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Abstract
Due to the ongoing globalisation of business, international expansion of different companies and the emergence of culturally diverse environments, project managers face challenges that have not existed before. Some of these issues can have a significant adverse effect on the performance of the team, and so they should be minimised. As such, the discipline of cross-cultural management has emerged to address the various difficulties associated with expatriate assignments and diverse teams. It is a relatively young area of research, but studies have yielded significant results that have been incorporated into the teachings of many business schools. The dissertation has identified five different aspects and the solutions that are currently considered the most effective in addition to suggesting future research directions.
Introduction
This chapter will elaborate on the importance of culture in project management in all of its aspects. The research will investigate various practices and situations that involve cultural considerations. This introductory chapter will define the background, problem, gap, aim, scope and justification of the study.
Background of the Study
Business is currently becoming increasingly globalised, with companies expanding their operations internationally and engaging in partnerships with foreign organisations. Firms outsource projects, send expatriates to establish foreign branches and create international virtual specialist teams using communications technology. However, expatriates undergo a significant amount of stress and sometimes fail in their tasks (Josserand, Kaine and Nikolova 2018). Sometimes, these issues result from corporate miscalculations, but they can also happen because the manager fails to adjust to his or her new environment. However, the specific aspects of the problems that result, as well as the various causes that create them, remain unexplored.
The presence of people who come from different cultures in the same environment can lead to a variety of issues. Language barriers can create miscommunications, with people failing to understand each other and compromising the project as a result. This issue is particularly pertinent for nonverbal communication, as people may not realise that they do not understand each other or give the wrong impression. As a result, conflicts emerge in the workplace, and they usually do not reach a positive resolution. The essential competencies of project managers tend to be inadequate for resolving these issues due to the lack of the required intercultural competencies (Ahmadi and Parhizgar 2015).
Companies are aware of the potential dangers of sending a project manager to work in an unfamiliar culture and train them. However, there is no well-defined best method for doing so, and different organisations can adopt significantly different education methods. As Chen and Chang (2016) note, these approaches do not necessarily achieve the same results. There have been efforts to determine the strategy that achieves the best results, but they are hampered by the lack of information on the topic in general. As such, it is challenging to generalise successes and isolate training from personal characteristics and circumstances.
It should be noted that these issues concern many businesses that have no interest in international projects. With the ongoing globalisation of the world, many countries accept increasing numbers of first-generation immigrants, who tend to retain much of their cultural characteristics even over time (Al Wekhian 2015a). As a result, environments within companies are becoming increasingly diverse, and, as Al Wekhian (2015a) notes, the new workers are not necessarily ready to integrate into their new culture. As such, more and more project managers face the task of increasing the performance of a team that does not respond well to the methods that they have been using up until the present. Intercultural competencies are becoming critical to the profession of project management in general, and so they warrant investigation.
Research Problem and Questions
Culture is well known as a determinant of interactions between people, as evidenced by the common practice of studying national business etiquette. Many firms employ practices that try to address the differences with their international partners. There is a multitude of literature on the topic, and companies can find it challenging to isolate the best recommendation for their specific needs. As such, this study aims to answer the following questions by reviewing contemporary research:
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What cultural issues tend to affect expatriate project managers and diverse work environments the most?
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How severe are these issues relative to each other?
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What successful methods for addressing these issues have managers, educational institutions and international companies developed?
Research Gap and Problem Statement
Most companies are aware of cultural differences and their potential effects on the performance of international projects. However, issues of expatriate adjustment and diverse work environments remain inadequately explored. However, there are isolated cases of success in resolving these concerns, which warrant an investigation and analysis so that they can be applied elsewhere. As Nakagawa et al. (2018) find, the approaches that people use to succeed in their home countries may not necessarily apply in other nations. Moreover, these companies cannot redesign their methods to improve because they do not have enough data to inform their efforts. Their international efforts are too rare to draw conclusions and adapt to suit expatriate needs.
However, while one company may not have enough data to inform its decisions, overall, enough efforts happen for analysis. As such, a researcher who has access to information from various companies can compile it and investigate the findings. In doing so, he or she may gather enough data to separate the various factors that affect a project managers intercultural performance. This study aims to organise findings about the experiences of a group of expatriate managers, highlight the prominent issues that they encounter and highlight some potential solutions. It intends to provide managers with knowledge on the issues they should expect to encounter and information on why specific methods will or will not work.
Research Aims and Objectives
The research aims to categorise the issues that project managers encounter on expatriate assignments and diverse environments. Its primary objective is to analyse which cultural factors affect their performance the most and how business schools and companies can prepare them to address these issues. As such, the following objectives can be set:
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Identify some of the relevant issues in project management that expatriate managers encounter during their assignments.
