Henley Business School

The Effect of Cultural Diversity in Global Program

Management

By

Ilkka Koskinen, ID 2077627

Dissertation submitted in partial fulfillment of

the requirements for the degree of

Master of Business Administration

2008

1 Abstract

During the past 15 years the speed and intensity of globalization has reached

unprecedented levels. Availability of mobile investment funds and inexpensive

communication has changed not only the way we live, but how businesses operate.

Multinational companies are transforming into truly globalized companies with

functions located in the most suitable locations. The new organizational structure and

heterogeneous operating environment present new challenges and opportunities to

globalized companies.

As companies become more dispersed and organizations flatter, global programs have

become critical in the execution of strategic and large scale initiatives in globalized

companies. These transitional and cross-cultural efforts require new skills from

program managers, team members and program stakeholders. This study explores the

effects of cultural diversity on global programs. The target is to identify general

themes, challenges, opportunities and effects of diversity in global programs.

The study was conducted in a large global insurance company by interviewing 11

program managers with experience of global programs. The study begins by

exploring literature concerning general themes related to global programs and the

internal dynamics of diverse groups. Specific topics about cultures and global team-

work are studied in depth. Then the study moves to semi-structured interviews.

Finally the interview results are compared to the literature study. The intent is to

confirm literature findings and identify new information.

It is concluded that cultural diversity increases the probability of failure in global

programs. This is due to the increased communication overhead and constant

misunderstandings. However, internal diversity of the program teams is a key enabler

for success. Diverse teams can create broader solutions and provide more approaches

to solving problems. These capabilities improve the fit of the end-product on a global

and local scale. Crucial for success is how diversity is managed.

3

In addition the study proposes a new framework for managing global programs. After

a universally accepted program goal has been formulated, the balance of program

management activities rotates between social integration and self-verification

activities. Crucial is that efforts are focused on out-groups. By applying the

framework, the program manager can overcome obstacles hindering program

performance and pursue the opportunities provided by cultural diversity.

The findings create knowledge that can be applied directly to program management

practices and improve the success rates of global programs in the company. The

results are not generalizable due to the small sample size and the interviewees being

from only one company. On a more general level the findings provide a starting point

for further research in the area of management of diverse transitional teams and

strategic initiatives on a global scale.

4

TABLE OF CONTENTS

1 Abstract ....................................................................2

2 Introduction..............................................................8

2.1 Study Objective......................................................8

2.2 Personal Objective.................................................9

3 Background............................................................10

3.1 The Unification Strategy.......................................10

3.2 Global Demand ....................................................10

3.3 Program Management .........................................11

4 Literature Study .....................................................13

4.1 Culture .................................................................13

4.1.1 National Culture ...................................................15

4.1.2 Subgroup Culture.................................................18

4.1.3 Globalization ........................................................19

4.1.4 Applying Dimensions............................................20

4.1.5 Ethnocentrism and Perceptions of Out-groups ....21

4.1.6 Trust.....................................................................22

4.1.7 Perceptions of Time .............................................25

4.2 Implications of Cultural Diversity ..........................27

4.2.1 Performance ........................................................27

4.2.2 Culture Shock ......................................................29

4.2.3 Risks ....................................................................31

4.2.4 Management and Leadership ..............................32

4.2.5 Communication and Collaboration .......................35

5

4.2.6 Intercultural Effectiveness ....................................38

4.2.7 Conflict Management ...........................................41

4.3 Benefits Management ..........................................48

4.4 Stakeholder Management ....................................53

4.5 Governance .........................................................53

5 Research Design ...................................................56

5.1 Conceptual Framework ........................................56

5.2 Research Question ..............................................57

5.3 Methods ...............................................................57

5.3.1 Qualitative Research............................................57

5.3.2 Capturing Data.....................................................59

5.3.3 Analysis................................................................62

5.3.4 Validity .................................................................63

6 Interview Results ...................................................66

6.1 Cultures and situational context ...........................66

6.2 Globalization ........................................................67

6.3 Ethnocentrism and Perceptions of Out-groups ....67

6.4 Trust.....................................................................68

6.5 Perceptions of Time .............................................68

6.6 Performance ........................................................69

6.7 Culture Shock ......................................................71

6.8 Risks ....................................................................71

6.9 Management and Leadership ..............................72

6.10 Communication and Collaboration .......................72

6.11 Intercultural Effectiveness ....................................75

6.12 Conflict Management ...........................................77

6

6.13 Benefits Management ..........................................79

6.14 Stakeholder Management ....................................81

6.15 Governance .........................................................82

7 Discussion and Conclusions ...............................83

7.1 Culture .................................................................83

7.2 Implications of Cultural Diversity ..........................86

7.3 Benefits Management, Stakeholder Management and Governance 92

8 Answer to Research Questions ...........................94

8.1 Question 1: Effect of Cultural Diversity on Global Programs 94

8.2 Question 2: Cultural drivers improving success of global programs 94

8.3 Question 3: Challenges facing culturally diverse global programs 94

8.3.1 Benefits management ..........................................94

8.3.2 Stakeholder management ....................................95

8.3.3 Governance .........................................................95

8.4 Question 4: Program Management Tools Methods and Skills 96

8.5 Question 5: Setting Up Culturally Diverse Global Programs 96

9 Recommendations ................................................97

9.1 Company Specific ................................................97

9.2 Global Programs ..................................................97

10 Future Research ....................................................99

11 Personal Development........................................100

Appendix a) References..................................................101

Appendix b) Reading .......................................................115

Appendix c) List of Exhibits............................................116

Appendix d) Glossary, abbreviations and acronyms...118

7

Appendix e) Cultural Dimensions ..................................123

Word count: 17 969

8

2 Introduction

This study was conducted in a top 5 global multi-line insurance company. The global

insurance company (later GIC) has 60 000 employees and operates in 170 countries.

GIC aspires to become the leading global insurance group in the general and life

insurance markets.

GIC is in a phase of change; from a multinational company to a truly global player.

The change is driven by new business reality where global financial services are in

increasing demand. Companies providing global insurance coverage through a single

point of contact have a competitive advantage in the global market. The change is felt

on the operational level with global programs spearheading the new reality.

Success of global programs is crucial for achieving the globalization targets of GIC.

Without successful global programs GIC will remain a multinational and will not be

able to leverage the opportunities of a global presence.

2.1 Study Objective

The field of this study, global program management, is mostly unresearched. The

target is to

• Identify themes related to cultural diversity that affect success of global

programs.

• Capture experiences and to identify how program managers make sense of

their surroundings and what reactions the sense-making creates.

• Identify program management processes that impact global programs with

cultural diversity.

9

2.2 Personal Objective

The author works at GIC as a program manager. The study will improve the authors

understanding of his field of work. The personal objectives of the study are:

• Gain knowledge of challenges and opportunities a culturally diverse

environment provides.

• Gain ability to solve and avoid issues caused by cultural diversity.

• Improve the success rates of programs.

• Learn from the experience of others on how to deal with challenges and

exploit opportunities.

• Learn to understand the author’s cultural heritage and how other colleagues

may react to the generic responses the author’s cultural heritage prescribes.

• Share the knowledge with GIC.

10

3 Background

3.1 The Unification Strategy

In the past functions and geographies in GIC operated independently; GIC was

known as “a conglomerate of independent companies”. During the 90’s GIC

experienced a period of growth through acquisitions. By 2002 the acquisitions phase

was over and consolidation was begun. The Unification Strategy (later TUS)

initiative was launched in 2004 to focus GIC on profit making by reducing

organizational segregation. The TUS is still in 2008 an on-going initiative targeting

the consolidation and globalization of GIC.

3.2 Global Demand

Global Business-to-Business (name changed) is the GIC unit managing corporate

customers on a global scale. It has experienced high growth in the past 5 years due to

increasing demand for global insurance services. The changes are driving GIC and

foremost Global Business-to-Business from a multinational corporation to what call

the final stage of globalization; a truly global company (Boyacigiller and Adler,

1991).

In 2007 GIC stated that the General Insurance business model is built on global

functions and practices, providing a global platform for local business delivery.

According to this statement, GIC top-level management is determined to globalize

GIC, while attending to local needs.

11

3.3 Program Management

Programs are “a group of related projects managed in a coordinated way to obtain

benefits and control that would not be available from managing them individually”

(PMI: 2006). According to (IPMA: 2006) “a program is set up to achieve a strategic

goal. A program consists of a set of related projects and required organizational

changes to reach a strategic goal and to achieve the defined business benefits”.

Project Program Portfolio

The goal of a Is to produce

deliverables.

Is to achieve strategic

change.

Is to coordinate,

optimize and

align with

strategy.

Vision and

strategy

Are related through

the business case of

the project.

Are realized by a

program.

Are aligned to

and monitored in

the portfolio.

Business

benefits

Are largely

excluded from a

project.

Is usually included in

a program.

Is excluded from

the portfolio.

Organizational

change

Is often excluded

from a project.

Is usually included in

a program

Is excluded from

the portfolio.

Time, cost Are defined in the

business case and

are manageable in a

project.

Are roughly defined

within the strategy;

are broken down to

individual projects

within the program.

Are based on

priorities and

strategic targets

in the portfolio.

Table 1. IPMA categories (IPMA: 2006)

12

Common to both definitions is the large scale change and transitional nature of

programs.

The underlying themes in program management are (PMI: 2006):

• Benefits management.

• Stakeholder management.

• Program governance.

13

4 Literature Study

4.1 Culture

“Culture is a generic solution to problems provided by the environment” (Fink et al,

2007). Trompenaars and Woolliams (2003) define culture as “a series of rules and

methods which a society or organization has evolved to deal with the regular

problems that face it.” Alas (2006) defines it as “a term used to mark a set of

parameters for collectives that differentiate each collective in a meaningful way”.

Triandis (2000) defines culture through language, time and geographic location:

“culture is a shared meaning system, found among those who speak a particular

language dialect, during a specific historic period, and in a determinable geographic

region”. (Foldy, 2004) expands this and sees cultures as “identities such as race,

ethnicity, nationality, religion, gender, and other dimensions of difference derived

from membership in groups that are socio-culturally distinct, that is, they collectively

share certain norms, values or traditions that are different from those of other

groups”. A widely used definition of culture is “a collective programming of the

mind” (Hofstede, 1984).

Depending on the situation an individual may act according to any cultural

programming in his/her heritage (Figure 1) creating a complex multilayered response

(Salk and Brannen, 2000) (Hofstede et al, 1990).

14

Level Place of Socialization

Nation

Occupation

Organization

Values

Practices

Family

School

Workplace

Figure 1. Multilayered response (Hofstede et al, 1990).

Hofstede et al (1990) identify the variables and layers in culture (Figure 2). Notable

is that practices cut through all layers of culture except the values.

15

Values Practices

Rituals

Heroes

Symbols

Figure 2. Manifestations of culture (Hofstede et al, 1990).

4.1.1 National Culture

In culture research, scholars refer to cultural prototypes instead of stereotypes. A

prototype implies a distribution around a central tendency; a stereotype implies that

all members of a culture would act alike. (Alon and Brett, 2007)

A common way to describe the central tendencies is the usage of dimensions (general

rules and categories). Using dimensions allows comparing cultures. When a culture is

defined through dimensions it is assigned values on a range scale (e.g. collectivist to

individualist) (Brislin, 1976). Many studies have created dimensions (Appendix g).

Due to the large sample size in his research, the Hofstede (1980) four dimensions of

national value differences are commonly used in research.

16

Later Hofstede (1984) extended the dimensions to five:

• large vs. small power distance

• strong vs. weak uncertainty avoidance

• individualism vs. collectivism

• masculinity vs. femininity and

• long- vs. short-term orientation.

The divide between individualists and collectivist cultures has become a major

building block in understanding differences in cultures. The dimension has a strong

influence on thinking, knowledge management and communication; it is often

considered as the difference between the “western” world and Eastern and Latin

cultures (Perlitz, 1994). Ting-Toomey (1988) and (Hui, 1988) have found that

individualists represent only themselves and are concerned to preserve the dignity

and autonomy of themselves – the basic unit. Individualists respect the same for

others, but feel under no obligation to enhance or engage with others. Collectivists

see themselves interlaced and networked with “others” in so far that they are also an

extension of "others". They are obliged and concerned to save and protect both

themselves and also the “others”.

Triandis (2000) and (Chiou, 2001) use additional attributes horizontal-vertical further

describe the collectivism-individualism dimensions. Hofstede’s power distance and

the vertical-horizontal dimension are partially the same (Chiou, 2001).

The horizontal-vertical dimension plays an important role in predicting the outcome

of mixed-motive decision-making and tendency to co-operate with strangers.

Horizontal groups would always try to maximize their own benefit, but vertical

groups would try to beat their in-group in competition. Vertical groups would not co-

operate with strangers in situations, where co-operation is voluntary, business

partners were strangers to each other and the business situation concerns great deal of

uncertainty. (Chen and Li, 2005)

17

Collectivist Individualist H

oriz

onta

l

Merge with in-groups (e.g. family,

tribe, co-workers, and nation).

Well-being of in-group is important.

Not sub-ordinate to in-group.

Seek individuality rather than

distinctiveness, i.e. “do their own

thing”.

Do not compare themselves to

others.

Ver

tical

Submit to the norms of their in-groups.

Willing to sacrifice personal identities

to in-groups.

Concerned with comparing

themselves with others.

Believe that competition is the

law of nature and desire to win in

all kinds of competitions.

Table 2. Collectivist versus Individualist and Vertical versus Horizontal Culture

(Chiou, 2001)

Hall (1976) divides cultures into low-context and high-context categories by their

ethno-linguistic characteristics. In high context cultures the message is dependent of

the situation, external environment and non-verbal behavior. In low-context cultures

a larger portion of the message comes through spoken language (Boyacigiller and

Adler, 1991). Research shows that low-context cultures tend to be analytic while

high-context cultures are holistic (Ishii et al, 2003).

High context cultures can change their communication style to low context style

(Adair, 2003) (Tjosvold and Wong, 2004), but low context cultures have difficulties

to change their behavior or understand high context communication (Adair, 2003).

The high-low context division is nearly the same as Hofstede’s individualist-

collectivist dimension (Adair, 2003).

18

4.1.2 Subgroup Culture

Individuals belonging to sub-groups may act according to the subgroup culture,

instead of national norms (Salk and Brannen, 2000). Examples of such groups are

gender, generational, religious, linguistic groups. E.g. women have a tendency

towards collectivism and men towards individualism (Eaton and Louw, 2000).

Neglecting the effect of sub-group cultures would be a mistake, e.g. assuming that

Asian women behave like Asian men in conflict situations (Jehn and Chatman, 2000).

Effective subgroups can be formed intentionally even when they strongly contradict

the prevailing national culture, e.g. team-work based manufacturing plants in the

United Kingdom (Mueller, 1994).

From a national perspective organizational cultures are small pockets of subgroup

culture inside a nation (Perlitz, 1994). Organizational culture is “a hidden yet

unifying theme that provides meaning, direction and mobilization that can exert a

decisive influence on the overall ability of the organization to deal with the

challenges it faces” (Trompenaars and Woolliam, 2003). In multinational companies

organizational culture has a unifying effect over borders, making processes and

structures more similar (Muller, 1994).

Organizational culture has been studied extensively; however the definition of

organizational culture has severe gaps (Allaire and Firsirotu, 1984). Most

organizational theory is based on studies of one national culture, mainly American,

which cannot be expanded to a global setting (Hofstede, Boyacigiller and Adler,

1991) (Triandis, 1982) (Allaire and Firsirotu, 1984) (Suk, 1999). Cultural dimensions

inside an organization may vary, e.g. the engineering department sees the culture as

rigid and top-management sees it as flexible (Johnson-Cramer et al, 2007).

Organizational culture can also be understood as a mutual-equivalence structure

where organizations are convenient means through which participants seek to achieve

their varied ends (Allaire and Firsirotu, 1984). This view is almost opposite to the

conventional meaning of culture: “shared values, beliefs and norms”.

19

4.1.3 Globalization

The drivers for globalization are today the “instantaneous and inexpensive

communications; abundant, readily accessible information; and plentiful, highly

mobile investment funds” (Boatright, 2000). Globalization is not a new phenomenon,

e.g. immigration peaked already in the early 20th century (Ghemawat, 2007b).

However, the nature of globalization has changed in the past 15 years and impacts

local cultures with unprecedented speed and intensity (Prasad and Prasad, 2007).

The efficiency of internal communication systems is the source of competitive

advantage for multinational corporations (Gupta and Govindarajan, 2007), which

would indicate that globalization drives the rise of multinationals. The rise of

multinationals is often seen as a negative consequence of globalization. Ghemawat

(2007a) points out that consolidation and the rise of multinationals is a perception

mistake; some industries are consolidating while others are dispersing due to

globalization.

In order to survive truly global companies must operate globally as “top-quality,

least-cost, state-of-the-art service providers”. Operational functions are no longer

confined to national borders; functions are located flexibly in the best possible

location. In truly global companies strategic coordination is global and integrated,

while high differentiation and local responsiveness are retained. As a result cross-

cultural work is no longer an exception; it is a part of the daily routine. (Boyacigiller

and Adler, 1991)

Global presence makes available five value-creation opportunities: to adapt to local

market differences, to exploit economies of global scale, to exploit economies of

global scope, to tap optimal locations for activities and resources, and to maximize

knowledge transfer across locations (Gupta and Govindarajan, 2001).

20

Globalization is often described as the Americanization of the world. Globalization

invites all organizations to acquire some attributes from the west (Carr, 2005);

although western ethics and culture may not be greeted by all cultures (Triandis,

2003). Ghemawat (2007b) contends that American corporations are under equal

pressure to change.

