LITERATURE REVIEW - The Effect of Emotional Intelligence as a Moderator on the Relationship bet

The primary goal of this section is to review and summarize literature and theories that are relevant to cultural intelligence, emotional intelligence, and cross-cultural adjustment.

The first part of this study presents a brief overview of foreign workers in Taiwan’s labor market, a brief overview of Thailand, and finally both countries’ culture, providing an understanding of the statistics of foreign workers and especially those from Thailand, and their culture differences. The second part focuses on cultural intelligence and cross-cultural adjustment, their conceptualization and the relation between them. The third part presents emotional intelligence conceptualization. Finally the content focuses on the moderating effect of emotional intelligence on the relationship between cultural intelligence, and cross-cultural adjustment.

Brief Overview of Foreign Workers in Taiwan’s Labor Market

The Republic of China, Taiwan, is one of the richest countries in East Asia, with a high life standard, high gross domestic product per capita (GDP) and a purchasing power parity of 31,100 USD a year. Its population living below the poverty line is only 0.95%, according to the Central Intelligence Agency (CIA, 2009). This is one positive factor that influences the foreign labor workers who come to the island.

Taiwan is one of the most important destinations for the immigrant labor market in Asia, especially for some people from countries like the Philippines, Indonesia, Vietnam, Thailand, and even for workers from Japan, USA, Canada, UK, etc. (Council of Labors Affairs of Taiwan [CLA], 2010).

Although Taiwan has a high unemployment rate (5.86%) in Asia, a lot of foreigners from south Asia still immigrate to Taiwan looking for employment opportunities. Thailand is the leading country in the male productive industry, with 52,760 workers around the island, while Indonesia leads the female social welfare, with 125,873 workers: see figure 2.1.

(Executive Yuan, 2010; CLA, 2010; Bureau of employment & vocational training [BEVT], 2010).

Figure 2.1. Foreign workers in Taiwan’s productive industries and social welfare by nationality and gender

Source: Council of labors affairs of Taiwan, 2010; & Bureau of employment & vocational training, 2010.

According to the Council of labor affair of Taiwan (2010), the occupational sectors in the island are divided in three large labor areas depending on the immigrants’ countries and abilities such as productive industries, social welfare, and special professions or technical assignments.

The productive industries are important and include the following: agriculture, manufacturing (major investing), construction (major construction projects). Workers from this sector are called blue collar workers. Jobs related to social welfare are: nursing workers and home-maids which are also called blue collar workers. The third sector is special

professions or technical assignments which are comprised of foreign white collar workers.

Base on the Central intelligence agency’s 2009 statistics, most countries in Southeast Asia do not have as high of a living standard as Taiwan and job opportunities are not easy to find; this implies that the people have to migrate to countries that provide a good opportunity to exploit their abilities. Some workers look for outsourcing agencies, and others just migrate by themselves, which is the same situation for many Latin-Americans, such as Mexicans, Guatemalans, Salvadorans, Nicaraguans, Hondurans, etc. who leave their countries in order to have a better life in a country with more equality, justice and jobs opportunities.

Brief Overview of Thailand

Thailand is located in Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and the southern extremity of Burma. Its maritime boundaries include Vietnam in the Gulf of Thailand to the southeast and Indonesia and India in the Andaman Sea to the southwest. Thailand has an estimate population of 65.99 million, almost three times more than the Taiwanese population (CIA, 2010).

The CIA (2010) discloses that the living standard of the Thai people is almost four times less than that of the Taiwanese; Their GDP for 2009 was 8,100 USD and most of the people work in the agriculture and services sector. CIA (2010) also reveals that the industry sector in Thailand is developing, as is the service sector; the two sectors merged together comprise 87.7% of GDP composition by sector; however, only a 57.3% of the labor force has the opportunity to work in the service and industry sector, according to the CIA (2005). The GDP composition by sector is illustrated in Figure 2.2 and figure 2.3 illustrates the Thai Labor force by occupation in Thailand.

Figure 2.2. GDP- Composition by sector Source: CIA, 2009.

Figure 2.3. Thai labor force by occupation in Thailand Source: CIA, 2005.

According to the Council of labors affairs of Taiwan and the Bureau of employment &

vocational training’s (2010) statistics, the Thai worker population in Taiwan is the most important foreign labor force around the island in the productive industry sector, with 61,147 Thai workers; and a minority in the social welfare sector, with only 1,283 Thai workers compared with other South Asian countries such as Indonesia, Malaysia, the Philippines, Vietnam and Mongolia. Moreover, the Council of labors affairs of Taiwan and the Bureau of

employment & vocational training’s (2010), report an increase of 838 Thai workers in the productive industry, and a decrease of 24 Thai workers in social welfare area since both institutions in November 2009 reported 60,309 and 1309 Thai workers respectively.