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Determine the relative importance of these concerns and their potential to harm the projects performance.
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Discuss the role of business schools and companies in selecting and preparing project managers who can deal with these issues and propose improvements.
Scope and Limitations
This study will be limited to local companies, as it is challenging to locate relevant respondents in distant locations and contact them due to considerations such as language barriers and the unavailability of specific communication methods. It will also only review solutions that have been used successfully before, as it is not an experiment but a gathering of information about the situation. Furthermore, the following limitations apply:
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Only current expatriate managers will be analysed in this survey, as it is challenging to locate people who have quit such a position. Furthermore, contacting them would likely require learning their personal information, while current managers can be contacted through company channels.
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Only managers who can speak English and understand it at a level sufficient to complete the survey will be considered for this research. Adaptation of the questionnaires for different languages would require an amount of effort that is not justified by the returns.
Justification of Research
While project managers are aware of the cultural implications of modern business, they struggle to understand the full scope of the issue until they encounter it. However, by that point, it is often too late, and they have to deal with reduced performance or outright failure. While they may succeed in some aspects, they will fall behind in others due to the complexity of the issue. This study aims to identify the most prominent issues for companies and business schools that should be addressed if one wants to improve project performance in the company.
Literature Review
The initial literature search attempted to assess the field of current scholarly research on the matter by collecting articles with broad topics. Jenifer and Raman (2015) discuss how cultural differences create communication barriers in the workplace, which stem from misunderstandings, mismatched norms and values, stereotyping and ethnocentric behaviours. Pham and Panuwatnawich (2016) discuss how foreign managers can employ styles that do not maximise the performance of their employees due to their preference for specific characteristics.
Mikhieieva and Waidmann (2017) identify risks that arise in intercultural environments, particularly stakeholder identification and management. Ihtiyar (2017) highlights a variety of reasons why people who work on a project can engage in intercultural conflicts. Lastly, Kumari and Nirban (2017) describe the need for capacity in fostering intercultural communication in a modern manager. All of these issues are prevalent in current projects that involve the cooperation between different ethnicities and nationalities.
Larger-scale issues can arise when a company participates in an international project or opens a branch in another country. According to Wang and Kwan (2017), Eastern cultures tend to prefer leadership styles that are not common in Western countries, such as paternalistic leadership. Their benefits are still under debate, as Top, Öge, Atan and Gümü_ (2015) note, but in any case, it may be beneficial to use an approach that works for employees locally instead of forcing them to use approaches derived from European and American cultures.
With regards to stakeholder-related risks, Bencikova, Mala and Dado (2018) note that intercultural competence is essential to customer satisfaction. According to Ihtiyar and Ahmad (2015), the characteristic strongly affects the companys service quality. As such, investigations into leadership styles and risk management are relevant and beneficial to companies.
The environment within a company and its relations with partners also contribute heavily to the success of each project it undertakes. Petrenko and Stolyarov (2019) note that companies from different countries can have significantly different cultures and use varying management styles, complicating cooperation. Stretton (2015) identifies situations where people from similar cultures struggle to resolve conflicts because of differences in values and misunderstandings.
According to Al Wekhian (2015a), workers from other cultures may not adopt the values of their new location, especially if they are first-generation immigrants. Padhi (2016) highlights the importance of intercultural communication in modern business due to the advancement of technology. Kobayashi (2019) discusses how traits that are seen as essential in American businesspeople are viewed as detrimental by their Japanese partners, forcing concessions and adaptation. Ultimately, the cultural management paradigm arose in response to the global emergence of issues such as these and aimed to address and resolve them.
A company cannot change the global environment and convince people to adhere to cultural norms that are different from their usual ones. As such, it has to adapt to the countries it enters and introduce acceptably small changes while respecting the culture and understanding it. Bird and Mendenhall (2016) introduce and discuss the concept of global leadership as an evolution of cross-cultural management. Mittal (2015) suggests the use of charismatic and transformational leadership styles for cultures with specific attributes. Pham and Panuwatwanich (2016) provide an example of an adaptation of one cultural style to another.
With regards to risk, Liu, Meng and Fellows (2015) propose the use of Hofstedes theory to evaluate dangers based on the countrys culture. Straka (2017) notes that companies should identify stakeholders correctly, accept their identity and adapt to it. Other details will be discussed in detail, later on in this paper.
Cultural management has created significant changes in the internal workings of companies throughout the world. Kiznyte, Ciutiene and Dechange (2015) introduce the concept of cultural intelligence, the ability to work well in culturally diverse environments. Stahl et al. (2017) discuss the use of cross-cultural management to take advantage of cultural differences in the workplace and achieve success.
