock, 2015). The results of both these tests indicate that the study does not suffer from common method bias.

Path analysis

The collected data were subjected to the assessment of measurement properties and hypotheses testing through partial least squares-structural equations modeling (PLS-SEM) using SmartPLS 3.0 (Ringle et al., 2015). The PLS-SEM produces a measurement model for the assessment of validity and reliability, and a structural model for hypotheses testing. Our conceptual model included second order constructs CQ and CCA. We used Wetzels et al. (2009) procedure for the estimation of second order constructs. Accordingly, to measure the second order construct CQ, all the indicators of its first order factors such as metacognitive CQ, cognitive CQ, motivational CQ and behavioral CQ were included and to measure the second order construct, CCA, all the indicators of its first order factors such as general CCA, interaction CCA and work CCA were included in the PLS-SEM model.

Validity and reliability testing

The constructs used in the study were examined for both convergent and discriminant validity. Convergent validity is examined by the value of outer loadings and cross loadings (Hair et al., 2017). The value of outer loading and cross loading of the all indicators of all first order constructs is presented in Table 1. The outer loading of all the indicators of all constructs were found to be more than the cut-off value of 0.50 (Hair et al., 2017) and its respective cross loadings with other constructs were found to be less than its outer loadings, which establishes the convergent validity of all the first order constructs used in the study (Hair et al., 2017).

Table 1.

Outer loadings and cross loadings.

Items /Constructs	MC-CQ	CO-CQ	MO-CQ	BE-CQ	GE-CCA	INT-CCA	WK-CCA
Cultural intelligence (CQ)—Second order construct
Metacognitive CQ (MC-CQ)
MC1	0.79	0.23	0.37	0.31	0.18	0.17	0.19
MC2	0.83	0.31	0.28	0.32	0.20	0.17	0.14
MC3	0.82	0.34	0.31	0.29	0.21	0.17	0.13
MC4	0.77	0.31	0.33	0.25	0.10	0.13	0.19
Cognitive CQ (CO-CQ)
COG1	0.29	0.78	0.31	0.27	0.12	0.21	0.13
COG2	0.28	0.81	0.23	0.25	0.06	0.19	0.12
COG3	0.33	0.77	0.20	0.28	0.04	0.17	0.16
COG4	0.27	0.80	0.24	0.30	0.09	0.14	0.14
COG5	0.33	0.83	0.26	0.31	0.11	0.19	0.14
COG6	0.28	0.80	0.28	0.29	0.11	0.20	0.13
Motivational CQ (MO-CQ)
MOT1	0.30	0.20	0.73	0.25	0.22	0.22	0.19
MOT2	0.29	0.21	0.72	0.32	0.09	0.14	0.08
MOT3	0.28	0.21	0.75	0.30	0.21	0.18	0.11
MOT4	0.33	0.29	0.79	0.35	0.08	0.08	0.15
MOT5	0.30	0.26	0.74	0.39	0.11	0.12	0.09
Behavioral CQ (BE-CQ)
BEH1	0.33	0.30	0.42	0.76	0.10	0.17	0.21
BEH2	0.32	0.34	0.37	0.81	0.10	0.07	0.14
BEH3	0.23	0.27	0.35	0.79	0.16	0.16	0.16
BEH4	0.25	0.24	0.28	0.79	0.11	0.02	-0.01
BEH5	0.28	0.21	0.24	0.73	0.12	0.08	0.15
Cross-cultural adaptation (CCA)—Second order construct
General CCA (GE-CCA)
GEN2	0.17	0.11	0.18	0.11	0.75	0.37	0.22
GEN4	0.18	0.09	0.13	0.08	0.76	0.39	0.18
GEN6	0.14	0.01	0.13	0.13	0.67	0.47	0.23
GEN7	0.16	0.12	0.12	0.12	0.76	0.46	0.22
Interaction CCA (INT-CCA)
INT1	0.10	0.13	0.10	0.11	0.47	0.77	0.20
INT2	0.17	0.16	0.22	0.10	0.48	0.78	0.31
INT3	0.15	0.20	0.11	0.10	0.42	0.78	0.37
INT4	0.18	0.21	0.15	0.09	0.35	0.69	0.30
Work CCA (WK-CCA)
WRK1	0.14	0.18	0.18	0.14	0.27	0.37	0.81
WRK2	0.18	0.10	0.05	0.09	0.25	0.29	0.79
WRK3	0.17	0.13	0.16	0.18	0.16	0.26	0.78

Notes: Bold values signify that the outer loadings of the construct are above the cut-off value.

