THE ROLE OF CULTURAL INTELLIGENCE AND COMMUNICATIVE EXPERIENCE IN THE PROCESS OF GETTING BUSINESS CONTRACT IN FDI COMPANIES

THAI NGUYEN UNIVERSITY SCHOOL OF FOREIGN LANGUAGES LE THI THUY NGA THE ROLE OF CULTURAL INTELLIGENCE AND COMMUNICATIVE EXPERIENCE IN THE PROCESS OF GETTING BUSINESS CONTRACT IN FDI COMPANIES (Vai trò am hiểu văn hóa kinh nghiệm giao tiếp q trình kí kết hợp đồng thương mại doanh nghiệp có vốn đầu tư nước ngồi) M.A THESIS Field: English Linguistics Code: 8220201 THAI NGUYEN – 2019 THAI NGUYEN UNIVERSITY SCHOOL OF FOREIGN LANGUAGES LE THI THUY NGA THE ROLE OF CULTURAL INTELLIGENCE AND COMMUNICATIVE EXPERIENCE IN THE PROCESS OF GETTING BUSINESS CONTRACT IN FDI COMPANIES (Vai trò am hiểu văn hóa kinh nghiệm giao tiếp q trình kí kết hợp đồng thương mại doanh nghiệp có vốn đầu tư nước ngoài) M.A THESIS (APPLICATION ORIENTATION) Field: English Linguistics Code: 8220201 Supervisor : Dr Hoang Ngoc Tue THAI NGUYEN – 2019 ACKNOWLEDGMENTS The study would not have been completed without enthusiastic support and encouragements of many people I would first like to thank my thesis advisor Dr Hoang Ngoc Tue, Dean of Faculty of Foreign Languages, Hanoi University of Industry The door to Dr Hoang Ngoc Tue office was always open whenever I ran into a trouble spot or had a question about my research or writing He consistently allowed this paper to be my own work, but steered me in the right the direction whenever he thought I needed it I also would like to thank the teachers from School of Foreign Languages Thai Nguyen University, who have given me useful advices and conditions for the completion I would also like to thank all the respondents who took time out of their busy schedules in order to participate in this study and to make the study a success Finally, I must express my very profound gratitude to my parents and to my boyfriend for providing me with unfailing support and continuous encouragement throughout my years of study and through the process of researching and writing this thesis This accomplishment would not have been possible without them Thank you Author Le Thi Thuy Nga DECLARATION ***** -I certify that the monitor thesis entitled “The role of cultural intelligence and communicative experience in the process of getting business contract in FDI companies” is my own study in the fulfillment of the requirement for the Degree of Master of Arts at Faculty of Foreign Language, Thai Nguyen University Signature: Le Thi Thuy Nga Thai Nguyen, 2019 ABSTRACT The world’s economic power is shifting as globalization, influenced by economic growth, trade policy, and new trading relationships presses onward Consequently, more efficient methods and outcomes are necessary The purpose of the study is to find out if cultural intelligence and comunicative experience are related to the success of a business negotiation The empirical part of this study was done using qualitative research method Semi-structured interviews were carried out among participants from different companies Results indicated that aggregate cultural intelligence predicts intercultural negotiation outcomes, intercultural negotiation satisfaction, and intercultural negotiation performancesatisfaction Together, the findings suggest that the cultural intelligence scale can be relied upon to predict intercultural negotiation outcomes as well to select managers for improved negotiation performance Contents ACKNOWLEDGMENTS DECLARATION ABSTRACT CHAPTER 1: INTRODUCTION Background Purpose, research question and scope of the study Research question Structure of the study CHAPTER II: LITERATURE REVIEW Cultural intelligence 1.1 Basic definition of culture and intelligence 1.2 The concept of cultural intelligence 12 1.3 Four facets of cultural intelligence 16 1.3.1 Metacognitive CQ 16 1.3.2 Cognitive CQ 18 1.3.3 Motivational CQ 19 1.3.4 Behavioral CQ 20 International Negotiation 21 Role of Cultural Intelligence in the International Business 23 The difficulties when developing Cultural Intelligence 24 CHAPTER III: METHODOLOGY 26 Research design 26 Culture and its role in organizations 28 The interview setting and participants 30 Research question 32 Data collection 32 Data Analysis 33 CHAPTER IV: FINDING AND DISCUSSION 34 Cultural Intelligence: Cultural awareness 35 Cultural Intelligence as a skill for effective businessman 38 Challenges of CQ in culturally diverse environment 40 CHAPTER V: CONCLUSIONS 42 Recommendations 42 Limitation 43 REFERENCES 44 APPENDIX 47 CHAPTER 1: INTRODUCTION This chapter discusses about background of study, purpose, research question and scope of the study The organization of this study also can find out in this chapter Background Today, it requires an ability to adapt to a variety of cultural situations in globalized world In the pace of globalization, the effectiveness of international assignment is becoming important source of competitive advantage for many organizations (Zhang & Dodgson, 2007) There are more and more companies extending domestic market and accessing to international market With this trend, it is