To manage people properly one is to understand their cultural background. The task is difficult even in the conditions of diverse workplaces within one particular country. In the process of globalization and business internationalization cultural issues have acquired ever greater importance. National cultures differ, which mirrors in business practices. Entrepreneurs and employees of various countries have different perceptions and attitudes, worldviews and approaches. National cultures and mentalities are reflected in nation-wide preferences for management styles and different notions of success. Western HR management has largely relied on the researches accomplished in the English-speaking countries, especially those in the USA. However, HR practices that are viewed as 'the best' in one country often fail in another cultural context. As a result, cross-cultural issues and their impact on business operations have become one of the most heavily researched areas in management. The vast empirical research conducted in different parts of the world has accumulated evidences demonstrating that cultural values being deep seated always lead to divergence in the approaches to management, while the convergence some believe to witness is superficial and limited in effect (Stening 2006). As Bruce W. Stening suggests 'understanding cultures is becoming even more important than previously believed'. This paper examines the relationship between national cultures, management styles and performance. There are several points to be supported. Cultural intelligence acquires enormous significance in international business operations. Cultural issues tend to form preferences in management styles and performance related practices. The choice of management styles in international context should rely upon concrete local conditions and should be a hybrid of best HRM practices used in two cultural settings.
The Importance of Cultural Intelligence. Cultural Intelligence is "A person's capability for successful adaptation to new cultural settings, that is, for unfamiliar settings attributable to cultural context" (Early and Ang 2003, in Stening 2006). CQ implies a set of knowledge and abilities, including knowledge of cultures and fundamental issues of cultural interactions; sensitivity to cues and ability to properly interpret what's going on in the cross-cultural situation; and behavioural skills enabling a manager to respond properly to different intercultural situations (In Stening 2006). CQ is a necessary tool for establishment of mutually beneficial relationships with the foreign party. Bruce W. Stening (2006) summarizes tricky situations in international business when CQ plays the decisive role. It is important for: negotiations with a potential joint venture partner, dealing with relationships between expatriate and local colleagues, motivation of local workforce, resolving intercultural disputes, dealing with local governmental authorities and bureaucrats, resolving ethical dilemmas, designing training and development programs for locals, developing policies and strategic plans, creating effective virtual teams, ability to