Managing Cultural Differences In International Project Management: A Case Study Of Pastori Ltd

Background

The context of an international project is much different from many contexts for with respect to a usual standard project. An international project is one that goes beyond the scope of national boundaries in terms of both the purpose and stakeholder nationality. Purpose, scope, key stakeholder and risk intensity are much different for an international project than a usual project (Paulmakesh and April 2021). Some key characteristics involved in such a project are significant complexity and diversity, high dynamics, limited resources and logistics, high-risk intensity and so on. Due to the cross-boundary project communication among the stakeholders and project management, cultural differences play a crucial role in an international project (Albert, Spang and Balve 2018). The current is presenting a detailed analysis of such a project management context of Pastori Ltd, Australia, where cross-boundary differences are likely to play a significant role. Following a detailed background development regarding the theoretical contexts and problem statement, the report has covered an analysis of the five key cultural factors, their impacts and likely mitigation strategies.

Pastori Ltd is a software company based in Australia, and it is responsible for developing various specialised products with high complexity to integrate the supply chain management for its clients. The operations are managed across the world with teams in Hyderabad (India), Milan (Italy), and Guangzhou (China) with Project Management Head Office situated in Brisbane (Australia). Further, the company is likely to enhance its operations across a variety of international offshore locations. In this context, the company is likely to face cultural barriers in managing efficient communication among the project teams. This is why the company needs a clear identification of the key cultural aspects that they are required to consider in such projects and the respective mitigations strategies.

The key context to be considered in the current analysis is the organizational culture. It can be considered as an organizational system of shared values and beliefs that guides the attitude and behaviour of the organizational members (Paais and Pattiruhu 2020). This can involve various internal artefacts (like logos, acronyms, specific terms or codes, organizational structure), espoused values and underlying assumptions that may or may not be formal. However, across boundaries, the overall culture of people change significantly which also affects the behaviour of the organizational members and shared values changing the overall organizational culture (Lubis and Hanum 2020). However, for international operations and projects, this would pose a severe threat due to the decentralisation of the overall organizational culture geographically.

Based on the context as discussed above, there are some cultural dimension models proposed by some experts to help organizations strategize their responses.

One such model is the Hofstede model, which involves the following dimensions:

• Power-Distance (high vs. low) – it refers to the complexity of hierarchy and gaps of authority across hierarchical levels (Beugelsdijk and Welzel 2018)
• Individualism vs. Collectivism – it refers to the context of whether a culture prefers individual accomplishments or interpersonal harmony and collective achievements
• Masculinity vs. Femininity – masculinity refers to a culture where the gender roles do not overlap much with high competitive (patriarchal) behaviour; femininity refers to a culture where gender roles are well overlapped and interpersonal relationships and work-life balance are of much importance
• Uncertainty Avoidance or UA (high vs. low) – this refers to the cultural trait of avoiding any uncertainty and consequential anxiety in their actions
• Orientation (long term vs. short term) – long term orientation refers to culture with modesty, compromising nature and more emphasis on obligations and virtues; whereas short term orientation refers to culture with strong convictions, less compromising nature and more emphasis on individual values and rights (Huang and Crotts 2019)

Figure 1: Hofstede Cultural Dimensions

(Source: Created by Author)

The model of Trompenars refers to eight dimensions, each referring to two opposing cultural contexts:

• Universalism vs. Pluralism – obedience to rules & regulations vs. building interpersonal relationships (Schuster 2021)
• Individualism vs. communitarianism – individual gains vs. group accomplishments
• Affectivity vs. Neutrality – displaying emotions vs. a less emotionally impulsive attitude
• Specific vs. Diffuse – separate public and private space in life vs. an interwoven public-private space in life
• Achieved vs. Ascribed – achievement-based social status vs. identity-based social status
• Sequential time vs. synchronous time – doing things one at a time vs. doing multiple things simultaneously with maintaining a natural rhythm
• Inner-directed vs. Outer-directed – environment controlling individual vs. individual controlling environment
• Past, Present & Future-oriented – which part is more crucial to the cultural values (historical events and ancestral values vs. daily-day demands vs. future prospects)

Figure 2: Trompenaars Cultural Dimensions

(Source: Created by Author)

As can be observed from the theoretical contexts of the cultural differences, both models have some common contexts from which cultural diversity can affect an international operation or project (Pirlog 2021). Therefore, both establish a context for the cultural challenges for the project management operations of Pastori Ltd. The company’s current operations as well as the future strategies, are based on cross-border operations where all these dimensions would cause severe impact on the project planning. Therefore, the key areas of impact due to the intercultural context of Pastori can affect the following project planning contexts:

1. Work Breakdown & Organization plan – a critical factor in the project execution planning (PEP) is the work breakdown where the human work management is to be considered. Now, in this context, the critical challenge would be the individuality context of a culture. The project structure or organization would get restricted to more individual tasks than group settings if a culture is based on individualism (Sent and Kroese 2022). Further, for a collectivistic culture, a group setting of work breakdown would be more important. Also, the power distance would further define the hierarchy of the project organization.
2. Resource and schedule management – in the case of resource management time management is a crucial factor and it is often required that parallel or simultaneous activities across borders may require an individual to synchronously manage the work. However, the project plan may get restricted for the resource management in this context if a culture prefers sequential time more than synchronous time.
3. Project control & quality assurance – In the context of controlling a project and maintaining quality assurance, it is crucial for a project to set particular plans during the PEP. This may be an adaptive setting like an agile methodology or a fixed rule set up like the traditional or waterfall methodology for software development projects (Covas and Pirlog 2019). However, a culture with a high UA and universal attitude would prefer a more traditional methodology. In contrast, a pluralist culture with low UA would prefer a change control based adaptive Agile methodology or a hybrid Agile-Waterfall methodology.
4. Information & Knowledge management – information & knowledge management are crucial for the PEP process of any project, especially when international operations play a major role. However, the gap between the power and authority levels would define the knowledge and information exchange measures (Oyemomi et al. 2019). Furthermore, for a past-oriented culture-historical knowledge would play a major role in decision making. Therefore, these contexts are crucial to be considered.
5. Contracting – the contract may or may not be considered as a fixed set up of deliverables to be provided during the project execution depending on the cultural aspects. If in a cultural environment, universalism is dominant, then these set standards and deliverables would be the fixed control parameters of the project. On the other hand, a pluralist cultural setting would require a flexible contract with in-between line information and scope for future changes.

Based on the five key cultural aspects detected in the project, the key impact concerns and mitigation strategies identified a successful international project planning for Pastori Ltd are as follow:

Table 1: Cultural impacts & mitigations for international project planning

(Source: Created by Author)

Conclusion

Therefore, based on the detailed consideration of the cultural dimensions of both the Hofstede and Trompenars model, it is understood how crucial it is for Pastori Ltd to control their PEP process. The key impacts and the respective mitigations strategies provided based on the analytical discussions above needs to be considered as project management guidelines while developing plans for each of the projects. Moreover, these aspects are equally important for the organization’s existing international and future offshore sites.

References

Albert, M., Spang, K. and Balve, P., 2018. Project success assessment–business and individual perspectives. International Project Management Association Research Conference 2017, UTS ePRESS, Sydney: NSW.

Beugelsdijk, S. and Welzel, C., 2018. Dimensions and dynamics of national culture: Synthesizing Hofstede with Inglehart. Journal of cross-cultural psychology, 49(10), pp.1469-1505.

Covas, L. and Pirlog, A., 2019. The importance of national culture dimensions on intercultural competence development of future managers. CrossCultural Management Journal, (2), pp.111-119.

Daniel, C.O., 2019. Influence of Organizational Culture On Project Success In Nigeria. A Case Of Nestle Nigeria PLC. International Journal of Innovative Science, Engineering & Technology, 6(5).

Huang, S.S. and Crotts, J., 2019. Relationships between Hofstede’s cultural dimensions and tourist satisfaction: A cross-country cross-sample examination. Tourism management, 72, pp.232-241.

Lubis, F.R. and Hanum, F., 2020, December. Organizational culture. In 2nd Yogyakarta international conference on educational management/administration and pedagogy (YICEMAP 2019). Atlantis Press (pp. 88-91).

Oyemomi, O., Liu, S., Neaga, I., Chen, H. and Nakpodia, F., 2019. How cultural impact on knowledge sharing contributes to organizational performance: Using the fsQCA approach. Journal of Business Research, 94, pp.313-319.

Paais, M. and Pattiruhu, J.R., 2020. Effect of motivation, leadership, and organizational culture on satisfaction and employee performance. The Journal of Asian Finance, Economics, and Business, 7(8), pp.577-588.

Paulmakesh, D.A. and April, Y.M.Y., 2021. Implementation of Project Management for Strategy Realisation. Journal of University shanghai for Science and Technology, 23(10), pp.887-892.

Pirlog, A., 2021. National Cultural Profile in the Republic of Moldova According Hofstede and Trompenaars-Hampden-Turner Models. Revista de Management Comparat International, 22(4), pp.450-457.

Schuster, N., 2021. Cultural Influence on Mobile App Design-A Theoretical Review of Culture Theories and Their Influence on App Design in China. J Comput Eng Inf Technol 10, 6, p.2.

Sent, E.M. and Kroese, A.L., 2022. Commemorating Geert Hofstede, a pioneer in the study of culture and institutions. Journal of Institutional Economics, 18(1), pp.15-27.

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