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Cultural Differences

Read "The Cultural Challenges of Managing Global Project Teams: a Study of Brazilian Multinationals." Comment on how cultural differences affect projects, illustrate with examples from your own experience.

The Cultural Challenges of Managing Global Project Teams: a Study of Brazilian Multinationals.

Authors:
Rodrigues, Ivete1
Sbragia, Roberto2
Source:
Journal of Technology Management & Innovation. 2013 Special Issue, Vol. 8, p38-52. 15p.
Document Type:
Article
Subject Terms:
*International business enterprise management
*Organizational behavior
*Globalization
*Project management
*Diversity in the workplace
International business enterprises -- Brazil
Cross-cultural orientation
Author-Supplied Keywords:
business internationalization
culture
global projects
inter-cultural competence
project management
NAICS/Industry Codes:
541611 Administrative Management and General Management Consulting Services
541614 Process, Physical Distribution, and Logistics Consulting Services
541619 Other management consulting services
Abstract:
The internationalization of Brazilian companies brings a new reality: the need for implementation of global projects that bring, in turn, the challenge of managing multicultural teams. Since this is a recent phenomenon with little theoretical development, this study sought to understand the relationships between cultural characteristics and management teams of global projects in Brazilian multinationals. To carry this discussion forward, we studied six cases of Brazilian multinational companies, with the aim of deepening the understanding of the management of global teams, involving the planning, deployment, development and management of human resources. Among the projects studied, it was found that there is very little concern with the specific issue of multiculturalism and little inter-cultural incentive to the development of team members, which ends up hindering the construction of a global mindset, important for the Brazilian multinational companies to performs uccessfully a broad. Faced with this situation, each of the managerial processes mentioned were presented with a number of actions to be undertaken by the project manager in three different dimensions: the project itself, the organization and the global environment. The work contributes, thus, to enable Brazilian multinational companies to manage their global teams in order to maximize the advantages of global teams, such as increased creativity and innovative capacity, but avoid the problems that multiculturalism can bring, ranging from conflicts between people to project failure. [ABSTRACT FROM AUTHOR]
Copyright of Journal of Technology Management & Innovation is the property of JOTMI Research Group and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Author Affiliations:
1FIA Business School, Rua José Alves da Cunha Lima, 172, São Paulo, Brasil
2School of Economics, Business and Accounting at the University of São Paulo, Av. Prof. Luciano Gualberto, 908, Cidade Universitária, São Paulo, Brasil
ISSN:
0718-2724
DOI:
10.4067/S0718-27242013000300004
Accession Number:
124588826