San Cristóbal (2015) proposes the use of game theory to resolve conflicts between people who may belong to different cultures and live in various locations. Maranga and Sampayo (2015) note that cohesion is essential to a high-performing organisation, and one persons capabilities are not sufficient to address the matter of intercultural conflict, necessitating the cooperation of facilitators and controllers. Overall, the research into cultural project management is still ongoing, with many areas remaining insufficiently explored and new proposals arising continuously.
Cultural Differences
A persons culture can affect a wide variety of aspects in his or her workplace performance, ranging from small details to large-scale paradigms. Robbins and Burleson (2015) suggest that there may be cultural differences in consideration for future consequences, which is crucial in business, between people. Furthermore, Gom et al. (2015) state that employees that come from different cultures will sometimes have different value priorities that will affect their work behaviours and performance.
Al Saifi (2016) discusses how the desire to save face and individualistic or collectivistic tendencies can negatively influence a workers willingness to share information. Trobez et al. (2017) also note that various countries approach ethics differently, highlighting the importance of bribery in Italy and the tendency of Croatians to be deceptive as examples. The successes of various projects and businesses in these countries show that the differences are not severe enough to impede operations heavily, but project managers should research their work environment to be safe.
When working in a new country, a manager should learn about his or her subordinates, but this focus does not mean that he or she can neglect his or her performance. Kathirvel and Febiula (2016) discuss the phenomenon of culture shock, meaning difficulties in adjusting to new and unfamiliar countries, and its tendency to inflict considerable stress on the person. Naeem, Nadeem and Khan (2015) note that the adverse effects culture shock usually follow a stage of positivity and optimism when the person experiences the positive aspects of another culture.
Schmidt and Uecker (2015) claim that while American and Russian business ethics used to be considerably different with regards to favouritism, data manipulation and adherence to the law, they are now more similar. Similar occurrences can take place in any environment, and managers should be able to notice them in time.
Different countries and cultures provide specific environments that may assist or impede the progress of particular international projects. Jørgensen and Yamashita (2016) claim that the characteristics of the countries where the two entities that cooperate for the project are located are more critical to the possibility of failure than the differences between itself and the home nation of the firm. Moura, Singh and Chun (2016) claim that websites designed in a cultural environment will reflect its values and primarily appeal to that culture.
Millar, Peters and Millar (2018) describe culture sensitivity as an essential part of knowledge management in organisations that process large amounts of information such as high-technology firms. Sunardi, Tjakraatmadja and Bangun (2015) suggest that cultural diversity enhances employees ability to interpret information and transfer it in ways others find easy to understand. As such, the awareness of this trend can contribute to a managers performance considerably when it comes to team selection and management.
Cultural adjustment is critical to guaranteeing an expatriate managers performance and ensuring that he or she can continue being productive in the new country. Basuki and Riani (2018) state that an expatriates gender, home country and educational background do not influence a persons willingness to leave but homesickness, which is moderated by cross-cultural adjustment, does. Singh and Mahmood (2017) claim that the trait improves expatriate performance and note that cultural adjustment is a significant factor that enhances this effect.
Tehseen and Saijian (2016) state that market orientation and technology orientation in culture have a significant relationship between innovative practices and business growth with the individualism-collectivism dimension acting as a mediator. Medcof and Wang (2017) claim that contemporary literature converges on the support of the culture, exploration, exploitation model of innovation. The framework can be used by companies to determine where to place their future research units for optimal performance.
Overall, the themes of general culture disparity, diversity, cultural change, and culture shock emerge. Both expatriates and project managers in their home countries are beginning to encounter people from significantly different cultures frequently. Sometimes, the implicit value differences between people can lead to misunderstanding and issues. Managers are aware of these concerns but not necessarily how to address them, particularly for changing cultures. As a result, they experience culture shock and perform worse than they would have otherwise.
Intercultural Management Methods
Business practices in many cultures usually evolve from interactions that occurred in the community in the past. As such, many countries will have evolved significantly different management approaches over time. For example, Al-Alawi and Alkhodari (2016) note that Germans prefer rigid hierarchy in business while Canadians are individualists who prefer direct communication, and Koreans favour punctuality while Moroccans are often late. Obeidat et al. (2016) discuss the influence of culture on human resource management, noting that masculinity, uncertainty avoidance, long term orientation and individualism are responsible for significant differences between countries.
