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MANAGEMENT AND TECHNOLOGY
CULTURAL IMPACT IF MULTINATIONAL WORK FORCE IN
CONSTRUCTION MANAGEMENT 1V. SAI SRI SHASHANK,
2Mr. P. NAVEEN KUMAR
1M.Tech Student,
2Assistant Professor
DEPT OF CIVIL ENGINEERING
SHRI SHIRDI SAI INSTITUTE OF SCIENCE AND ENGINEERING
Abstract: Multinational organizations have
workforces that involve people from different
countries, defined by linguistic, religious, and
political backgrounds, in other words, people of
different cultural backgrounds. Generally,
differences related to culture are more evident and
prominent than similarities and homogeneity. For
multinational companies, it is a must to take
cultural differences into account in their managerial
practices the interactions between the project
manager and team members may be affected by
several variables, such as culture, leadership style
of the project manager, and the complexity of the
developed tasks. Focused in this context, the
objective of this paper is to investigate and describe
how the culture issue can affect the management of
global project teams. It is a qualitative, descriptive
study conducted in a large multinational company
in the automotive sector. The results of this
research show that cultural issues can influence
both positively and negatively the management of
project global teams and the managers of these
projects have to deal with several management
challenges that require the adoption of certain ways
of dealing with culture impacts in managing their
teams to minimize potential problems in this
context.
I.INTRODUCTION
Cultural factors play an important role as
invisible barriers. With the continuous
globalization the firms should focus on eliminating
the invisible cross cultural communication barriers
Solving these barriers is important in order to foster
the organizational climate This will also create
opportunities for expansion of the organization and
widen their geographical outlook. Many serious
problems may arise when people from different
countries, races values, corners of world come
together. Working in multicultural team involves
many challenges, disagreements and conflicts.
These challenges and conflicts affect the
performance of the individuals and the entire firm
to a certain degree. In a multicultural internal
environment, the firms need to find out a solution
to bring a clarity in communication. Cross cultural
communication where people belonging to diverse
cultures being in communication with each other
needs to be effective in order to avoid
disagreements and conflicts and in turn achieve the
business objectives. In order to make cross cultural
communication effective, a firm has to understand
the barriers involved in cross cultural
communication process & identifying means of
overcoming such barriers in order to make cross
cultural communication effective.
The increasing trend of globalization has become a
major concern of many businesses that led to the
growing demand of human resource outsourcing
and filling the gap of shortage in human capital.
Consequently, as many companies operate
globally, it requires the hiring of foreign workers
from different countries with different origins and
cultural background thereby prompting the
managers to address the issues on cultural
differences as well as the concerns on how
managers effectively communicate their decisions
that equitably benefits the workers and the
organization. As businesses expand from local to
international operations, managers will be able to
gain understanding on the importance of cultural
diversity in the workforce especially in the human
resource management that largely deal with the
employees. Moran, stated that, modern managers
have undergone unending challenges in managing
employees of different cultural orientations and
nationalities considering that people‟s reaction to
situations are determined by culture Common
example to this is the language barrier where by,
different perceptions and interpretation of
information related to business operations due to
the varying culture. In other words, the culture of
time for instance may suggest different
implications country to country.
1.1 MULTINATIONAL ORGANIZATIONS
AND CULTURE:
Multinational organizations are the result
of economic structures that adapt the global
economy; these companies prefer to produce goods
or services in foreign countries for many reasons,
one of them being the financial one, as most of the
time it is cheaper this way. Also, the labor force is
cheaper and the resulting services and goods
exceed expectations. Multinationals are structures
that are multicultural, which on the other hand
requires a different management concept because
of the challenges that can and often arise from
cultural differences Having this in mind, being
multicultural is about being positive and open to
the effects that are positive, and the interaction with
other cultures, which develops significant methods
of interaction the most important aspect of being
multicultural is to have a positive perception of the
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cultural variety that can bring positive income to
the organization. Multinational companies are
present in almost every sector of activity and they
require management and employees from different
cultural backgrounds. The assignment of managers,
experts, and workers to countries with different
legal, cultural and political structures on one hand,
and also their relations with the workers from the
host country, on the other hand, make the
management of cultural differences something that
cannot be avoided in these organizations. These
organizations require not only management of
production in a traditional sense, but because of the
employment of people that are from different
cultures and beliefs, also to actually manage these
differences. However, investment deals with
different countries allow multinationals to act both
alone and in partnership in foreign countries, which
in return makes the cultural differences to
inevitably show up. The activities of multinationals
differ from those of the local ones because of the
variety of nationalities of managers and employees,
of different cultural backgrounds.
1.2 CULTURAL ORIENTATIONS
A society‟s cultural orientations mirror the
intricate pattern of interactions of the values,
behaviours and attitudes by its members.