Not only companies, but also private people are enjoying the cheaper communication

and travel. Cross-cultural entertainment and global tourism have reached extents

never experienced before (Prasad and Prasad, 2007). Due to the intense cross-border

exchange, also American culture is being changed by foreign cultures (Prasad and

Prasad, 2007).

4.1.4 Applying Dimensions

Dimensions by themselves cannot answer questions such as why Swedes behave

mostly according to the feminine dimension, but sometimes in a masculine fashion

(Nielsen and Gannon, 2006), why Americans are the most individualistic, but have

also the highest rate of charity work, why Japanese have a high tendency of

uncertainty avoidance, but make contracts with intentional open ends, why Chinese

appear to be extremely respectful and deceptive at the same time (Osland and Bird,

2000). The afore-mentioned are examples of cultural paradoxes that cannot be

understood through cultural dimensions. Dimensions are a poor indicator of how

cross-cultural co-operation works, because they do not consider the social setting or

context, such as power-relations (Hyunghae and Ybema, 2005) (Osland and Bird,

2000).

Cultures move with time on the dimensions (Chiou (2001), (Valdiney et al, 2003)

(Whiteoak et al, 2006). Certain dimensions remain unchanged through time, but

these dimensions have not been clearly identified in current research (Nielsen and

Gannon, 2006).

21

Not all individuals can be expected to always act according to dimensions. The

differences between individuals are greater than differences between national

cultures. (Osland and Osland, 2006)

4.1.5 Ethnocentrism and Perceptions of Out-groups

All cultures are ethnocentric, which limits our cognitive perceptions, i.e. causes

“culture blindness” (Triandis, 2003). Individuals expect that what their culture

dictates as “good or bad” can be used as a standard for comparing other cultures.

When observing other cultures people tend to commit the “fundamental attribution

error”. People see the success of their in-group to be due to internal factors and the

failures of their in-group due external factors. With out-groups the opposite is

observed, success is due to external factors and failure is due to internal factors.

(Triandis, 2003) (Kanter and Corn, 1994)

There is also a tendency to favor the in-group and devalue other groups. In addition

to simply favoring in-groups, people remember perceived stereotypical behavior

better than non-typical behavior, i.e. positive behavior of others is more easily

forgotten than the positive behavior of their in-group. (Kanter and Corn, 1994)

In large cultural groups (e.g. USA, China, Japan, Latin America) people have little

international experience and cross-border exchange. In these groups cross-cultural

skills are less developed and they have more difficulties to work with other cultural

groups. Members of such cultures are likely to be “monolingual, ethnocentric, to

rank their culture above other cultures, and to see a large difference between us and

them”. (Triandis, 2003)

22

4.1.6 Trust

Effective workplaces are characterized by high levels of trust (Golesorkhi, 2006)

(Gill et al, 2005). Trust enables people to take risks (Jarvenpaa et al, 1998).

Employees trust each other according to the perceived level of trustworthiness (Gill

et al, 2005) (see also Figure 3). A commonly used set of determinants for

trustworthiness are: integrity, ability, and benevolence (Gill et al, 2005) (Jarvenpaa et

al, 1998) (Mayer et al, 1995).

In a cross-cultural setting cultural similarity plays a key role in trust (Golesorkhi,

2006). It is natural for all cultures to trust their in-groups and distrust dissimilar

groups (Triandis, 2003). In high power-distance cultures others are more likely to be

considered a threat than someone to trust (Casimir et al, 2006). High context cultures

define trustworthiness through the context of the situation and events surrounding the

situation (Tan and Chee, 2005) (Casimir et al, 2006).

Ability

Benevolence

Integrity

Trustor’s

propensity

Trust

Risk taking in a

relationship

Outco

me

Perceived risk

Figure 3. Model of Trust (Mayer et al, 1995)

23

When the trustor does not have knowledge of the subject and must rely on an expert

(trustee), cultural similarity becomes the most important factor (Siegrist et al, 2000).

Often the managerial response to not having knowledge is tightening control and

monitoring. Tightening control and monitoring reduces the perception of

trustworthiness of the manager (Whitener et al, 1998) and reduces trust in the

organization (Schoorman et al, 2007).

Trust propensity varies according to the trustor’s culture, developmental experiences,

and his or her personality traits (Bird and Osvald, 2006) (Brown et al, 2004) and

becomes especially important in cross-border knowledge exchange (Roberts, 2000).

In collectivist cultures trust is built only over time. Some cultures prefer the use of

intermediaries to lend trust to the relationship in the beginning (Bird and Osland,

2006). When dealing with collectivist, high power distance, high context and high

uncertainty avoidance cultures, trust building exercises are required before and

during interaction (Elahee et al, 2002).

Individualists tend to trust strangers until otherwise proven (Bird and Osland, 2006)

(Alon and Brett, 2007), but will never trust their partners as deeply as collectivists.

Individualists are also more prone to use information to pursue opportunistic targets

(Griffith et al, 2006). In high power-distance cultures distrust between supervisors

and sub-ordinates is customary, because in these cultures superiors do not actively

build trust; they create stability through inequality (Casimir et al, 2006).

“Mutual trust is most likely to occur when people are positively oriented to each

other’s welfare” (Brown et al, 2004). Richness of face-to-face communication helps

to reduce difficulties caused by cultural differences and hence expedites the process

of building trust (Roberts, 2002). When communicating electronically it is difficult to

judge benevolence, hence integrity and ability play a more important role in virtual

teams (Jarvenpaa et al, 1998).

24

Trust is pivotal in preventing geographical distance from leading to psychological

distance in a global team (Jarvenpaa et al, 1998). Globally dispersed teams have less

possibilities to reflect and develop trust (Sauders et al, 2004) (Maloney and Zellmer-

Bruhn, 2006); the global and virtual context constrain and impede the development

of trust (Jarvenpaa et al, 1998). The resulting trust gap undermines credibility, saps

enthusiasm and commitment, often leading to mediocrity and teams failing to meet

even that modest level of performance (Walker, 2002). Reduced communication

increases also burn-out and reduces overall agility of the project team (Walker,

2002).

At the on-set of virtual collaboration ability is a leading factor in creating trust, with

time benevolence becomes more important (Jarvenpaa et al, 1998). Jarvenpaa et al

(1998) found that members in high trust teams exhibited individual initiative,

volunteered for roles, met their commitments and the team dealt decisively with

“free-riders”. The high trust teams in the research by Jarvenpaa et al (1998) used

confrontation to deal with “free-riders” and informed the project coordinator of non-

active members. These are typical modes of operation in individualist cultures.

Building trust in a relationship requires that one party makes the first move. Whitener

et al (1998) suggest that building trust should be initiated by the manager.

Impediments for the manager to make the move are:

• Motivational complexity: tension between building a relationship and

reduction of risk of opportunism

• Social dilemmas: conflict between self-interest and collective good

• Cultural values: trust propensity and individualism-collectivism dimensions

of the manager

(Whitener et al, 1998)

25

Jarvenpaa et al (1998) found that teams that start with actions and remain task-

oriented, have high levels of trust. If the members of the team become non-active e.g.

due to inability to fulfill tasks or unclear roles, the trust in the team will be low.

In a manager-employee relationship Whitener et al (1998) suggest that the

employee’s perception of the manager’s trustworthiness is influenced by the

manager’s:

• Behavioral consistency,

• Behavioral integrity

• Sharing and delegation of control

• Communication (e.g. accuracy, explanations and openness) and

• Demonstration of concern

Caldwell and Hayes (2007) state that three leadership traits are essential to building

trust: relationship development, resource utilization and image management. Image

management plays an important role in developing trust; it assures of the integrity

and consequently the trustworthiness of the manager (Caldwell and Hayes, 2007).

4.1.7 Perceptions of Time

In planning, actions and events must be sequenced. The key to sequencing is the

ability to answer precisely when actions and events occur (Hayden, 1998).

Differences in time visions vary between cultures (Saunders et al, 2004); time is a

societal construct (Hayden, 1998). Roughly time perceptions can be divided into

three: linear, cyclical and pendulum (Hayden, 1998). Without a common time

perception the ability to answer precisely when is more difficult.

26

Of the three types cyclical time is the most common. In cyclical time activities repeat

in loops, which can run parallel or move forwards. Events in cyclical time are not

distinct episodes with causal effect, they are repeatable. Cyclical time is used e.g. in

India. Linear time originates from Christianity and is most common in western

countries. In linear time people try to do all activities in a limited amount of time;

before time ends. Events are unrepeatable and ordered into sequences, which do not

move backwards. For people in neo-classical linear time the present is most

important. For people in cyclical time the past or the future might be much more

important. (Hayden, 1998)

Individualist cultures typically have events scheduled by the clock; other cultures

have events schedule people (Alon and Brett, 2007). E.g. do we eat at 12:00 or when

the food is ready? In event-driven time events like before work and after work

synchronize the time on a micro scale. Religious feasts etc set the time on the major

scale e.g. before Christmas or after Christmas.

In linear time, processes can be described in stages. Especially in conjunction with

international research the stage models have been criticized. Is time moving

backwards, when something moves back to its original stage? (Hayden, 1998)

In some languages it is more difficult to describe sequences from the past or in the

future, because they lack the past or future tense (Hayden, 1998). In some cultures

the future is owned by God and suggesting that humans can plan and shape the future

is impossible and disrespectful (Alon and Brett, 2007).

27

4.2 Implications of Cultural Diversity

4.2.1 Performance

The changing competitive environment forces companies to become flatter and more

dispersed. In these organizations culturally diverse teams are playing a major role

(Gupta and Govindarajan, 2001).

Laboratory studies show that diversity within work groups increases effectiveness

(Richard et al, 2004) due to the work groups networks breadth and depth, (Hislop et

al, 2000), wider array of information and knowledge (Reagans et al, 2004) and

tendency to think in the broader context (Foldy, 2004). Diverse groups make bolder

decisions (Hambrick, Cho, & Chen, 1996), have greater decision-making

comprehensiveness (Simons, Pelled, & Smith, 1999) and produce more creative

ideas (O’Reilly, Williams, & Barsade, 1998)

Cultural differences cause many difficulties, e.g. high emotional conflict,

misunderstandings, high member-turnover and slow decision-making (Brannen and

Salk, 2000) (Foldy, 2004) (Hambrick et al., 1996) (O’Reilly, Caldwell, & Barnett,

1989). Field studies show that diversity is associated with negative performance

(Richard et al, 2004) because “diverse teams are unlikely to assume a cohesive,

community-like character; demographic diversity reduces internal coordination,

which hinders a team’s ability to succeed” (Reagans et al, 2004). The minority

members are less committed in teams (Kirchmeyer and Cohen, 1992). Earley and

Mosakowski (2000) prove that performance in teams has a U-shaped relationship to

heterogeneity: homogenous and highly heterogeneous teams have the highest

performance.

The specifics of global programs create a complex management setting. Unlike e.g.

expatriates on international assignment were a manager is sent to manage a foreign,

but culturally homogenous, local team, global programs are the collaboration

28

platform of multiple nationalities over long distances. Applying the Tuckmann

(1965) model for team building: forming, storming, norming and performing, it takes

longer for a diverse team to reach the performing phase (Earley and Mosakowski,

2000). Differences in cultures do not create poor performance; poor performance is a

result how the differences are managed (Brannen and Sal, 2000). Global presence

allows the manipulation of team heterogeneity. Due to skill requirements or political

reasons, the manager’s ability to manipulate diversity is restricted (Reagans, 2004).

When facilitating efficient team work two dimensions need to be considered: social

integration and self-verification (Maloney and Zellmer-Bruhn, 2006). Social

integration is needed to create a safe environment for individuals to express

themselves and self-verification is required to assure that individuals keep their

individual perspective when contributing to the input.

29

Low

Low

High

High

Ineffective

global team

Failure to

capitalize fully on

deliberate

heterogeneity

Effective

Global Team

Unlikely

Soci

al In

teg

rati

on

Self-Verification

Figure 4 Valuation and verification as dimensions of team effectiveness (Maloney

and Zellmer-Bruhn, 2006).

4.2.2 Culture Shock

Culture shock is “the situation where an individual is exposed to new ways of

thinking and acting. It is a mixture of reactions to stress from being exposed to a new

environment, cognitive fatigue from trying to decipher spoken, behavioral,

contextual and social communications, role shock from changes in and elimination of

one’s social role and finally personal shock from loss of interpersonal contact with

significant others” (Winkelman, 1991).

30

Contextual and personal

variables

Mediating psychological states Experienced emotions

Cultural

Knowledge

Psychological

safety norms

Norm

complexity

Norm

discrepancy

Personal values

Experienced face threat /

validation

Experienced performance

difficulty / efficacy

Experienced identity conflict

/ fit

Embarrassment

or Pride

Performance

anxiety or

Confidence

Guilt, distress,

anxiety or

Contentment,

excitement

Psychological

Toll

Increased by

negative emotions

Decreased by

positive emotions.

Figure 5. Determinants of psychological toll (Molinsky, 2007).

Working with other cultures increases stress, because of the uncertainty of social

roles and how to comply with them (Shaffer et al, 2006). To cope in culture shock

situations individuals resort to cultural code-switching; they accommodate the foreign

culture by acting in a way that contradicts their culture (Molinsky, 2007). This is

emotionally depleting, but through experience individuals can learn to manage the

situation in a less burdening ways. (Molinsky, 2007)

31

4.2.3 Risks

Certain cultures have a tendency to systematic overconfidence when judging the

result of a risky activity (Weber and Hsee, 2000). E.g. Chinese will take higher risks

than Americans (Fung, 1999), but the Japanese will evaluate the probability more

correctly than Europeans and Americans (Weber and Hsee, 2000). The difference is

explained by the differences in world-views, experience in critical thinking and social

factors (Weber and Hsee, 2000).

World-view differences could be the divided between the probabilistic-causal view

and a deterministic view. The former searches for causes and effects and the probable

paths events would take; finally coming to a conclusion of what is most likely to

happen. A deterministic view takes all end-results as equally likely; something might

happen or it might not. (Alon and Brett, 2007)

Depending on their culture children are taught to follow traditions and precedents or

to think critically. Critical thinking reduces over-confidence (Weber and Hsee, 2000).

In some cultures solutions must be based on precedence and tradition; innovation is

strongly discouraged or even forbidden (Alon and Brett, 2007).

Cultures assess risk exposure differently. Individualist cultures judge risk according

to the probability of the downward risk, but collectivist cultures base decisions on the

size of the downward risk. Weber and Hsee (2000) assume that the difference is due

to the collectivist’s social network working as a “cushion”; it is expected that any

negative outcome is born by the social network of the decision-maker. The lack of a

“cushion” makes individualists more risk-averse as they bear the negative outcome

alone. The theory is supported by the fact that the difference between collectivists and

individualists disappears for risks without a “cushion” e.g. personal health (Weber

and Hsee, 2000). The risk of losing “face” is in fact weighted much more severely in

China than in the west (Tse et al, 1988).

Cultures pick some risks as relevant and others are ignored. What one culture

perceives as an opportunity another may perceive as a threat. E.g. people from

32

hierarchically structured societies see technological advancements as opportunities

while other types of societies perceive them as threats (Weber and Hsee, 2000).

Hsee and Weber (1998) suggest that when differences in perceived risk are the

driving force behind preferences for the way the parties define and perceive the risk,

an exploration of cognitive and perceptual variables is required. If the driver is the

attitude towards risk the preferred affective response towards the risky choice needs

to be explored.

4.2.4 Management and Leadership

Leadership expectations vary and contradict between different cultures (Javidan et al,

2006). Leadership traits that are respected in certain cultures may be regarded as poor

in others (Weaver, 2001).

33

Cultural Leadership Dimension

Societal Cluster

Charism

atic /

Value-B

ased

Team

-

Oriented

Participative

Hum

ane

Oriented

Autonom

ous

Self-

Protective

Eastern Europe M M L M H H

Latin America H H M L L M

Latin Europe M M M L L M

Confucian Asia M M L M M H

Nordic Europe H M H L M L

Anglo H M H H M L

Sub-Sahara Africa M M M H M L

Southern Asia H M L H M H

Germanic Europe H M/L H M H L

Middle East L L L M M H

Table 3. Comparison of leadership dimensions (Javidan et al, 2006). H=high rank;

M = medium rank; L = low rank. H or L (bold) indicates highest or lowest cluster

score for a specific Cultural Leadership Type dimension.

The cultural environment constrains common management functions such as:

defining goals, planning, selecting people, training, controlling people and motivating

people (Triandis, 1982). The managerial response is a result of many factors; culture

among others (Lindell and Arvonen, 1997). The ability to cope flexibly and positively

with cultural relativity has become a key requirement for global managers (Suk,

1999) (Javidan and House, 2001). Globally dispersed teams that are together only for

a transient period of time are the most difficult to manage (DeRosa et al, 2004).

34

According to Javidan et al (2006) there are universal facilitators of leadership

effectiveness:

• Being trustworthy, just, and honest (integrity)

• Having foresight and planning ahead (charismatic-visionary)

• Being positive, dynamic, encouraging, motivating, and building confidence

(charismatic-inspirational)

• Being communicative, informed, a coordinator, and a team integrator (team

builder)

Similarly Javidan et al (2006) list universal impediments to leadership effectiveness:

• Being a loner and asocial (self-protective)

• Being non-cooperative and irritable (malevolent)

• Being dictatorial (autocratic)

Culturally contingent endorsements of leader attributes are according to Javidan et al

(2006):

• Being individualistic (autonomous)

• Being status conscious (status conscious)

• Being a risk taker (charismatic, self-sacrificial)

Liddell (2005) identifies six global leader behavior dimensions: the transformational-

charismatic leader, team-oriented leader, self-protective leader, participative leader,

humane style leader and the autonomous leader. Of these leadership dimensions the

transformational-charismatic leader was universally strongly endorsed. This is also

the most difficult leadership dimension to learn (Liddell, 2005). Casimir et al (2006)

contend that transformational leadership is not necessarily appropriate in collectivist

cultures, because it may jeopardize group harmony. Casimir et al (2006) further

suggest that in collectivist cultures leadership plays a less important role and

performance is driven through the groups norm setting, e.g. how hard to work and

external factors e.g. unemployment rate.

