Abstract
Cultural intelligence can effectively solve cross-cultural problems, which encourages contractors to adapt to the new international market environment. However, in international projects, the effectiveness of cultural intelligence can be complicated or moderated by the host country’s institutional environment. This study explores the impact of cultural intelligence on the performance of international construction projects and the moderating effect of institutional distance, then compares the differences between Chinese contractors and Korean contractors. In this paper, eleven hypotheses were proposed, and an empirical analysis was conducted to test the hypotheses and measure the impact of cultural intelligence on the performance of international construction projects and the moderating effect of institutional distance. The results from 144 valid questionnaires indicated that process capability and path capability in cultural intelligence have a significant positive impact on the performance of international construction projects, while formal institutional distance can positively moderate the relationship between position capability and international construction project performance. Moreover, Chinese and Korean contractors display significant differences in the moderating role of institutional distance. These findings provide theoretical support and strategic suggestions for not only contractors in China and Korea but for all international contractors seeking to improve project performance through cultural intelligence and institutional distance.
Similar content being viewed by others
References
Afsar B, Shahjehan A, Shah SI, Wajid A (2019) The mediating role of transformational leadership in the relationship between cultural intelligence and employee voice behavior: A case of hotel employees. International Journal of Intercultural Relations 69:66–75, DOI: https://doi.org/10.1016/j.ijintrel.2019.01.001
Ang S, Inkpen AC (2008) Cultural intelligence and offshore outsourcing success: A framework of firm-level intercultural capability. Decision Sciences 39(3):337–358, DOI: https://doi.org/10.1111/j.1540-5915.2008.00195.x
Ang S, Van Dyne L, Koh C, Ng KY, Templer KJ, Tay C, Chandrasekar NA (2007) Cultural intelligence: Its measurement and effects on cultural judgment and decision making, cultural adaptation and task performance. Management and Organization Review 3(3):335–371, DOI: https://doi.org/10.1111/j.1740-8784.2007.00082.x
Atkinson R (1999) Project management: Cost, time and quality, two best guesses and a phenomenon, its time to accept other success criteria. International Journal of Project Management 17(6):337–342, DOI: https://doi.org/10.1016/S0263-7863(98)00069-6
Benghida D (2017) Prospects and challenges in the Korean construction industry: An economic overview. International Journal of Civil Engineering and Technology 8(4):1338–1346
Bond MH (1996) The Oxford handbook of Chinese psychology. Oxford University Press, New York, NY, USA
Camargo A, Storme M, Çelik P (2020) Further investigation of the relationship between cultural intelligence and expatriate career intentions. International Journal for Educational and Vocational Guidance 20(1):101–122, DOI: https://doi.org/10.1007/s10775-019-09396-1
Cha HS, Kim KH (2018) Measuring project performance in consideration of optimal best management practices for building construction in South Korea. KSCE Journal of Civil Engineering 22(5):1614–1625, DOI: https://doi.org/10.1007/s12205-017-0156-2
Chang H-C (1997) Language and words. Journal of Language and Social Psychology 16(2):107–131, DOI: https://doi.org/10.1177/0261927X970162001
Chao MC-H, Kumar V (2010) The impact of institutional distance on the international diversily-performance relationship. SSRN Electronic Journal 45(1):93–103, DOI: https://doi.org/10.1016/j.jwb.2009.04.005
Dikova D, Sahib PR, van Witteloostuijn A (2010) Cross-border acquisition abandonment and completion: The effect of institutional differences and organizational learning in the international business service industry, 1981–2001. Journal of International Business Studies 41(2):223–245, DOI: https://doi.org/10.1057/jibs.2009.10
Estrin S, Ionascu D, Meyer KE (2007) Formal and informal institutional distance, and international entry strategies. SSRN Electronic Journal, DOI: https://doi.org/10.2139/ssrn.665110
Gao-Zeller X, Li X, Yang F, Zhu W (2019) Driving mechanism of CSR strategy in chinese construction companies based on neo-institutional theory. KSCE Journal of Civil Engineering 23(5):1939–1951, DOI: https://doi.org/10.1007/s12205-019-0989-y
Gelbuda M, Meyer KE, Delios A (2008) International business and institutional development in central and Eastern Europe. Journal of International Management 14(1):1–11, DOI: https://doi.org/10.1016/j.intman.2007.05.011
Göl İ, Erkin Ö (2019) Association between cultural intelligence and cultural sensitivity in nursing students: A cross-sectional descriptive study. Collegian 26(4):485–491, DOI: https://doi.org/10.1016/j.colegn.2018.12.007