Individuals articulate culture as well as its
normative characteristics by way of values which
they hold regarding life as also the world
surrounding them. Such values impact their
attitudes regarding the behaviour type hold to be
attest and most defective in a particular situation.
Steadily stirring patterns of group and individual
behaviours ultimately the culture of the society, and
the cycle starts again. A discussion involving the
issue of cross vengeance usually results in a
discussion on multiculturism. Multiculturism
signifies the process of managing sub-cultures in a
particular nation. It implies an analytical level,
which Hofstede Trompenaars and some others have
completely lost sight of in their work Nonetheless
cross-cultural perspectives regarding nations get
strengthened by making reference to various sub-
cultures in the context of those nations It has been
demonstrated that in Africa numerous cultural
groups care able to have divergent views regarding
the desirability of applying specific practices of
management. A particular system of management
may be adopted but it hardly indicates preference in
cultural terms of a vast majority Contrary to that it
is likely to have been opted for done to the
immense political power of a specific sub -culture
which may assert itself in order that its different
members get hold of the organisations upper
echelons. So, a major sub-culture may involve
itself in order that its different member get hold of
the organisations upper echelon .so major sub-
culture may involve itself in a type of cultural
imperialism which is touched upon by cross-
cultural exporter only form the standpoint of one
nation that is dominating another nation culturally
and not a particular sub-culture taking precedence
over another sub-culture.
Figure1: Impacts of cultural diversity
on individuals
1.3 CULTURAL DIFFERENCE
MANAGEMENT STRATEGIES
The subject of culture has rightly come to
the fore in construction research. So far, the work
has focused on industrialised countries. It is
necessary to reconsider the arrangements and
procedures of the construction industries of
developing countries, especially since the countries
from which they are borrowed have already taken
measures to review or replace them. Effort is
required to reflect the cultural attributes and values
of individual developing countries in their
construction practices and procedures. The existing
ones are not only currently obsolete, but they are
also inappropriate.
1.4 LIMITATIONS AND FUTURE
RESEARCH:
This study suffers from several
limitations. First, the size of the sample was
relatively small, which may affect the significance
level of the moderating effect. Increasing the
sample size may yield new revelations. Second,
there was a lack of diversity among the
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respondents, who were overwhelmingly contractors
(85%). This lack of stakeholder diversity may limit
the perspective(s) offered by this particular study.
Advantages and Disadvantages of Different
Cultures:
The research findings also suggest that the
cultural structure is the determiner in taking
responsibilities but that the managers think
otherwise in relation to agreeing with the decisions,
taking responsibilities, and organizational identity.
It is clear that different cultural backgrounds may
make reaching agreement more difficult.
Heterogeneous cultural settings may give rise to
different attitudes or misunderstandings, which in
turn could lower performance and raise conflicts.
What is taboo for some may be a joke for others,
which could jeopardize organizational
communication and diminish employees‟
satisfaction. While different cultures may enrich an
organizational culture, they can also weaken
communication and emotional commitment. The
participating managers complained about having to
explain things at length to members of other
cultures. It is further suggested by the research
findings that cultural differences may make
communication difficult but at the same time make
the work more interesting, with many points that
often go unnoticed being questioned. The
disadvantages of cultural differences are lack of
communication, misunderstandings, conflict, and,
consequently, poor performance. According to the
participating managers, the advantages are a wide
range of opinions, flexibility, increased creativity,
and more tolerance. Multicultural management of
multinationals is of significance for the following
key factors: while informing employees of
organizational activities, information must be given
in more detail and in more time, communication
breakdown in certain processes and activities, too
much difference in opinions and perspectives, and
respecting other cultures. On the other hand,
managers from different cultural backgrounds have
different views on multicultural management. They
might sometimes prefer employees from their own
culture. This raises the importance of forming a
common language (concept) in the work
environment. For this reason, in management of
different cultures, focusing on meritocracy and
performance, rather than culture alone, is more
important.
1.5 NEED FOR RESEARCH
There has been no such research
performed to analyze the organizational culture
between two unique districts, in such a socially
enhanced nation like India; been done before. Past
discoveries of the study performed so far was done
regardless various geographical cultures prevailing
in India, and classifying Hyderabad to follow a
particular organizational culture as a whole, leaving
behind the organizational culture of various regions
in Hyderabad. So, an exploration is being done to
break down whether diverse districts in India have
distinctive Organizational Culture.
II.LITERATURE REVIEW
Al-Jenaibi, B [1] Another positive effect
of cultural diversity in the workplace is the
increased tendency of organizational personnel to
overcome culture shock as the business expands in
other countries and becomes international. This is a
very important benefit derived from cultural
diversity of the employees because many modern
companies have global expansion on their
corporate agendas. With expansion into other
countries comes a range of obstacles including, but
not limited to, gathering information about local
customs and laws in the foreign country, assessing
risk, and designing strategies to overcome those
risks. When an organization has a culturally diverse
workforce, it can use the information and
knowledge of the individual workers to achieve
these objectives and overcome the aforementioned
obstacles. For example, an American company
trying to expand its business in India can draw
information about the Indian federal and provincial
laws that apply to the business, insurances required,
and applicable tax regulations.
