Berger and Gudykunst previous discussions on cultural adjustment in “An anxiety/uncertainty management, (1991, p.421) and in “Uncertainty and Communication”
(2005, p.24) both argued that certitude reduces discomfort and allows for cultural adjustment when the individual learns which appropriate behaviors are to be used within the cultural context of the new culture. Cross-cultural interactions between people of different background naturally introduce obstacles to communication, as some concepts just don’t translate well across cultures. Differences create barriers as previously discussed uncertainty of environment.
Developing a communication skill can help to overcome cultural barrier that affect cultural adjustment. Cultural intelligence development equips people with the skills necessary to overcome uncertainty, thereby reducing barriers to cultural adjustment. Studies have supported that exposure to multi-cultural experiences advances cognitive and learning outcomes such as critical thinking, stereotype reduction, openness to new experiences, empathy, and accelerated moral reasoning (Martin et al., 2015). Four major facets of intelligence (Earley & Ang, 2003; Crowne, 2008) meta-cognition, cognition, motivation, and behavior, are said to be high- functioning when all four facets are used in unison.
Motivational CQ has been linked to all aspects of cultural adjustment. Individuals that are highly motivated, tend to make a greater effort in adjusting (Huff et al., 2014).
Hypothesis 3: Cultural intelligence will have a positive effect on cross-cultural adjustment
Openness to Experience, Cultural Intelligence, and Cultural Adjustment
Cultural exposure and experiential learning lead to cultural intelligence. Familiarity of different culture can increase intelligence. Experience, is categorized by Crowne (2008), as travelling, studying, and reading and viewing television program about other cultures. But it is argued that some types of exposures as well as the depth of exposure had significant influence on cultural intelligence. Exposure by travelling and reading, for example had been found to be less effective in cultural intelligence enhancement than education abroad and being employed in a cultural diverse environment (Crowne, 2008). More in depth is that certain types of cultural exposures impact different facets of CQ.
International students in Taiwan are not only exposed to the host country’s culture but to cultures of various other international students. They are constantly interacting and readjusting to different cues within their multi-cultural environment. It is important then for effective communication among students in order to have high levels of cultural intelligence.
The level of cultural intelligence enhancement varies by type of experience. But can we assume that simply being in a cultural diverse setting enhances ones CQ? Information on what leads to cultural intelligence and what contributes to higher levels by facets are few (Crowne, 2008). Meta-cognitive cultural intelligence has been found to be higher in individuals who have visited more countries, but does it lead to an overall- higher CQ? Does personality affect learning and consequently easier adjustment? This study intends to examine some antecedent factors and the relationship within the facets of cultural intelligence and cultural intelligence on a whole.
Hypothesis 4: Cultural intelligence will serve as mediator between openness to experience personality and cross-cultural adjustment.
Institutional Distance
“Institutional theory attends to the deeper and more resilient aspects of social structure. It considers the processes by which structures, including schemas; rules, norms, and routines, become established as authoritative guidelines for social behavior” (Scott, 2004, p.2). Institutional distance stems from Institutional Theory grounded in “social structures”
about individual perception of in -group vs. out-group in an international context (Scott, 1995). Institutional distance is defined as the degree of differences and/or similarities between two countries based on a regulatory, cognitive and normative institutional property (Kostova & Zaheer, 1999).
The regulative dimension is concerned with the formal guidelines and principles set by any country (Scott, 1995), and reflect the existing laws and rules in a particular national environment that promotes or restricts certain behavioral expressions (Kostova & Zaheer, 1999). The normative dimension is concerned with the value system, beliefs, and norms assumed by the country about human nature and consequent behaviors, and includes social commitments and practices held by individuals within a country (Scott, 1995). The third, cognitive, dimension is concerned with widely shared social knowledge, for example stereotypes, that influences schematic categorization and interpretations of particular phenomenon (Kostova & Roth, 2002); it is an indicator of the way of life by the general public within a country.
A country’s institutional profile is reflected by the institutional environment, which is transferred to the individual through organizations within the country. The construct of institutional distance is seen as perceived institutional distance because it is the sum of individual perception of the degree of differences or similarities between familiar (in-group) and the non-familiar (out-group) (Ramsey, 2013).
Institutional Theory examines elements of the environment within the scope of three major pillars: The regulatory, the cognitive, and the normative to determine the fit of an individual in an international context, which is in accordance with person-environment fit theory by Edwards (1996). Institutional theories like person-environment fit theory are both concerned with the amount of strain the individual experienced when encountered by
dissimilarities to the schematic construct. The strain affects their cross-cultural adjustment to the international environment and effectively performance.
Another theory that is supportive of Institutional Theory is Self-Categorization Theory, which is that people tend to group themselves by in-group-out-group categories when there is uncertainty. The individual strives to reduce uncertainty by identifying and assimilating to the group prototypes. In instances where the distance is perceived to be high, theory explains that the individual has difficulty gaining insights on social cues or commonalities of the host country cultural insights and understandings. Therefore, the theory suggests that when there is high distance between institutions the cross-cultural adjustment is slower than the linear trend predicted in most cases (Ramsey, 2005). Institutional distance is the measurement with which to quantify uncertainty, the greater distance between institutions of each pillar, the greater the uncertainty the individual will experience within the host country. Cross-cultural adjustment is achieved through uncertainty reduction and change (Ramsey, 2005).