Gregory R, Prifling M, Beck R (2009) The role of cultural intelligence for the emergence of negotiated culture in IT offshore outsourcing projects. Information Technology & People 22(3):223–241, DOI: https://doi.org/10.1108/09593840910981428
He X, Brouthers KD, Filatotchev I (2018) Market orientation and export performance: The moderation of channel and institutional distance. International Marketing Review 35(2):258–279, DOI: https://doi.org/10.1108/IMR-09-2015-0194
Hofstede G (1980) Cultural consequences: International differences in work related values. Sage, Beverly Hills, CA, USA
Horak S (2014) Antecedents and characteristics of informal relation-based networks in Korea: Yongo, Yonjul and Inmaek. Asia Pacific Business Review 20(1):78–108, DOI: https://doi.org/10.1080/13602381.2013.791567
Horak S, Taube M (2016) Same but different? Similarities and fundamental differences of informal social networks in China (guanxi) and Korea (yongo). Asia Pacific Journal of Management 33(3):595–616, DOI: https://doi.org/10.1007/s10490-015-9452-x
Hu S, Liu H, Zhang S, Wang G (2020) Proactive personality and cross-cultural adjustment: Roles of social media usage and cultural intelligence. International Journal of Intercultural Relations 74:42–57, DOI: https://doi.org/10.1016/j.ijintrel.2019.10.002
Imm Ng S, Anne Lee J, Soutar GN (2007) Are Hofstede’s and Schwartz’s value frameworks congruent? International Marketing Review 24(2):164–180, DOI: https://doi.org/10.1108/02651330710741802
Kim YJ (2012) Comparative study on interaction concepts of ‘yeongo’ and ‘guanxi’. MSc Thesis, Nanjing University, Nanjing, China
Konara P, Shirodkar V (2018) Regulatory institutional distance and MNCs’ subsidiary performance: Climbing up vs. climbing down the institutional ladder. Journal of International Management 24(4): 333–347, DOI: https://doi.org/10.1016/j.intman.2018.04.004
Korzilius H, Bücker JJLE, Beerlage S (2017) Multiculturalism and innovative work behavior: The mediating role of cultural intelligence. International Journal of Intercultural Relations 56:13–24, DOI: https://doi.org/10.1016/j.ijintrel.2016.11.001
Kostova T, Zaheer S (1999) Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. The Academy of Management Review 24(1):64, DOI: https://doi.org/10.2307/259037
Lee CW (2014) A study on the organizational culture-based growth engine of the large Korean companies: Cultural capabilities model and Shared values DNA structure Model. Korean Journal of Financial Management 22:39–93
Lee S-H, Jeon R-K, Kim J-H, Kim J-J (2011) Strategies for developing countries to expand their shares in the global construction market: Phase-based SWOT and AAA analyses of Korea. Journal of Construction Engineering and Management 137(6):460–470, DOI: https://doi.org/10.1061/(ASCE)CO.1943-7862.0000316
Lin YH, Guo Y, Kim CJ, Chen PH, Qian M (2020) The impact of relational governance on the adaptability of international contractors: A comparative study between China and Korea. Engineering, Construction and Architectural Management 27(10):3235–3259, DOI: https://doi.org/10.1108/ECAM-12-2019-0719
Lin YH, Shi B, Chen PH, Xu Z, Liu H (2019) A grey-BPNN model for evaluating the competitiveness of chinese contractors in the highspeed rail market in Europe. Advances in Civil Engineering 2019, DOI: https://doi.org/10.1155/2019/5858094
Liñán F, Chen Y-W (2009) Development and cross-cultural application of a specific instrument to measure entrepreneurial intentions. Entrepreneurship Theory and Practice 33(3):593–617, DOI: https://doi.org/10.1111/j.1540-6520.2009.00318.x
Liou RS, Chao MCH, Yang M (2016) Emerging economies and institutional quality: Assessing the differential effects of institutional distances on ownership strategy. Journal of World Business 51(4): 600–611, DOI: https://doi.org/10.1016/j.jwb.2016.03.001
Lorenz MP, Ramsey JR, Andzulis JM, Franke GR (2020) The dark side of cultural intelligence: Exploring its impact on opportunism, ethical relativism, and customer relationship performance. Business Ethics Quarterly 30(4):552–590, DOI: https://doi.org/10.1017/beq.2020.2
Lu W, Li H, Shen L, Huang T (2009) Strengths, weaknesses, opportunities, and threats analysis of Chinese construction companies in the global market. Journal of Management in Engineering 25(4):166–176, DOI: https://doi.org/10.1061/(ASCE)0742-597X(2009)25:4(166)
Mathew N, Javalgi R (2018) Conceptualizing the Relationships among the strategic orientations, cultural intelligence, international diversification and performance of firms. KnE Social Sciences 3(10):100, DOI: https://doi.org/10.18502/kss.v3i10.2888
Minkov M, Hofstede G, Hofstede GJ (2010) Cultures and organizations: Software of the mind, 3rd edition. McGraw-Hill Education, New York, NY, USA
Moon T (2010) Organizational cultural intelligence: Dynamic capability perspective. Group & Organization Management 35(4):456–493, DOI: https://doi.org/10.1177/1059601110378295
North DC (1990) Institutions, institutional change, and economic performance. Harvard University Press, Cambridge, MA, USA