According to Top et al. (2015), Eastern workers respond well to the paternalistic approach, which involves strict discipline and strong leader authority alongside benevolence and morality, and the servant leadership style is emerging as an alternative to the traditional transformational style. Mensah and Qi (2016) offer a comprehensive overview of leadership style preferences by country, though the study does not cover some culture-specific approaches, such as paternalistic leadership. With that said, it is not feasible for a manager to be able to change their style freely, as many of them are associated with specific personality traits that are intrinsic to a person.
The situation becomes more complicated once a firm enters a transitional economy, one where traditional management styles are phasing out of existence, but new ones are not yet sufficiently established to define the culture. Validova and Pulaj (2016) describe how Russian and Albanian managers tend to gravitate towards authoritarian styles established in the Soviet Union, though the younger generation tries to adopt the transformational style.
With that said, Zubanov et al. (2017) note that Anglo-Saxon management patterns can be applied in Serbia, which also tends towards an authoritative management style, but required significant and careful alteration. Yam et al. (2017) discuss how transformational leadership is essential to promoting safety and reducing accidents in Malaysia, even if the countrys culture may not favour the use of the style for general business. Garg (2018) states that certain leadership styles and practices transcend international boundaries (p. 35), even if specific leadership decisions usually depend on the situation. However, these fundamental practices currently remain mostly unknown, as no style has been found universally applicable.
Previous research has established the fact that different countries will display considerable variation in their preferred management styles. Al-Alawi and Alkhodari (2016) discuss the situation in four different countries and find considerable dissimilarities that correspond to variations in Hofstedes cultural dimensions. Sharif et al. (2017) discuss how some countries may accept bribery but hold environmental concerns in high regard while others display the opposite practices.
Hartono (2016) describes cases in which culturally appropriate models that fulfil the emotional needs of customers achieved considerable success with both local and foreign clients. Hosseini and Allahyari (2016) note how cultural intelligence can significantly enhance customer satisfaction in the bank industry, establishing more efficient and lasting relationships. A model may emerge in the future that can determine the changes in ones management style that will be necessary to adapt to their new country, but so far, these findings are mostly only of interest to scholars.
Some issues, particularly ethical ones, remain static and unchanging regardless of the country, but different societies show varying concern for addressing them. D~upina (2016) discusses how managerial altruism, religious beliefs and education drive corporate social responsibility practices alongside regulatory and institutional frameworks as well as stakeholders. However, there are still difficulties, and Xiao and Overton (2018) highlight the fact that the perception of socially responsible practices differs considerably between the United States and China.
Nakagawa et al. (2018) claim that while a complete transfer of Japanese management styles to a companys foreign subsidiaries does not improve performance, a departure towards looser and freer relationships shows positive results, particularly in emerging markets. Lee, Park and Ban (2016) claim that some workers do not want to adjust to their new culture or its management preferences. Overall, it is essential to balance the managers beliefs with the adaptations required to suit the culture, a task that demands significant competence of an expatriate.
The section highlights cultural preferences for specific management styles and the issues that arise from their differences. Managers who come from a country that has a strong bias towards a specific style can insist on using it elsewhere. They may also be forced to use the style of their destination country, which is not necessarily the most effective. Some degree of adjustment is optimal, but it is challenging to achieve. As such, though most project managers attempt to resolve the conflict in some manner, their degrees of success vary.
Intercultural Risks
Companies will often decide to begin working on a project in another country and begin making assumptions about the local culture that may not necessarily be true. However, Binder and Varga (2015) discuss situations where such initiatives are less viable than expected due to sociocultural factors in the location where they would be implemented. According to Hyun and Yoan (2018), countries with similar cultures will still often display sufficient differences to complicate interactions without sufficient cultural adaptation.
Alami (2016) claims that interactions between different groups of workers are prone to misinterpretation due to a language barrier, and differences in local organisational culture can lead to mutual dissatisfaction. Amster and Böhm (2016) note that employees, as well as managers, should receive training in cross-cultural competencies. However, due to the ambiguous definition of culture, current training strategies are not transparent or well-defined, with no indication of what aspects of the culture workers should learn to improve their intercultural awareness and enhance the communication quality.
Another issue is in the interactions between stakeholders from different countries or cultures and the firm. According to Browning and Ramasesh (2015), such agents may have conflicting goals and visions, complicating the firms planning and forcing it to decide whose needs will be satisfied and whose will not. According to Alotaibi and Mafimisebi (2016), the communication of goals to various stakeholders and quick as well as the fair resolution of goal conflicts is among the foremost challenges of project management in the 21st century.
Varma et al. (2016) note that host culture members respond better to people whom they believe to share its values, and the resemblance must be more than a superficial cultural similarity. These concerns create the need for a careful selection of the potential expatriate as well as in-depth awareness of the local practices that would help one identify and engage stakeholders.
