Cultural differences in project owner-manager communication

Dr. Ralf Müller
Assistant Professor
Dept of Business Administration
Umeå School of Business and Economics
Umeå University
Sweden

Dr. J. Rodney Turner
Professor
Groupe ESC
Lille
France

Proceedings of the PMI Research Conference 11-14 July 2004 – London, UK

This paper investigates the cultural differences in the communication between project owners and project managers in buyer—seller relationships during business-to-business interactions. The quantitative study uses Hofstede's (2004) five dimensions of cultural differences and associated country scores, together with Müller's (2003a) categorization of project owner— manager communication, focusing on frequency and content. A worldwide survey generated 200 responses that identified four groups of countries operating along a two-dimensional continuum of social collectivism-to-individualism and a low–to-high context of communication. The communication preferences of these groups differed significantly. Communication profiles for each group of countries were developed. This can help project managers adjust their communication practices when working abroad. The results allow project managers and sponsors with different cultural backgrounds to improve their collaboration as a result of greater cultural awareness. This awareness has proven itself to be a major factor in helping project teams successfully realize cross-cultural projects.

Introduction

The open borders in the European Union and the ease of worldwide transportation and communication are just a few examples of modern human evolutions that are making possible the opportunity for companies to work across national borders (Stohl, 2001). This includes an increase of suppliers who are conducting business outside their home country and with international clients. This expansion of business activity requires inter-cultural communication between buyers and suppliers. Project owners (as buyers) and managers (as suppliers) need to bridge their cultural borders and aim for effective communication in the planning and delivery of projects. While effective communication is already difficult, albeit important, in intra-cultural settings (Keller, 2001, Müller & Turner, 2001), it becomes a major factor for project success in inter-cultural settings. It's common wisdom that knowledge of language and culture are needed for effective communication across borders (Ihator, 2000). Cultures, however, differ in a variety of ways, most significantly in the way people communicate in their different cultures (Miller, 2002). In his discussion about the literature on global organizational communication, Stohl (2001) says that “communication is the essence of culture, inextricably and reciprocally bound together, and effectiveness is rooted in the ability of people from different cultures to work together” (p. 326).

Culture describes values shared by a group of individuals. The values are inherited and shape the behavior of the members of the culture. Values are the broad tendencies to prefer one thing over the other (Merchant, 2002).

A number of studies have addressed the problem of inter-cultural communication in the past. However, the issue of communication between project owners and managers (the representatives of project buyer and seller firms) has not yet been investigated on a global scale. Therefore, this study investigates the differences in communication between project owners—managers from different cultures. The underlying research question is:

What mix of communication frequency, contents, and media is expected by project owners and managers in different cultures?

The empirical study described in this paper is theoretically based on Hofstede's (2004) five dimensions of culture, and Müller's (2003a) typology of project sponsor—manager communication. Quantitative methods are applied to develop a model for communication in different cultures. The next section of the paper summarizes the literature on inter-cultural communication as it relates to project management. This is followed by a description of the method and analysis used for a worldwide survey, a presentation of the quantitatively developed model, and our conclusions from the research.

Culture and communication

Culture appears to be difficult to define. A review by Stohl (2001) revealed that over 300 definitions of the term exist and that scholars have identified dozens of dimensions of cultural variability in terms of different beliefs, values, and practices. However, in agreement with many other researchers, Stohl identifies the work of Hofstede (1984) as the most influential scholarly work in the area of culture. Hofstede (1984, p. 21) defines culture as “the collective programming of the mind, which distinguishes the member of one human group from another.”

This definition identifies the work of Hofstede—as well as the work of many other researchers—as focused on the differences—or divergent qualities—between cultures. A second category of cultural research relevant to the research question stated above addresses the aspect of dyadic inter-cultural communication, e.g., between project owner and manager in cross-cultural projects. This second category is convergent in nature; it focuses on the factors that can be addressed to improve mutual understanding of people engaged in inter-cultural communication. Both categories of literature are reviewed in the next section.