35

Members of a sub-group do not necessarily conform to the dimensions of their

national culture; generalizations about effective leadership in a sub-group setting do

not always hold true (Salk and Brannen, 2000). The applicability of management

principles stemming from national culture theory to a cross-cultural setting is under

serious questioning (Suk, 1999).

According to Liddell (2005) leaders with certain traits have to be selected according

to the culture of the people they will be leading. (Murtha et al, 1998) (Gupta and

Govindarajan, 2001) and (Maloney and Zellmer-Bruhn, 2006) indicate that successful

global leadership requires a global mindset. According to Maloney and Zellmer-

Bruhn (2006) this requires that managers are able to attend to local needs and respond

to global demands of scale and scope. The mindset requires also that individuals have

gathered international experience that makes them sensitive to other cultures and

allows them to treat individuals as people instead of stereotypes of national cultures

(Gupta and Govindarajan, 2001).

4.2.5 Communication and Collaboration

The internal knowledge transfer system in a multinational corporation is the source

of their competitive advantage (Gupta and Govindarajan, 2000), because

collaboration and knowledge sharing is what makes multinationals better than their

competition. Cultural factors are the most important inhibitors for usage of

knowledge management systems in a multinational corporation environment

(Damodaran and Olphert, 2000). The willingness of local contributors to share their

knowledge is dependent on the geographic and cultural distance (Li and Scallion,

2006) (Child et al, 2002). With rising cultural diversity, intra-team openness of

communication and the intensity of knowledge transfer are reduced (Puck, 2006).

.

On the other hand the limited role of information technology in knowledge-sharing is

not due to cultural or social factors, but the fundamental character of knowledge

36

itself (Hislop, 2002). Current technical solutions are able to transfer only partially the

explicit component of knowledge (Hislop, 2002) (Roberts, 2000) and have almost no

capabilities to transfer the tacit component (Bhagat et al, 2002). Notable is that

collectivist cultures are more likely to capture and have interest in tacit knowledge

(Bhagat et al, 2002).

Collaboration is promoted by trust (Hislop, 2000), especially in the case of virtual

collaboration and knowledge transfer (Brown et al, 2004) (Roberts, 2000) and cannot

be based only on a formal contract. Griffith et al (2006) state that trust is the first step

to sharing of information (Figure 6).

Relationship Resources Knowledge Resources

Trust Commitment

National Culture

Information

Sharing

Problem

Resolution

Figure 6. Conceptual model of relationship and knowledge resources (Griffith et al,

2006).

37

Any technological implementation of knowledge management systems will fail

unless the organization has a knowledge-sharing culture (Damodaran and Olphert,

2000). Griffith et al (2006) describes a knowledge-sharing culture as commitment to

the relationship. Cultures that target building long-term relationships, roughly

collectivist cultures, are more successful at sharing information once trust and

commitment has been secured in the relationship (Elahee et al, 2002) (Griffith et al,

2006).

The way information is conveyed is culturally based (Triandis, 2000) (Triandis,

2003). Individualists present one fact after another; collectivists start with the

conclusion and then progress through an interrelated series of relationships. Also

assumed consequences differ between cultures; according to individualists good is

followed by more good, but according to collectivists good is followed by bad

(Triandis, 2003).

The limitations of modern communication tools also benefit communication, because

they reduce majority influence and the need for normative behavior (Zhang et al,

2007). This results in slower decision-making, but allows teams to leverage diverse

opinions when creating solutions. Virtual communication creates also new rules for

communication, which break through the culturally defined politeness barriers

(Morand, 2003), hence improving team work.

All individuals try to accommodate and adapt in cross-cultural communication

situations (Tjosfold and Wong, 2004). In mixed-culture settings high-context

cultures can change to low-context communication to facilitate information exchange

(Adair, 2003).

38

4.2.6 Intercultural Effectiveness

To adapt to new cultures one must learn to suspend at least some culturally based

reactions. This does not mean that one should give up one’s identity, values or

culture. But one must learn to manage culture shock. To effectively operate in a

cross-cultural environment one must have the ability to:

• “Deal with psychological stress

• Communicate effectively

• Establish interpersonal relationships

• Understand and adjust to another culture and

• Deal with different social systems”

(Winkelman, 1991)

To achieve the above one must have cultural intelligence (Molinsky, 2007). Cultural

intelligence is a mixture of:

• Cognitive capabilities: ability to recognize cultural differences, e.g. values,

and to understand that one is in a situation of cultural difference (Molinsky,

2007) (Osland and Bird, 2000) (Winkelman, 1991),

• Motivation and energy to learn about and how to function in cross-cultural

situations (Molinsky, 2007)

• Behavioral capabilities: the ability to perform new skills properly in a foreign

environment. (Molinsky, 2007)

In addition resistance to emotional stress is required to manage code-switching

situations (Molinsky, 2007) (Winkelman, 1991).

39

Shaffer et al (2006) found that “emotionally stable, outgoing and agreeable

expatriates, who are high in openness to experience”, function better. Osland and

Osland (2006) found that expatriates manage the situations in the following ways:

1. Look for reasons to explain the situation and understand why the other culture

behaves as it does, i.e. understand the “foreign” side of the paradox.

2. Determine what ones role is in the particular situation and gauge whether you

can influence or change it. And determine whether the foreigner has the right

to initiate change.

3. Weigh the contingencies of the situation: What would happen if one chose to

act on either side?

4. Discern the critical factors (norms or actions) essential for success.

5. “Pick battles” in headquarters vs. local conflicts and avoid losing causes.

6. Accept what one cannot change.

7. Learn from the experience and apply it to the next situation.

According to Winkelman (1991) the above steps are possible only when the

individual enters the adaptation phase of culture shock. Prior to the adaptation phase

individuals try to confront, flee or isolate them from the cause of shock. The

adaptation phase can be expedited or made more comfortable with training and

preparation (Winkelman, 1991) (Osland and Bird, 2003) (Triandis, 2003).

Winkelman (1991) states that it is important to recognize the differences between

own cultural values and the new culture. However, in anxiety producing situations

individuals tend to fall back into their cultural behavior models, i.e. in the most

difficult situations lessons from cultural training are not applied (Molinsky, 2007).

Defining cultures through dimensions does not provide much value by themselves

(Morand, 2003). No individual exactly represent their culture and cannot be managed

simply as a stereotype (Tjosvold and Wong, 2004). Winkelman (1991) states that

40

individuals who valued their intercultural experiences positively illustrate that

intercultural effectiveness skills do not only remediate culture shock, but also

facilitate cultural adaptation. Experience and contact with other cultures plays an

important role in learning how to deal with culture shock, and a new culture. (Dow,

1998) (Kanter and Corn, 1994). Triandis (2003) suggests that people should simply

get to know other cultures to reduce “culture blindness”. It is especially important to

have an opportunity to compare the defects and limitations of ones national culture

with the advantages and triumphs of other cultures.

(Osland and Bird, 2000) and (Bird and Osland, 2006) see that understanding can be

created through a framework of sense-making (Figure 7).

Figure 7. Osland and Bird framework for cultural sense-making (Bird and Osland,

2006).

The sense-making framework requires skills from the users and understanding of

seeming cultural paradoxes. (Osland and Bird, 2000) and Osland (2000) suggest the

value of using mentors and coaches with insight of the foreign culture. Also using

41

cultural assimilation is proposed. In assimilation students are presented with a

problematic situation and the student tries to solve the situation with the guidance of a

mentor.

4.2.7 Conflict Management

Culturally diverse groups are more prone to conflict (Foldy, 2004). Conflict has also

a more negative effect on culturally diverse teams (DiStefano and Maznevski, 2000).

Conflict drives heterogeneous teams to compromise so strongly that their

performance becomes less than average or the teams turns in on itself with such

power that the team collapses.

Conflicts start with poor communication (Triandis, 2000). Most types of group

conflict stem from the tendency to form hierarchies; keep “us” on the top and “them”

on the bottom (Triandis, 2003). When grouping according to dissimilarity has been

accomplished, people are more likely confront or avoid each other, do not target

“win-win” situations and go for zero-sum, win/lose situations (Brewer, 1968)

(Tjosvold and Wong, 2004) (Triandis, 2003).

Hierarchy conflicts are more common in hierarchical societies; one does not want

make amends with something seen as “lesser” group, e.g. Mexican speakers in the

USA (Triandis, 2003). Furthermore the divide between “us” and “them” is stronger in

collectivist cultures (Triandis, 2003). Collectivist cultures also expose their dislike for

out-groups openly, while in individualist cultures the dislike is kept hidden and

conflict based on dissimilarity is not desired (Doucet and Jehn, 1997)

42

Societal and Institutional Context

A

Essential and

Facilitating

Situational

Factors

C

Initial Contact

De-categorisation

B

Participants’

Experiences

and

Characteristics

D

Established

Contact

Salient

Categorisation

E

Unified Group

Re-categorisation

Initial Anxiety.

Optimal

Situation Leads

to Liking

Without

Generalization

Optimal

Situation Leads

to Reduced

Prejudice with

Generalization

Optimal

Situation Leads

to Maximum

Reduction in

Prejudice

Time

Figure 8. Re-categorization and de-categorization (Pettigrew, 1998).

Sub-groups which dissolve the in-/out-group borders can be created to reduce conflict

(Wilson, 2000). However, superfluous differences between individual’s values may

prevent the formation of a sub-group (Salk and Brannen, 2000). Formation of a sub-

group requires the creation of a collectivist culture. All people have both individualist

and collectivist cognitions (Triandis, 2000), which allow the sub-group formation.

Hewstone et al (2002) note that the re-categorization and de-categorization (Figure 8)

may be short-lived or unrealistic when powerful ethnic or racial categorizations exist,

there is a history of antagonism between groups, or belonging to a super-ordinate

category constitutes a threat to the minority group. Creating a common in-group

culture restricts also the individual’s social identities and is considered an unstable

solution (Hewstone et al, 2002).

43

Impoliteness causes much of the confrontation in a cross-cultural environment

(Morand, 2003). Politeness is less important than personal freedom in individualist

cultures, but in collectivist cultures face-saving through politeness is valued (Weaver,

2001). Cultural dimensions can be applied to understand polite behavior: high social

distance and power distance require increasingly polite behavior (Morand, 2003).

Conflict in itself is not a problem; it is the way that conflict is managed that makes a

difference in team work (Walker, 2002). The absence of conflict is not beneficial to

individual or group performance (Jehn and Chatman, 2000). According to

Kirchmeyer and Cohen (1992), constructive conflict is the way to get heterogeneous

groups to generate better quality and more innovative results than homogenous

groups.

The type of conflict plays an important role on team performance. Relationship-

conflict is detrimental to performance (Jehn, 1997), but cooperative conflict promotes

productive teamwork, quality service, and effective leadership (Tjosvold and Wong,

2004) (Griffith et al, 2006). Without controlled conflict the benefits of diversity

cannot be realized in global teams (Maloney and Zellmer-Bruhn, 2006). Constructive

conflict brings the input of minority members to the same level as majority members

(Kirchmeyer and Cohen, 1992). According to Jehn (1997) the “optimal profile for

high-performance groups includes moderate task conflict, no relationship conflict,

little or no procedural conflict, with norms that consider conflict as acceptable,

perceptions that conflict is resolvable, and with little emotionality.”

44

Resolution

potential

Gro

up

Per

form

ance

Acceptability

Norms

Task Conflict

Relationship

Conflict

Process Conflict

Acceptability

Norms Emotionality

Importance

Figure 9. Model of group conflict and performance (Jehn, 1997).

Task and process conflict increase with the cross-functionality of the team.

Relationship conflict is affected by diversity, but the mechanism is complex and

impact on performance is difficult to identify (Pelled et al, 1999). Jehn and Mannix

(2001) have studied high-performance groups and note that the conflict profile

changes over time (Figure 10). Groups with the ideal conflict profile have: “similar

pre-established value systems, high levels of trust and respect, and open discussion

norms around conflict during the middle stages of their interaction” (Jehn and

Mannix, 2001).

45

Legend

Process conflict

Task conflict

Relationship

conflict

Time

Co

nfl

ict

Project

finished

Figure 10. Conflict in high-performance groups (Jehn and Mannix, 2001).

Individualists tend to confront and resort to dominating styles, while collectivists

avoid disrupting group harmony and avoid bringing the conflict out into the open

(Weaver, 2001). Individuals from collectivist cultures feel especially unsure about

how to handle diverse multicultural demands in conflict situations (Tjosvold and

Wong, 2004). Open discussion is a western approach to conflict management and not

always suitable (Tjosvold and Wong, 2004). Rewards and punishments vary between

cultures, e.g. personal rewards and threatening with firing are deemed inappropriate

in collectivist cultures. In collectivist cultures the threat of breaking the psychological

contract between GIC and the employee has a much greater impact on job motivation

(Probst, 2005)

If the conflicting parties could conclude that achieving “their” goals moves also “us”

closer to goal attainment, the conflict situation would be resolved (Triandis, 2003).

46

This is a self-verification strategy, which may resolve and prevent conflict, but does

not facilitate the benefits of team diversity (Maloney and Zellmer-Bruhn, 2006). The

usage of super-ordinate goals may also fail because they are being interpreted

according to the team member’s cultural background (Maloney and Zellmer-Bruhn,

2006). The self-verification strategy is often seen as applicable only in individualist

cultures. However, the approach can be applied also to collectivist cultures, as long

as the managers feel confident in the situation and team members felt that conflict is

positive (Tjosvold and Wong, 2004).

Kanter and Corn (1994) suggest that cultural tension is decreased when the

relationship between groups is made desirable, uncertainty is reduced, respect for

other groups is shown, communication channels are created, and business success is

ensured.

DiStefano and Maznevski (2000) suggest that conflict should be proactively managed

before it happens:

1. Teams map their diversity

2. Knowing their diversity mapping team members make a mental effort to

bridge opposing opinions

3. Teams members try to integrate different cultural behavior to allow maximum

creativity

4. The effort of their mapping/bridging/integration approach is so great that it

makes only sense when the team is working on high stakes targets or complex

problems that require a high level of creativity (DiStefano and Maznevski,

2000).

47

In the (Maloney and Zellmer-Bruhn, 2006) approach social integration is increased

by:

• Faultline bridges: designing teams with deliberate heterogeneity to prevent the

creation of sub-groups

• Swift norms: building of team norms and rules that make collaboration

structured

Self-verification is increased by creating:

• A global mindset: upper management promotes a mindset where operational

employees can attend to geographically local needs with global demands for

scope and scale

• Thought world windows: to proactively drive the team members towards a

shared reality through face-to-face meetings in different locations and the

rotation of meeting places

48

Social

Integration

Self Verification

Heterogeneity

and Distance

Faultline Bridges

Swift Norms

Global Mindset

Thought World

Windows

Global Team

Effectiveness

Figure 11. Methods to improve effectiveness of diverse teams (Maloney and Zellmer-

Bruhn, 2006).

4.3 Benefits Management

The idea of program management is that the program manager identifies the

benefits and aligns projects to the creation of benefits. If the preferences of the

organization are to change the program manager re-aligns the projects with the

benefit of the organization.

49

Benefit

Project A

Benefit

Project n

The ProgramDiscrete Benefits

Project A

Project B

Project C

Project D

Project E

Project nPro

gram

Man

agem

ent

Benefits

deliveryProject

Benefit

A…n

Coordinated

Benefits

Figure 12. Program Benefits Management (PMI 2006)

The benefits of a program can be tangible and / or intangible (PMI 2006). PMI (2006)

states the benefits management activities as:

• Assess the value and organizational impact of the program

• Identify the interdependencies of benefits being delivered among various

projects within the program

• Ensure that targeted benefits are specific, measurable, actual, realistic, and

time-based

• Analyze the potential impact of planned program changes on benefits

outcome

• Assign responsibilities and accountability for the actual benefits required from

the program

(PMI 2006)

50

To successfully complete the above tasks the program manager is assumed to have

knowledge of the environment and is able to create a well-organized and structured

system of preferences. The program manager would then understand and

communicate the costs and pay-offs in a universally accepted message. The strategic

orientation of an executive is strongly influenced by his/her cultural background;

benefits have multiple culturally based interpretations (Hitt et al, 1997). Also the

valuation of tangible and intangible benefits varies, e.g. collectivist cultures place

higher value on maintenance of harmony and westerners focus on hard facts like

revenue increase (Hitt et al, 1997) As Rippl (2002) states, “values frame the

interpretation of information”.

PMI (2006) benefits management activities presume certain responsibilities and

powers for the program manager. The authority to make decisions is culturally

dependent, e.g. the decision-making authority is not always delegated to the person

looking for the alternatives (Schramm-Nielsen, 2001). Feminine cultures on the other

hand prefer bottom-up planning in their decision-making (Hoffman, 2007).

The point in time when a decision is made varies between cultures (Schramm-

Nielsen, 2001) (Hitt et al, 1997). In some cultures the decision is made well before

execution, in others decisions are left to a time when execution has already been

started (Schramm-Nielsen, 2001). The time horizon differs between the cultures on

which benefits are targeted to be achieved (Hoffman, 2007).

The point the decision is made has also an effect on the ability to control; precise

upfront decisions are easier to measure than high-level dynamic decisions (Schramm-

Nielsen, 2001). Cultures with high uncertainty avoidance tend towards stricter control

(Hoffman, 1987). Some cultures prefer to leave the plan flexible while others prefer

rigid plans for execution (Hoffman, 2007). Planning increases the performance of

cultures with high power-distance and high level of uncertainty avoidance, while in

low power-distance and low uncertainty cultures the effect on performance is the

opposite (Hoffman, 2007).

