National culture's effects on project management in UAE organizations

¶ … national culture on project control: emirates project manager in *xyz company case study

This work addresses effects of national and international culture upon business, using a corporate organization in the UAE as an example. Theoretical aspects of culture are discussed and a detailed research program is outlined, with data from a Pilot Study being presented, as a basis to plan and delineate the best approach to the overall research protocols.

Intent

The goals of this manuscript are to evaluate the XYZ organization in the UAE in terms of the effects of national and international culture upon a business.

Approach/Methodology/Design

The various aspects of a given national culture are used to develop theoretical hypotheses concerning the manner in which culture influences corporate actions.

Value/Originality

This work offers a contribution to the field through data-provision and analysis focusing on common presumptions that corporate actions are modified according to the 'home country' cultural background. Particular aspects of national culture may impact upon both appreciation and adoption of cultural diversity, while other aspects of the 'home country' culture appear to have a lesser impact. Therefore, corporate initiatives that seek to develop upon and enhance innate cultural traits may bring about a positive diversification enhancing corporate and programmatic success.

Introduction

The culture of the individuals in a corporation has a significant impact on business activities, and this has become increasingly important, even critical, as companies either hire employees from different cultures or begin to do business outside their home culture. The cultural milieu and the adaptation of individual members of a corporation to cultural diversity become far more significant when one considers the global marketplace; organizations that can handle cultural variances and diversity of style, thinking, and business approach have a strong advantage in competition. Conversely, inability to address cultural differences either within the company or in terms of the overall market can not only decrease productivity but also limit global success. Thus for the XYZ Company manager in the UAE, it is important to manage and understand internal and external cultural differences.

Every corporate culture handles issues such as accountability, authority, bureaucracy, and creativity differently. Management of human resources in organizations requires an understanding of both external and internal environments. Whereas ownership (stockholders for example) is a significant factor of the external environment, organizational culture is the basis of the internal environment. When a foreign-based multinational company (MNC) establishes a UAE presence, this links the MNC's home base culture to the UAE culture. Because companies reflect cultural attitudes (Hofstede et al., 1991), this means managements must learn how to interact with different cultures, as it is impossible for any management to be free of cultural-bias.

Using a hypothetical XYZ company based in the UAE, this study, based on qualitative interviews and literature review, focuses on the impact of culture upon performance management.

Research problem: Cultural Differences and Project Success

The precise definition of 'culture' varies. That of Hofstede et al. (1991) is 'the collective programming of the mind which distinguishes one group from another.' Hofstede and colleagues divide culture into four dimensions: individualism/collectivism, masculinity/femininity, power distance, and uncertainty avoidance, and use these as the foundation by which the particular cultural organization and management can be evaluated. In contrast, for Holden (2002) culture is seen as the diverse types of 'common knowledge'. In this case culture becomes a resource for organizational knowledge, and extension to a cross-cultural milieu is simply knowledge management. Other aspects of culture are more broadly defined, such that culture is seen as something which can change over time, shapes behavior, and is traditional, symbolic, learned, and shared (Barthorpe et al. 2000, Loosemore 1999).

Trompenaars (1993) studied the nature of cultural differences and assigned seven dimensions: environmental awareness, time-awareness, achievement-aspiration, neutral-emotional, diffuse-specific, universalism-particularism, and collectivism-individualism. The literature for project management has studied successful projects extensively. Project success is traditionally measured in terms of quality, cost, and time investment, although these criteria may not be wholly sufficient (Yu et al.2005, Atkinson 1999). Other criteria include the customer's benefit(s) and client satisfaction (Wang and Huang 2006). As stated by Hyvari (2006), to date project management literature have not presented a consensus definition for project success.

Studies of business culture have been increasing. Whether an organization works nationally or internationally, cultural differences can have a significant effect on daily business. In their study of a British/Russian joint venture company, Murray-Webster and Simon (2004) explored how cultural differences impacted project success. Their research discovered that project success was impacted by cultural differences between the British and Russian partners. In the study by Tukiainen et al. (2003), a global engineering project was the subject of a study investigating outcomes and process as impacted by cultural dynamics. These researchers proposed that a catalyst was required in order for perceived cultural differences to emerge. In contrast, Nummelin (2005) reported that cultural differences had no impact on project success.