Cultural divergence

The most often cited study in work-related cultural differences is by Hofstede (1980). His empirical research is based on survey responses from more than 100,000 IBM employees in over 50 countries. He identified four major dimensions to explain differences among cultures. These are:

  • Individualism versus collectivism. People in individualist cultures are supposed to take care of themselves and their immediate family. In collectivist cultures individuals can expect their relatives, clan, or other groups to look after them in exchange for unquestioning loyalty. This dimension addresses the concept of I or we.
  • Power distance. The extent individuals in cultures accept the unequal distribution of power. Individuals in large power distance cultures accept hierarchical order and their position in it. In small power distance cultures, people strive for equalization and demand justification for power inequalities. This dimension addresses the question of how inequalities among people are handled when they occur, along with the consequences for the way people build their institutions and organizations.
  • Uncertainty avoidance. The extent individuals in a culture feel uncomfortable with uncertainty or ambiguity. Cultures with strong uncertainty avoidance maintain rigid codes of belief and behavior and are intolerant towards deviant persons or ideas. Weak uncertainty avoidance cultures are more tolerant towards deviants and practice counts more than principles. The underlying issue addressed by this dimension is the culture's stance towards time and future, i.e., whether the culture tries to control the future or just let it happen.
  • Masculinity versus femininity. The former stands for a preference in a culture for achievement, heroism, assertiveness, and material success. Femininity stands for a preference for relationships, modesty, caring for the weak, and quality of life. This dimension addresses the way in which social roles are allocated within a culture. In masculine cultures, men are given the more outgoing, assertive roles and women the more caring and nurturing roles. Feminine cultures strive for less strong social differentiation between men and women and women can take on assertive roles, while men can pursue modest, caring, and relationship-oriented roles if this is their preference (Hofsede, 1984).

Under the influence of the Chinese culture connection (see below), Hofstede developed a fifth dimension which is concerned with:

  • Long-term orientation. This is the degree to which a culture embraces long-term devotion to traditional values. High long-term oriented cultures prescribe to long-term commitments and respect for traditions. In cultures ranking low on this dimension, change occurs more rapidly (Hofstede, 2004).

As reaction to the Western perspective of Hofstede, the Chinese culture connection developed the Chinese value survey. This questionnaire was applied to 22 Asian countries, from which four dimensions of cultural differences emerged (Chang & Ding, 1995):

  • Integration. This focuses on the social stability and tolerance for others. It is correlated with Hofstede's dimension of power distance between a superior and a subordinate.
  • Confucian work dynamics. This reflects the Confucian work ethics by showing a culture's ethic through its search for virtue, social hierarchy, and structure through work. This dimension is not related to any of the four dimensions developed by Hofstede, it instead led to the creation of his fifth dimension concerning long-term orientation.
  • Human heartedness. This dimension reflects the compassion among individuals in a culture. It is correlated with Hofstede's masculinity dimension.
  • Moral discipline. This focuses on the extent to which individuals keep themselves under control in relation to others, thus it emphasizes a moderate, prudent, and adaptable behavior. It corresponds to Hofstede's individualism/collectivism dimension.

A related empirical study by Trompenaar (1993, 2004) focused on the ways cultures develop approaches to handling problems and difficult situations. Based on empirical evidence from approximately 15,000 employees in 47 cultures, he developed a framework of seven dimensions. Five of these dimensions cover the way people in a culture relate to each other, i.e., universalism versus particularism, individualism versus communitarianism, neutral versus affective, specific versus diffuse, and achievement versus ascription. Another dimension is the culture orientation towards time, i.e., sequential versus synchronous time. The last dimension reflects the relationship of the people in a culture with their environment, i.e., internal versus external control.

Focusing on the correlation of language and context in communication, Hall (1976) categorized cultures by the extent their language is contextually related. Communication in low context cultures is characterized by a separation between personal and work relationships, as well as information vested in explicit and detailed codes. High context communication is based on existing relationships caused by lesser differentiation between personal and work life. Communication in these cultures is less explicit because individuals know each other for longer periods and therefore share a common context. Here very little information is in the coded, explicit part of communication and more in the person and their relationship.