The convergent validity is also examined by the value of average variance extracted (AVE) of the constructs, which is supposed to be more than the cut-off value of 0.50 (Hair et al., 2017). The AVE values are shown in Table 2. The AVEs of all the first order constructs (metacognitive CQ = 0.65; cognitive CQ = 0.64; motivational CQ = 0.56; behavioral CQ = 0.60; general CCA = 0.54; interaction CCA = 0.57; work CCA = 0.63) and second order constructs (CQ = 0.53; CCA = 0.61) were found to exceed the cut-off value, thus establishing a satisfactory convergent validity of all the constructs. The discriminant validity of the first order constructs used in the study was examined by Fornell-Larcker criterion (Hair et al., 2017). As per this criterion, the square root of AVEs of the respective construct should be more than that construct’s inter-correlations with other constructs under study (Hair et al., 2017). In Table 2, the result of square root of AVEs of all the first order constructs is presented in diagonals and are shown in bold and their respective inter-correlations are also shown. The square root of the AVE values of all the first order constructs were found to be more than their inter-correlations, which satisfactorily confirms the discriminant validity of all the constructs under study.

Table 2.

Results of construct reliability and validity testing.

Constructs	Second order factor loadings	Cronbach’s Alpha	Composite Reliability	AVE	Inter-construct correlations**
Constructs	Second order factor loadings	Cronbach’s Alpha	Composite Reliability	AVE	MC-CQ	CO-CQ	MO-CQ	BE-CQ	GE-CCA	INT-CCA	WK-CCA
CQ—Second order		0.89	0.90	0.53
MC-CQ	0.70*	0.82	0.88	0.65	0.80**
CO-CQ	0.75*	0.89	0.91	0.64	0.37	0.80**
MO-CQ	0.72*	0.80	0.86	0.56	0.40	0.32	0.75**
BE-CQ	0.74*	0.83	0.88	0.60	0.37	0.35	0.44	0.78**
CCA—Second order		0.82	0.86	0.61
GE-CCA	0.82*	0.72	0.83	0.54	0.22	0.11	0.19	0.15	0.74**
INT-CCA	0.87*	0.75	0.84	0.57	0.20	0.23	0.19	0.13	0.57	0.76**
WK-CCA	0.64*	0.71	0.84	0.63	0.20	0.17	0.17	0.17	0.29	0.39	0.79**

Notes: Cultural intelligence (CQ), Metacognitive CQ (MC-CQ), Cognitive CQ (CO-CQ), Motivational CQ (MO-CQ), Behavioral CQ (BE-CQ), Cross-cultural adaptation (CCA), General CCA (GE-CCA), Interaction CCA (INT-CCA), Work CCA (WK-CCA); *p-value <0.01 level; **Square root of the AVE on the diagonal; Bold values signify that the square root of the AVE of the construct is more than its correlation with other constructs.

The reliability of the constructs was examined using two values, namely Cronbach’s Alpha and composite reliability, which are expected to exceed the cut-off value 0.70 (Hair et al., 2017). Table 2 shows the results of Cronbach’s Alpha and composite reliability. All the first order constructs (metacognitive CQ = 0.82; cognitive CQ = 0.89; motivational CQ = 0.80; behavioral CQ = 0.83; general CCA = 0.72; interaction CCA = 0.75; work CCA = 0.71) and second order constructs (CQ = 0.89; CCA = 0.82) used in the study exceeded the cut-off value for Cronbach’s Alpha. Similarly, all the first order constructs (metacognitive CQ = 0.88; cognitive CQ = 0.91; motivational CQ = 0.86; behavioral CQ = 0.88; general CCA = 0.83; interaction CCA = 0.84; work CCA = 0.84) and second order constructs (CQ = 0.90; CCA = 0.86) used in the study exceeded the cut-off value for composite reliability, which establishes satisfactory reliability of all the constructs under study. The significance of the factor loadings of first order constructs with its respective second order constructs was established using the bootstrapping procedure. We used the bootstrapping procedure with 5000 samples with the number of cases equivalent to the sample size of our study (n = 315). Furthermore, the first order constructs also significant loaded with their respective second order constructs at p-value <0.01 level.

Hypotheses testing

In PLS-SEM, the structural model has to be evaluated for its explanatory power using R² value, predictive relevance using Q² value and predictive power of the independent variables using the significance of path coefficients (Hair et al., 2017). The R² value denotes the contribution of independent variable(s) for the variation in the dependent variable. Hair et al. (2012) suggest that the appropriateness of the R² value depends on the context of the study. The Q² value is drawn by performing blindfolding approach available in SmartPLS3.0 and is expected to exceed zero for a satisfactory predictive relevance. Table 3 provides the results of structural model. The R² value was found to be very less, that is 0.099, which means that the independent variable, CQ was able to explain 9.9 percent of variance in the dependent variable, CCA. We consider this small R² value drawn in the study is an acceptable explanatory power as the purpose of our study is to only find the effect of only one independent variable, CQ on the dependent variable, CCA and not to find all the variance due to CCA. There could be other independent variables that were not included in our study could also explain the variance in CCA. The Q² value was found to exceed zero (Q² value = 0.03) confirming the predictive relevance of the model. Furthermore, CQ was found to have a significant effect on CCA within a domestic context (path coefficient = 0.302, at p-value <0.01 level). This result confirms that the first hypothesis of our study, H1 is supported.