Moore, T. W. [2] Difference is just any
other quality that a person uses to uncover personal
differences are people‟s variations in terms of
„race, culture, gender, age, and physical adequacies.
Some definitions of difference also include
variables such as ethnic origin, national origin,
class, religion, ways of learning and
communication, place of birth, and profession.
Cultural difference is a structure that arises from
the mixture of people with different group
identities within the same social system
Management of cultural differences is to create an
environment that allows employees from different
cultures to use their potentials to the full, and to
direct and manage these differences in line with the
organizational goals. In other words, it is the
activity of directing and managing the attitudes and
behaviours of employees from different cultures in
line with the organizational goals. It is the process
of turning cultural differences into a competitive
edge by supporting them with managerial and
organizational strategies rather than melting them
away in organizational settings. This includes all
the organizational and managerial activities relating
to a sense of multinational leadership, formation of
multicultural teams, and creation of a multicultural
structure representative of all these teams.
III.METHODOLOGY
Culture as such has been given many
definitions over the years. It does not have the same
meaning to all people or even researchers in the
fields of anthropology, sociology, psychology and
management Individuals behave differently in
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groups than when alone. We human beings are
“social animals” and define ourselves in relation to
different groups to which we belong or want to
belong. On one hand, all humans have the same
needs to eat and sleep, but on the other hand, we
are individuals with our own personalities, in which
nobody else is equal. Belonging to a group creates
a feeling of safety and comfort for an individual
This way, a culture creates possibilities to respond
to the challenges that come from outside; to break
the comfort zones and create new solutions to
problems. According to the widely used definition
of culture by Hofstede a culture is a group‟s
response to its environment. The members of the
group share a set of beliefs and values. This
description is based on the idea that culture is
something that all the members of the group have,
instead of being a social construct, which exists
only in human interaction This means that the
people within a specific culture do not necessarily
share the same meaning or act similarly Levels of
culture have been used in literature in ambiguous
ways, for example in describing the visibility of
culture to the observer (artefacts, values/beliefs,
basic assumptions) or the different spheres of
culture (e.g. national, organisational, professional
etc.) Without analysing and understanding the basic
underlying assumptions of a specific culture, the
interpretation of artefacts and values will be limited
Various spheres of culture interact with each other;
however, it seems that national culture is very
strongly bound to basic assumptions in different
spheres has questioned the whole existence of
national culture, especially if it is linked directly to
the nation state. On the other hand, institutions in a
nation state define the national culture in that
country
Figure2: flow chart
In a global environment with an increasing number
of organizations where more and more people from
different cultural backgrounds work together, the
way in which cultural differences are perceived and
managed gains significance. The present study is
expected to make a contribution to the literature
both with its findings and the academic critiques
that it will attract. This study mainly aims to reveal
how managers at multinationals perceive cultural
differences and what their cultural difference
management strategies are. Studies along these
lines are significant both for management literature
and for managers who have to work with people
from different cultures.
3.1 METHOD AND RESEARCH
TECHNIQUES:
This study is characterized by a
qualitative and descriptive research to examine how
the cultural issue can influence the management of
teams of global projects in multinational
companies. The unit of analysis of this research are
two global projects of a multinational company of a
large automobile industry. For data collection,
proposals were initially drawn up based on the
theoretical referential of this study and, based on
these propositions, it was developed both a
structured interview with semi open questions, as a
questionnaire for the lifting of the level of
agreement of respondents with the statements
presented. The interviews were conducted
personally with each of the managers, and the
issues of the interview guidelines were used, in
order to verify how the cultural issue can influence
the management teams of global projects. At the
end of the interview, it was delivered to the
respondents the questionnaire to indicate the degree
of agreement with the statements presented, with
the aim of ascertaining whether the reports of the
professionals interviewed were in accordance with
the propositions outlined in the study. In addition to
the interviews and questionnaires, information was
collected on each project. For the study of these
different data sources, the method used was content
analysis of the interviews, the responses to the
questionnaire were subsequently evaluated
comparing them between themselves and also with
the propositions laid down, and in parallel, it was
done the analysis of the information provided by
the managers on each project.
3.2 CULTURE AND PERFORMANCE – A
CONCEPTUAL FRAMEWORK
The preceding chapter that there are
grounds for hypothesising that culture does have an
impact on performance, and that this relationship
can be captured empirically. In order to investigate
systematically this empirical relationship between
culture and performance, it is necessary to have a
conceptual framework that brings together in a
logical manner all the essential aspects to be
investigated, and provides appropriate parameters
and points of reference for investigating culture
within a construction project context. This chapter
focuses on the development of such a conceptual
framework and on the development of empirical
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referents to aid the development of appropriate
hypotheses, data collection and hypotheses testing.