51

The process of getting to a decision varies, between pragmatic emotional decisions to

thoroughly analyzed Cartesian decisions and variations between the two extremes

(Figure 13) (Schramm-Nielsen, 2001) (Hoffman, 1987). Individualist cultures allow

diversions from the process, while collectivist cultures require that all follow the

same process (Hoffman, 2007). Cultures with a feminine culture try to affect the

decision through negotiation, while other cultures prefer using position authority

(Hoffman, 1987).

Economic

Man

Administrative

Man

Muddling

Through

Accidental

Decisions

Full

rationality

Bounded

rationality

Incremental

rationality

Intuition

Reason logic

deduction

Routine Past

experience

Imagination

creativity

Figure 13. Continuum of rational-irrational decision-making (Schramm-Nielsen,

2001).

In a mixed-motive situation also the cultural background affects the likely preferred

option. In a mixed-motive situation maximum gains are realized through mutual trust.

In a culturally diverse setting the decision-maker has to overcome his/her distrust

while not being able to determine the choice of the other decision-makers due to the

52

uncertainty of the foreign individual’s choice. A mixed-motive situation creates high

tension on the decision-maker. (Chen and Li, 2005)

Siegrist et al (2000) state that in communicating benefits and risks the similarity of

values plays a key role on how the receiver reacts to the sender’s message. This

implies that culturally similar groups accept the benefit and risk assessments.

Dissimilar cultures would be less accepting to the assessment. Trust is the intention

(Gill et al, 2005) and willingness (Mayer et al, 1995) to take risk in a relationship and

thus a key factor in the program manager’s ability perform benefits management

activities.

Figure 14. Model of value similarity's effect on perception of benefit and risk.

(Siegrist et al, 2000)

53

4.4 Stakeholder Management

The program manager creates and maintains relationships with stakeholders. This is

an inevitably political mediation task (PMI 2006) (Boatright, 1996), due to its nature

of trying to balance sometimes conflicting interests. Boatright (1996) sees the role of

the managers as of “a neutral referee” when trying to coordinate through the maze of

conflicting stakeholder interests.

Freeman and McVae (2001), define stakeholders as "any group or individual who is

affected by or can affect the achievement of an organization’s objectives”. In global

programs this is a large and varied group of individuals. However, the actual practice

varies; in the USA key stakeholders are stockholders while in France the group is

much broader (Hitt et al, 1997).

The way to manage stakeholders is dependent on the contract between the

stakeholder and the organization. Depending on the culture, implicit or explicit

contracts are preferred. In collectivist cultures the agreement between an individual

and a firm is a relationship between the in-group of the individual and the firm, i.e.

the in-group (e.g. family or community) of one employee could be a stakeholder.

However, even in collectivist cultures it is not always expected that stakeholders

should affect corporate decisions, i.e. the boss is not a “neutral referee” in all cultures.

In high power distance cultures, the boss is the ultimate expert (Weaver, 2001) and

makes decisions without consulting the in-group (Javidan et al, 2006).

4.5 Governance

According to Boatright (1996) governance mechanisms address wrongful harms,

misallocations and misappropriations. In a cross-cultural setting, all rules are under

constant multiple interpretations (Suk, 1999) and control systems vary between

subsidiaries due to the nature of the global organization (Gupta and Govindarajan,

1991).

54

Any form of co-operation entails the full range of ethical responsibilities (Boatright,

1998). Ethics are embedded in cultures and the interpretation of “good” varies across

cultures (Gonzalez, 2003) (Sarwono and Armstrong, 2001) (Cherry and Lee, 2003)

(Alas, 2006). E.g. hiring based on relationships common in a collectivist culture, but

in individualist cultures hiring decisions are based on the individual’s achievements

(Boyacigiller and Adler, 1991).

According to (PMI 2006) program governance is “the process of developing,

communicating, implementing, monitoring, and assuring policies, procedures,

organizational structures, and practices associated with a given program. The result is

a framework for efficient and effective decision-making and delivery management

focused on achieving program goals in a consistent manner, addressing appropriate

risks and stakeholder requirements”.

The above implies explicit contractual agreements; a preference of individualist

cultures. By other cultures explicit contractual agreements may be ignored or

regarded as a sign of distrust (Weaver, 2001).

According to Boatright (1998) organized activity requires a set of rules or established

expectations to guide each person's behavior. These rules and expectations would be

more or less formalized depending on the cultural dimensions of the team. Weaver

(2001) notes that in individualist cultures, shared values do not exist and formal rules

replace shared values. In collectivist cultures rules are less formal, although high

ethical standards may be the norm (Weaver, 2001). In low-context cultures written

information is better understood, but in high-context cultures the formal codes and

procedures may be ignored (Weaver, 2001).

Moral standards are not set by authoritative bodies (Alas, 2006), but the validity of a

moral standard is based on the reasoning provided by the authoritative body. How

much an authority is respected in a country is dependent on the cultural dimensions

(Javidan et al, 2006) (Weaver, 2001).

55

Dimension Ethical behavior

In-group collectivism Higher

Individualism Higher

Uncertainty avoidance Higher

High power distance Lower

Masculinity Lower

Table 4. Cultural dimension’s effect on ethical behavior (Alas, 2006) (Armstrong,

1996) (Ruhe and Davis, 2003).

Hofstede’s dimensions of national culture are limited when applied to ethics, because

ethical conduct is more strongly affected by subgroup culture, e.g. religion,

generation, gender, education, peers etc (Nyaw and Ng, 1994) (Barnett and Karson,

1989) (Lysonski and Gaidis, 1991) (Sarwono and Armstrong, 2001) (Armstrong,

1996) (Westerman et al, 2007). When an individual is immerged into another

subgroup they may change their reaction to unethical conduct as well as their

perception of ethical conduct depending on the conduct of their peers (Westerman et

al, 2007).

Ethical behavior changes for collectivist cultures depending on whether they are

working with in-group or out-group individuals (Elahee et al, 2004). This is seen

when stricter standards are applied to individuals from other cultures (Tsalikis and

Nwachuku, 1991). Ethical behavior is also affected by the severity of punitive

actions, which varies among cultures (Sarwono and Armstrong, 2001). Standard

rewards and punishments, from individualist cultures, e.g. threatening with firing, are

deemed inappropriate in collectivist countries due to disruption of group harmony

(Weaver, 2001). Hence, the ethical standard is dependent on the status of the sub-

group and the situation.

56

5 Research Design

5.1 Conceptual Framework

The conceptual framework was developed “on the job”; the author works as a

program manager of global programs. The author created a list of issues he has

identified on the job and discussed findings with colleagues. The issues were

organized around the PMI framework. Later the framework was extended through a

literature research (see also chapter 4) as presented in Figure 15. The framework

served only as a starting point for the field research.

Trust

Time Perceptions

Group Performance

Risk perceptions

Management and

Leadership

Communication and

collaboration

Conflict Management

Culture Shock

Prog

ram o

utco

me

Benefits Mgmt

Stakeholder Management

Governance

Program Mgmt

National Cultures

Subgroup cultures

Diversity

Intercultural

Effectiveness

Figure 15. Conceptual framework of the study.

57

5.2 Research Question

The research question is formulated below.

What are the effects of cultural diversity in global program management?

The research question was broken down into the following sub-questions:

Q1. What are the cultural drivers that improve success of global programs?

Q2: What are the challenges facing culturally diverse global programs in the three

core areas:

o Benefits management

o Stakeholder management and

o Governance?

Q3: What are the program management tools, methods and skills that facilitate

success of culturally diverse global programs?

Q4: What factors need to be considered when setting up global programs in a

culturally diverse environment?

5.3 Methods

5.3.1 Qualitative Research

Due to the nature of the topic, schedule restrictions and geographic constraints, the

results of the study are of limited internal and external validity (see Table 5).

58

Validity target Constraint

Internal validity: the extent to which

causal conclusions can be drawn

The causality of the results is weak. With

the limited time frame and geographic

constraints it is not possible to obtain

sufficient data to compare programs and

their cause-effects mechanisms.

External validity: the extent to

which it is possible generalize from

the data and context to broader

populations and settings

The sample is from a specific field and

industry, which limits the sample size and

applicability of the results to a broader

context. The time and geographic

constraint limited the sample size.

Construct validity: the extent to

which the constructs in the

conceptual framework are

operationalized in the research study

The variables in the conceptual

framework cannot be measured.

Statistical conclusion: the extent to

which the study has used

appropriate design and statistical

methods to enable it to detect the

effects.

The independent variables in the study are

non-quantified and the sample is small. It

is not possible use statistical methods to

detect effects.

Table 5. Validity targets and constraints, adopted from (Bickman et al, 1998).

The target of the study was to explore the effect of cultural diversity in global

program management and hence balancing towards internal and external validity is

acceptable.

59

The target of “drawing a picture” of the phenomenon “cultural diversity in global

program management” indicates that descriptive research methods are to be used

(Bickman et al, 1998) (Miles and Huberman, 1994). The research also includes

description of subjective nature, which might be difficult to respond to in a

questionnaire. Hence, interview techniques are preferred (Crano and Brewer, 2002).

Descriptive research cannot be used to make causal inferences and generalization will

be difficult (Bickman et al, 1998) (Miles and Huberman, 1994). Accepting all the

above, it was decided to proceed according to Maxwells (1998) qualitative research

project framework.

An approach of iterating the research design and questions during interview execution

was adopted, as suggested by Miles and Huberman (1994) and Maxwell (1998).

The validity of the results was improved with the following methods:

• External validity: the questions are tied to the PMI standard of program

management.

• Construct validity: usage of a semi-structured interviewing technique

• Using a three-phased interview

The improvements were driven by the suggestion of Maxwell (1998) to balance free-

form exploration and structure in a qualitative research, when time is limited.

5.3.2 Capturing Data

Primary sources of data were targeted and the format was self-report data. Program

managers from global and culturally diverse programs were interviewed and the

interviews were captured with an audio recorder. The interviewees described

experiences according to a flexible question agenda. Diversions to explore a topic

further were allowed. In the end of the interview the question list was checked to

make sure that all questions have been answered. The interviews were conducted

face-to-face and via telephone by one interviewer. The telephone was used due to

60

time and geographical constraints, but this does not have an effect on the research

quality (Crano and Brewer, 2002).

The interviewees were asked to recommend other interviewees. This is what Maxwell

(1998) calls “purposeful sampling” individuals are “deliberately selected for the

important information they can provide that cannot be gotten as well” by applying

probabilistic sampling. However, the sample size was not predefined; the sample was

expanded until “there was nothing new” as proposed by Ezzy (2002). As Ezzy (2002)

states “this sort of research provides a much more sophisticated understanding of the

issues, will facilitate the formulation of more effective policy, and is politically and

ethically sensitive.”

The literature research provided all the secondary data for the study. Data from extant

databases, observational data and documents were not gathered due to time

limitations of the research; this research is based on self-reports.

The research was limited to program managers due to data relevance reasons.

Expanding to other groups jeopardizes the construct validity of the data, because the

theme requires program management knowledge.

The interviews were split into three (see Table 6). It was expected that more than

three interviews would not be tolerated. Less than three interviews would not allow

capturing the themes and testing the findings.

61

Interview Target

1. Interview set-up,

background information and

exploration of general themes

• Introduce the interviewee to the topic,

project targets and methods.

• Gain understanding of the interviewee’s

experience, cultural background the

environment.

• Discuss general themes.

• Gain knowledge of possible further

interviewees.

2. Explore specific themes • Explore themes found in first interview.

3. Test validity of findings • Test findings with interviewees.

Table 6. Interview targets.

To assess the level of cultural diversity the interviewees are asked to provide samples

of cultural mixes they commonly encounter in their programs. Less direct questions

were applied to assess cultural intelligence, e.g. “In how many languages are you

comfortable in ordinary conversations?” (Triandis, 2003)

Similar to the work of Alas (2006) the common behaviors, institutional practices,

proscriptions and prescriptions were discussed through the usage of “What is” and

“What are“-questions. Values are discussed through questions “What should be”,

which should express the interviewees’ values concerning the practices.

62

The questions were designed according to the guiding principals by Crano and

Brewer (2002):

• Questions are short

• Questions are direct

• Double-barreled questions are avoided

• Jargon is avoided

• Items are pre-tested

5.3.3 Analysis

Analysis of the results was started immediately after the first interview and continued

through the interview process as recommended by Ezzy (2002) and Maxwell (1998).

The analysis used four methods:

• Categorizing: splitting data in to categories that allow comparison inside the

category and between categories

• Contextualizing: identification of relationships in the data and understanding

the context of the data

• Memoing: was used to stimulate thinking and capture ideas

• Checking interpretations with participants.

Interviews did not proceed to the next phase before the analysis of the first phase was

completed. The interviews of the following phase were based on the analysis results

of the previous interview round. The systematic research approach guarantees the

quality of the research (Ezzy, 2002).

63

5.3.4 Validity

The interview approach had three phases. In the final interview the theories were

tested on the interviewees. The testing approach removed the possibility of drawing

conclusions that the interviewees do not agree with. This is known as the “member

check” method (Maxwell, 1998). However, the member check method does not

validate the correctness of the conclusions in general, only within the group. It does

also not completely remove the effect the author has on the results; the results are an

interpretation of the data made by the author. In this study 11 GIC program managers

formed the group. They were interviewed between June and October 2008. The group

represents all GIC business divisions and geographies. During the interviews the

financial industry was in turmoil. With another group or during another time period

the results could have been different. But for this period of time and this group the

results are valid and applicable within GIC.

Triangulation (Maxwell, 1998) was used to validate the transferability of the

conclusions. Results were compared to findings from the literature review (see 7).

The main study questions were framed before starting interviews. To avoid the

possibility that important areas of the research are not identified, the second round of

interviews was left open until interviewees had stated the themes they find important.

This did not create significant new themes. It is to be assumed that the topics in the

literature research cover the research topic sufficiently.

The research did not target measurable data and answers with no metrics were

allowed, e.g. feelings and intentions. This was necessary to explore the themes the

program managers experience in their environment and allows theorizing about

phenomena that is not directly observable (Maxwell, 1998). The approach sets

constraints concerning the validity of the research. However, the research targets are

64

aligned with the approach and responsibility is on the reader to not apply the research

results beyond the boundaries of validity.

The interview questions were tested by three valuators to avoid leading questions and

assumptions. Also variance questions were avoided; the focus was on process

questions (“How…?” and “Why…?”).

The study sample was created by asking interviewees for suitable candidates. The

captured experiences where therefore not controlled by the interviewer. With this

technique there is danger of working within a network of similarly thinking

individuals, e.g. close friends. Considering the small sample this risk is high.

However, as Maxwell (1998) states, sampling based on typicality and relative

homogeneity “provides far more confidence that the conclusions adequately represent

the average members of the population than does a sample of the same size that

incorporates substantial random or accidental variation”.

The sample size was based on the rule by Ezzy (2002): “keep expanding the sample

until you hear nothing new”. The interview results began repeating already after 6

interviews. Adding interviewees was continued until 11 interviewees to verify that

the sample was sufficient. Additional interviewees increased depth to program

management answers, but did not present new themes. The group opinion converged

much earlier than expected, but Ezzy’s criterion was fulfilled.

The research was made by a GIC employee on GIC employees. Most likely the

interviewees did not always describe the situation as they see it, but as the situation

requires them to. For this reason a three phased interview approach was applied, so

general themes could be collected from the test group and then rephrased and fed

back to the test group. The approach improves the accuracy of the results but does not

completely remove the effect of the situational context.

It is likely that the interviewees underreport problems, because unsuccessful

management is viewed with disapproval by the working community (Crano and

Brewer, 2002). The research therefore concentrated, first of all to affirm the

65

interviewees that the results are untraceable. Secondly, the research urged program

managers to report success stories in order to capture the root cause of issues being

solved.

66

6 Interview Results

The results of the interviews are presented in this chapter. The results have been

grouped under specific topics to help the reader. The author has not added his own

conclusions to the results, i.e. this chapter presents filtered and categorized raw data

produced by the interviewees.

6.1 Cultures and situational context

In the context of program management the GIC environment comprises of three

inseparable factors: national culture, sub-group culture and situational context (Figure

16). E.g. “local regulatory standards drive the behavior of people” but “an American

sales rep will change his behavior in order to be accepted in Switzerland, but he is

still an American sales rep and will never be Swiss.”

Figure 16. Cultures and situational context mix when observed from the outside.

67

6.2 Globalization

Most interviewees were cognizant of the threat globalization has on individual

company locations, e.g. outsourcing of services to other countries. Most interviewees

recognized that global programs drive globalization in GIC. One interviewee vocally

objected to taking part in globalization. The value-creation opportunities from

globalization were not clearly recognized by the interviewees.

Globalization in GIC was not perceived as “Americanization”, but almost the

opposite; more cultures e.g. Indian are being introduced to GIC. “Globalization is not

a culture, it is the absence of cultures” as one interviewee stated.

Some interviewees missed personal incentive for globalization or to change

functional silos or locations.

6.3 Ethnocentrism and Perceptions of Out-groups

Some interviewees displayed signs of cultural blindness. They perceived cultural

diversity as a challenge and never an opportunity. They prepared for challenges that

cultural diversity causes, but opportunities were not actively pursued. These

interviewees used terms like “put a stake in the ground” when describing how the

projects should be executed.

Other interviewees noted that the value of cultural diversity generates broader

solutions and provides more approaches to solving problems. Some interviewees

pursued cultural opportunities actively e.g. by placing certain cultures into strategic

program roles and by creating “local ambassadors”. Other program managers did not

pursue the opportunities actively, but exploited the opportunity when it presented

itself.