Table 3.

Results of complete PLS structural model.

Hypothesis	Independent variable	Dependent variable: CCA			Hypothesis supported?
Hypothesis	Independent variable	Path coefficient	t-value	p-value	Hypothesis supported?
	Age	0.062	1.200	0.231
	Gender	0.004	0.077	0.939
	No. of Languages Known	0.045	0.952	0.342
	Total Job Tenure	0.000	0.009	0.993
H1	CQ	0.302	5.078*	0.000	Yes
R²	0.099
Q²	0.03

*p < 0.01 level.

To test the moderation effect of intra-national diversity, we performed a partial least squares-multi-group analysis (PLS-MGA) available in SmartPLS 3.0, which is considered to be a non-parametric test (Henseler et al., 2009; Hair et al., 2017). Sarstedt et al., (2011) state, “in PLS-MGA, the bootstrap estimates are used to assess the robustness of group-specific parameter estimates” (p. 202). The PLS-MGA draws a probability value (p-value) to the respective path coefficients difference estimates to assess its significance and the p-value is expected to be <0.05 or >0.95 to confirm the significant moderation effect of the grouping variable (Hair et al., 2017). The results of PLS-MGA of our study are presented in Table 4. We used PLS-MGA technique with 5000 samples. Our data included two groups, the first one with respondents from culturally homogenous work environment (n = 92) and the second group of data with respondents from culturally diverse work environment (n = 223). The results of PLS-MGA suggested a significant moderation effect of intra-national diversity (path coefficient difference = 0.351; p-value = 0.991) on the CQ-CCA relationship. The effect of CQ on CCA was found to be significantly different for those from a culturally homogeneous work environment and those from a culturally diverse work environment. This finding confirms that the moderation effect hypothesis of our study, H2 is supported.

Table 4.

Moderation effect of cultural distance—Results of multi-group analysis.

Hypothesis	Independent variable	Dependent variable: Cross-cultural adaptation						Hypothesis supported?
Hypothesis	Independent variable	Path Coefficient for homogenous environment group	p-value	Path Coefficient for diverse environment group	p-value	Path coefficients-Difference	p-value	Hypothesis supported?
H2	Cultural intelligence	−0.169	0.175	0.190	0.011	0.359	0.991	Yes

Discussion

The major contribution of this study is establishing CQ as a critical human resource capability for predicting outcomes in the context of intra-national diversity. This study examines domestic adjustment within the CQ framework and establishes the ability of CQ to understand intra-national differences and enable the domestic adjustment of individuals moving from one part of the country to another. Intra-national diversity can be wider than diversity between countries (Tung and Verbeke, 2010). The results of this study are consistent with previous findings in CCA but provide new insights into the use CQ within the context of intra-national diversity. H1 of our study i.e. CQ as an enabler of CCA within the domestic context was supported. CQ as an individual capability has proven to predict a host of cross-cultural outcomes, but this research shows that CQ has the ability to predict outcomes even within the context of intra-national diversity. When expatriated to a different country, individuals are generally more aware about the cross-cultural differences because many a times there may be a stark difference in the environment as soon as they get out of the airport. But in case of mobility within the country, individuals may tend to overlook the differences due to comfort of being in one’s own country. In such cases, CQ plays an important role in enabling individuals to overcome the unknown barriers they might face due to intra-national differences. High metacognition will enable individuals to be aware of the within-country cultural variations and enable them to plan ahead to adjust themselves to those cultural differences. Individuals with high cognitive CQ will have actual knowledge about the different cultural practices, food habits or language that might vary from their own home state. High motivational CQ enables them to proactively try to learn about and adjust themselves to the new environment. Finally, behavioral CQ enables individuals to adjust their verbal and nonverbal behavior as appropriate to the region within the country. The second hypothesis of this study H2 i.e. the moderating effect of intra-national diversity was also supported. The cultural differences existing around an individual activate the trait of CQ that enables the individual to better adjust to the new environment. According to trait activation, when individuals are present with trait-relevant situations, their trait is activated which leads to trait-related performance outcomes. On similar lines, when individuals are a part of a culturally different environment, it provides them with contextual cues that further activate the trait of CQ and enable their adjustment within the new environment. These findings support the applicability of CQ within the context of intra-national diversity

