International cultures and project work Difficulties and possibilities

The Stages of Internationalization Stage 4: Multinational Operations The firm becomes a full-fledged multinational corp. (MNC) with assembly and production facilities in several countries and regions of the world. Some decentralization of decision making is common, but many personnel decisions are still made at corp. headquarters. Stage 2: Export Operations The firm expands its market to include other countries, but retains production facilities within domestic borders. Stage 1: Domestic Operations The firm’s market is exclusively domestic. Stage 5: Transnational Operations Firms that reach this stage are often called transna-tional because they owe little allegiance to their country of origin. Operations are highly decentralized, with each busi-ness unit free to make personnel decisions with very loose control from corp. headquarters. This illustration shows the five stages that firms progress through as they internationalize their operations. The higher the stage, the more HR practices must be adapted to diverse cultural, economic, political, and legal environments. Stage 3: Subsidiaries or Joint Ventures The firm physically moves some of its operations out of the home country.

What is a Project? Attributes Temporary Unique product, service, or result Progressive Elaboration Project Management Book of Knowledge (PMBOK, 2000) …a project is about implementing change!

What is Culture? Definition – “A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Rogers, 1995)

Levels of Culture Cultural differences can exist in any setting involving varying groups: Inter-organization Intra-organization Organizations include any grouping of people (corporations, societies, etc.) Inter-organization Differing international cultures Differing corporate cultures Intra-organization Internal sub-cultures Sales/Marketing vs. Operations/Production Internal ethnic cultures

7 Dimensions of Difference Universalism vs. Particularism – (Rules vs. Relationships) Individualism vs. Communitarianism (Self interest vs. Group interest) Neutral vs. Effective (Reason vs. Emotion) Specific vs. Diffuse (Compartmentalization versus Depth in relationships) Achievement vs. Ascription (Doing vs. Being) Synchronous vs. Sequential (Time is circular vs. Time is a race) Inner Directed vs. Outer Directed (Control Nature vs. Align with Nature) Provided as an example of attributes to be studied. Trompenaars, F., & Hampden-Turner, C. (1998). Riding the Waves of Culture: Understanding Diversity in Global Business. New York: McGraw-Hill.

Recognizing Differences May be: Explicit (easily observed) Implicit (hidden, requiring more effort) Both are potential barriers The key is to quickly and efficiently identify both types

How can we identify Cultural Differences? Interviews Questionnaires Direct Observation These require time and should, therefore, be implemented early in the project life cycle

Why is cross-cultural work so difficult? Comfort Zones Complacency Fear i.e. culturally dependent aspects!

Communication leads to Conflict Resolution Engage all parties Look for hidden dilemmas Communication is the first step toward reconciliation

You cannot “over-communicate”! Be consistent and accurate Rumors and/or lack of information can erode support Don’t miss opportunities to praise positive results and/or milestones achieved Bad news Gets worse with age Reveal it as early as possible to allow for recovery Dilute it by providing information on recovery plans Good PR Plan aligns the organization with the effort. Provides early warning of competing / conflicting efforts by uncovering inconsistencies.

How do we change the organizational culture to conform with our project? “WE” don’t! Only time and the shared experience of the members will change the culture We must first seek to understand the cultural differences …then, establish an environment for change

So what do we do as Project Managers? Realize that we are cultural “change agents” Learn how to identify cultural differences that may impact our projects Learn how to resolve these cultural differences

How are cultural differences resolved? “Reconciliation” Maximize the strengths of each position Minimize the weaknesses of each position The resulting position is synergistic Cultural reconciliation greatly simplifies project implementation (fewer people fighting the effort!) This is NOT a compromise, which can erode BOTH positions

Forces Shaping Individual Culture Personal Culture Values World-views Beliefs Behaviours Urbanization Migration Minority Experience Cross-cultural Adjustments Profession Gender Language Education Industrialization Social background Ethnic background Religion Nationalism Colonisation

Dangers! Stereotypes Prejudice Ethno-centric perspectives

Managing an offshore project Ethnocentric Approach Top management and other key positions are filled by people from the home country Polycentric Approach International subsidiaries are managed and staffed by personnel from the host country Geocentric Approach Nationality is deliberately downplayed and the firm actively searches on a worldwide or regional basis for the best people to fill key positions This illustration presents the three different approaches to managing an international subsidiary.

Discussion questions for April 13th Each group shall make short summaries of the literature and be prepared to present this summary in class (about 4 pages) List the main messages, the main advantages and the main problems of the three IJPM articles in the readings. The project work form, to which national cultures is it best suited, and to which is it problematic? GROUPWORK: Put together a staffing policy for a project-oriented firm that intends to send out project managers worldwide as expatriates (for example, in the construction industry). The policy shall concern both the necessary competences for the PMs as well as the organizational support for the PMs. It shall be formulated in 10 bullet points. All summaries and answers/reflections to questions shall be handed over to Johann in paper format at the beginning of the seminar. Use the standardised cover form!!!