non-denied when international business negotiation becomes a necessary requirement for companies They contact to customers, suppliers from anywhere they get benefits Getting a business contract is not an easy task for anyone And with the businessmen at FDI companies, it is more difficult because they must negotiate with foreigners, who come from many different countries in the world In the progress of negotiation, cultural differences which has significantly impact on the outcome (Angelmar & Stern, 1978), because international business negotiation involves at least two or more parties coming from different cultural backgrounds (Liu & Liu, 2006) Cultural adaptation is an important dimension of this complexity and requires appropriate communication skills (Yamazaki and Kayes, 2004) In the table, negotiators from different countries will have their values and observation, and this will cause some challenges through the process This is the reason: cross-cultural interactions might threaten people as they realize that the previously taken-for-granted assumptions they had are no longer relevant or appropriate when communicating with people from a different culture (Kim, 2001) The feeling of ‘losing-ground’ often leads to anxiety (Bücker, 2014) Studies have shown that cultural intelligence (CQ), which is a person’s ability to adapt effectively to new cultural contexts (Earley and Ang, 2003), can help to reduce anxiety during intercultural interactions (MacNab, Brislin and Worthley, 2012), as it helps individuals to interpret unfamiliar cultural cues (Brislin et al., 2006) The controller in negotiation table will get achievement, and particularly, negotiators play important role is the table Beside the advantages of their companies such as prices, transportation, process, etc , their own experiences, confidence and skills in intercultural context also take part in their successful The negotiators should be raised more awareness about cultural intelligence and their performance to get the best achievement when they have an international business negotiation There has been a growth researches and papers focused on international negotiation or intercultural context Many researchers also focused on negotiators and provided guides for them However, they only referred to developed countries and other developing countries Vietnam is a developing country More and more companies from over the world invest into Vietnam, we call it foreign direct investment companies (FDI companies) The leadership of FDI companies also often contact and make an international contract Therefore, this paper will address the gap of literature regarding on negotiators’ performance and CQ in Vietnam FDI companies This research also figured out the impacts of negotiator’s profile to their international business contract These two factors will be developed in another way with the previous research Purpose, research question and scope of the study International business negotiation is a complexity task, then in this situation each evolved parties always hope about a success negotiation, that is negotiation outcome The businessman taking part in a business negotiation can be divided into types:  Having basic knowledge about local culture and communicative experiences  Having basic knowledge about cultural intelligence, however not know exactly to improve it Therefore, the result of this research can be developed to trends for types of businessman This research will be conducted in Thai Nguyen Industrial Zones to find the difficulties about cultural intelligence and communicative experiences after that suggesting the best solution and recommendations for businessman Moreover, this research can help universities to make a suitable syllabus through teaching and studying Research question To get the answers to the problem statement, the author need to formulate research questions that can be helpful This question will be critical in getting the correct answers, seeing as good questions give good answers:  How FDI leaderships in Thai Nguyen Industrial Zone understand the role of Cultural Intelligence in business negotiation? Structure of the study The research study includes five (5) chapters The first chapter provides the background of the study, general understanding of issue It gives the justification for the project and discusses the importance of the topic This chapter also shows what the objective of the study is and which questions author is going to answer during the research The second (2) chapter summarizes the relevant literature and dealing the theoretical background relevant to the research matters and previous studies in the field This chapter also gives the explanations and definitions for the main concepts used in this study culturally diverse environment A separate section of the interview guide was connected to CQ as a leadership skill in multi-cultural working environment Data Analysis In this thesis, participants from Thai Nguyen Industrial Zones were interviewed Concerning the interviewees, all of them hold leader positions in their