In Taiwan, although the Thai are one of the four biggest groups of foreign workers in the productive industries, they are leading in the manufacturing and construction sectors as foreign workers in Taiwan, followed by Filipinos, Vietnamese, and Indonesians as illustrated in Figure 2.4

Figure 2.4. Foreign workers in sectors of productive industry by nationality

Source: Council of labors affairs of Taiwan, 2010; & Bureau of employment & vocational training, 2010.

Furthermore, Thais are behind the three other above-mentioned countries in the social welfare sector, as revealed by the Bureau of employment & vocational training and the Council of labors affairs of Taiwan, (2010) shown in Figure 2.5.

Figure 2.5. Foreign workers in social welfare by nationality

Source: Council of labors affairs of Taiwan, 2010; & Bureau of employment & vocational training, 2010.

The Council of labors affairs of Taiwan and Bureau of employment & vocational training’s (2010) reported on geographic location the Thai labor population around the island.

The majority of the Thai workers in Taiwan can be found in the north, central and south areas however, a minority of Thai labors still immigrated to the east area and islands which do not have a lot of productive industries as illustrated in figure 2.6

Figure 2.6. Thai worker population in Taiwan’s productive industries by areas Source: Council of labors affairs of Taiwan, 2010; & Bureau of employment & vocational

The Cultures of Taiwan and Thailand

The culture of Taiwan is a combination of various sources, for example, elements of traditional Chinese culture or Han Chinese, attributable to the historical and ancestry origin of the majority of its current residents, Japanese culture, traditional Confucianism beliefs, and increasingly globalized values (Wikipedia, 2010). Furthermore, O’Hagan (2006) said that most of the Taiwanese are a mixture of races because the aborigines, who did not escape to the mountains and stayed on the plains, married with Chinese and Europeans. Today the population is made up of about 70% of Taiwanese, 28% of Chinese and 2% of aborigines.

Moreover, most of the Taiwanese are influenced by two traditional religions, Buddhism and Taoism and also a kind of philosophy called Confucianism, in addition there are nine other religions practiced on Taiwan and recognized by the government (O’Hagan P., 2006). On the other hand, the culture of Thailand is mainly influenced by the Indian culture and is strongly influenced by Buddhism, specifically the Theravada school of Buddhism, which is the oldest school of Buddhism. Other influences include Hinduism, cultural and culinary influences from Southeast Asian neighbors such as Laos, Cambodia and Myanmar, and repeated influxes of Chinese immigrants (Wikipedia, 2010 & CIA, 2010).

Hofstede (1983) shows in his empirical research “National cultures in four dimensions”

the cultural differences between 50 countries. He considers the four dimensions, power distance, uncertainty avoidance, individualism versus collectivism and masculinity versus femininity to be fundamental problems which any human society faces. Furthermore, Hofstede’s dimensions are a convenient approach to highlight possible conflict between Taiwanese managers and Thai subordinates, as illustrated in Table 2.1.

Table 2.1.

Differences in the Taiwanese and Thai National Culture According to Hofstede.

Cultural dimensions Taiwanese Thai Difference

Power distance (higher = more hierarchy) 58 64 Thai + 6 Individualism (higher = more individualistic) 17 20 Thai +3 Masculinity (higher = more masculinity) 45 34 TW + 11 Uncertainty avoidance (higher = more uncertainty

avoidance)

69 64 TW + 5

Source: Hofstede, 1983; Hofstede, 1999; Hofstede & Hofstede, 2005.

Table 2.1 shows the differences in the Taiwanese and the Thai national cultures according to Hofstede. Both cultures are high in power distance and uncertainty avoidance, but the Thai culture is somewhat higher in power distance, and the Taiwanese culture is somewhat higher in uncertainty avoidance. Taiwanese and Thai cultures are rated low in individualism which indicates a collective orientation, but the Taiwanese culture is more collective than that of Thailand.

Taiwanese and Thai cultures are both low in masculinity, but the Taiwanese is moderately higher (Hofstede, 1983; Hofstede, 1999; Hofstede & Hofstede, 2005). The Taiwanese are more collectivist, masculinity and uncertainty avoidance oriented than the Thai people; these are all possible conflict sources between Taiwanese managers or superiors and Thai subordinates.

