Effect of Cultural Intelligence on Transactional and Transformational Leadership Styles: A Research in Charity Organizations in Erbil

Globalization and its counterpart – international/multinational organizations enable different cultures coincide with one another in both social and organizational settings. Interaction of diversified cultures necessitates behaving accordingly to different settled cultural values and conditions. At this point, Cultural Intelligence (CI) comes into scene as a crucial asset while being in relation with society or any community from different cultural backgrounds. In organizations, leading heterogeneous individuals coherently is of critical importance for the continuity of the organization itself. Thus, it is anticipated that cultural intelligence shall have a part in leadership styles in terms of its implementation process. The aim of this study is to examine whether cultural intelligence has an impact on leadership styles – transactional and transformational leadership styles. Four charity organizations located in Erbil, Iraq are chosen as the population and the sample of the investigation consists of 116 employees out of 200 employees working for them. To measure cultural intelligence, a scale developed by Ang and Dyne (1996) is used. The items of the scale are taken from Ang et al (2007). To measure leadership styles, a scale developed by Bernard M. Bass and Bruce J. Avolio, has been used (Multifactor Leadership Questionnaire Leader Form (MLQ 5x-Short) published by Mind Garden, Inc. This scale is composed of 45 items but 32 questions are used (12 questions Transactional Leadership and 20 questions Transformational Leadership) for this research. The data collected by survey method is analysed by SPSS 23 program using frequency analysis, correlation analysis, regression analysis and mean comparison analyses. The results indicate that there is a positive significant relationship between cultural intelligence and both leadership styles – transactional and transformational leadership. Also there is a positive significant relationship between each dimension of cultural intelligence with both transactional leadership and transformational leadership. As a result of this, in other words, when cultural intelligence levels rise at work, the leaders are also performing very well. According to the results of the regression analysis, the cultural intelligence has an impact on the transactional leadership (R=24.8%, Adjusted R=24.2%). Also the results showed that cultural intelligence has an impact on the transformational leadership (R=25.7, Adjusted R 25.0%). As discussed in other research examples including transactional leadership and transformational leadership, which is related to the cultural intelligence, our research has confirmed the relationships between each other, too. Even if there are some differences, this is due to handling of different culture, geography and time.