Paillé P, Mejía-Morelos JH (2014) Antecedents of pro-environmental behaviours at work: The moderating influence of psychological contract breach. Journal of Environmental Psychology 38:124–131, DOI: https://doi.org/10.1016/j.jenvp.2014.01.004
Peng H, Duysters G, Sadowski B (2016) The changing role of guanxi in influencing the development of entrepreneurial companies: A case study of the emergence of pharmaceutical companies in China. International Entrepreneurship and Management Journal 12(1):215–258, DOI: https://doi.org/10.1007/s11365-014-0323-6
Peng MW, Wang DYL, Jiang Y (2008) An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies 39(5):920–936, DOI: https://doi.org/10.1057/palgrave.jibs.8400377
Pesch R, Bouncken RB (2018) How to achieve benefits from diversity in international alliances: Mechanisms and cultural intelligence. Global Strategy Journal 8(2):275–300, DOI: https://doi.org/10.1002/gsj.1167
Petry J, Amal M, Floriani D (2018) Institutional distance, regional clusters and performance of foreign subsidiaries: Evidences from Brazil. Brazilian Business Review 15(3):302–316, DOI: https://doi.org/10.15728/bbr.2018.15.3.6
Santos Silva JMC, Tenreyro S (2015) Trading partners and trading volumes: Implementing the Helpman-Melitz-Rubinstein model empirically. Oxford Bulletin of Economics and Statistics 77(1):93–105, DOI: https://doi.org/10.1111/obes.12055
Shirodkar V, Konara P (2017) Institutional distance and foreign subsidiary performance in emerging markets: Moderating effects of ownership strategy and host-country experience. Management International Review 57(2):179–207, DOI: https://doi.org/10.1007/s11575-016-0301-z
Shou Z, Chen J, Zhu W, Yang L (2014) Firm capability and performance in China: The moderating role of guanxi and institutional forces in domestic and foreign contexts. Journal of Business Research 67(2):77–82, DOI: https://doi.org/10.1016/j.jbusres.2012.11.014
Sousa CMP, Bradley F (2006) Cultural distance and psychic distance: Two peas in a pod? Journal of International Marketing 14(1):49–70, DOI: https://doi.org/10.1509/jimk.14.1.49
Trapczyński P, Gorynia M (2017) A double-edged sword? The moderating effects of control on firm capabilities and institutional distance in explaining foreign affiliate performance. International Business Review 26(4):697–709, DOI: https://doi.org/10.1016/j.ibusrev.2016.12.009
Utama WP, Chan APC, Gao R, Zahoor H (2018) Making international expansion decision for construction enterprises with multiple criteria: A literature review approach. International Journal of Construction Management 18(3)221–231, DOI: https://doi.org/10.1080/15623599.2017.1315527
Wade R (2004) The reprinting of governing the market: A dinner table conversation. Issues & Studies 40(1):103–134
Wunsch-Vincent S, Lanvin B, Dutta S (2015) Global innovation index 2015 — Effective innovation policies for development. Cornell University, INSEAD, WIPO
Xue J, Shen GQ, Yang RJ, Zafar I, Ekanayake EMAC, Lin X, Darko A (2020) Influence of formal and informal stakeholder relationship on megaproject performance: A case of China. Engineering, Construction and Architectural Management 27(7):1505–1531, DOI: https://doi.org/10.1108/ECAM-07-2019-0353
Yitmen I (2013) Organizational cultural intelligence: A competitive capability for strategic alliances in the international construction industry. Project Management Journal 44(4):5–25, DOI: https://doi.org/10.1002/pmj.21356
Zardkoohi A, Harrison JS, Josefy MA (2017) Conflict and confluence: The multidimensionality of opportunism in principal-agent relationships. Journal of Business Ethics 146(12):405–417, DOI: https://doi.org/10.1007/s10551-015-2887-7
Zhang YB, Lin M-C, Nonaka A, Beom K (2005) Harmony, hierarchy and conservatism: A cross-cultural comparison of confucian values in China, Korea, Japan, and Taiwan. Communication Research Reports 22(2):107–115, DOI: https://doi.org/10.1080/00036810500130539
Zhao Y, Feng Y, Li C (2018) Effect of organizational cultural differences and mutual trust on contract management of nonequity construction project Alliances. Advances in Civil Engineering 2018:1–9, DOI: https://doi.org/10.1155/2018/3534209
Acknowledgments
This work was supported by the National Natural Science Foundation of China (Grant Number: 71573037).
Author information
Authors and Affiliations
Corresponding author
Electronic supplementary material
12205_2021_1694_MOESM1_ESM.pdf
The Influence of Cultural Intelligence and Institutional Distance of Chinese and Korean Contractors on the Performance of International Construction Projects
Rights and permissions
About this article
Cite this article
Lin, YH., Zhang, H., Kim, C.J. et al. The Influence of Cultural Intelligence and Institutional Distance of Chinese and Korean Contractors on the Performance of International Construction Projects. KSCE J Civ Eng 25, 3223–3234 (2021). https://doi.org/10.1007/s12205-021-1694-1
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12205-021-1694-1