Swierczek and Onishi (2003) research reveals important characteristics of Thai national culture alongside Hofstede’s national culture dimension; for example, the Thais are individualism oriented and prefer solving problems alone when they have sufficient knowledge. In their research they show that the Thais are feminine-oriented society, and its

emphasis is on “work in order to live”; this implies that Thai subordinates’ values emphasize free time, enjoyment and comfort. Moreover, the Thai people, being lower in uncertainty avoidance, prefer flexibility and believe that a decision should be adjusted as the environment changes.

Cultural Intelligence (CQ)

Cultural intelligence (CQ) is a new term introduced by Earley and Ang (2003). They define CQ as an individual’s capability to deal effectively in situations characterized by cultural diversity (Ang, et al., 2006). Therefore, they explain how people can be effective in a multicultural environment. Meanwhile, Earley and Mosakowsky (2004) and Earley et al.

(2006) said cultural intelligence resides in the body and the heart, as well as the head. Head refers to learn about the beliefs, customs, and taboos of foreign culture. Body means the people actions, gestures, and demeanor that must prove that they already understand and enter to the foreign culture. Heart refers that people must believe in their own efficacy and motivation. Thomas and Inkson (2004) defined cultural intelligence as the capability to interact effectively with people from different cultural backgrounds; they added cultural intelligence enables us to recognize cultural differences through knowledge and mindfulness and gives us a propensity and ability to act appropriately across cultures.

Earley and colleagues developed the composition of the cultural intelligence’s four factors or dimensions as meta-cognitive CQ, cognitive CQ, motivational CQ, and behavioral CQ (Ang et al., 2006; Ang et al., 2007). Meta-cognitive CQ is the procedure or strategy that the people use to acquire and understand cultural knowledge. While cognitive CQ is general knowledge and knowledge structures about culture. Knowledge structures imply economic, legal and social aspects of different cultures. Meanwhile, motivational CQ is magnitude and direction of energy applied toward learning about and functioning in cross-cultural situations.

This implies an individual’s intention to adapt to different cultural situation; it is conceptualized as intrinsic motivation and self-efficacy in cross cultural contexts.

Intrinsic motivation reflects drivers of performance that originate from within an individual while self-efficacy refers to one’s belief that one can be effective on a given task in cross cultural contexts.

Behavioral CQ is the ability to do in proper verbal manner such as individuals utilize culturally sensitive communication, and non verbal actions when interacting with people from different cultures and some adopted behaviors should be different from the one’s own.

Cultural intelligence researchers look at the importance of the personality traits.

According to Ang et al. (2006), openness to experience (which is characterized by curiosity, broad-mindedness and imagination) was positive and was related to all four dimensions of Cultural intelligence and it is a crucial personality dimension that is highly related to a person’s capability to deal effectively with people when interacting with those who have different cultural backgrounds. Researchers encourage examining the extent of which openness to experience might be the key personality factor that relates to adaptability after having controlled age and years of experience of interacting with people from other cultures.

On one hand, Kim et al. (2006) theoretically studied how CQ influences foreign workers adjustment and performance and they contributed to the literature in terms of expatriate selection, placement and training process. On the other hand, Templer et al. (2006) examine the relationship of the motivational dimension of cultural intelligence and realistic preview to the three factors of cross-cultural adjustment of global professionals. They found strong evidence on the relationship between motivational CQ and all three adjustment factors after controlling for gender, age, month spent in the host country and prior international assignment.

Cross Cultural Adjustment

Adjustment has been conceptualized in basically two ways. The first used in the past as unitary cross cultural adjustment constructs which consist of the degree of adaptation has been towards more objective terms such as job satisfaction and organizational commitment;

this implies objective terms such as performance ratings obtained from independent sources.

And the second is a multifaceted construct which refers to the adjustment to work, interaction with host national and adaptation to the general environment (Black, 1990; Black &

Gregersen, 1991a).

Black (1990) conceptualized cross cultural adjustment as “the degree of psychological comfort and familiarity that an individual has for the new environment” (Templer, et al., 2006). This implies moving from a culture in which one currently resides to a different culture in which one has never resided or has not resided for some period of time (Black &

Gregersen, 1991).

According to Black and Gregersen (1991), Kim and Slocum (2008), cross-cultural adjustment is composed of three dimensions: adjustment to the job or work adjustment, adjustment to interacting with host nationals or interaction adjustment, and adjustment to the general non work environment or general life adjustment.

Adjustment to the job refers to the adjustment to job responsibilities, supervision, and job performance expectation. While adjustment to interact with host nationals means the ability to socialize and communicate with host country nationals. Adjustment to the general non work environments reflects the ability to adjust to life, housing, food, shopping and so forth.