Unformatted Attachment Preview

Special Issue on Selected Papers from ALTEC 2011. Selected February 11, 2013 J. Technol. Manag. Innov. 2013,Volume 8, Special Issue ALTEC. The Cultural Challenges of Managing Global Project Teams: a Study of Brazilian Multinationals Ivete Rodrigues1, Roberto Sbragia2 Abstract The internationalization of Brazilian companies brings a new reality: the need for implementation of global projects that bring, in turn, the challenge of managing multicultural teams. Since this is a recent phenomenon with little theoretical development, this study sought to understand the relationships between cultural characteristics and management teams of global projects in Brazilian multinationals. To carry this discussion forward, we studied six cases of Brazilian multinational companies, with the aim of deepening the understanding of the management of global teams, involving the planning, deployment, development and management of human resources. Among the projects studied, it was found that there is very little concern with the specific issue of multiculturalism and little inter-cultural incentive to the development of team members, which ends up hindering the construction of a global mindset, important for the Brazilian multinational companies to perform successfully abroad. Faced with this situation, each of the managerial processes mentioned were presented with a number of actions to be undertaken by the project manager in three different dimensions: the project itself, the organization and the global environment. The work contributes, thus, to enable Brazilian multinational companies to manage their global teams in order to maximize the advantages of global teams, such as increased creativity and innovative capacity, but avoid the problems that multiculturalism can bring, ranging from conflicts between people to project failure. Keywords: project management; global projects; business internationalization; culture; inter-cultural competence. FIA Business School, Rua José Alves da Cunha Lima, 172, São Paulo, Brasil, CEP: 05362-070. Phone: (55-11) 3818-4035. E-mail: iveter@fia.com.br 2 School of Economics, Business and Accounting at the University of São Paulo, Av. Prof. Luciano Gualberto, 908, Cidade Universitária, São Paulo, Brasil. CEP: 05508-900. Phone: (55-11) 3818-4048. E-mail: rsbragia@usp.br 1 ISSN: 0718-2724. (http://www.jotmi.org) Journal of Technology Management & Innovation © Universidad Alberto Hurtado, Facultad de Economía y Negocios. 38 J. Technol. Manag. Innov. 2013,Volume 8, Special Issue ALTEC. Introduction By 1980’s, developing countries hardly recorded outflows of Foreign Direct Investment (FDI). This reality has changed since then, thanks to the significant increase in the importance of these countries in the global economy and the competitiveness that their firms reached. An example of that is the global crisis of 2008, which caused a drop in FDI outflows from developed countries, but not in the development. In Brazil it has been no different, in that 2006 marked the year that, for the first time, the flow of Brazilian investments abroad exceeded foreign investment in Brazil (MDIC, 2009). This systemic process of internationalization of Brazilian companies has led to a significant increase in projects developed across national borders.This new reality introduces an unprecedented range of management challenges, from the moment in which individuals from different organizations in different countries and with different value systems need to share authority, responsibility and decision making (Shore & Cross, 2005). The ability of multinational corporations to integrate resources, knowledge and assets globally dispersed, becomes, in this new context, one of its key competitive advantages. To that end, a major challenge for managers is to seek the cooperation and coordination between task forces and project teams through social networks and human interactions between geographically distant individuals (Atamer and Schweiger, 2003). If on the one hand the cooperation and coordination of project teams is a global challenge, on the other hand the cultural issue is also identified as the cause of failures in projects of this nature. Because each individual carries their culture (beliefs and values), the project manager needs to be aware of the impacts of cultural diversity on the performance of the project. However, despite such importance, research shows that the subject has been poorly studied by authors in the field of project management (Leybourne, 2007; Rodrigues et al., 2009; Henrie and Sousa-Poza, 2005). Even studies in the area of people management with an organizational focus, cultural aspects of people management in the international level appears as an emerging theme and lacking in publications, and the existing literature deals, in part, with issues related to expatriate professionals to foreign subsidiaries, not taking into account the specificity of managing global projects (Barreto et al., 2011). This gap in the literature presents challenges for researchers who need to incorporate theories and concepts developed in other disciplines in order to build knowledge and methods applicable to project management. Encouraged by the relevance of the subject, both from the point of view of the necessity of Brazilian multinational companies to undertake global projects, as well as the lack of literature on the management of multicultural teams, the present authors conducted a study to identify, among the cultural characteristics of the countries, which would be those that would impact over the performance of such teams (Rodrigues and Sbragia, 2011). Once identified the existence of such impacts, this earlier research pointed to the need for qualitative research that sought to understand how such impacts are effectively managed by leaders of global projects. Having set this panorama, the aim of this study is to explain, through case studies, as is the process of managing global teams in Brazilian multinationals. From these results, we propose a framework that takes into consideration the need for management of cultural aspects that impact the performance of global teams. Conceptual Background National cultures and Intercultural Competence The impact of national cultures in the management of organizations has been a constant target of scientific studies. Hofstede (2003), one of the great scholars of the subject, argues that the globalization of business does not necessarily lead to the globalization of culture and, therefore, generic managerial solutions may not be useful in specific cultural contexts. In other words, management solutions, to be successful, must take into account cultural differences that govern human societies. According to this author, culture works as a mental programming constituted by patterns of