The review above indicates that the broadest coverage of dimensions appropriate for a work-related inter-cultural communication study is provided through Hofstede's five dimensions model.

Cultural convergence

These studies focus on the dyadic communication across cultural boundaries with the aim to improve communication effectiveness. Here low and high context communication is dominant in individualistic and collectivistic cultures respectively (Li, 1999; Kapoor, Hughes, Baldwin, & Blue, 2003).

In an empirical study with 373 U.S.-American and Japanese students, Gudykunst and Nishida (2001) identified anxiety and uncertainty as major factors influencing the effectiveness of communication across cultural borders. They concluded that moderate levels of anxiety and uncertainty are required for effective communication. Extremely high anxiety causes stereotyping, and low anxiety loss of motivation for communication, both leading to ineffectiveness. High levels of uncertainty lead to lack of predictability of the other's attitudes, feelings, and behavior, whereas low uncertainty lead to overconfidence in these predictions, again leading to ineffective communication.

Using an empirical experiment with Canadian and Chinese students, Li (1999) contrasted the effectiveness of intra-cultural and inter-cultural communication. The experiment showed that in face-to-face communication, the receiver only captures about 75% of the information communicated by the sender in an intra-cultural setting. This was reduced to 50% in inter-cultural settings. In line with other researchers (e.g., Armstrong & Kaplowitz, 2001), Li found that the loss of information was independent from the language skills (above a certain level) of the individuals and the amount of information sent by the sender. Rather, “barriers other than language prevented inter-cultural dyads from getting the information through” (Li, 1999, p. 404). It shows the need to understand not only the language, but also the hidden and unhidden cultural rules in a conversation.

These cultural rules were investigated by Pheng and Leong (2000), who used a case study of a Chinese—American joint venture in the construction industry. Their analysis revealed that the assertive style of the western culture was perceived as not listening by the eastern counterparts, which eventually caused the joint venture to fail.

By investigating in the differences that cause inter-cultural communication problems, Armstrong and Kaplowitz (2001) identified the following two major dimensions of difference:

  • Intercultural universals. This includes differences between cultures in the commonalities across context, e.g., in terms of power versus solidarity, direct versus indirect speech, and avoidance of face threatening behavior.
  • Situational norms. These are the differences in characteristics of utterances, recognition of structures, and norms in talks. Situational norms are the main resources for negotiation of relational meaning, thus its absence due to inter-cultural misunderstandings constitutes a loss of interaction.

Along with other studies, Armstrong and Kaplowitz (2001) concluded that a main cause for misunderstandings in these two dimensions is ethnocentricity, i.e., interpreting and evaluating the other's behavior in light of one's own cultural values, which leads to false conclusions.

The studies listed in this section support the findings of Hall (1976), which focus on the extent of contextual orientation of languages in different cultures. The next section focuses on the dyadic communication of project owners and managers during project implementation.

Project owner—manager communication in projects

Several series of studies confirmed the crucial role of project owner—manager communication in projects (e.g., Keller, 2001; Tushman & Katz, 1980). In an empirical study, Müller and Turner (2001) showed that the quality of communication management has the most significant impact of all knowledge areas—as defined by the Project Management Institute (PMI)—on project results, when results are measured in earned value terms. In a global study with 209 participants across 34 countries, Müller—individually (2003a, 2003b)—and with Turner (Turner & Müller, 2004) showed that high performing projects are characterized by high levels of collaboration and trust between project owner and manager and medium levels of structure in project execution. Collaboration and trust are built through informal face-to-face communication complemented by formal reports at frequencies necessary to help the owner feel comfortable about the project team's performance and the decisions made by the project manager on the owner's behalf. This type of communication involves:

  • Continuous communication, with daily or at least weekly interaction. This is the most preferred frequency across all projects.
  • Fixed interval communication, at bi-weekly or monthly intervals. This frequency of communication is mostly preferred in high performing projects with high levels of collaboration.
  • Variable interval communication, at milestone or project-phase end achievements. This is occasionally preferred in order to reduce communication efforts in projects. It shows, however, a risky decrease in at least one party's interest in the project and can lead to a decrease in collaboration and subsequent project failure.