68

Without specifically asking to do so, most interviewees pointed out traits of other

nationalities that cause challenges, e.g. “US team members are not co-operative”,

“Spaniards are always late”, “Italians are chaotic”, “the Swiss are uncommunicative”

and “Germans are confrontational”.

Minorities stated that “having a different background makes life tougher, because

expectations are higher” than for the majority.

6.4 Trust

Trust towards program managers was not perceived as an issue. However, most

interviewees told how difficulties can be overcome through trust building exercises. It

was also noted that effective program management relies on the ability to build

trusting relationships.

The interviewees reported that a program manager should “never assume anything

and always check everything”. In practice program managers apply stricter methods

of monitoring and control on off-site and out-group individuals. Increased monitoring

and control was believed to reduce consequences of constant misunderstandings.

6.5 Perceptions of Time

Time perceptions were mentioned as an issue when working with Latin cultures and

Indians. Their event driven and circular time perceptions did not meet the

expectations of the program managers working in linear and clock time.

One interviewee noted that for a Swiss stakeholder group timely delivery is more

important than the content of the delivery.

69

The interviewees accepted the usage of linear time as the norm and responded to

variations with stricter monitoring and control.

6.6 Performance

Most interviewees stated that the performance of a program is directly related to the

clarity of the goal; a clear goal drives performance. A clear goal is a goal that can be

communicated globally with little possibility for misunderstanding.

Some interviewees perceived culturally diverse programs more prone for failure.

They felt that the programs fail often because of the high communication overhead.

In general all interviewees considered communication slow and cumbersome. English

is the GIC corporate language and many can speak it. Not all non-native English

speakers are fluent in written English. This may cause documentation tasks to take

longer and quality issues. Also document reviews may sometimes be ineffective and

time consuming.

According to other interviewees success or failure was not determined by cultural

diversity, but how diversity is managed. Key step to good performance in programs

was “the acknowledgement of existence of cultures and cultural diversity”.

Some interviewees had structured approaches to management of diversity. They

prepared a thorough analysis of the cultural environment during program initiation.

The preparations included assessments of cultural risks and mitigation planning. The

management of cultural risks continued throughout the program.

Some indicated that the higher risk inherent to global programs is due to the

complexity of the programs. Differences in local standards add complexity and slow

down solution creation.

Global program teams take longer to form. This is partially due to distance, but also

due to people not understanding each other. Longer running programs were told to

70

have better performing project teams later in the program. One interviewee reported

having used controlled conflict to speed up team forming processes; she let the

cultures clash, which led faster to the performing stage.

The motivation to take part in culturally diverse programs is very high, which has a

positive effect on performance. “The richness of the environment makes work

interesting.”

Decision-making processes vary across cultures, which slows down programs. E.g.

Germans were described to prefer a Cartesian decision process and US Americans

preferred an approach of incremental rationality.

There are also cultural preferences for setting up projects; some cultures prefer

Cartesian up-front planning and structured execution others prefer agile projects with

intensive risk management. The interviewees had also noticed differences in

preferences to use top-down or bottom-up planning: the Swiss prefer bottom-up and

US Americans top-down planning.

The decision-making and project set-up preference was identified as a practice; i.e.

not deeply rooted in the value-system of a culture. This means that one or the other

practice can be chosen as long as the individuals are aware of the need to decide.

Before decisions can be made or a project planned the approaches must be agreed.

Some interviewees were very straightforward about combinations of cultures that

were more prone for difficulties. Such a combination was e.g. Swiss program

manager, with German line manager and US stakeholders. Also the suitability of

Indian culture on the supplier side was questioned. Other interviewees felt that this

type of categorization might be true in some cases, but is a too extreme statement.

Poor performance was accepted by many interviewees. Few interviewees actively

mitigated issues detrimental to performance. All interviewees noted that although the

performance overhead is significant and known it is usually not planned for.

71

6.7 Culture Shock

Only few interviewees used the term culture shock, but most described unpleasant

surprises caused by language issues, differences in social norms and incompatible

standards.

Typical for global programs is a constant fluctuation of staff, which puts the program

manager and the program team through multiple cycles of culture shock.

Face threat was not mentioned often. Program managers work in a transitional role

with little formal authority. Authority questions are not targeted at the program

managers but the sponsor. It could be also that the interviewees did not want to

present personal humiliation to a peer.

Performance difficulties were mentioned by every interviewee. They stem from the

difficulty to decipher spoken, behavioral, contextual and social communication. E.g.

the German formal and non-formal usage of you is not apparent when speaking

English, but the behavior of the German-speaker indicates first formality and later in

the relationship non-formality although the language stays the same. The change is

difficult to understand.

Role shock was apparent, because governance structures are not clear. When asked

who is responsible for governance each interviewee answered according to his/her

national culture. In a global environment the governance roles are not the same

everywhere.

6.8 Risks

Differences in risk aversion and risk management were noted. As one interviewee

stated: “the Americans have always much more ambitious programs”.

72

6.9 Management and Leadership

The interviewees described the most suitable leadership type as the charismatic value-

driven leader. Also the team-oriented leader received positive comments.

Authoritarian leadership was described in a negative context.

The interviewees preferred to use face-to-face communication when leading projects.

Active listening and participative team work were described in positive terms.

It was reported that often program managers manage via emails and do not

necessarily ever communicate directly with their teams. Because progress cannot be

followed on-site they set up extensive monitoring and controlling frameworks.

6.10 Communication and Collaboration

Global programs have extensive communication overheads, caused not only by

distance and time zones, but mainly by language issues. Underestimation of the

communication overhead was identified as one of the leading factors for trouble in

programs. Communication in global programs was described as constantly confusing;

every word has multiple interpretations.

73

Misunderstandings were e.g.

• “There is no common agreement for what is a deadline; e.g. is it exactly on

the agreed date or close to it”,

• “Each location and function has its own interpretation of standard terminology

like User Acceptance Testing, Confidentiality Agreement or Market Launch.

• Foreign language speakers cannot identify a difference between “we do not

have an issue in the process” and “we do not have an issue with the process”.

For non-native English speakers written communication in English is slower and of

reduced quality. This affects both email communication and communication via

written documents e.g. specifications.

The interviewees identified that communication tools like email or telephone are not

suitable in culturally diverse situations. The program manager needs visual cues to

send and receive messages correctly; i.e. the tools do not convey the tacit component

of communication.

The situational context plays a strong role in communication and is present only in

on-site and face-to-face communication. Videoconferencing utilities are not usable in

normal program management situations; the connections are unreliable. Other

methods of visual communication, e.g. web conferencing, are not available in GIC.

The interviewees considered them potentially beneficial. Also the need to create

though-world windows; i.e. understand the environment on-site, is required. This

means in essence that team members need to travel between company locations to

understand the true content of the message. It was noted that GIC travel policy has

been devised to reduce travel and increase reliance on electronic communication. The

efficiency focused travel policy was perceived detrimental for building thought world

windows and a global mindset.

Multicultural meetings need more structure than single-culture meetings. Structure

assists the non-native speakers understand when a decision is made. Often native-

74

speakers think that agreement has been reached; later non-English speakers will try to

revisit the decision. The non-native speakers need more time to think through the

discussions, which causes English speakers and non-English speakers to run out of

synch.

Co

mm

un

icatio

n e

ffectiv

eness a

nd

efficie

ncy

Drivers for ineffective communication Drivers for effective communication

Structured meetings

Reliance on written communicationFluency in writing and speech

Workshops

Decisions clearly stated

Negligence of situational context

Corporate Culture

Face-to-face meetings

Co-location

Time zone differences

Lack of common glossary

Communication planning

Tight schedules

Figure 17. Communication drivers in global programs.

75

6.11 Intercultural Effectiveness

Many interviewees stated that the most important factor to intercultural effectiveness

is the “acknowledgement that cultures and cultural diversity exists”. Most

interviewees expressed that they change their behavior according to culture. Many

stated that “other” program managers did not understand or adjust to cultures. Some

interviewees stated that they do not change their behavior because “everyone must be

treated in the same way” and “the program manager determines how things are

done”.

Some interviewees indicated that certain cultures lack the motivation and energy to

learn and adjust to cross-cultural situations. The cultures mentioned were American,

French and German. The interviewees did not identify such behavior in their own

culture.

Interviewees noted that in-group stakeholders tend to get more attention than out-

group stakeholders, because program managers like to spend more time managing the

easier relationships. It would be beneficial for the program manager to spend more

time with the out-group stakeholders, because misunderstanding and resistance are

more likely in these groups.

Most interviewees found that living abroad and international assignments were

beneficial for participants of global programs. The experience would help

“understand what makes people tick”. Experience helps also to put communication in

the right context. One interviewee noted that experience helps in respecting other

cultures, while being proud of one’s own identity. It was proposed that travel between

company locations must be added to program plans.

Most interviewees made it clear that individuals are not to be treated as stereotypes.

Some interviewees believed that treating one person differently than the majority is

discrimination. Some interviewees considered very specific needs of different

cultures, e.g. food, need for prayers and holidays.

76

Reading about cultures to meet expected norms and understand possible sources of

conflict was common. Most interviewees referred to training as a way to gain

knowledge, but felt hesitant, because the content of the training was unclear. None of

the interviewees mentioned the cultural knowledgebase available on the GIC intranet.

Some interviewees described structured methods of managing cultures. The methods

included:

• Knowledge gathering prior to the program.

• Identification of possible challenges and opportunities.

• Mitigation planning for cultural risk.

• Realization planning for cultural opportunities.

• Systematic monitoring and mitigation of cultural risk during program

execution.

Inte

rcultu

ral e

ffectiv

eness

Drivers for ineffective intercultural co-

operation

Drivers for effective intercultural co-

operation

Communication difficulties

Ability to perform in new environment

Inability to recognize the situation

Motivation to learn and adjust

Managing only “easy” relationships

Acknowledgement of cultures

Working and living abroad

Consideration for specific needs

Training

Reading about cultures

Structured management of cultures

Figure 18. Drivers and obstacles for intercultural effectiveness.

77

6.12 Conflict Management

The main sources of conflict in global programs are communication difficulties,

resistance to change and process gaps in GIC enterprise standards (e.g. cross-border

budgeting rules).

Constant misinterpretations drive to high amounts of task conflict; it is never quite

clear what needs to be done and how. Differences in social norms create relationship

conflict. People feel often that “they are not liked”. Process conflict is very common,

because programs operate in a non-standard environment with overlapping local

standards and practices.

The distance makes identification of conflict and resolution difficult. People resort to

avoidance strategies instead of bringing the conflict out in the open.

One interviewee stated that in programs, the first project is most conflict prone. Later

team members understand each other better and conflict is less frequent. Another

interview stated that conflict can erupt in any of the projects, “because what works in

one country may not work in another”.

Global programs have often an element of threat to local operations, which drives

resistance and politically motivated “trouble-making”. The source of this conflict is

disagreement on the goals.

The interviewees did not express out-right dislike towards any group. A divide

between Europe and America was often mentioned, with interviewees describing the

situation in terms of “us” and “them”.

Impolite communication was mentioned often as the cause of conflict. Many

interviewees stated that short and blunt emails create perceptions of impoliteness and

aggression. In the absence of agreed upon social norms it is difficult to estimate what

is impolite. Often the message format is more important than the message the content.

Not having agreed rules of social conduct causes confusion and people easily

conclude that the “person does not like me” or that others are showing disrespect.

78

Program managers have very limited ability to use punishments or rewards to resolve

conflict. Popular conflict management strategies included the creation of super-

ordinate groups (the program team), consensus building, confrontation, negotiating,

bargaining with favors, threatening and escalating. One interviewee stated that using

neutral “arbitrators” from the foreign culture helped in conflict resolution. One

interviewee stated that conflict without material consequences does not need to be

resolved. Many stated that showing respect to other groups, e.g. personal visits,

reduces conflict

Some interviewees managed conflict “playing it by the ear”. Others preferred

planning escalation paths upfront, using issue lists to voice concern and guide

resolution activities. The latter approach included sometimes sophisticated

monitoring-analysis-response frameworks. Both methods require an effective

relationship with key decision-makers and estimating the reactions of different

cultures. . All interviewees stressed the importance of face-to-face communication in

conflict situations.

Many interviewees told that they “dress up the message” and hence create “buy-in”.

They would emphasize how achieving “our” goals will move also “the others” closer

to “their” goal attainment; i.e. self-verification strategies. Sometimes “dressing up the

message” would include telling only what the audience wanted to hear. Some

interviewees perceived this practice as dishonest. On the other hand, one interviewee

stated that self-verification is not possible when the program targets conflict with

local interests. Conflicting interests is usually the case for global programs.

79

Am

ou

nt o

f con

flict

Drivers for increase in conflict Drivers decrease in conflict

Communication difficulties

Threat of globalization

Process gaps

Impoliteness

First project in program

Team worked together longer

Immediate escalation

Confrontation, negotiation, bargains and threats

Controlled conflict

Super-ordinate groups and goal

Relationship with decision-makers

Alignment with global strategy

Clear organization structure

Expressing benevolence

Figure 19. Factors driving and reducing conflict.

6.13 Benefits Management

Benefits in GIC are primarily measured in financial terms, e.g. internal rate of return.

Some interviewees felt that positive or negative effect of cultural diversity is not

sufficiently considered in GIC, although most interviewees noted that diversity is

causing many challenges.

What is meant by specific, measurable, actual, realistic and time-based (SMART) is

culturally dependent (Table 7). Therefore agreeing on and communicating a

universally accepted goal is challenging.

80

Cultural Challenge GIC Standard

Specific What is specific:

E.g. Germans need to understand the logic

before something is considered specific. For

others less will suffice.

Financial facts

Measurable What is the measure:

• Most measures have local variations

What is measured:

• The US-style is to measure everything

• The European style is to measure only

what has relevance and data quality

Financial

measures

Actual What is actual depends on the local situation. Corporate

strategy

Realistic Depends on the risk adversity of the group. No standard

Time-

based

Depends on the time system:

• Clock-time vs. event-time

• Linear time vs. cyclical time

No standard

Table 7. Challenges in defining SMART objectives.

The process of defining a benefit is culturally dependent; some cultures prefer a

Cartesian decision-making process while others use an incrementally rational

approach. The point a final decision is made is unclear and especially the point when

can the decision be reversed.

81

6.14 Stakeholder Management

There was no agreed definition for “stakeholder”. For some, stakeholders were only

the key executives with interest in the program, for others stakeholders were all

impacted parties including end-users, team members and line managers.

Unstructured approaches to managing stakeholders were often stated as the cause for

troubled programs, because ad-hoc methods failed to identify stakeholders.

To manage stakeholders effectively trust is required. All interviewees created trusting

relationships via ad-hoc trust building exercises.

Some saw the program manager’s role as “neutral referee”. Some thought the

program manager was responsible for implementing strategy and should not care

about impact. These individuals thought caring about impact and creating “buy-in”

was an upper management concern.

Global programs tend to have more senior stakeholders. GIC corporate talk is well

understood by this group.

Some interviewees noted that certain stakeholder groups are not motivated by hard

benefits. For these groups the program manager must translate the benefit in a

meaningful way for that group.

The situational context plays a role how stakeholders are managed; a line manager

who is losing resources is managed differently than a manager who is gaining

resources. How they react to the situation depends on their cultural background.

During one-to-one communication most interviewees treated individual stakeholders

according to the stakeholder’s culture. But in mass communication all interviewees

resorted to a unified GIC corporate communication styles. But some interviewees

phoned the stakeholders immediately before or after the message to check that the

message was received correctly.

82

6.15 Governance

The interviewees had differing opinions of who is responsible for program

governance, proposals ranged from team members to the CEO.

There is a global governance structure for programs, but in addition local governance

frameworks need to be adhered to. Some felt that the global governance process does

not always support programs. Some interviewees thought that a global governance

process is achievable, but must be kept simple. Some interviewees stated that the

decentralized company structure prevented global governance rules from being

created. Some interviewees also noted that a global governance process is possible to

create, but the process must have local variations due to cultural and situational

differences. One interviewee stated that it is the most difficult activity set up

governance in a diverse environment, because all cultures have different practices and

expectations.

It is expected that program managers coordinate the creation and application of

governance also in their programs. This requires understanding of rules, standards

and norms and the ability to set standards. It was advised to baseline the governance

to one company location. Having a baseline in a foreign location causes resistance,

because local actors are used to local rules. One interviewee noted that the challenge

for program managers is to get a single status report for the program, but manage

each culture differently when acquiring the relevant information. Other interviewees

stated that rules must be obeyed independent of cultural aspects. Hence, they made no

adjustments or exceptions to governance processes.

Most interviewees thought that rules must be stated in writing. This is not a cultural

preference, but a consequence of constant misunderstandings in communication.

Creating and maintaining governance documentation needs to be a considered in

program budgets.

83

7 Discussion and Conclusions

The key conclusions concerning the effects and underlying themes of cultural

diversity in global programs are presented in this section.

7.1 Culture

All interviewees had an opinion of what culture is, but a common definition was not

found. The usefulness of stereotypes was criticized by the interviewees, because

stereotypes do not represent average individuals sufficiently (Osland and Osland,

2006). Some interviewees recognized the benefit of using cultural prototypes to

prepare for the unexpected and to understand multicultural situations as suggested by

Alon and Brett (2007). The interviewees recognized the interplay between national

cultures, sub-group cultures and the situational context (Hyunghare and Ybema,

2000) (Osland and Bird (2000), which further complicates the correct evaluation of a

culturally diverse situation. The presence of a GIC company culture was often

mentioned, although it was also noted that the dispersed company structure made

shared practices and values uncommon.