Research Questions

The goals of this investigation are to address corporate and management practices in the United Arab Emirates (UAE) and to consider how both Islamic and National culture, as well as environment, affects practices of management. Management practices with respect to culture in Arab Middle Eastern countries are considered initially, followed by presentation of the research approach, results, discussion, and conclusions. The key question in this study is: how both Islamic and National culture, as well as environment, affects practices of management?

Literature review

Both culture and environment are fundamental topics in management studies. Comparative management systems for Western and Eastern cultures result in their differentiation. Middle Eastern society is strongly influenced by its culture, with specific cultural emphasis on interactions, authority, and control that are derived from religious, social, and historical traditions that are unique. In the UAE, the civic and religious Islamic traditions impact the entrepreneurial culture, based upon deeply seated beliefs, attitude, and enculturated behavior. Thus, management requires a deep understanding of a culture's inner motivations and their outer expression.

Management practices -- culture relationship

The culture-management relationship has been studied empirically. In the case of team performance, success is often a result of congruency between National Cultural values and management practices (Horii et al., 2005). Hofstede (1991) proposed 'preferred coordination mechanisms' through which the use of nationally preferred management practices by each individual culture resulted in better performance. Analysis by Neman and Nollem (1996) of the 'five national culture dimensions' of Hofstede et al. (1991), and their correlation with management practices, suggested that when management practices are congruent with culture, they are most likely to have a positive impact on business performance.

Methods

In order to provide productive descriptions and deeper understanding of cultural differences, this research will utilize a qualitative approach, with semi-structured interviews. The participants will be chosen from experienced managers, including Human Resources, group managers, directors, and project managers. All interviews will be conducted within the UAE. Because the interviewees to be chosen will be upper level management (with approximately 20 years experience each), they are expected to understand corporate strategies, culture, and organizational structure. Ten companies will be selected from which to acquire interviewees, again providing an established business experience of approximately 20 years in the UAE. One hour interviews are planned, with interviews being conducted over a three-month period. In each of the interviews, not only will the participants be asked open-ended questions upon which they may expand and expound, but also the participants will provide further details for the study through probing questions. For this study, the research instruments are both audio recordings and interviews, with the audio-recordings being transcribed. Content analysis will be performed on the data collected from the interviews, with coding and analysis using the foundational guidelines from Strauss and Corbin (1998) and from Gillham (2000). Organization of the substantive content of the interview is 'content analysis' according to Gillham (2000). This approach consists of a set of categories established by the researchers, with attention focused on how many answers from the interviewees are instances that belong to each category (Silverman, 2001). A software program and computer assistance will be used to finalize the content analysis, selecting a program that has strong data searching capabilities as well as data codification. Ultimately, as the data are analyzed, emerging themes will be identified, as discussed below.

Anticipated Study Findings

Participants being interviewed will be queried concerning the impact of cultural variance on management practices, cultural impact on outcomes of projects, and cultural impact on inter-personal relationships that impact project outcomes. Baseline data will be derived from the interviewee's current corporate position, educational background, and age, tabulating categories as they emerge. Tabulated data will also include sub-categories where necessary, and include quantitative data with respect to how often the various project managers being interviewed address a given issue related to project management and cultural diversity. One result of the study is expected to be a response from most of the management interviewees recognizing that cultural issues have a more than considerable impact upon business activities.

Different aspects of the impact of cultural differences upon management practices are expected to be derived from the participants in this study. It is expected that the interviews will result in emphasizing certain management practices: negotiation, human resources management, data and knowledge management, safety management, time management, and communications management. In a study by Kivrak et al. (2008), the general findings of a study such as this one have been presented. However, the specific work of this study intends to focus more specifically on the manner in which project success is impacted by cultural differences. Six themes are expected to emerge from the data analysis: (a) project location, (b) experience in international projects, (c) bench-marking and learning, (d) cultural awareness, (e) company strategy, and (f) effective management system (Kivrak et al., 2008).