Furthermore, the studies show that communication content is intertwined with the media used for communication. Project owner and manager prefer four types of contents/media mix:

  • Personal project reviews: face-to-face meetings with in-depth discussion of project status and outlook.
  • Project analysis: information on quality metrics and project trends, provided through all media (face-to-face, verbal, and written).
  • Written status reports: written information about current status, achievements, issues, changes, next steps, and other items needing communication. These other items are potentially followed-up through verbal (telephone) or face-to-face communication.
  • Verbal updates: brief and timely updates over the phone on project status, achievements, issues, changes, and next steps.

The authors also showed the crucial nature of good project owner—manager communication for project performance. Cases with an imbalance in formal and informal communication were characterized by a loss of trust and collaboration, eventually leading to project failure. Formal communication was found to reach a wider audience due to its written nature; it is, therefore, crucial for the management of stakeholders.

The above review of the literature on dimensions of cultural differences, dyadic inter-cultural communication, and owner—manager communication in projects shows the difficulties that arise when projects are delivered across national borders. Good owner—manager communication, a vital element for project success, becomes vulnerable to disturbances through misinterpretations caused by cultural differences. With the crucial role of owner—manager communication, and the contextual communications differences among national cultures, as described above, the following research hypothesis is stated:

      H1: Formal communication between project owners and managers is influenced by their national culture.

The underlying research model classifies cultural differences variables as independent variables and communication preferences of project owners and managers as dependent variables.

Methodology and analysis

An online survey, globally distributed through PMI, the International Project Management Association (IPMA) and the online journal PM World Today, was used to collect data for a quantitative analysis. The sample consisted of 200 usable responses—62 responses from project owners and 138 from project managers—from 34 countries. Twenty-nine percent of those who accessed the survey's web-link answered the questionnaire. Of the responses, 47% were from Europe, 34% from North America, and 19% from other regions. The average age of respondents was 42 years, with 10 years of project management experience and six years experience in project sponsorship.

The analysis was done in three steps:

  1. Analysis of the impact of each of the five cultural variables on the seven preferences for communication frequency and contents.
  2. Analysis of the combined set of cultural variables on the set of frequency and contents variables.
  3. Identification of cultural groups with similar communication practices and development of communication profiles for each group.

Step one was done using a forward regression analysis. Hofstede's (2004) latest country scores of the five dimensions listed above were used as independent variables; Müller's (2003a) communication frequency and contents variables were used as dependent variables. Only those cultures with data for all variables in both studies were used for the analysis. This reduced the number of countries to 12. The sample data fulfilled the requirements for regression analysis. The results were assessed for statistical and practical significance, with the former indicating whether the results are attributable to chance and the latter whether the results are useful, i.e., substantial enough to warrant action (Hair, Anderson, Tatham, & Black, 1998). Thresholds for statistical significance were set at .05. Practical significance was assessed through effect size, which estimates the magnitude to which a phenomena being studied exists in the population (Hair et al., 1998, p. 2). The assessment followed Cohen (1988, p. 413), in that it observes the level of Goodness-of-Fit (R2) of the regression model to the observed data. The magnitude of effect size was classified using minimum R2 thresholds of .02 for small, .13 for medium, and .26 for large effect size (Cohen, 1988, p. 413). The regression analyses showed two significant models.

Regression models for cultural impact on communication preferences

Exhibit 1: Regression models for cultural impact on communication preferences

The preference for verbal updates is positively correlated with individuality and power distance in a culture, and to a lesser extent, negatively correlated with masculinity, uncertainty avoidance, and long-term orientation. The model is significant both statistically (p = .000) and practically with a medium effect size (R2 = .21). This level of effect size is of a magnitude that “would be perceptible to the naked eye of a reasonably sensitive observer” (Cohen, 1988, p. 80).