thought, feeling and potential actions that each individual carries. It is a result of continuous learning and predetermines partially the behavior of human beings. Despite the enormous diversity of minds, there is a structure that serves as the starting point for mutual understanding and which is composed by dimensions of cultural differences. Besides Hofstede (1981), several authors, including Hall (1990), Trompenaars (1994), Schein (2001), Kabasal and Bodur (2004) and House (2002) pored over the study of the different dimensions of national cultures. Among them it is possible to say that there is more complementarity than contradictions. For this study, we adopted the concept and dimensions proposed by Hofstede (2003) that allow comparisons between the cultures of various countries. The cultural dimensions proposed by Hofstede (2003) are called: a) Power distance (PDI), b) individualism versus collectivism (IDV) c) masculinity versus femininity (IMAS), d) uncertainty avoidance (UAI). This set forms a four-dimensional model of the differences between national cultures. Each country, according to this model has different results for each dimension. There is a fifth dimension - the longterm direction and guidance in the short term - that was not part of the previous model, which was built later by Hofstede in order to capture value from the perspective of Eastern society. This last dimension, it contains a lower amount ISSN: 0718-2724. (http://www.jotmi.org) Journal of Technology Management & Innovation © Universidad Alberto Hurtado, Facultad de Economía y Negocios. 39 J. Technol. Manag. Innov. 2013,Volume 8, Special Issue ALTEC. of data available from different countries was not used in this study (for a greater understanding of cultural dimensions, see Hofstede, 2003 and Rodrigues & Sbragia, 2011). The Brazilian national culture is understood as high hierarchical distance. Both upper and subordinates believe that ignoring hierarchical levels, although it is best to carry out the work, it is a sign of insubordination. Brazil may be a more collectivist than individualist country, albeit not as sharp as it witnesses in relation to the hierarchical distance and control uncertainty. In relation to femininity and masculinity, Brazil’s position is dubious, but with a tendency towards femininity. In this case, the professionals have lower results orientation. Prevail care for others, equality, well-being and quality of life. Finally, Brazil is considered a country with high control of uncertainty, in which people feel uncomfortable with ambiguity. On the desktop no greater career stability and people feel an emotional need for rules, even though they are ineffective. Brazilian authors corroborate, in large part, the theoretical findings of Hofstede (2011), particularly with regard to the hierarchical distance and control uncertainty (Alcadipani and Crubelatte, 2003; Almeida, 2007; Freitas, 1997). Cultural distance between countries The concept of cultural distance is from the term psychic distance, coined by Johanson and Vahlne (2003). For these authors, the psychic distance is the sum of factors such as the difference between language, education, legal and business practices, culture etc., That interfere with the flow of information between markets. Companies tend to do international business, initially with smaller markets psychic distance, only to enter other markets. Based on extensive research by Hofstede in 50 branches of IBM, whose results were commented in the previous section, Kogut and Singh (1988, 2008) created an index of cultural distance, defined as the degree to which a firm is uncertain the characteristics of an international market. The contribution of the authors was considered innovative in that it managed to translate the cultural features a numeric index that allows comparison of the cultural distance between countries. This index is based on the deviation of each of Hofstede’s dimensions in relation to the classification of the target country. These deviations are then corrected for differences in the variance of each dimension, also calculating the arithmetic mean. Importantly, Kogut and Singh (1988) deal only with cultural distance. The concept of psychic distance is larger, since it includes other dimensions such as political, geographical and economic (Silva and Rocha Figueiredo, 2007; Cuervo-Cazurra 2007; Ghemawat , 2001). The projects in this study had their degree of cultural distance measured according to the proposal of Kogut and Singh (1988). Global Projects Projects in their generic definition are temporary endeavors undertaken to create products, services or unique results. Their features are temporality, which means that every project has a beginning and a set end, the uniqueness of its products, services, or results and progressive development, which means developing in steps and continuing by increments (PMI, 2008). Domestic and global projects are common in relation to the temporality of the effort, the uniqueness and progressiveness, but differ in the location: the first occurs globally, while traditional projects occur locally. Global projects may be characterized also as structures, temporary organizations designed to achieve a common goal and whose results come from horizontal cooperation within or between organizations (Chevrier, 2003). They involve multiple locations, entities, organizations and business units (Lientz and Rea, 2003). Likewise, the location of the stakeholders can be a way to differentiate between domestic and global projects. In the latter, unlike the former, the stakeholders are spread across different countries. It is the systematic analysis of stakeholders that will reveal whether a project will require treatment as international (Cleland and Gareis , 2006). In the idea of Govindarajan and Gupta (2011), global teams are those formed by individuals of different nationalities, working in different cultures and organizations, who gather, in a given period of time, to coordinate some aspect of multinational operation on a global basis. Based on these different definitions, global projects in this study were defined as those that carry the characteristics of a domestic project (temporality, singularity and progressivity), but have, in their teams, individuals from different countries, where teams may be co-located or distributed. Managing Global Teams In the literature on the human resource management in the organizational context there is a relative consensus on the processes to be developed. From the tactical-operational standpoint, the manager’s role is focused on functional issues such as recruitment, selection, development, evaluation and compensation, thus exploiting the impact of people management practices on individuals (Barreto, 2011). The complexity of operating in different countries and of employing workers of different national categories is what differentiates traditional HRM from international management. In international processes encompass concerns such as managing expatriate employees and implementation, comparison and adjustment of management practices of people in different countries where the subsidiaries are (Homen &Tolfo, 2008). The best way to manage the differences between the countries is to adapt organizational policies for the vari- ISSN: 0718-2724. (http://www.jotmi.org) Journal of Technology Management & Innovation © Universidad Alberto Hurtado, Facultad de Economía y Negocios. 