According to Black, Mendenhall, and Oddou (1991) the existing literature regarding cross cultural adaptation consists mostly of anecdotal or atheoretical empirical efforts to understand the phenomenon. In addition, Black (1990) said “Much of the general interest in cross cultural adjustment began in 1955 with Lysgaard’s study of the adjustment of

Norwegian students who have received Fullbright scholarships” (p.120). Furthermore, much of the theoretical foundation for cross cultural adjustment research is based on Oberg’s work on cultural shock. (Black, 1990; Black & Gregersen, 1991a)

Black and Gregersen (1991) argued that moving from one country to another often involves two situations such as changes in the job the individual performs and the corporate culture in which responsibilities are executed; it can also involve dealing with unfamiliar norms related to the general culture, business practices, living conditions, weather, food, health care, daily customs, and political systems, plus facing a foreign language on a daily basis.

Some researchers provided an important insight to the cross-cultural adjustment field.

For example, Black (1990) demonstrated that only four dimensions of personality, cultural flexibility, social orientation, willingness to communicate, collaborative conflict resolution orientation had a high relationship with the three facets of psychological adjustment for Japanese expatriate managers in America. Selecting employees with these personal factors may be most appropriate if the job the individual will fill involves a lot of interaction with host nationals either inside or outside of work. On the other hand, the personality trait such as openness to experience guides the expatriates to socialize with the host country nationals to enhance their adjustment in the foreign country (Caligiuri, 2000). Moreover, Hechanova et al., (2003) explored the relationship between individual, job, environmental, and family-related variables with expatriate adjustment and they found that self-efficacy, frequency of interaction with locals, and family support were highly related to all three types of adjustment.

Furthermore, individual differences such as self monitoring personality, prior experience in the host country and local language fluency were related with only two dimensions of cross-cultural adjustment, work and interaction adjustment; but the researchers encourage to include a general dimension of cross-cultural adjustment because this might provide a big

expatriate assignment effectiveness (Kim & Slocum, 2008).

Also some studies in cross-cultural adjustment focus on expatriate and spouse cross-cultural adjustment because either foreign workers adjustment influences spouse adjustment or vice versa. Some factors such as age, time overseas, and housing conditions were important in both expatriates and spouse adjustment but in general a high percentage of the variance in re-entry adjustment was explained for expatriates than for spouses (Black &

Gregersen, 1991a; Black & Gregersen, 1991b; Black & Stephens, 1989).

Cultural Intelligence (CQ) and Cross-Cultural Adjustment

Kim et al. (2006) theoretically explored how Cultural intelligence (CQ) influences expatriate adjustment. They said that individuals having a higher, rather than a lower level of CQ will be better adjusted to the new work and non-work environment in the host country because it is likely that individuals with higher CQ gain more appropriate emotional and informational support through getting along with local people. Further, Early et al. (2006) define cultural intelligence as a person’s capability for successful adaptation to new cultural settings; that is, for unfamiliar settings attributable to cultural context.

Templer et al. (2006) provided a strong evidence of the relationships between motivational CQ and all three adjustment criteria after they have been controlled by gender, age, length of time living in the host country, and prior international assignments. They demonstrated the validity, generalizability, and applicability of the CQ concept. Global employees who are more self-confident in their abilities to adapt to new cultural environments adjust better to work, life, and social demands in foreign assignments.

Therefore, this study has the first hypothesis as follow:

Hypothesis 1 Cultural intelligence is positively related to cross-cultural adjustment.

Emotional Intelligence (EQ)

Salovey and Mayer (1990) provided the first modern definition of Emotional Intelligence as “the subset of social intelligence that involves the ability to monitor one’s own and other’s feelings and emotions, to discriminate among them and to use this information to guide one’s thinking and actions” (p. 189). Thomas and Inkson (2004) defined EQ as the capability of regulating and using one’s emotional states. Furthermore, Brown, Bryant, and Reilly (2006) refer Salovey and Mayer’s emotional intelligence concept to the ability to deal with one’s own emotions and those of others to advantage in problem solving and decision making. However, Daniel Goleman in 1996 defined EQ as “the capacity for recognizing our own feelings and those of others, for motivating ourselves, and for managing emotions well, in ourselves and in our relationships” (Bagshaw, 2000, p. 61). This implies that his idea of social and emotional competencies differs from the concept of Salovey and Mayer who pay more attention to emotional abilities which link emotion and individual cognition. In addition, Wong and Law (2002) pointed out that emotional intelligence is referred to as a set of

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