Ethnocentrism was present in some form in all interviewees as predicted by Triandis

(2003). The fundamental attribution error was often present, where program

managers acted as if their local practice was the only way to execute a program and

success by other approaches was due to luck. Many interviewees stated that out-

groups need to be controlled more than in-groups, which indicates that cultures tend

to trust their in-groups and distrust dissimilar groups (Triandis, 2003). According to

the interviewees this was not as much due to distrust, but more often due to the

inability to forecast what would happen; dissimilar groups caused often surprises and

the interviewees increased monitoring and control to identify the situation in a timely

manner. The interviewees did not perceive the negative behavior of out-groups more

84

severely than negative behavior of in-groups, which is the opposite of what is

proposed by Kanter and Corn (1994).

Trust or lack of trust was never mentioned directly, but all interviewees engaged in

trust building activities. The general trust between GIC employees could be due to the

individualist’s tendency to trust everyone until otherwise proven (Bird and Osland,

2006) (Alon and Brett, 2007). Especially benevolence was mentioned as a key

attribute for program managers in global programs. It was often noted that

benevolence is difficult to achieve because global programs pose a local threat.

Integrity was also often mentioned in program governance activities and as a general

objective to “treat everyone the same”. Ability was not mentioned, otherwise than

that global program managers must be more skilled and experienced than other

program managers. Avoiding discussions about abilities could be due to the peer

status of the interviewer. All interviewees admitted that creating trustful relationships

was difficult in a diverse environment (Gill et al, 2005). Although the importance was

recognized they lacked structure and methods for building trust in relationships.

Figure 20 presents the worst case scenario of a program manager unknowingly

leading an out-group into a cycle of increasing distrust and decreasing performance.

Noteworthy is how the performance of the in-group has a negative effect on the out-

group. The key mechanism in the chain of events is the lack of self-verification on the

part of the out-group. To end the spiral of decreasing performance the program

manager should increase stakeholder management activities on the out-group and

display integrity in governance of both groups.

85

Out-group

DistrustUnpredicted results

Trust

Predicted results

Increased

performance

In-group

Increased

monitoring

and control

Decreased

monitoring

and control

Decreased

performance

Fundamental

Attribution Error

Negative results

emphasized

Positive results

de-emphasized

Unpredicted results

Predicted results

Negative results

de-emphasized

Positive results

emphasized

Lack of

Integrity

Figure 20. Differences in the management of in- and out-groups and the effect on

performance.

As suggested by Triandis (2003) certain large cultural groups where perceived

difficult to work with in cross-cultural situations, because they lacked motivation to

adjust to other cultures.

“Us and them” was often used when describing Europeans and US citizens. This

indicates that Europeans see themselves as a part of the European GIC while US

citizens perceive themselves as a part of the US GIC. The “us and them” is also

indicative of the work that needs to be still done in creating one globalized GIC.

The effect of various time perceptions was causing stress in programs. The highest

distress was indicated by individuals with linear clock-time culture. Program

managers from a linear or event time culture were annoyed, but not outraged by

others not having the same time perception.

86

7.2 Implications of Cultural Diversity

It was verified that diversity increases the solution scope and possible approaches

(Hislop et al, 2000), (Reagans et al, 2004) and (Foldy, 2004). The increase in creative

ideas was also mentioned like suggested by O’Reilly, Williams & Barsade (1998).

However, diversity also creates overheads and complexity, through communication

difficulties and constant misunderstandings (Brannen and Salk, 2000) (Foldy, 2004)

(Hambrick et al, 1996) and (O’Reilly, Caldwell, & Barnett, 1989). The slower team

forming process was also verified (Early and Mosakowski, 2000).

The amount of culture shock due to continuous stakeholder turnover was unexpected.

How program managers experienced norm discrepancy seems to depend on how they

react to the situation. Interviewees that had a clear view of how programs are to be

executed described more guilt, distress and anxiety. Interviewees that described an

approach of managing only issues with “material consequences” described more

contentment and excitement. The difference seems to be between task-orientation

(how things are done) and value-orientation (what must be achieved). The mechanism

of emotional toll in a program management environment complies with Molinsky’s

(2007) framework.

87

Figure 21. Psychological Toll in Global Program (adopted from Molinsky, 2007).

The variances in risk aversion between cultures were as expected. The results verify

the common perception that US Americans have more risk appetite than Europeans

(Weber and Hsee, 2000).

Global leadership preferences of the interviewees are aligned with the work of

Javidan et al (2006). Management of dispersed and transitional teams was indicated

to be difficult as expected (DeRosa et al, 2004). New information is the need for

program managers to increase monitoring and control to identify misunderstandings

and “keep on top of the situation”. Balancing charismatic value-driven leadership and

tight monitoring and control is one of the key challenges for program managers. This

is what (Suk, 1999) and (Javidan and House, 2001) described as the ability to cope

flexibly and positively with cultural relativity.

Three types of leadership were identified: authoritarian, comfort zone and diversity

management. Authoritarian management was described as a common cause leading to

program failure. Authoritarian leadership relies heavily on email and has little direct

88

contact with the teams or stakeholders. The focus of this style was not specifically on

controlling the team. But due to the insufficient communication the management

paradigm becomes that of telling and controlling.

Management in the comfort zone is a balance between stakeholder management and

governance, but only for the in-group. The manager leads the in-group efficiently, but

leaves out-groups unmanaged. The group with most misunderstandings and highest

need for support receives the least amount of the program manager’s time.

Managed diversity acknowledges that out-groups require extra focus. More effort is

put on managing the “difficult” groups than the “easy” groups. Diversity management

was supported by all interviewees, although all acknowledged that it is time

consuming, emotionally depleting and requires additional budgets. The Brannen and

Sal (2000) theorem of cause for poor performance, i.e. poor management creates poor

results in diverse teams, was verified.

Comfort Zone

Management

Diversity

Management

Program Mgmt Effort

In-group Governance

In-group Stakeholder Mgmt

Out-group Governance

Out-group Stakeholder Mgmt

In-group Governance

In-group Stakeholder Mgmt

Out-group Governance

Out-group Stakeholder Mgmt

Authoritarian

ManagementIn-group Governance

In-group Stakeholder Mgmt

Out-group Governance

Out-group Stakeholder Mgmt

Figure 22. Management styles.

89

The program managers need information about the situational context, but it is not

delivered via email or phone. The main issue with communication is not lack of trust

or the tools as proposed by Hislop (2002), but the language skills. Especially written

communication is impeded because of gaps in English skills. Lacking a common

language is major impediment when creating a global company, because without a

language people cannot share a meaning system (Triandis, 2000) and the

multinational company loses a part of its competitive edge (see Gupta and

Govindarajan, 2000).

The program managers describing the most distress did not modify their behavior to

accommodate the cultural situation. These interviewees seemed to lack behavioral

capabilities to perform in a foreign environment, see (Molinsky, 2007).

Native English speakers did not always recognize that speaking English does not

mean that the speaker would apply English social norms or share English values. This

suggests a gap in cognitive capabilities; inability to recognize the situation (Molinsky,

2007) (Osland and Bird, 2000) (Winkelman, 1991).

The interviewees called self-verification activities as the creation of “buy-in”; a key

activity in stakeholder management. Essential in “buy-in” activities is the resolution

of conflicts of interests, i.e. maximizing the stakeholders positive self-view resulting

from supporting or participating in the program. These activities create positive

orientation towards each other’s welfare, which according to Brown et al (2004) is a

pre-requisite for trust. Social integration on the other hand was sought by setting up

governance. Setting up governance is prerequisite for the program manager to display

integrity in activities; also a pre-requisite for trust. Mastering both social integration

and self-verification were identified as essential for program success.

90

Low

Low

High

High

Ineffective

global team

Effective

Global Team

Social Integration

Self

-Ver

ific

atio

n

Governance

Stak

eho

lder

Mg

mt

The Program Manager balances

Self-Verification and Social

Integration in small increments.

Figure 23. Self-verification and social integration in a global program setting

(adopted from Maloney and Zellmer-Bruhn, 2006)

Neglecting social integration or self-verification was reported to lead to increasing

difficulties (Maloney and Zellmer-Bruhn, 2006). The implementation of the two

needed to be executed in small steps. Balancing the two components results in a

perception of integrity (structured governance) and benevolence (understanding of

local needs), which creates trust. Notable is that especially self-verification is not a

given in global programs, because they often target locally non-beneficial objectives.

The interviewees suggested that in non-beneficial situations (i.e. in a zero-sum

situation) the program manager must translate the program need and goal to locally

acceptable terms. This changes the situation from zero-sum to mixed-motive

situation, which requires trust in the relationship with the decision-maker; see Chen

and Li (2005).

91

The combination of managed diversity and balanced self-verification / social

integration resembles the strategies of expatriate managers (Osland and Osland,

2006), with the difference that the environmental complexity in global programs is

multiplied by the number of sub-groups. E.g. instead of considering the contingencies

of the situation for one country the program manager considers it for every location

and function impacted by the program.

Culturally blind program managers emphasized governance activities and did not

consider the cultural background when managing stakeholders. As they also reported

higher failure rates it can be assumed that the required balance suggested by Maloney

and Zellmer-Bruhn (2006) is not achieved. It seemed that neglecting self-verification

creates an atmosphere where diversity is considered a cause of friction and not an

opportunity. This would indicate that a global mindset has not been achieved

everywhere in GIC; see (Gupta and Govindarajan, 2001) (Maloney and Zellmer-

Bruhn, 2006).

Of the Maloney Zellmer-Bruhn (2006) approach to social integration and self-

verification the programs managers identified only the creation of norms and thought

world windows. However, implementation of norms often was considered difficult

and actually task of central management. Deliberately heterogenic teams are usually

not created in GIC and the interviewees did not feel that a global mindset would be

promoted by upper management.

Most program managers did not mention receiving any kind of training, preparation

or incentive for increasing cross-cultural effectiveness. Living and working in foreign

countries and with foreign people was perceived as beneficial for diversity

management. GIC does not have incentives for people to gain experience outside

their country or functional silo. The gaps in training and incentives suggest that GIC

has still some improvement opportunities in the implementation of the globalization

strategy.

As expected (Foldy, 2004), conflict was more common in diverse groups. As stated

by (Triandis, 2000) conflict begins with poor communication; global programs are

92

plagued by poor communication. The interviewees used actively re-categorization to

reduce conflict. De-categorization was not mentioned directly. The interviewees did

not seem to systematically dissolve in-/out-group borders. However, together benefits

management, stakeholder management and governance activities target de-

categorization. Most interviewees noted that their programs present a threat to local

sub-groups and the program teams are therefore unstable (Hewstone et al, 2002).

Unlike stated by Morand (2003), usage of electronic tools does not create new

cultures that break through politeness barriers. People pay more attention to the

message format when they do not completely understand the content, i.e. electronic

communication in diverse teams must be more polite than usual.

Most interviewees listed Kanter and Corn’s (1994) methods for decreasing tension:

the relationship is made desirable, uncertainty is reduced, respect for the other group

is shown, communication channels are created and business success is ensured. It was

also noted that the program managers should not need to be in the position to make

relationships desirable; this is an executive management task. In addition it was noted

that often the relationship with programs cannot be made desirable, because global

programs are non-beneficial locally.

7.3 Benefits Management, Stakeholder Management and Governance

The interviewed program managers applied traditional project management methods,

but emphasized the soft side: communication management and conflict management.

In addition a new management area was identified: the management of cultural risk.

The theoretical framework based on the literature research (Figure 15, pp. 56) was

modified according to the new findings (Figure 24).

93

Benefits Management

Management

and

Leadership

Governance

Stakeholder Management

Reason for

Change

Social Integration

Self Verification

Communication

Management

Cultural Risk

Management

Conflict

Management

Program

Outcom

e

Environment National Cultures Sub-group Cultures Situational Context

Factors Increasing Program Success Factors Decreasing

Program Success

Decision-making

preferences

Ethnocentrism

Culture Shock

Time Perceptions

Risk Perceptions

Communication

Difficulties

Figure 24. Program Management in a diverse setting.

The framework emphasizes the fact that in global programs the focus of program

management is in aligning the organization to the program outcome. Essentially this

is the act of combining multiple cultures and various situational contexts into one

agreed upon goal and way of working.

The program manager must create global and local understanding of the relevance of

the goal. The need for change provides a context for stakeholder management and

governance activities. The center pieces of the framework are the management and

leadership activities providing the program manager the tools to control the situation

and pursue cultural opportunities.

94

8 Answer to Research Questions

8.1 Question 1: Effect of Cultural Diversity on Global Programs

Global environments are diverse by nature. Increasing diversity increases also

complexity of the program and consequently the probability of failure. In a global

environment the program teams need breadth and depth of knowledge to fit the end-

products to various cultural groups. Due to their broadness of knowledge and

multiple solution approaches culturally diverse teams working on global programs are

more likely to be successful than homogenous teams. However, overheads and risk

stemming from cultural diversity must be considered in the program set up. A key

element in successful programs is how the internal and external diversity is managed.

8.2 Question 2: Cultural drivers improving success of global programs

The key cultural driver for success is the individual team member’s motivation to

adjust to different cultures. Motivation to adjust may depend on the national culture

of the individual.

8.3 Question 3: Challenges facing culturally diverse global programs

8.3.1 Benefits management

In the absence of universally agreed upon SMART criteria program managers need

to translate the global program goal into a locally meaningful objectives. Especially

95

the relevance of the initiative must be presented in a locally acceptable way, which

includes describing the path to change.

8.3.2 Stakeholder management

Identifying stakeholders is challenging. In a culturally diverse environment, the

program manager might be working with very influential people or a person with no

decision-making power or access to it. A key challenge is to identify and gain access

to the correct group of stakeholders.

A generic approach to stakeholder management does not apply in a diverse

environment. Each stakeholder has different expectations, depending on their

situation and background.

Stakeholder management is based on trusting relationships. Creating trusting

relationships over cultural boundaries and in a conflict prone environment is

challenging.

8.3.3 Governance

Global programs operate in an environment of unclear governance. Each rule has

multiple interpretations. Most employees feel that find local norms and standards

most appropriate. The challenge for the program manager is to rise to a position of

authority and create a baseline norm that is applied across the program. This requires

modifying rules and governance expectations according to global and local practice.

The program manager must create the balance. Understanding corporate targets and

local needs is required. With multiple locations the balancing act becomes more

complex and change management skills become increasingly important.

96

8.4 Question 4: Program Management Tools Methods and Skills

In a diverse environment the ability to apply the framework presented in 7.3 is a

crucial skill for the program manager. First formulating and communicating a

universally accepted goal and then balancing stakeholder management and

governance are crucial. In addition the management of communication, conflict and

cultural risk is crucial. Applying the framework in a systematic and structured manner

is crucial for success. The framework provides the basis for creating trust in

relationships, which in the end is the most important skill for program managers.

General methods are presented in chapter 6.

8.5 Question 5: Setting Up Culturally Diverse Global Programs

The program goal must be very clear, because it has multiple interpretations.

The communication overhead must be mitigated or budgeted for and considered in

the schedules. The complexity of communication restricts also how complex the

general goal can be.

Communication and collaboration cultures must be analyzed to get input also from

withholding cultures and minorities. Communication must be started very early.

Communication must be participative from the beginning.

Certain cultural mixes are more prone for dysfunction in certain situations. The

cultural mix must be considered and mitigation planned before start. Also cultural

aspects like holidays, food etc need to be addressed.

The diversity of the environment and beneficiaries must be matched in the program’s

organizational diversity. This includes identifying impacted locations and

implementing local ambassadors.

97

9 Recommendations

The recommendations have been split to two: recommendations specific to GIC and

recommendations specific to any global program.

9.1 Company Specific

Global programs implement GIC strategy and, hence require strong sponsorship. This

is not only sponsorship for a specific benefit, but also the cultural transformation

objectives the programs have. The programs should not be creating buy-in for the

globalization strategy of GIC as sometimes is the case; this should in general be in

place when programs are initiated.

The program managers are change agents for the GIC transformation. The training for

change agents should be intensified for the new way of working; to create

understanding of global value-creation opportunities and to create global mindsets.

The lack of language competence is a challenge for global programs. Improvements

in communication tools cannot make up for gaps in English skills. It is recommended

that English courses are increased and incentives for learning are created. Native

speakers should be made aware of the communication difficulties and more training

about improving cross-cultural communication should be given. It is recommended

that GIC creates incentives for program managers to gain experience about cultures

and diversity.

9.2 Global Programs

A culturally diverse environment has high likelihood for misunderstandings, hence

communication management requires focus. The management activities include

budgeting for sufficient communication, including travel for all team members, and

planning communication according to the cultural preferences of the recipients.

98

Acknowledging the constant nature of misunderstanding in global programs requires

that feedback loops and quality checks are considered. As a consequence it must be

understood that diverse programs require more time.

Pursuing cultural opportunities and mitigation of cultural risks must be considered

during planning and implementation of activities. The situation can be analyzed

correctly only when cultures are acknowledged and understood. Acknowledgement

and understanding are results of experience and training. Building thought world-

windows in the beginning of programs must be budgeted for, i.e. travel of individual

team members is required. It is also proposed that cultural training is made a

mandatory initiation phase activity for global programs.

The sponsor must be active providing support and creating the alignment with

corporate strategy. Additionally networks of local sponsors must be created. Strong

global and local sponsorship will allow the execution of the program in global, but

locally responsive fashion.

99

10 Future Research

More detailed research in the areas of cultural risk management, re-categorization

techniques in programs and structured techniques for building trust in relationships.

The three suggested topics are crucial for the success of global programs. Program

managers are very capable and well trained in the mechanical side of program

management, while the soft side does not have a similar level knowledge, tools and

frameworks.

It was interesting to notice that the responses of program managers are very similar.

It would be interesting to study to what extent program managers form a sub-group.

