The imitation game: building cultural intelligence as a social learning capability to boost SMEs' international performance

Purpose: Drawing on the upper echelons theory and resource-based view, the purpose of this paper is to investigate how SMEs' decision-makers can develop cultural intelligence to improve firms' adaptive capability and performance in foreign markets. The study addresses this need by using social cognitive theory as an appropriate tool to measure cultural intelligence development. Design/methodology/approach: Using a sample of 244 Italian SMEs, data were collected through an online survey and analyzed with structural equation modeling techniques. Findings: The results show that decision-makers of resource-constrained SMEs can rely on modeled behaviors to inform their decisions when dealing with diverse cultural contexts. The findings also reveal that the development of cultural intelligence can foster adaptive strategies and support SMEs in achieving superior performance outcomes in international markets. Research limitations/implications: Other variables can be taken into account to expand the model and recognize new determinants able to affect the link between the constructs. Other learning theories could provide additional interpretations of cultural intelligence development. Practical implications: Social cognitive processes nurture cultural intelligence in helping SMEs' owner-managers become more flexible and adaptive in responding to the requests of local settings. When facing the uncertainties of foreign markets, decision-makers can effectively make inferences from the observation of successful modeled behaviors. This helps owner-managers better coordinate, recombine and allocate resources to address the needs of diverse cultural markets. Originality/value: This study demonstrates that social cognitive theory is a relevant tool to measure cultural intelligence development in small business settings.