companies The author was actively looking for the themes, which might have support or contradict the main points of the research questions as the thematic analysis is considered to be one of the most common approaches to qualitative data analysis (Bryman, 2012: 579) During the theme searching process, Ryan and Bernard (2003) advise to look for repetitions, metaphors and analogies, similarities and differences, theory related material During the analysis an emphasis on repetition was the most common criteria for establishing a pattern that the data can be organized into a theme For example, a constant repetition of the word ‘observe’ allowed the author to establish a theme related to factors of CQ Other themes were straightforwardly linked to the content of the questions To cover the cultural intelligence and the business negotiation process as best as possible, the in the framework are divided into the following categories: Cultural Intelligence awareness, role of CQ on leaderships, challenges of CQ in international business context During the interview, the interviewer will have the possibility to ask questions that aren’t listed in the interview guideline This gives the interview the possibility to gain better access and understanding to/of the respondent and their reasoning After the interviews, we will analyze the responses we received In addition, we will analyze the experience that we had from the session Even though the questions are segmented into different categories, it is important to understand that responses to the categories can be obtained on different areas 33 Through this Chapter, the author explain the methodology and the design, how to conduct this study Cultural Intelligence awareness, role of CQ on leaderships, challenges of CQ in international business context also are mentioned as categories for interview questions to get the best result from respondents CHAPTER IV: FINDING AND DISCUSSION The findings after interviewing will be discussed in this Chapter The awareness of respondents about role of CQ on international negotiation was discussed This section will be divided into sub - sections according to the main themes emerged from the interview: cultural awareness, cultural intelligence as a skill of leaderships, and the challenges of CQ The results from the interview will 34 be presented, described, and linked to the previous study which has been appeared on the previous section Cultural Intelligence: Cultural awareness a Demography When interviewed, all respondents were graduated university with others major, Respondent from economic major, Respondent from English major, Respondent from engineer major, Respondent from IT major And they all have at least years negotiation experience in different industries From the analysis of the interviews, it appears that the age of the respondent didn’t have any specific impact on the business negotiation with foreign companies Furthermore, there was no apparent relation between the education and influence on the business negotiation process The author assume that educational background has no effect on the business negotiation process However, the reasons behind this can be that all the respondents had solid experience with negotiations They all where form different industries, and there was no apparent difference on how they conducted business b Cultural intelligence All of the participants agree that cultural intelligence is an important element for negotiation success However, they cannot give clearly definition for this term When being asked about the term Cultural Intelligence, the respondents almost answer the question disputably The Respondent said: “Cultural Intelligence is the way to face to face to new culture effectively”; or the Respondent said: “Cultural Intelligence is a scale to value the ability of human to receive a new culture, new language, new society…”; and the Respondent said: “It is a new term for me, … maybe it relates to how he/ she adapts to new 35 person from another culture, maybe foreigner, foreign language.” Comparing with the definition of Cultural Intelligence in Chapter “a person’s capability to successful adaptation to new cultural settings, that is, for unfamiliar settings attributable to cultural context” (Earley et al., 2006: 5)., we can realize that almost respondent know this term disputably When be asked about the detail of three factors of Cultural Intelligence, although they have some actual experiences, all of them cannot name out Continuing with the next questions about factors of Cultural Intelligence, although they cannot name these factors, they can understand and give examples for these The first part of Cultural Intelligence is the Intercultural Engagement When the author look at the four interviews, the author see that creating good and stabile relationships is a common factor The respondents develop their skills by negotiation with other cultures They want to have a good atmosphere to make the relationships prosper and thereby create good professional and personal contacts The respondents