The results could be compared to the requirements of the profession and to focus

program management training.

100

11 Personal Development

The study was a great learning experience. I feel that during the interviews I learned

more than during my entire professional career. Not only did I learn about program

management, but I also the realized the power of sharing experiences.

The level of knowledge I gained concerning the challenges and opportunities has

risen immensely. Certain interviews have led to deep evaluation of my own values

and practices. Realizing as one interviewee stated “what you think is normal might

not be normal elsewhere” was a key moment in my personal development.

The tools provided by the interviewees were straight-forward and I have started using

them in my work.

The study has raised questions in GIC about how global programs are executed and

the questions have led to improvement ideas. I strongly believe that in the future we

will see improved success in global programs.

I feel that I am in great dept to the interviewees for the information they shared with

me. I will do my best to pay the debt by consolidating the results and presenting it at

GIC.

101

Appendix a) References

1. Adair, W. L. (2003). Integrative Sequences and Negotiation Outcome in Same-

And Mixed-Culture Negotiations, The International Journal of Conflict

Management. 14(3/4) pp. 273-296

2. Allaire, Y. and Firsirotu, M. E. (1984). Theories of Organizational Culture,

Organization Studies., 5(3) pp. 193-226

3. Alon, I. and Brett J. (2007) Perceptions of Time and Their Impact on

Negotiations in the Arabic-Speaking Islamic World, Negotiation Journal. 23(1)

pp. 55-73

4. Armstrong, R. W. (1996). The Relationship between Culture and Perception of

Ethical Problems in International Marketing, Journal of Business Ethics. 15 pp.

1199-1208

5. Barnett, J. H. and Karson, M. J. (1987). Personal Values and Business

Decisions: An Exploratory Investigation, Journal of Business Ethics. 6 pp. 371-

382

6. Barnett, J. H. and Karson, M. J. (1989). Managers, Values, and Executive

Decisions: An Exploration of the Role of Gender, Career Stage, Organizational

Level, Function, and the Importance of Ethics, Relationships and Results in

Managerial Decision-Making, Journal of Business Ethics. 8 pp. 747-771

7. Bennington, P and Baccarini, D. (2004) Project Benefits Management in IT

Projects – An Australian Perspective, Project Management Journal. 35(2)

pp.20-30

8. Bhagat, R. S., Kedia, B. L., Harveston, P. D., Triandis, H. C., (2002). Cultural

Variations in the Crossborder Transfer of Organizational Knowledge: An

Integrative Framework, Academy of Management Review. 27(2) pp. 204-221,

102

9. Bickman, L., Rog, D. and Hedrick, T. (1998) Applied Research Design, A

Practical Approach, Handbook of Applied Social Research Methods. An

Applied Approach. Thousand Oaks. California. USA. Sage Publishing

10. Bird A. and Osland, J. S. (2006). Making Sense of Intercultural Collaboration,

International. Studies of Management & Organization. 35(4) pp. 115–132

11. Boatright, J. R. (1991). Review Article: Bridging the Gulf between

Management Practice and Ethical Theory, Business Ethics Quarterly. 1(4)

12. Boatright, J. R. (1996). Business Ethics and the Theory of the Firm, American

Business Law Journal. 34

13. Boatright, J. R. (1998). Ethics and the Role of the Manager, Journal of Business

Ethics. 7 pp. 303-312

14. Boatright, J. R. (2000). Globalization and the Ethics of Business, Business

Ethics Quarterly. 10(1)

15. Boyacigiller, N. A. and Adler, N. I (1991), The Parochial Dinosaur:

Organizational Science in a Global Context, Academy of Management Review.

16(2) pp. 262-290

16. Brannen, M. Y. and Salk, J. E. (2000). National Culture, Networks, and

Individual Influence in a Multinational Management Team, Academy of

Management Journal. 43(2) pp. 191-202.

17. Brett, J, Behfar, K. and Kern, M. C. (2006). Managing Multicultural Teams,

Harvard Business Review. November 2006

18. Brew, F. P. and Cairns, D. R. (2004). Styles of Managing Interpersonal

Workplace Conflict In Relation To Status and Face Concern: A Study with

Anglos and Chinese, The International Journal of Conflict Management. 15(1)

pp. 27-56

19. Brislin, R. W. (1976). Comparative Research Methodology: Cross-Cultural

Studies, International Journal of Psychology. 11(3) pp. 215-229

103

20. Brislin, R. W. and Kim, E. S. (2003). Cultural Diversity in People’s

Understanding and Uses of Time, Applied Psychology: An International

Review. 52(3) pp. 363–382

21. Brown, H., Poole, S. and Rodgers, T. (2004). Interpersonal Traits,

Complementarity, and Trust in Virtual Collaboration, Journal of Management

Information Systems. 20(4) pp. 115–137

22. Byun, H. and Ybema, S. (2005). Japanese Business in the Dutch Polder: The

Experience of Cultural Differences in Asymmetric Power Relations, Asia

Pacific Business Review. 11(4) pp. 535–552

23. Caldwell, C. and Hayes L. (2007) Leadership, trustworthiness, and the

mediating lens, Journal of Management Development. 26(3) pp. 261-281

24. Carr, C. (2005). Are German, Japanese and Anglo-Saxon Strategic Decision

Styles Still Divergent In The Context of Globalization?, Journal of

Management Studies. 42(6)

25. Casimir, G., Waldman, D., Bartram, T. and Yang, S. (2006) Trust and the

Relationship between Leadership and Follower Performance: Opening the

Black Box in Australia and China, Journal of Leadership and Organizational

Studies. 12(3)

26. Chen, X-P and Li, S. (2005). Cross-national differences in cooperative decision-

making in mixed-motive business contexts: the mediating effect of vertical and

horizontal individualism, Journal of International Business Studies 36 pp. 622-

636

27. Cherry, J. and Lee, M. (2003). A Cross-Cultural Application of a Theoretical

Model of Business Ethics: Bridging the Gap between Theory and Data, Journal

of Business Ethics. 44 pp. 359-376

28. Chiou, J.-S. (2001). Horizontal and Vertical Individualism and Collectivism

among College Students in the United States, Taiwan, and Argentina, The

Journal of Social Psychology. 141(5) pp. 667–678

104

29. Costigan, R., Insinga, R., Berman, J., Ilter, S., Kranas, G. and Kureshov, V.

(2007) A Cross-cultural Study of Supervisory Trust, International Journal of

Manpower. 27(8) pp. 764-787

30. Crano, W. and Brewer, M. (2002) Principles and Methods of Social Research.

Lawrence Erlbaum Associates. New Jersey.

31. Damodaran, L. and Olphert, W. (2000). Barriers and facilitators to the use of

knowledge management systems, Behavior & Information Technology. 19(6)

pp. 405 – 413

32. Davis, J. H. and Ruhe, J. A. (2003). Perceptions of Country Corruption:

Antecedents and Outcomes, Journal of Business Ethics. 43 pp. 275-288

33. Derosa, D. M., Hantula, D. A., Kock, N. and D’Arcy, J. (2004). Trust and

Leardership in Virtual Teamwork: A Media Naturalness Perspective, Human

Resource Management. 43(2 & 3) pp. 219-232

34. Distefano, J. J. and Maznevski, M. L. (2000). Creating Value with Diverse

Teams in Global Management, Organizational Dynamics. 29(1) pp. 45-63

35. Doucet, L. and Jehn, K. A. (1997). Analyzing Harsh Words in a Sensitive

Setting: American Expatriates In Communist China, Journal of Organizational

Behavior. 18 pp. 559-582

36. Dow, D. (2000). A note on export market selection and psychological distance,

Journal of International Marketing. 8(1) pp. 51-64

37. Earley, P. C. and Mosakowski, E. (2000). Creating Hybrid Team Cultures: An

Empirical Test Of Transnational Team Functioning, Academy of Management

Journal. 43(1) pp. 26-49

38. Earley, P. C. and Mosakowski, E. (2004). Cultural Intelligence, Harvard

Business Review. October 2004

39. Eaton, L. and Louw, J. (2000). Culture and Self in South Africa: Individualism-

Collectivism Predictions, The Journal of Social Psychology. 140(2) pp. 210-217

105

40. Elahee, M. N., Kirby, S. L. and Nasif E. (2002). National Culture, Trust, and

Perceptions about Ethical Behavior in Intra- and Cross-Cultural Negotiations:

An Analysis of NAFTA Countries, Thunderbird International Business Review.

44(6)

41. Ezzy, D. (2002) Qualitative Analysis: Practice and Innovation. Unwin & Alle.

Crows Nest. Australia

42. Fink, G., Neyer, A.-K., and Kölling, M., (2006) Understanding Cross-Cultural

Management Interaction, International Studies of Management. &

Organization. 36(4) Winter 2006–7 pp. 38–60

43. Foldy, E. G. (2003). Learning from Diversity: A Theoretical Exploration,

Public Administration Review. 64(5)

44. Freeman, R. E. and McVea, J. (2001). A Stakeholder Approach to Strategic

Management, Darden Business School. Working Paper No. 01-02

45. Fung, S. (1999). Risky Business, Across the Board. July/August pp. 10-11

46. Gamble, J. (2000). Localizing management in foreign invested enterprises in

China: practical, cultural, and strategic perspectives, International Journal of

Human Resource Management. 11(5) pp. 883-903

47. Gannon, M. J., Locke, E. A., Gupta, A, Audia, P. and Kristof-Brown, A. L.

(2006). Cultural Metaphors as Frames Of Reference for Nations, a Six-Country

Study, International Studies of Management & Organization. 35(4) pp. 37–47

48. Ghemawat, P. (2007a). The Worlds Biggest Myth, Foreign Policy. 163 pp. 52-

55

49. Ghemawat, P. (2007b). Globalization Is an Option Not an Imperative. Or Why

the World Isn't Flat, Ivey Business Journal. Jan/Feb2008 pp. 1-11

50. Gill, H., Boies, K., Finegan, J. and McNally, J. (2005) Antecedents of Trust:

Establishing a Boundary Condition for the Relation between Propensity to Trust

and Intention to Trust, Journal of Business and Psychology. 19(3) pp. 287-302

106

51. Golesorkhi, B. (2006) Gender Differences and Similarities in Judgments of

Trustworthiness, Women in Management Review. 21(3) pp.195-210

52. Gonzalez, A. M. (2003). Ethics in Global Business and in a Plural Society,

Journal of Business Ethics. 44 pp. 23-36

53. Gouveia, V. V., Clemente M. and Espinosa, P. (2003). The Horizontal And

Vertical Attributes Of Individualism And Collectivism In A Spanish

Population, The Journal Of Social Psychology. 143(1) pp. 43-63

54. Griffith, D. A., Myers, M. B. and Harvey, M. G. (2006). An Investigation of

National Culture’s Influence on Relationship and Knowledge Resources in

Interorganizational Relationships, Journal of International Marketing. 14(3) pp.

1–32

55. Gupta, A. K. and Govindarajan, V. (1991). Knowledge Flowsand the Structure

of Control with In Multinational Corporations, Academy Of Management

Review, Academy Of Management Review. 16(4) pp. 768-792

56. Gupta, A. K. and Govindarajan, V. (2000). Knowledge Flows within

Multinational Corporations, Strategic Management. Journal. 21 pp. 473–496

57. Gupta, A. K. and Govindarajan, V. (2001). Converting Global Presence into

Global Competitive Advantage, Academy Of Management Executive. 15(2)

58. Harrison, D. A. and Klein, K. J. (2007). What's The Difference? Diversity

Constructs As Separation, Variety, Or Disparity In Organizations, Academy Of

Management Review. Forthcoming 2007 [Available Online: Www-

Management.Wharton.Upenn.Edu/Klein/Documents/New_Folder/Harrison_Kle

in_Amr_2007_Mockup.Pdf Last Accessed 28 March, 2008)

59. Hayden, F. (1998) Evolution of Time Constructs and Their Impact on

Socioeconomic Planning, Journal of Economic Issues. 21(3) pp. 1281-1321

60. Hedlund, G. (1994). A Model of Knowledge Management and the N-Form

Corporation, Strategic Management Journal. 15 pp. 73-90

107

61. Hewstone, M.., Rubin, M. and Willis, H. (2002). Intergroup Bias, Annual

Review of Psychology. 53 pp. 575–604

62. Hislop, D. (2002). Mission impossible? Communicating and sharing knowledge

via information technology, Journal of Information Technology. 17 pp. 165–

177

63. Hislop, D., Newell, S., Scarbrough, H. and Swan, J. (2000). Networks,

Knowledge and Power: Decision Making, Politics and the Process of

Innovation, Technology Analysis & Strategic Management. 12(3)

64. Hitt, M., Dacin, T., Tyler, B. and Park, D. (1997) Research Notes and

Communications: Understanding the Differences Korean and U.S. Executives’

Strategic Orientations, Strategic Management Journal.18(2) pp. 159.167

65. Hoffman, R. (1987) Political Versus Rational Sources of Decision Power

among Country Clusters, Journal of International Business Studies. 18(3) pp. 1-

14

66. Hoffman, R. (2007) The Strategic Planning Process and Performance

Relationship: Does Culture Matter?, Journal of Business Strategies. 24(1) pp.

27-48

67. Hofstede, G. (1984). Culture's consequences. Beverly Hills. USA: Sage.

68. Hofstede, G. (1998). Attitudes, Values and Organizational Culture:

Disentangling the Concepts, Organization Studies. 19(3) pp. 477-492

69. Hofstede, G., Neuijen, B., Ohayv, D. D., Sanders, G. (1990). Measuring

Organizational Cultures: A Qualitative and Quantitative Study across Twenty

Cases, Administrative Science Quarterly. 35(2) pp. 286-316

70. Hope Pelled, L., Eisenhardt K. M. and Xin, K. R. (1999). Exploring the Black

Box: An Analysis of Work Group Diversity, Conflict, and Performance,

Administrative Science Quarterly. 44 pp. 1-28

71. IPMA 2006: ICB - IPMA Competence Baseline, Version 3.0

108

72. Ishii, K., Reyes, J. A. and Kitayama, S. (2003). Spontaneous Attention to Word

Content versus Emotional Tone: Differences among Three Cultures,

Psychological Science. 14(1)

73. Jarvenpaa, S., Knoll, K and Leidner, D. (1998) Is Anybody Out There?

Antecedents of Trust in Global Virtual Teams, Journal of Management

Information Systems. 14(4) pp. 29-64

74. Javidan, M. and House, R. J. (2001). Cultural Acumen for the Global Manager:

Lessons from Project GLOBE, Organizational Dynamics. 29(4) pp. 298-305

75. Javidan, M., Dorfman, P. W., de Luque, M. S. and House, R. J. (2006). In the

Eye of the Beholder: Cross Cultural Lessons in Leadership from Project

GLOBE, Academy of Management Perspectives. 20(1) pp. 67-90

76. Jehn, K. A. (1997). A Qualitative Analysis of Conflict Types and Dimensions in

Organizational Groups, Administrative Science Quarterly.

77. Jehn, K. A. and Chatman, J. A. (2000). The Influence of Proportional and

Perceptual Conflict Composition on Team Performance, The International

Journal of Conflict Management. 11(1) pp. 56-73

78. Jehn, K. A. and Mannix, E. A. (2001). The Dynamic Nature of Conflict: A

Longitudinal Study of Intragroup Conflict and Group Performance, Academy Of

Management Journal. 44(2) pp. 238-251

79. Johnson-Cramer, M. E., Parise, S. and Cross, R. L. (2007). Managing Change

Through Networks And Values, California Management Review. 49(3)

80. Kanter, R. M. and Corn, R. I. (1994). Do Cultural Differences Make A Business

Difference? Contextual Factors Affecting Cross-Cultural Relationship Success,

Journal of Management Development. 13(2) pp. 5-23

81. Kim, D., Pan, Y. and Soo Park, H. (1998). High- Versus Low-Context Culture:

A Comparison of Chinese, Korean, and American Cultures, Psychology &

Marketing. 15(6) pp. 507-521

109

82. Kim, P. S. (1999). Globalization of Human Resource Management, a Cross-

Cultural Perspective for the Public Sector, Public Personnel Management.

28(2)

83. Kirchmeyer, C. and Cohen, A. (1992) Multicultural Groups: Their Performance

and Reactions with Constructive Conflict, Group & Organization Management.

17(2) pp. 153-169

84. Konrad, A., Prasad, P. and Pringle, J. (2006) Methods for Studying Workplace

Diversity, Handbook of Workplace Diversity. Thousand Oaks. California. USA.

Sage Publishing pp. 206

85. Li, S., Scullion H. (2006). Bridging the distance: managing cross-border

knowledge holders, Asia Pacific Journal of Management. 23 pp. 71–92

86. Liddell W. (2005). Macroeconomic Processes And Regional Economies

Management Project GLOBE: A Large Scale Cross-Cultural Study of

Leadership, Problems and Perspectives in Management, 3

87. Lindell, M. and Arvonen, J. (1997). The Nordic Management Style in a

European Context, International. Studies of Management. & Organization.

26(3) pp. 73-91

88. Lysonski, S. and Gaidis, W. (1991). A Cross-Cultural Comparison of the Ethics

of Business Students, Journal of Business Ethics. 10 pp. 141-150

89. Maloney, M. M. and Zellmer-Bruhn, M. (2006). Building Bridges, Windows

and Cultures: Mediating Mechanisms between Team Heterogeneity and

Performance in Global Teams, Management International Review. 46(6) pp.

697

90. Maxwell, J. (1998) Designing a Qualitative Study, Handbook of Applied Social

Research Methods. An Applied Approach. Thousand Oaks. California. USA.

Sage Publishing

91. Mayer, R., Davis, J. and Schoorman, F. (1995). An integrative model of

organizational trust, Academy of Management Review. 20(3) pp. 709–734.

