August 2013 ■ Project Management Journal ■ DOI: 10.1002/pmj 5 ABSTRACT ■ Cultural intelligence (CQ) on the organizational level is an organization’s capacity to reconfigure its capability to function and manage effectively in culturally diverse environments and to gain and sustain its competitive advantages. This study aims to present a model, examining how organizational CQ through competitiveness framework might potentially affect the strategic alliancing ability of contracting firms operating abroad. The research involves a questionnaire survey conducted with the contracting firms. The research findings support the contracting firms leveraging their cultural intelligence as their main cross-cultural competence for establishing and increasing the performance of international strategic alliances. KEYWORDS: cultural intelligence; cross- cultural competence; international strategic alliance; construction industry Project Management Journal, Vol. 44, No. 4, 5–25 © 2013 by the Project Management Institute Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/pmj.21356 INTRODUCTION ■ A s businesses and industries progress toward rapid globalization, a growing number of organizations have moved to a broader and more diverse set of cross-cultural environments. By entering globally competitive environments, firms face a variety of severe challenges, such as greater complexity and differentiation, the need for integration, and the problem of transferring knowledge across a global firm caused by geo- graphical, psychic, economic, administrative, and cultural differences (Daft, 2004; Ghemawat, 2001; Moon, 2010; Sousa & Bradley, 2006). To be successful in cross-cultural environments, a firm should adjust to the numerous coun- tries in which it operates and overcome these differences. Among several fac- tors that should be considered in the achievement and maintenance of a firm’s competitive advantage in cross-cultural environments, culture remains one of the most significant (Sousa & Bradley, 2006; Moon, 2010; Soutar, Lee, & Ng, 2007; Yeniyurt & Townsend, 2003). Intercultural contact is necessary and unavoidable in international business ventures. Firms with capabilities to manage intercultural contact (i.e., culturally intelligent firms) will outper- form firms that are “less intelligent” (Ang & Inkpen, 2008). Since the beginning of the year 2000, cultural intelligence (CQ), which refers to an individual’s capability to function and manage effectively in culturally diverse environments (Earley & Ang, 2003), has attracted great attention from researchers and practitioners. Earley and Ang (2003) developed the multifactor concept of CQ. Based on the larger domain of individual differences that consists of personality, capability, and interest, CQ is viewed as an individual’s capability (Earley & Ang, 2003; Earley, Ang, & Tan, 2006; Moon, 2010). This conceptualization of cultural intelligence extends Herrmann, Call, Hernandez-Lloreda, Hare, and Tormasello’s (2007) recent views in that cultural intelligence refers not only to a person’s capability in creating cultural groups and functioning effectively in one of those cultural groups, but also to a person’s capability to function effectively in interactions across cultural groups. Previous studies in CQ literature have focused on a set of abilities or capabilities on an individual or group level, but few have examined a set of capabilities on an organizational level, partly because of the novelty of the construct. Firm-level cultural intelligence is rooted in both psychological research on individual cultural intelligence and the resource-based view of the firm, which views the firm as a bundle of resources and capabilities (Ang & Inkpen, 2008). As the construction industry adapts to trends in globalization and project networks collaborate interculturally, network participants are bound to Organizational Cultural Intelligence: A Competitive Capability for Strategic Alliances in the International Construction Industry Ibrahim Yitmen, Civil Engineering Department, European University of Lefke (EUL), North Cyprus PAPERS