Project location

In terms of project success, the ultimate location of the business project is important. In real estate the saying is 'location, location, location', and this applies as well to corporations. It is expected that managers being interviewed will state that the legal and cultural aspects of the UAE have a significant impact on the ongoing projects of XYZ Company. The study will also question managers as to their perspective on regional cultural differences within a country, and how these impact project success. There are some suggestions that even within the Arab Middle East, local and regional differences in culture may have a strong impact on business activities. Being aware of these variances can make a difference in success and/or failure for a project.

Experience in international projects

For international projects, familiarity with a different culture as well as international project experience is expected to become important themes of the study. It is expected that managers will acknowledge international market experience as a positive factor in overcoming cultural differences. Buckley et al. (2002) reported that in those cases where managers had international experience, they functioned more effectively given that they were better able to understand, or at least recognize, cultural differences and their impact upon projects and project performance. Thus, it is expected that the managers being interviewed in this Pilot Study will address the manner in which international experience is a productive avenue towards improvement of company performance either in an international setting or when employees from more than one country are involved in a given project.

Bench-marking and learning 'Bench-marking', comparison of a given business attribute/product to the best available, is a highly useful approach and should be a significant theme of the research: learning from others enhances success. It is expected that managers being interviewed will emphasize knowledge sharing and the necessity for, and importance of, bench-marking Considerable data from a variety of businesses has shown that effective knowledge sharing, as well as bench-marking, can lead to growth and excellence in terms of efficiency and productivity. For the XYZ business from the UAE, there are significant advantages and opportunities to be successful via learning to interact with individuals having different areas of expertise and different cultural backgrounds. In previous work by Michailova and Hutchings (2006), knowledge sharing in organizations was shown to be heavily impacted by cultural differences.

Cultural awareness

The success and business/project outcomes of the XYZ company projects can be significantly impacted by cultural variances. It is expected that this study will demonstrate a direct relationship between understanding of cultural differences and project success. It is generally expected that a successful manager, at the level of company expertise being interviewed in both the Pilot Study and the main project, should be aware that acceptance, appreciation, respect, and understanding of various cultures is an important aspect for the successful outcome of the XYZ corporation projects. A previous study by Buckley et al. (2002) found that when there is acceptance of cultural variances and different cultural responses to issues, business dealings between individuals (and corporations) from different countries were generally more fruitful as well as ultimately leading to project success.

Company strategy

A culturally diverse environment is expected to alter management approaches. There are three approaches for a company in terms of management: synergistic, parochial, and ethnocentric (Adler (1991). Knowledgeable managers are more likely to point out the effectiveness of a synergistic approach. The synergistic approach essentially balances inter-cultural differences - 'more than one way can be right' - in contrast to the parochial approach, which essentially chooses a single-cultural viewpoint, or 'do it our way'. In his paper, Majidi (2007) suggested that cultural differences should be directly and explicitly addressed by a company's management plans and strategy.

Effective management system

Project success depends on the management system. One aspect of the study is to determine how managers view their role in addressing cultural differences, as well as how they perceive such cultural differences as potentially impacting project success. A management 'style' that is capable of working with individuals from diverse cultural backgrounds is logically important for success. The most important impact upon cultural interactions in a corporation is likely to come from top management, once the relevance of culture is realized to have significance. Reduced productivity and loss of efficiency are only some of the negative consequences of ignoring cultural differences.