110

92. Miles, M. and Huberman, A. (1994) Qualitative Data Analysis: An Expanded

Sourcebook. USA. SAGE

93. Molinsky, A. (2007). Cross-Cultural Code-Switching: The Psychological

Challenges of Adapting Behavior in Foreign Cultural Interactions, Academy Of

Management Review. 32(2) pp. 622–640.

94. Morand, D. A. (2003). Politeness and the Clash of Interaction Orders in Cross-

cultural Communication, Thunderbird International Business Review. 45(5) pp.

521–540

95. Mueller, F. (1994). Societal Effect, Organizational Effect and Globalization,

Organization Studies. 15(3) pp 407-428

96. Murtha, T. P., Lenway, S. A. and Bagozzi, R. P. (1998). Global Mindsets and

Cognitive Shift in a Complex Multinational Corporation, Strategic Management

Journal. 19 pp. 97–114

97. Nielsen C. S. and Gannon, M. J. (2006). Preface: Cultural Metaphors,

Paradoxes, and Cross-Cultural Dimensions, International Studies of

Management. & Organization. 35(4) pp. 4–7

98. Nyaw, M.-K. And Ng, I. (1994). A Comparative Analysis of Ethical Beliefs: A

Four Country Study, Journal of Business Ethics. 13 pp. 543—555

99. Osland, J. S. (2000). The Journey Inward: Expatriate Hero Tales and Paradoxes,

Human Resource Management. 39(2 & 3) pp. 227–238

100. Osland, J. S. and Bird, A. (2000). Beyond Sophisticated Stereotyping:

Cultural Sensemaking In Context, Academy Of Management Executive. 14(1)

101. Osland, J. S. and Osland, A. (2006). Expatriate Paradoxes and Cultural

Involvement, International Studies of Management. & Organization. 35(4) pp.

91–114

102. Perlitz, M. (1994). The impact of cultural differences ion strategy innovations

103. Pettigrew, T. (1998). Intergroup Contact Theory, Annual Review of

Psychology.

111

104. PMI: 2006. The Standard for Program Management

105. Prasad, A. and Prasad, P. (2007). Mix, Flux and Flows: The Globalization of

Culture and Its Implications for Management and Organizations, The Journal of

Global Business Issues. 1(2) pp. 11-20

106. Probst, T. M. (2006). Cultural Values as Moderators of Employee Reactions

to Job Insecurity: The Role of Individualism and Collectivism, Applied

Psychology: An International Review. 55(2) pp. 234–254

107. Puck, J. (2006) Cultural Antecedents and Performance Consequences of

Open Communication and Knowledge Transfer in Multicultural Process-

Innovation Teams, Journal of Organizational Transformation and Social

Change. 3(2)

108. Reagans R., Zuckerman, E. and McEvily, B. (2004). How to Make the Team:

Social Networks vs. Demography as Criteria for Designing Effective Teams.

Johnson Graduate School,, Cornell University

109. Rhinesmith, S. R. (1991). An Agenda for Globalization, Training and

Development Journal. 45(2) pp. 22

110. Richard, O., Barnett, T., Dwyer, S. and Chadwick, K. (2004) Cultural

diversity in management, firm performance, and the moderating role of

entrepreneurial orientation dimensions, Academy of Management Journal, 47(2)

pp. 255–266.

111. Rippl, S. (2002). Cultural Theory and Risk Perception: A Proposal for a

Better Measurement, Journal of Risk Research 5(2) pp. 147-165

112. Roberts J. (2000). From Know-how to Show-how? Questioning the Role of

Information and Communication Technologies in Knowledge Transfer,

Technology Analysis & Strategic Management. 12(4)

113. Ruth, A. (2006). Ethics in countries with different cultural dimensions,

Journal of Business Ethics. 69 pp. 237–247

112

114. Sarwono, S. S. and Armstrong, R.W. (2001). Microcultural Differences and

Perceived Ethical Problems: An International Business Perspective, Journal of

Business Ethics. 30 pp. 41–56

115. Saunders, C., Van Slyke, C. and Vogel, D. R. (2004). My time or yours?

Managing time visions in global virtual teams, Academy of Management

Executive. 18(1)

116. Schoorman, F., Mayer, R. and Davis, J. (2007) An Integrative Model Of

Organizational Trust: Past, Present, And Future, Academy of Management

Review.32(2) pp. 344-354

117. Schramm-Nielsen, J. (2001) Cultural Dimensions of Decision Making:

Denmark and France Compared, Journal of Managerial Psychology. 16(5/6)

pp. 404-423

118. Senge, P. (2003). Creating Desired Futures in a Global Economy

119. Shaffer, M. A., Harrison D. A., Gregersen, H. J., Black, S. and Ferzandi, L.

A. (2006). You Can Take It With You: Individual Differences and Expatriate

Effectiveness, Journal of Applied Psychology. 91(1) pp. 109-125

120. Siegrist, M., Cvetkovich, G. and Claudia R. (2000). Salient Value Similarity,

Social Trust, and Risk/Benefit Perception, Risk Journal. 20(3) pp. 353-362

121. Snell, S. A., Snow, C. C., Canney Davison, S. and Hambrick, D. (1998).

Designing and Supporting Transnational Teams: The Human Resource Agenda,

Human Resource Management. 37(2) pp. 147

122. Tan, H. and Chee, D. (2005) Understanding Interpersonal Trust in a

Confucian-influenced Society: An Exploratory Study, International Journal of

Cross Cultural Management.5(2) pp. 197-212

123. Tjosvold, D. and Wong, A. S. H. (2004). Innovating Across Cultural

Boundaries: Applying Conflict Theory to Develop a Common Approach,

International Negotiation. 9 pp. 291–313, 2004

113

124. Triandis, H. C. (1982). Dimensions of Cultural Variation as Parameters of

Organizational Theories, International Studies of Management & Organization.

Spring 1982-Winter 1982-83

125. Triandis, H. C. (2000). Culture and Conflict, International Journal of

Psychology. 35(2) pp. 145-152

126. Triandis, H. C. (2003). The Future of Workforce Diversity in International

Organizations: A Commentary, Applied Psychology: An International Review.

52(3) pp. 486-495

127. Trice, H. M. and Beyer, J.M. (1991). Cultural Leadership in Organizations,

Organization Sciences, 2

128. Trompenaars, F. and Woolliams, P. (2003). A new framework for managing

change across cultures.

129. Tsalikis, J. and Nwachukwu, O. (1991). A Comparison of Nigerian to

American Views of Bribery and Extortion in International Commerce, Journal

of Business Ethic. 10 pp. 85-98

130. Tse, D., Kam-hon, L., Vertinsky, I. and Wehrung, D. (1988) Does Culture

Matter? A Cross-Cultural Study of Executives’ Choice, Decisiveness, and Risk

Adjustment in International Marketing, Journal of Marketing. 52(4) pp. 81-95

131. Von Weltzien Hoivik, H. (2007). East Meets West: Tacit Messages about

Business Ethics in Stories Told By Chinese Managers, Journal of Business

Ethics. 74

132. Walker D. H. T. (2002). Enthusiasm, commitment and project alliancing: an

Australian experience, Melbourne. RMIT University

133. Weaver, G. R. (2001). Ethics Programs in Global Businesses: Culture’s Role

in Managing Ethics, Journal of Business Ethics. 30 pp. 3–15

134. Weber, E. and Hsee C. (1998). Cross-cultural Differences in Risk Perception,

but Cross-cultural Similarities in Attitudes Towards Perceived Risk,

Management Science. 44(9) pp. 1205-1217

114

135. Weber, E. and Hsee C. (2000). Culture and Individual Judgment and Decision

Making, Applied Psychology: An International Review. 49(1) pp. 32-61

136. Westerman, J., Beekun, R., Stedham, Y. and Yamamura, J. (2007) Peers

versus National Culture: An Analysis of Antecedents to Ethical Decision-

making, Journal of Business Ethics. 75 pp. 239-252

137. Westwood R. G. and Everett, J. E. (1987). Culture's Consequences: A

Methodology For comparative Management Studies in Southeast Asia?, Asia

Pacific Journal of Management. 4(3)

138. Whitener, E., Brodt, S., Korsgaard, M. and Werner, J. (1998) Managers as

Initiators of Trust: An Exchange Relationship Framework for Understanding

Managerial Trustworthy Behavior, Academy of Management Review. 23(3) pp.

513-530

139. Whiteoak, J. W., Crawford, N. G. and Mapstone, R. H. (2006). Impact of

Gender and Generational Differences in Work Values and Attitudes in an Arab

Culture, Thunderbird International Business Review. 48(1) pp. 77–91

140. Wilson, E. (2000) Inclusion, exclusion and ambiguity: The role of

organizational culture, Personnel Review. 29 pp. 274-303

141. Winkelman, M. (1994). Culture Shock and Adaptation, Journal of

Counseling & Development. 73

142. Zhang, D., Lowry, P. B., Zhou, L. and Fu, X. (2007). The Impact of

Individualism—Collectivism, Social Presence, and Group Diversity on Group

Decision Making under Majority Influence, Journal of Management

Information Systems. 23(4) pp. 53–80

143. Peters, T. and Waterman, R. (1982), In Search of Excellence, Harper Row

115

Appendix b) Reading

1. Graen, G. and Hui, C. (1996). Managing changes in globalizing business: how

to manage cross-cultural business partners, Journal of Organizational Change

Management. 9(3) pp. 62-72

116

Appendix c) List of Exhibits

Figures

Figure 1. Multilayered response (Hofstede et al, 1990). 14

Figure 2. Manifestations of culture (Hofstede et al, 1990). 15

Figure 3. Model of Trust (Mayer et al, 1995).......22

Figure 4 Valuation and verification as dimensions of team effectiveness (Maloney and Zellmer-Bruhn, 2006). 29

Figure 5. Determinants of psychological toll (Molinsky, 2007). 30

Figure 6. Conceptual model of relationship and knowledge resources (Griffith et al, 2006). ......................36

Figure 7. Osland and Bird framework for cultural sense-making (Bird and Osland, 2006). ...............................40

Figure 8. Re-categorization and de-categorization (Pettigrew, 1998). ............................................................42

Figure 9. Model of group conflict and performance (Jehn, 1997).......................................................................44

Figure 10. Conflict in high-performance groups (Jehn and Mannix, 2001). ............................................................45

Figure 11. Methods to improve effectiveness of diverse teams (Maloney and Zellmer-Bruhn, 2006). .............48

Figure 12. Program Benefits Management (PMI 2006) 49

Figure 13. Continuum of rational-irrational decision-making (Schramm-Nielsen, 2001)..............................51

Figure 14. Model of value similarity's effect on perception of benefit and risk. (Siegrist et al, 2000) ........................52

Figure 15. Conceptual framework of the study. ..56

Figure 16. Cultures and situational context mix when observed from the outside. ....................................................66

Figure 17. Communication drivers in global programs. 74

117

Figure 18. Drivers and obstacles for intercultural effectiveness. 76

Figure 19. Factors driving and reducing conflict. 79

Figure 20. Differences in the management of in- and out-groups and the effect on performance.......................85

Figure 21. Psychological Toll in Global Program (adopted from Molinsky, 2007). ............................................87

Figure 22. Management styles............................88

Figure 23. Self-verification and social integration in a global program setting (adopted from Maloney and Zellmer-Bruhn, 2006) .............................................................90

Figure 24. Program Management in a diverse setting. 93

Tables

Table 1. IPMA categories (IPMA: 2006)..............11

Table 2. Collectivist versus Individualist and Vertical versus Horizontal Culture (Chiou, 2001) ...................17

Table 3. Comparison of leadership dimensions (Javidan et al, 2006). H=high rank; M = medium rank; L = low rank. H or L (bold) indicates highest or lowest cluster score for a specific Cultural Leadership Type dimension. ............33

Table 4. Cultural dimension’s effect on ethical behavior (Alas, 2006) (Armstrong, 1996) (Ruhe and Davis, 2003)...55

Table 5. Validity targets and constraints, adopted from (Bickman et al, 1998). .......................................................58

Table 6. Interview targets....................................61

Table 7. Challenges in defining SMART objectives. 80

Table 8. Cultural Dimensions (adopted from Bird and Osland, 2006)....................................................................124

118

Appendix d) Glossary, abbreviations and acronyms

Definition

Ability Group of skills that enable a trustee to be perceived

competent within some specific domain. (Jarvenpaa et

al, 1998)

Attitude 'a relatively enduring organization of beliefs around an

object or situation predisposing one to respond in some

preferential manner' (Rcriceach 1972: 112). (Hofstede,

1980)

Benevolence Extent to which the trustee is believed to feel

interpersonal care and concern, and the willingness to

do good to the trustor beyond an egocentric profit

motive. (Jarvenpaa et al, 1998)

Buy-in Display of commitment and positive attitude towards

an initiative.

Effective The focused usage of resources to achieve relevant and

only relevant goals.

Efficient The optimal usage of resources.

Explicit knowledge Explicit knowledge represents knowledge that can be

codified in a tangible form, for example scientific

theories published in documentation. (Hislop, 2002)

(Nonaka and Takeuchi, 1995).

119

Definition

Global Global means that the international division is not a

subdivision of a domestic division (Boyacigiller and

Adler, 1991). According to Rhinesmith (1991):

• International companies export products to

international markets

• Multinational companies create miniatures of

themselves in multiple countries

• Global companies disperse company functions

into several countries

In-group The set of individuals with whom an individual feels

similar. Based on salient demographic characteristics

like gender and ethnicity. (Doucet and Jehn, 1997)

Integrity Adherence to a set of principles (such as study or work

habits) thought to make a trustee reliable according to

the trustor. (Jarvenpaa et al, 1998)

IT Information Technology

Mixed-motive In a mixed-motive situation a stakeholder must cope

with conflict arising from a clash of intrapersonal

motives and interpersonal conflict. When stakeholders

co-operate in the benefits per stakeholder are higher

than the total sum of benefits when the stakeholders

would not co-operate. A pre-requisite for co-operation

is trust in the other stakeholders. Also known as

variable outcome situation.

Organizational Culture 'the collective programming of the mind which

120

Definition

distinguishes the members of one organization from

another' (Hofstede 1991: 262)

Out-group The set of individuals with whom one feels dissimilar.

Out-group members are treated differently than in-

group members. (Doucet and Jehn, 1997)

Process conflict Disagreements about task strategy, delegation of duties,

who is capable of doing what and how resources should

be allocated. (Jehn and Chatman, 2000) (Jehn and

Mannix, 2001)

Program A program is sequence of projects grouped together to

realize a benefit or a set of benefits while managing the

uncertainty of the outcome. Characteristic for programs

is coordination of activities over functional and

divisional borders.

Project A coordinated team activity targeting to create

deliverables within a set timeframe and budget.

Project Portfolio Is a set of projects and programs grouped together to

optimize resource usage.

Propensity to trust General personality trait that conveys a general

expectation of how trusting one should be. (Jarvenpaa

et al, 1998)

121

Definition

Relationship conflict Disagreements based on personal and social issues that

are not related to work. Typically in relationship

conflicts group members avoid each other or spend time

resolving interpersonal issues. (Jehn and Chatman,

2000)

Self-categorization The usage of social characteristics, including

organizational membership, to define psychological

groups and to promote a positive self image.

Self-verification The desire to seek appraisals from others that verify

that they perceive the individual as he/she sees

himself/herself. Includes also the verification of status in

a group situation.

SMART Criteria used to check the completeness of program

objectives. Abbreviated from Specific, Measurable,

Actual, Realistic and Time-bound.

Tacit knowledge Tacit knowledge represents knowledge that people

possess, but which is inexpressible and incorporates

both physical skills and cognitive frameworks (Hislop,

2002) (Nonaka and Takeuchi, 1995).

Task conflict Disagreements about the work that is being done in the

group. Differences in viewpoints and opinions about

tasks void of intense interpersonal negative emotions.

Includes also constructive debate. (Jehn and Mannix,

2001)

122

Definition

Trust The willingness of a party to be vulnerable to the

actions of another party based on the expectation that

the other will perform a particular action important to

the trustor, irrespective of the ability to monitor or

control that other party’’ (Mayer et al., 1995, p. 712).

Value 'a broad tendency to prefer certain states of affairs over

others' (Hofstede, 1980)

Zero-sum situation A situation where the benefits gained by a stakeholder

or a group of stakeholders and costs born by another

stakeholder or group of stakeholders equals zero

independent of co-operation between the stakeholders.

Appendix e) Cultural Dimensions

Dimension Explanation Value

Environment How individuals view and relate to the people,

objects, and issues in their sphere of influence

Control – Harmony – Constraint

Internal locus of control – External local of control

Trustworthy human nature – Untrustworthy human nature

Mutable human nature – Immutable human nature

Time How individuals perceive the of time and its

use

Single-focus – Multi-focus

Fixed – Fluid

Past – Present – Future

Space How individuals demarcate their physical and

psychological space

Private – Public

Individualism How individuals define their identity Individualistic – Collectivist

Achievement – Ascription

Universalistic – Particularistic

Power How individuals view differential power

relationships

Hierarchy – Equality

Competitiveness How individuals are motivated in relationships

with others

Competitive – Cooperative

124

Dimension Explanation Value

Structure How individuals approach change, risk,

ambiguity, and uncertainty

Order – Flexibility

Tight – Loose

Action How individuals conceptualize actions and

interactions

Being – Doing

Relationship – Task

Thinking How individuals conceptualize Deductive – Inductive

Linear – Systemic

Communication How individuals express themselves High context – Low context

Direct – Indirect

Expressive – Instrumental

Neutral – Informal

Self-effacement – Self-enhancement

Status-oriented – Person-oriented

Elaborate – Exacting – Succinct

Table 8. Cultural Dimensions (adopted from Bird and Osland, 2006)