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Why Cultural Intelligence in the Retail Industry is Essential

We have all, at some point, come across terms such as IQ (Intelligence Quotient) and EQ (Emotional Quotient). While IQ is used to assess the cognitive ability of a person, the EQ tests are used to identify a person’s ability to recognize and relate to emotions exhibited by others and themselves. A new metric for measuring human capability has now been introduced, known as Cultural Intelligence or CQ.

Developed due to the complex economic situation of international trade and globalization, CQ is considered as important as IQ and EQ.

Read on to find out more about Cultural intelligence and its’ presence in the retail industry.

What is Cultural Intelligence?

Cultural Intelligence or cultural quotient (CQ) is defined as the ability to relate and work seamlessly across cultures. The term is predominantly used in the business sectors though it is has been rising up in other areas such as education, government, and academic research.

It’s role in the present economic situation

With weakening international trade borders and globalization, companies need to think big and look to expand beyond local markets. In the long run, cross-border trading is going to be more profitable. Foreign markets have the potential to create massive profits for products and companies. At the same time, a product that might work in one country might not work in another and this can lead to a loss in sales or negative public response. This is where CQ comes into play. When you have a grasp of cultures that your product or business is planning to attract, the risk associated with failure is significantly reduced. A culturally intelligent workforce can help you get the maximum from the globalized economy that’s open to all.

Significance in retail industry and how to utilize it

Selling of goods and services is what drives the retail industry. An organization that is culturally intelligent can identify the market instantaneously and devise measures to ensure a successful venture into a market that has consumers from different cultures.
It ensures the prevention of conflict between two parties from different cultural backgrounds and will aid in the forming of a cordial and professional relationship with mutual trust. According to David Livermore, President of the Cultural Intelligence Centre, cultural intelligence plays a key role during stressful situations in a diverse workplace. This is due to the reaction and coping mechanisms exhibited by people from various cultural backgrounds when exposed to high-pressure situations. An individual or a leader that has high CQ can easily dissolve the tension and thereby maintaining amicability between workmates and thereby not hamper productivity.


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Who is it applicable to?

Cultural intelligence is not something associated with senior members of the company or a specific department within one. Design, manufacturing, marketing and sales all play a key role in how well a company does and it is necessary for every individual to be culturally aware. The necessity for each and every member of the business organization to be culturally intelligent arises from the need to interact with people from various segments of the industry and from diverse cultural backgrounds. From negotiating with local landowners to dealing with regional managers, cultural intelligence can give you the upper hand while setting up or expanding your business.

Assess yourself

Cultural intelligence or Cultural Quotient (CQ) can be assessed by identifying certain aspects of an individual. Forbes lists four main factors that can be attributed to identifying the level of cultural intelligence of an individual:

Motivation: It can be described as the individuals’ passion and confidence in functioning effectively in a multicultural environment. Studies conducted by Forbes suggest the lack of motivation in doing so can be attributed to the fall of many business leaders in the past.

Cognition: The cultural awareness of the person to identify the similarities and differences of various cultures. The aim is not to be a cultural expert, but to accommodate core cultural differences and its effects on day-to-day business.

Strategy: The person tries to decipher the cultural experiences he or she has faced and utilized it when needed to aid the process of decision making or understanding a fellow employee’s thought process.

Behavior: The adaptability of the person to improvise his or her actions according to the culture they deal with. From ordering coffee to shaking hands or modulating your voice while conversing, it’s all about blending in without making the other person uncomfortable or putting up a fake persona of yourself.


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By Govind

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