40 J. Technol. Manag. Innov. 2013,Volume 8, Special Issue ALTEC. ous national contexts, as some policies may be effective in one country but not in others. This reasoning also applies to people management policies, which must be flexible, able to deal with differences, which indicates a great need for observation of demographic and cultural differences (Nishii & Özbilgin, 2007). Regarding the management of human resources within specific projects, according to the Project Management Body of Knowledge (PMI, 2008), it is the manager´s job to put the following processes into practice: a) human resource planning: identify, measure and relate the needs of skilled manpower for the project during the time of execution of the project, b) hiring or mobilization of the project team: select and allocate the workforce required for execution of the project, c) development of Project Team: conduct training to improve skills and interaction of team members in order to run the same project activities with productivity, quality, safety and timely contract, e) Manage the project team: control productivity, quality of work, safety and achievement within the contract terms. Also involves monitoring the behavior of the team, providing feedback, solving problems and coordinating changes that aim to better project performance. With regard to project oriented organizations, there is another important step in the model which is not predicted in the PMBOK (PMI, 2008) - the demobilization of staff. It is, according Huemann et al. (2008), the process rarely discussed in the literature on project management or on human resource management. It is at this stage that the organization needs to define the next steps regarding the professionals. It is necessary to decide whether a particular professional will be immediately allocated to a new project, a project that still start and go where his skills will be best used, or if he will be dismissed because there are no projects he can be allocated to. There are organizations that use the period in which the employee is not involved in projects for training and development or to assist in the tasks of the project management office. Anyway, it is a moment that causes anxiety for professionals, due to the uncertainties involved. The appointment of persons to global projects has strategic importance and can influence the ability of the organization to retain their talent. Organizations must consciously allocate people based on previous assessments that take into account not only the availability but also the specific development needs, knowledge and international experience of the professionals involved.The development team usually involves training and feedback throughout the project, but few managers are able to deal with other needs of professionals, for example, support for career management. The timing of projects is a critical issue for the management of both global and domestic teams. Being temporary organizations, each time a new project is started, the configuration of the or- ganization’s human resources must adapt. This lack of continuity makes the planning of human resources in global projects complex, because it involves not only the expatriation but also the repatriation of professionals, often in a short period of time. Regarding the performance of the teams, there are no results that demonstrate that the performance can be negatively impacted in environments of international projects when compared to domestic projects, especially in the beginning. Performance is improved and can be even higher when the members of these multicultural teams have become accustomed to collaborate and develop strategies to overcome cultural and linguistic barriers. Therefore, the manager has a role to play in developing teams, so that this point of inflection in performance be obtained as soon as possible (Human et al, 2007; Comu et al, 2011). Nurick and Thamhain (2006) offer a number of recommendations for the process of developing global teams throughout the lifecycle of the project. At the beginning of the project, the manager should seek the involvement of staff in order to create a favorable environment for project performance, as people feel more committed to the outcome to be achieved. The appropriate definition of the interfaces, responsibilities with the duties, authority relationships, communication channels and work protocols must be developed and information, shared. In the allocation and organization of teams is important that leadership is carefully defined early in the project, as the credibility of the leader with the team, with senior management and stakeholders is crucial for the management and integration of different tasks that are required to achieve the project. The construction of an image of high-performance project is crucial and requires organizational support, project visibility and reward system for team members to attract qualified professionals. Throughout the project it is important to carry out team development sessions, such as brainstorming, exchange of experience, creating a relaxed and informal atmosphere to discuss the needs of the project. Cultural Impacts In practice, the cultural dimensions have significant implications for managing global teams. By analyzing the cultural differences management styles, preferences and motivations of team members can be identified. Hofstede (1983) argues that the dimensions of individualism and hierarchical distance are very important to understand how organizations operate in different parts of the world, especially with regard t ...
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Running Head: EFFECT OF CULTURAL DIFFERENCES ON PROJECTS

Effect of Cultural Differences on Projects

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EFFECT OF CULTURAL DIFFERENCES ON PROJECTS

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Effect of Cultural Differences on Projects
Cultural difference is a key factor that project managers must look into to be successful.
The reason behind this is that cultural differences interact with individual factors, organizational
issues and groups to establish the ...

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