There is a wide variety of dangers associated with beginning a project in another country, many of which are related to the differences in their cultures. Dinu (2015) identifies vendor selection, incompatible standards, security gaps, legal and regulatory issues, single seller dependence, cultural differences, reduced employee motivation and a lack of centralised control as the most significant risks associated with outsourcing.
However, Baptista et al. (2016) claim that the challenges of global development can be addressed using new developments in project management. Epifanova and Hild (2015) highlight the issues that arise during interactions between expatriate managers and employees in Thailand, in particular with regards to the acceptable modes of talking. Notably, Alves (2017) describes the influence of cultural similarities on the relationship quality between companies from different countries. However, while the scenario of working in a similar country is ideal, research should focus on the worst-case scenario of significantly different cultures.
Inadequate stakeholder identification and analysis can lead to subpar project outcomes, including failures to accomplish some parts of the overall goal. Josserand, Kaine and Nikolova (2018) discuss examples such as Apples failure to control the pollution created by its suppliers, which were located in China. Jian et al. (2017) note that Eastern companies are prone to underreporting their successes in such initiatives due to the culture of modesty prevalent in a region, though there is some variation.
Taiwan, Na-Nan and Ngudgratoke (2017) discuss the various reasons why an employee sent overseas may underperform or fail, with adjustment and personality being the most significant determinants. Erogul and Rahman (2017) note that the managers partner is likely to experience stress as well, and the pressure contributes to the chance of project failure. Project managers should be prepared to address deep-seated issues such as dishonesty and lack of transparency, but they may encounter significant resistance in doing so.
Overall, the most significant risks arise when the manager encounters unknown situations. The initial period after arrival, when the project manager is adapting to the situation, can lead to significant harm if issues emerge initially. Some situations that a company may see as suboptimal from the outside may involve an ecosystem that is concealed from an external perspective. Additionally, project managers often have to balance conflicting demands from various stakeholders. Improvement initiatives often involve changing traditional practices, an approach that can encounter resistance from subordinates.
Conflict Management Styles
The cultural differences between different countries and cultures tend to manifest strongly in their conflict management styles. According to Gunkel, Schlaegel and Taras (2016), cultural values and emotional intelligence are the two primary determinants of a persons conflict-handling preferences. Abbas and Karage (2015) claim that Indians tend to adopt a dominating attitude but become more avoiding as they devote more time to their work while Nigerians are compromising, integrating and obliging but become less so as they work.
However, Ani (2017) discusses how the introduction of unique indigenous principles can enhance the resolution process. As Conti, Arcuri and Simone (2018) state, team leaders should develop excellent communication skills and gather information about conflicts as well as understand the groups emotions. Learning about local cultural practices and determining when intervention is necessary are critical parts of these competencies.
The situation is complicated by the lack of research into every cultures preferences with regards to conflict resolution. European and American approaches are usually seen as radically different from Arab ones, but Gardner and Barcella (2015) argue that there are many similarities between the two. Khalil (2017) notes that conflict resolution and cross-cultural training are vital competencies for team performance improvement, especially in modern virtual long-distance environments.
Kim and Jang (2017) state that there are many points of conflict between cultures that may be perceived as similar from the outside, ones that can result in disagreements and issues in the workplace. However, as Al Wekhian (2015a, 2015b) notes, first and second-generation immigrants tend to display significantly different values, beliefs and conflict resolution approaches, as the latter are more acculturated. Overall, the research field is highly complex, and managers currently have to rely on their capabilities.
Conflict is inevitable in large-scale corporate settings, as it is part of the decision-making process and, therefore, integral to the regular operation of the enterprise. However, Smits and Brownlow (2017) state that a lack of unity manifests in collaborative multicultural environments, and therefore, conflict is more likely to emerge and be unproductive. Shaw (2015) highlights how, depending on cultural dimensions, companies may prefer to force their decisions through or try to negotiate.
Wanyonyi, Kimani and Amuhaya (2015) note that the use of various conflict resolution styles can affect the organisational commitment of the employees, potentially lowering it. The analysis by Hussein, Al-Mamary and Hassan (2017) concludes that conflicts, including cultural ones, can be managed in a manner that creates positive outcomes. Overall, the narrative that the manager should create an environment where the organisation is more important than a specific culture emerges.
A manager needs to obtain overall cross-cultural competencies to become able to manage conflicts. Calvin, Beale and Moore (2017) claim that an approach wherein one values the various aspects of different cultures is the most effective at maximising benefits and minimising conflicts. Hassani, Ahmadi and Parhizgar (2015) identif
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