Furthermore, the context in which this research is set makes a unique contribution to literature on CQ and CCA. Theoretically, the conceptual framework proposed in this paper contributes to three different streams of research. Firstly, we contribute to the CQ stream of research. We extend the nomological network of CQ by proposing domestic adjustment as one of the individual-level consequences of CQ and establish the ability of CQ to predict outcomes in intra-national settings as well. Furthermore, while extant research has tested CQ in cross-country scenarios, we develop this framework to be specifically tested within highly diverse countries like India. This will further contribute to establishing CQ as an excellent construct for predicting intercultural competence. Secondly, we contribute to CCA literature by applying the concept to domestic adjustment rather than cross-national adjustment. Scholars in CCA research have already called for the need to explore domestic adjustment to better understand international adjustment. This framework provides a foundation for the same. Furthermore, integrating the two streams of research, the unique contribution that we make to the CQ-CCA relationship is that we propose it within a domestic context when rest of the research investigates it in an international context. We contend that domestic adjustment can be as challenging as CCA and requires organizations to equip individuals with the right competencies to overcome the challenges posited by the same. Finally, we extend the research on trait activation theory by using it within cross-cultural research to study the impact of intra-national diversity on CQ-CCA relationship. Next, we discuss the practical implications of this research for individuals and organizations likewise.

Managerial implications

The journey to adjusting and living in a new culture can be exhilarating and exciting, but it can also be filled with insecurity, uncertainty and anxiety. Citing Black and Gregersen (1991), Tran (2013) states that “the process of CCA can be stressful because there is the insecurity and ambiguity of not knowing what is appropriate, coupled with a potential inability to understand feedback from the environment due to a lack of knowledge of language or culture” (p. 178). It may take time to learn that the values, beliefs and norms that one grew up with may not be acceptable in another culture. What is appreciated in one culture may be looked down upon in another culture. Understanding these variances in cultures and having the strategies to adapt to them makes one successful in cross-cultural situations. According to Templer et al. (2006), “when global professionals perform ineffectively in a foreign work assignment, they incur substantial direct and indirect costs to themselves (e.g. diminished self-esteem, impaired relationships, and interrupted careers) and to their employing organization (e.g. damaged corporate image and reputation)” (p. 154). Hence, it becomes necessary to counsel and train employees when they are deployed to a culturally different work and social environment. This culturally different environment need not necessarily be cross-border but can exist within a country also. The challenges put forth due to intra-national diversity are less addressed in literature. Especially in today’s age, assuming nations and organizations to be homogenous would suppress the multiculturalism existing within societies. The current study has practical implications for HR professionals and organizations. When within-country transfers happen, an employee’s job skills, knowledge and experience is taken into account to find the best fit. But these factors alone cannot assure performance of the employee on the new assignment. Equipping the individual with the necessary skills to adjust to the new cultural environment, both work and social, is necessary for optimum performance of the individual. Like expatriates, CQ related interventions should also be designed for individuals relocating within the country. Developing the CQ level of employees would enable them to adjust better to the new environment and have a positive impact on their job performance. Failure to do so may result in adjustment issues and the employee might continue performing in the new environment, but be under continuous stress and tension. Efforts should be made to disseminate the right knowledge and develop intercultural skills to ensure the stress and uncertainty that employees may suffer due to a different environment, is reduced. Helping employees develop their intercultural skills prior to moving to a new location would also give employees the motivation and self-confidence to succeed in the new environment. This would in turn have a positive impact on their job performance and ensure success of their assignment. Pre-departure trainings focusing on development of CQ would enable employees to be effective in the new cultural surroundings. Organizations can also use CQ as a criterion for selection of employees for deployments or transfers to different company locations. It would ensure that the selected employees have the basic qualities to succeed in a culturally different environment and this would mitigate the problems associated with cross-cultural adjustment. Employees with high-CQ levels have better chances of succeeding in culturally different workplaces and the success of their job performance would be guaranteed.

Limitations and future research

Next, we will list the limitations of this study and discuss opportunities for further research. Like all cross-sectional research studies, this relationship has been tested at a particular point in time. The changes in the macro environment over the period of time that can affect the CQ-CCA relationship have not been taken into consideration. Also, the use of self-reported measure for CQ and CCA may be regarded as a further limitation. Further research could use supervisor or peer ratings of CQ and CCA. Nonetheless, the limitations of this study can be improved in future research. The current study contributes, both theoretically and practically, to the domestic adjustment literature, which is under-researched as compared to cross-national adjustment. Developing a nomological model for the same by examining the various antecedents, consequences and intervening variables can provide organizations with the knowledge of the domestic adjustment process and in turn can help them design policies, practices and training programs for supporting employees. Further research could explore the role of social support or organizational support practices in this conceptual framework of domestic adjustment. We could also explore how the CQ-CCA relationship differs for individuals who are deployed by their organizations versus self-initiated relocation by individuals within the country.

Footnotes

Declaration of conflicting interests

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

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Raavee Kadam

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