The second model identified the preference for fixed interval communication as being positively correlated with power distance and uncertainty avoidance, and negatively with individuality, masculinity and long-term orientation. The model is of statistical (p ≤ .003) and practical (R2 = .13) significance, with the latter being at the borderline between small and medium effect size.

It shows that the extent of power distance in a culture impacts both contents with a preference for verbal updates and timing with preference for communication at fixed timely intervals. Individuality sets the preference for verbal updates, whereas the extent of uncertainty avoidance and short-term orientation (the inverse of long-term orientation) determines the preference for communication at fixed timely intervals.

Step two of the analysis was done using canonical correlation analysis to identify the relationships between the two data sets of independent and dependent variables. This approach takes into account the interrelationships between the variables within each of the two data sets. Canonical loadings were used to interpret the relationships. The usual threshold of .30 for loadings was applied. The results are shown in Exhibit 2. The model has a high statistical significance (p = .000). Practical significance is medium, with a Redundancy Index of .142.

Exhibit 2: Canonical correlation model for all projects

Exhibit 2: Canonical correlation model for all projects

The model resembles the collectivism—individualism dimension of Hofstede's model, with individualistic cultures, such as North America, UK, and Australia at one end of the continuum, and collectivist cultures with high levels of power distance, long-term orientation, and uncertainty avoidance, like China, India, Japan, and Middle East countries at the other end of the continuum.

The same analysis was done on the high performing projects only (those projects rated at or above average performance of all projects in the sample). It revealed the same collectivism— individualism dimension as before, plus a second dimension, which reflects the high context—low context dimension of Hall (1976). The model is statistically significant (p = .000, .019) but has a smaller practical significance than the prior model (cv = .107, .069).

Canonical correlation model for high performing projects

Exhibit 3: Canonical correlation model for high performing projects

Graphical representation of the canonical correlation model showed a two-dimensional orientation with a low-to-high context dimension determined by the culture variables for power distance, uncertainty avoidance, and long-term orientation. The second dimension of collectivism to individualism comprised the individuality variable as well as the inverted uncertainty avoidance and long-term orientation variables. The countries average values in each dimension were plotted in a continuum of the two dimensions. Exhibit 4 shows that this identified four groupings of countries.

Grouping of cultures by context orientation and individualism

Exhibit 4: Grouping of cultures by context orientation and individualism

Japan (JPN), Brazil (BRA), and Taiwan (TAI) make up Group 1 with the highest levels of collectivism and context orientation. Group 2 includes Hungary (HUN) and India (IND) with medium levels in both dimensions. Group 3 comprises The Netherlands (NET) and Germany (GER) who show lower context orientation and higher individualism. Finally Group 4 includes Australia (AUL), USA, Canada (CAN), New Zealand (NZL), England (GBR), and Sweden (SWE) with highest levels of individualism and lowest levels of context oriented communication.

In the third step, the average preference for communication frequency and contents was calculated for each of the four distinctive groups, which resulted in a communication profile for each of the four groups. These are shown in exhibits 5 through 8, with the left side of the spider diagram showing the preference for communication frequencies and the right side the preference for contents.

Communication profile of Japan, Taiwan, and Brazil

Exhibit 5: Communication profile of Japan, Taiwan, and Brazil

Group 1, with Japan, Taiwan, and Brazil, prefers personal communication with analytic contents, mainly at the achievement of milestones or phase ends in projects. Their profile shows that owners and managers in these countries do not rely on written reports and have a negative attitude towards verbal updates over the phone. Communication in these countries is face-to-face.

Communication profile of Hungary and India

Exhibit 6: Communication profile of Hungary and India

Group 2, with Hungary and India, is very different from Group 1. This group shows a preference for written status reports at fixed bi-weekly or monthly intervals. Communication in these countries is often done through pre-scheduled written reports.