Pilot Study

For the pilot study, we chose one Human Resource Manager and one project manager from ABC Company. Both interviews were conducted within UAE as would be the case in the actual study. Both interviewees had 20+ years experience each and they understood corporate strategies, culture, and organizational structure. As indicated in the methodology, the researcher ensured that the interviews were one hour each. In each of the 2 interviews, not only were the participants asked open-ended questions upon which they expanded and expounded, but also the participants were provided further details about the purpose of the study through probing questions. For this pilot study, the researcher used audio recordings as instruments to collect the data. Content analysis was performed on the data collected from the interviews, with coding and analysis using the foundational guidelines from Strauss and Corbin (1998) and from Gillham (2000) as would be the case in the actual study. The results indicated that the 6 themes outlined in the anticipated results were strongly felt in the pilot study. Both interviewers indicated that project location and experience in international projects are critical. For effective human resource management both bench-marking and learning and cultural awareness are critical tools. Similarly, company strategy and effective management system is critical for company's growth. The pilot study was carried out to evaluate not only feasibility but also time and cost issues and it seems that nothing unexpected with regards to time and cost issues emerged. Similarly, the researcher has not come across any adverse events and the sample size also seems appropriate. Therefore, there is not need to alter the methodology to improve the study design.

Conclusion

The population of the UAE is 9% Hindu and others, 15% Christian, and 76% Muslim. Most Emirates companies have a strong vertical hierarchy, with an innate preference for doing business with acquaintances rather than strangers. In order for businesses to succeed in an increasingly globalized world, communication between cultures is a necessity in order to exchange both emotional attitudes/expressions and ideas. In some cases, cultures that are more expressive may have difficulty interacting with cultures that tend to be 'neutral' in expression. For example, members of the Arab Middle East perceive themselves as being 'informal, relaxed, and considerate of others', which is simultaneously contradictory of a hierarchical culture with top-down power management structures. When large multinational companies (MNC) attempt to develop global strategies, a burden is placed upon human resource policies due to cultural variances. Such a corporation likely has its 'home-base' in one country, with one set of cultural mores, and yet is operating in one or more outside countries, each with their own cultural perspectives. Thus, international human resource management becomes a complex situation with diverse national backgrounds for the individual, as well as diverse legal requirements in the various countries.

Recently the UAE government has begun efforts to increase participation of women in workforce. Cultural mores still prevail such that men do not offer to shake hands with a woman unless she initiates the handshake. While the legal status of women in the UAE is defined as being one of equality, this has not yet filtered throughout UAE society as a while. Similarly, cultural mores throughout the Islamic world may not be those of the broader international community. Indeed, in some cases political leaders may prevent the dissemination of knowledge or change in order to retain power.

Recommendations

Hofstede has suggested the necessity for an improvement in the relationships between employees and management as well as a reduction of 'power distance'. In particular, he suggested that a centralized decision-making entity should not be a part of organizational structure, but rather, better results would arise from employee involvement. Hofstede's analysis of a 70-country IBM study led him to observe that both culture and economy impact power distance; as well, he recommended that equality in the employer-employee relationship was beneficial. Hofstede opined that optimal creativity and flexibility require risk-taking, in the second dimension of uncertainty. With respect to the third dimension of uncertainty, Hofstede compares collectivism and individualism. Whereas individualism values personal goals and success, 'looking out for oneself', and autonomy, these are traits of a society where there are low levels of social benefits and transition. In contrast, social acceptance of team work, and a high valuation of such, is more typical of collectivism. In terms of femininity and masculinity in the work-place, Hofstede describes masculinity as assertiveness and competitiveness.

Evaluation of these considerations for the UAE clearly indicates the presence of power distance. Most companies clearly have a hierarchical system, thus a moderate opinion is generally proposed. While technically there is parity between females and males in corporations in the UAE, this remains in a transitional phase, and more direct and immediate steps are suggested. Similarly, in the UAE there is still much more collectivism, which is generally growth-producing as well as socially beneficial, and similarly, the UAE culture disposes towards low risk for the dimension of uncertainty. Cultural changes come about through individuals in both a business and in a social environment. For XYZ Company in the UAE, development of business strategy comes through the employees - new methods of working, new skills, new fundamental knowledge. Continuity for a business should also be assessed to bring and balance change with aspects of capitalization that should remain constant.

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