show that they try to create a better understanding of the counterparts, in order to deliver solid values to the company and negotiation After reviewing the audible interviews, the author have found that the Cultural Engagement from all respondents, is affected to all the parts in the Business Negotiation Process By collecting information about counterparts’ habits, culture, taboo in their culture before getting an official negotiation, all four respondents feel that they can make a positive atmosphere on the table The second part of Cultural Intelligence is the Intercultural Communication The Respondent states: “The language they use can be tricky also sometimes We always try to hire an English translator.” This shows that the respondent knows that language between different cultures can lead to misunderstandings, and that they try to prepare as best as possible to diminish such 36 potential problems According to Brigit Zinzius (Zinzus, 2004, p 76), its usual to hire translators, but it is important that the translator must also be able to mediate between the two cultures The respondent also states that “In many ways, body language plays a good part in how we communicate when we don’t understand each other.” This shows that the respondent sees the importance of non-verbal communication during a negotiation, and therefore is able to see the different signs that the counterpart might show if he misunderstands or feels that there is something uncomfortable with the communication Furthermore, this indicates that the respondent often uses the non-verbal communication to show his understanding of the negotiations This is supported by another statement from others: “Making sure the communication goes smooth is important” The statement shows that the respondents appreciate the communication going as smooth as possible From the interviews, the author have found that the influence from Intercultural Communication is on all aspects of the Business Negotiation Process for all respondents Further, the respondents often rely on the non-verbal communication to express understanding, or convey information From this we can conclude that the non-verbal communication is used for supporting the information given and received, thereby constructing a special environment that makes it easier for all parts to understand each other The reason behind this is that they experience miscommunications when only using the verbal forms of communication Likewise, the written correspondence also seems to give some room for misunderstandings Therefore, they prefer to convey information and conduct negotiations face to face The third part of Cultural Intelligence is the Intercultural Understanding This part is based on how good the negotiators understand his own positon when it comes to knowledge and details surrounding the product and interaction process itself This also applies to understanding the counterpart in the negotiations The 37 respondent states: “I try to see if the buyer understands what we are talking about, and I often repeat things to make sure of this.” The statement proves that he realizes the importance of the other part to understand what they can offer It also reflects that he knows the importance of knowing what abilities they have and what they have to offer Respondent states: “To know the culture of the counterpart is important, because then you can understand them better.” This leads to the conclusion that even though he doesn’t adapt to certain cultural aspects in a negotiation, she tries to understand the culture as best as possible, in an effort create a good basis for the business negotiation process In the audible interviews, the author have found that the influence affects all aspects of the business negotiation process The author see that all the respondents have some understanding towards the importance of knowing the counterparts cultural background This leads to the expected outcome of a negotiation Cultural Intelligence as a skill for effective businessman Through interviews, th author realize that all respondents know the role of CQ, however, most of them not know how to demonstrate CQ, how to make it as a skill to apply on the negotiation table The theoretical discussion of the factors of the CQ underlined the certain attributes related to the Intercultural Engagement, Intercultural Communication, Intercultural Understanding CQ The curiosity, observation, processing and adjustment can be considered as core leadership skills that correspond to the factors The second part of the interviews was dedicated to respondents’ perception on the way to get CQ as a skill The Respondent answers that: “We need to improve Cultural Intelligence, and make it as an important element of successful negotiation We can study a new language, go to new land, meet someone from new culture After that using all knowledge, from small things, to get an attractive impression from counterparts.” Other respondents can only show that it is important to business 38 negotiation, however they said they get this skill from their