Communication profile of The Netherlands and Germany

Exhibit 7: Communication profile of The Netherlands and Germany

Group 3, with The Netherlands and Germany, shows a more balanced set of preferences. Here analytic data about the project and its progress are preferred at bi-weekly or monthly intervals. Communication in these countries is very detailed, using all possible media at pre-scheduled dates.

Communication profile of Australia, New Zealand, North America, England, and Sweden

Exhibit 8: Communication profile of Australia, New Zealand, North America, England, and Sweden

Group 4, with Australia, New Zealand, North America, England and Sweden, prefers continuous communication through verbal updates over the phone, backed up by written status reports. Communication in these countries is done using frequent telephone calls to keep each other informed. Written reports are created to satisfy legal needs and an organization's policies for formal reporting.

Significant differences between groups were tested through ANOVA with a post-hoc Scheffe test. It showed that Group 4 differed significantly from Group 3 in their higher preferences for verbal update (p = .001) and lower preference for fixed interval communication (p = .041). Group 4 also differed significantly from Group 1 in their preference for verbal updates (p = .001), and Group 1 differed from Group 3 in their higher preference for communication at variable intervals (p = .041). These results confirm the study's hypothesis. Formal communication between project owner and manager is significantly impacted by national cultures.

Conclusions

The study described herein assessed communication preferences of project owners and managers in different countries. The hypothesis that the formal communication of project owners and managers is influenced by their national culture is supported. The results show that an increase in the cultural dimension of power distance leads to preferences for verbal communication at bi-weekly or monthly intervals. The dimension of individuality supports the preference for verbal communication over the phone. Uncertainty avoidance and a short-term orientation towards tradition in a culture correlate with communication at fixed timely intervals.

The quantitative analysis supported Hofstede's (1980) dimension of collectivism versus individualism and Hall's (1976) dimension of low versus high context orientation, as being relevant for modeling of communication preferences between project owner and manager in different countries. This is also indicated by Li (1999) and Kapoor et al. (2003). Four distinctive groups of cultures were identified at decreasing levels of context and collectivism. Cultures with high context orientation and collectivism prefer personal communication at every possible occasion. Cultures with medium levels of context orientation and collectivism clearly prefer monthly written reports. Those cultures with lower context orientation and higher individualism prefer analytic information about projects at fixed timely intervals. Finally, cultures with the lowest levels of context orientation in their communication and the highest levels of individualism prefer continuous verbal updates, backed-up by written status reports.

The implications for project managers working in foreign cultures can be identified by comparing exhibits 5 through 8. Project managers from, for example, North America or England should change their communication behavior when working in Japan or Brazil. The practice of verbal updates from their home culture is not appreciated in their host country. Personal communication at milestone or project end, as well as at fixed intervals is recommended for these countries. Project Managers from The Netherlands or Germany managing projects in England, North America, Australia, or Sweden should be aware that their preferences for detailed analytic assessment at fixed time intervals is not appreciated in their host culture. They should adapt to the continuous verbal update practices via telephone to keep their project owner informed.

This study has provided project owners and managers with a series of recommendations on how to avoid inter-cultural communication problems and the associated adverse effects for their joint project. Using exhibits 4 through 8, project managers can identify the communication practices of their host culture and better prepare themselves to communicate cross-culturally according to the expectations and requirements of their host country.

A wide variety of communication preferences can be imagined outside the scope of the 12 countries included in this study. However, the cultures assessed span from the highest to the lowest levels of context orientation and collectivism, thus covering a wide breadth of cultural diversity. Even though the study aims for generalizable results it should be noted that average values were used for cultural dimensions and communication preferences. Behavior and preferences can differ widely within cultures. The above recommendations should therefore not be blindly applied, but thoughtfully tested in each individual project.

A further research study could focus on the details of communication contents in the different national cultures, to identify cultural preferences for handling progressive and regressive information, as well as an assessment of the applicability of other cultural dimensions for such a study.

The cultural communication profiles and the recommendations from this study can help project managers to satisfy communication expectations when working abroad and thereby build long-term business relationships. At the same time, it can help project managers to improve their efficiency in project execution to the benefit of their client and their home organization.

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