Past studied concerning cross-cultural adjustment and distance between different cultures has been concentrated on a country-level, for example, Hofstede’s and Schwardz’s cultural distance model. Hofstede’s model is based on the assumption that culture pertaining to distance functions as a sum figure on a national level. Using the dimensions (uncertainty avoidance, individuality, power distance and masculinity-femininity) a formula derived a sum for each country, which is then statistically compared (Ramsey, 2005). Cultural distance then is a representation on a national level ignoring individual differences within a country.
Schwartz’s model although looking at different aspects (hierarchy, intellectual & affective autonomy, conservation, egalitarian compromise, harmony) assumes the same conclusion and are best to test macro-economic and macro-social situation (Gouveia & Ros, 2000). Kostova and Zaheer (1999) emphasized the attention on host and home countries institutional distance rather than the individual institution (Hassan, Ibrahim & Uddin, 2016). After which many models were developed to measure the institutional distance construct.
Ghemawat developed the CAGE Model, 2001, which classifies institutional distance into four categories (administrative distance, cultural distance, economic distance, and geographical distance). In another study by Berry, Guilen, & Zhou (2010), a nine-dimension framework (political distance, economic distance, financial distance, knowledge distance, global-connectedness distance, demographic distance, administrative distance, cultural distance, and geographic distance), was developed to measure institutional distance, which
have been widely used by organizations interested in global business (Hassan, Ibrahim &
Uddin, 2016). Ramsey (2013) developed a measure for institutional distance that incorporated Institutional Theory and person-environment fit. The measure is based on the three pillars of institutional distance and focuses on individual’s perception on the international environment, providing an individual level analysis of the construct than the preferred group level analysis.
This measure provides an insight to the individual’s perception of national cultures and can further investigate what conditions affect the cultural adjustment. Ramsey (2013), similarly as Ghemawat (2001) measures both subscribe to both the formal and informal institutional distance, which studies have shown when looked at as interrelated provides a clearer picture to performance (Hassan, Ibrahim & Uddin, 2016).
Institutional Distance and Cultural Intelligence
High-perceived institutional distance implies a wider gap in the individual’s categorization between in-group and out- group and in response to this difference; the reaction is to reduce this tension leading to a recoiling effect towards their in-group stereotype and towards familiarity. According to Rockstuhl et al. (2011, p.825) in “Beyond general intelligence and emotional intelligence: The role of cultural intelligence on cross-‐
border leadership effectiveness in a globalized world”, On the one hand this outsider stress can have negative effects on cultural intelligence development affecting the motivational dimension of cultural intelligence. On the other hand, this acute awareness between groups (host and home groups), promotes ruminating about cross-cultural difference, thereby adding to their metacognition about cultures, consequently developing it. Exposure to adversity in this case, high perceived institutional distance, can enhance development of cognitive and metacognitive aspects of cultural intelligence and, in turn contribute to learning from each situation and re- shaping perceived distance. This back and forth between learning and applying new cultural cues through group identification proposes a complimentary relationship between Institutional distance and cultural intelligence.
Despite increased globalization, international market and cross-cultural integrations, differences between institutions of different countries have not yet diminished; therefore, it remains an important aspect to study concerning cross- cultural adjustment and performance in a host country (Caligiuri, 2000). “Institutional distance offers an alternative facet to cultural distance. Cultural distance is an index that captures national differences, but it fails to
capture the complexity of cross-country differences. Specifically, neglecting the role of societal institutions in articulating, disseminating, and arbitrating cultural and social cues”
(Ramsey, 2005, p.380). Looking at perceived institutional distance can give insight on an individual level of analysis of perceived “cultural distance” i.e., stress towards adjustment.
This form of measurement of institutional distance incorporated national level differences, group differences within and across institutions, as the individual perceives it and consequently becomes their reality. Individual level analysis on this variable can expose hidden variances in the perceived individualistic/collectivistic dyad that relates to how cultural intelligence development occurs within context (Ramsey, 2005).
Perceived Institutional distance is a measure that tests individuals’ perception on how big the gap is between these in-out groups and hypothesizes that the higher the distance the higher the stress which results in slower adaptation and learning (Hechanova, Beehr, &
Christiansen, 2005).
The lower the perceived distance between in-out groups the less stress or tension the individual feels and is able to adapt quicker and learn faster. Applying this concept to cultural intelligence, high or low perceived distance would have an effect on the different dimension of cultural intelligence, for example motivational CQ.
High-perceived institutional distance implies a wider gap in the individual’s categorization between in-group and out- group and in response to this difference; the reaction is to reduce this tension leading to a recoiling effect towards their in-group stereotype and towards familiarity. This outsider stress can have negative effects on cultural intelligence development influencing the motivational dimension of cultural intelligence.
(Ramsey, 2005) However, with this acute awareness between groups (host and home groups) the individual is constantly ruminating about cross-cultural difference thereby adding to their metacognition about cultures. Exposure to adversity situations in this case develops highly perceived institutional distance, which can enhance development of cognitive and metacognitive aspects of cultural intelligence by learning from each situation and re- shaping your perceived distance.