failures They not know exactly to set Cultural Intelligence as a skill on negotiation table The Respondent figures out: “Building awareness, Adapting behavior, studying new language are the key to get CQ skill” He understands exactly what leaderships need to build up CQ in this intercultural context Culturally intelligent leaders are open to knowledge and develop new skills to help them succeed This means understanding the cultural attributes the relationship between they and their counterparts This may be achieved by developing alliances with other leaders from different cultural backgrounds who can provide different perspectives for comparison Leader in FDI companies should be comfortable in adapting their behavior to suit different circumstances without changing their inherent leadership style With stronger awareness they can determine Successful global leaders spend time with their counterparts to understand their comfort level, and listen to what is said and not said Leaders should understand that the way they communicate is critical to their success Once they are aware of the cultural attributes of their counterparts and have adapted to their environment, it will be easier to tweak their communication style accordingly Apart from the obvious need to use clear language, this may also mean determining how much information needs to be imparted in order to achieve the required goal It also means adjusting communication styles to take into account whether their counterpart’s culture is one that exhibits an implicit rather than explicit manner, as well as non-verbal communication traits Comparing to the factors of CQ, the author can point out the lacks of understanding of most of respondents about the necessary to improve: selfpresentation, communication, and understanding about culture (Plum, 2016) For leadership positions it is now not only necessary to have a high IQ and EQ 39 (emotional intelligence), but strong Cultural Intelligence (CQ) is also increasingly regarded as a necessary skill to succeed in today’s global business community Challenges of CQ in culturally diverse environment In this part, all respondents agree that CQ is an important element of international negotiation to get successful outcomes They also realize that there are challenges for them in today intercultural context, and they also are essensial opportunity To identify the profile of the CQ minded leader the interviewer’s question was about the attraction of working within a diverse environment The general outcome of the opinions is that at the present moment the cultural diversity of working environment is a norm and the employers are interested in a set of jobbased skills regardless of the location or the cultural background As Respondent states: “We can close the cultural gap by looking at similarities among cultures” Focusing on differences between oneself and others is not an absolute means to solve interpersonal problems Kowske and Anthony (2007) identified that leadership competence is conceptualized similarly when individuals have similar geographical regional backgrounds (e.g., Anglo and Latin American) Looking at similarities (also commonalities) rather than differences in people can be a good approach in assisting leaders to communicate and lead more effectively (Cranford & Glover, 2007) Leaders can thus build relationships and close the cultural gap before meeting table All respondents agree that who has CQ, who win on negotiation table In global environment, adapting and learning new things is necessary, however the leaderships in Thai Nguyen Industrial Zone still have not yet catch this effectively As David Livermore states: “A leader’s CQ may easily be the single greatest difference between thriving in the 21st century world and becoming obsolete.”, it 40 is an opportunity, also is a challenge to the leadership in Thai Nguyen Industrial Zone Let’s think about the three factors of CQ: Intercultural engagement, Intercultural communication, Cultural The leadership can improve their CQ by these ways: “spending time and money on cross-cultural training, reading a memoir or novel that takes place in another culture to gain a visceral account of what’s going on (The Kite Runner or Man Gone Down are two good options), scheduling lunch with a colleague from a different cultural background and discuss leadership differences in your cultural contexts (David Livermore) 41 CHAPTER V: CONCLUSIONS The author’s work led to conclusion that CQ is a crucial attribute of the effective leadership within culturally diverse environment This paper has investigated the concept of Cultural Intelligence as a three-dimensional structure the culturally diverse environment and worked on establishing the links between the cultural intelligence and leadership The results of this study support the idea that the role of the cultural intelligence is important from the point of view of a leader on a negotiation table The findings explore the leaderships in Thai Nguyen Industrial Zone still have some lacks of understanding about CQ term and also show that cultural intelligence is an important skill of the effective leadership within the intercultural environment Recommendations Today, every company that like to business internationally must understand beliefs and values that underlie their own country’s business and management practices, avoid cultural mistakes and understand the organizational and national culture of others People with different cultural backgrounds often not share the same basic assumptions and this has an influence on international business negotiations on several levels For example, the trust between parties, attitudes toward each other during negotiations and tactics and flexibility while negotiating can be affected To prepare for the best development of company, Human resource department also can contribute by choosing the potential candidate for important positions When the company is preparing for negotiation, it must think in the other side of culture, such as on the elements of another country’s culture This is one of the reasons why culture is a main issue that affects international business From the elements of culture, language is one of the most important issues that can affect international business 42 Limitation Due to the small scale and the limited scope of the study, other Industrial zones where there are FDI companies having international business cannot be studied Therefore, the conclusion of this evaluation cannot be generalized to other similar programs Besides, all leaderships from Thai Nguyen Industrial Zone who often take a negotiation with international customer cannot be reached to gather more representative data Further evaluation studies are recommended to investigate a clearer view about the importance of CQ and communicative experience to the business negotiation in the intercultural context The qualitative interviews done in this research is limited to a few individuals in Thai Nguyen Industrial Zone that are working as negotiators for individual companies The author has limited the scope of the research by choosing the theoretical material mainly connected the cultural intelligence and its four dimensions Numerous theories on culture and leadership were not specifically explored due to the wide range of interpretations, non- related to the research aim 43 REFERENCES Adair, W L., Brett, J M., Lempereur, A., Okumura, T., Shikhirev, P., Tinsley, C H., & Lytle, A L (2004) Culture and negotiation strategy Negotiation Journal, 20, 87-100 https://doi.org/10.1111/j.1571- 9979.2004.00008.x Ang, S., & Dyne, V L (2008) Handbook of cultural Intelligence: Theory, Measurement and Application Antecedents of Four-Factor Model of Cultural Intelligence Lon Don and New York: Routledge 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KY, Van Dyne, L & Ang, S 2009, 'From experience to experiential learning: Cultural intelligence as a learning capability for global leader development' Academy of Management Learning and Education, vol 8, no 4, pp 511-526 Plum, E (2008) CI: Cultural Intelligence: The art of leading cultural complexity London: Middlesex University Press Plum, E (2007b) KI: Kulturel intelligens København: Børsens Forlag Thomas, D.C.; Stahl, G.; Ravlin, E.C.; Poelmans, S.; Pekerti, A.; Maznevski, M.; Lazarova, M.B.; Elron, E.; Ekelund, B.Z.; Cerdin, J.-L.; Brislin, R.; Aycan, Z.; & Au, K (2008) “Cultural Intelligence: Domain and Assessment”, International Journal of Cross Cultural Management, 8(2): 123-143 Thomas, D.C (2006) “Domain and Development of Cultural Intelligence: The Importance of Mindfulness”, Group & Organization Management, 31(1): 7899 Thompson, L (1990) The Influence of Experience on Negotiation Performance Journal of Experimental Social Psychology, 26, 528-544 https://doi.org/10.1016/0022-1031(90)90054-P https://hbr.org/2004/10/cultural-intelligence Xác nhận cán hướng dẫn: Học viên Cán hướng dẫn 46 Lê Thị Thúy Nga Hoàng Ngọc Tuệ APPENDIX Interview Question What is your name? What industry sector you work in? How long have you been working for the company you are working currently? What is your position in the company? How many years is your negotiation experience? How would you evaluate your level of cross-cultural experience? Do you know the term Cultural Intelligence? How you define it? Can you name the factors of Cultural Intelligence? Do you think it is important to international negotiation? Did you find international negotiation challenging? If you have any suggestions to improve CQ? 47 ... that the monitor thesis entitled The role of cultural intelligence and communicative experience in the process of getting business contract in FDI companies is my own study in the fulfillment of. .. SCHOOL OF FOREIGN LANGUAGES LE THI THUY NGA THE ROLE OF CULTURAL INTELLIGENCE AND COMMUNICATIVE EXPERIENCE IN THE PROCESS OF GETTING BUSINESS CONTRACT IN FDI COMPANIES (Vai trò am hiểu văn hóa kinh... feelings and subtle meanings during intercultural interactions 24 Cultural mindfulness is the knowledge of and control over one´s thinking and learning activities in the specific domain of cultural