This chapter thus addresses the third objective of
this research which was to develop a conceptual
framework of the relationship between
organisational culture and performance.
Although models of organisational culture have
been criticised for oversimplifying a complex
phenomenon, it is also recognised that such models
serve an important role in guiding empirical
research and theory generation
Figure3: A conceptual model of the impact of
culture on performance and satisfaction
IV.RESULTS AND DISCUSSIONS
The cultural differences were discovered
through a comparison between national cultures in
Hyderabad and Vijayawada the study was
conducted with a descriptive and explanatory
design. The empirical findings have been retrieved
from a qualitative case study with one Hyderabad
and one Vijayawada manager working within the
case company. The empirical data was collected
through semi-structured interviews that focused on
cultural diversity and how it is managed together
with a concentration on the four cross-cultural
aspects chosen; time, relationships, hierarchy and
gender equality.
Data analysis
In the process of analysing the cultural
differences between India and Sweden an
identification of both cultures had to be done. The
cultural dimension and Trompenaars time
orientation an interpretation of four cross-cultural
aspect causing issues for Swedish companies to
efficiently manage the cultural diversity when
operating in India was made. These aspects are
time, relationship, hierarchy, and gender equality.
The theories have been used as a base to increase
the understanding of cultural diversity and the
effect it has on global organizations. When the data
needed had been collected the procedure continued
with testing the different cultural aspects. This was
done through interviews with a Swedish
organization operating in Hyderabad. The process
of collecting data from the case study was to
develop a real and deep understanding of how the
cultural differences could be managed in an
efficient way. The data collected has been carefully
reviewed in order for the conclusion to be as
reliable as possible and for the analysis to be
legitimate. The authors have throughout this study
continuously evaluated and revaluated the inclusion
of the data to only include the data of relevance for
this research. Furthermore, data has been removed
and added since it is essential for the process of
selecting, abstracting and simplifying data to
enable the analysis to be consistent the
interviewees did go off the topic sometimes during
the interviews, therefore everything that was stated
and discussed was not included in the empirical
data. Only the parts of relevance for the study were
included which was decided after listening to the
interviews more than once to make sure that
nothing valuable was discarded
Comparison of organizational culture between
Hyderabad and Vijayawada region of India
Figure4: Difference of cultural profiles between
Hyderabad and Vijayawada regions
It was concluded from this examination that
"market" type of organizational culture dominates
in the small-scale development companies located
in both the selected study area,
Figure5: Organizational Chart
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Hyderabad and Vijayawada the characteristic
features of “market” culture following companies
are that their focus lingers around getting the work
done by any means, with a high competition to
reach the end goal. This prominence on winning
keeps these organizations together. This finding is
disputing that Indian culture has both socialistic
and unorthodox or individualistic attributes because
of their inclination for a bigger social system.
Table1: Mean Scores of Elements of
Organizational Culture
Finding no statistical difference between the
Hyderabad and Vijayawada region of Indian
construction companies, it can be reasoned that
there is no huge distinction of the organizational
cultures honed in these two regions of India. The
mean score of the “market” culture in both the
regions are comparatively higher than the other
types of organizational culture, concluding that
both the regions follow dominantly “market” type
of organizational culture. It can also be stated that
India, being a developing a nation, follows
“market” culture. With a specific end goal to look
at the organizational culture of the interviewees‟
construction companies more thoroughly, the
scores of each of the individual attributes of
organizational culture were plotted the differences
of dominant characteristics graph are given in
organizational leadership management of
employees in organizational glue in strategic
emphasis and criteria for success in in between the
Hyderabad and Vijayawada regions. The plots for
each of the individual attributes of organizational
culture demonstrate the degree to which attributes
reflect the controlling culture between the regions;
and the overall cultural profile gives the idea about
the type of organizational culture practiced in the
selected study areas.
Figure6: The difference of the dominant
characteristic feature of the organizational culture
Figure7: The difference of the organizational
leadership feature of the organizational culture
Figure8: The difference of the employee
management feature of the organizational culture
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Figure9: The difference of the organizational glue
feature of the organizational culture
Figure10: The difference of the strategic emphasis
characteristics of the organizational culture
Figure11: The difference of the criteria of success
feature of the organizational culture
Connection between the culture of organizations
in the construction organizations and its impacts
on development
As indicated by the outcome‟s organizations of
Hyderabad and Vijayawada regions of Indian have
the similar dominant organizational culture. This
might be the reason why all the reviewed
development companies encounter relatively same
level of delay in their projects. It is worth
investigating the connection between
organizational culture and postponement in
construction. The discoveries displayed in Table
demonstrate that the construction organizations of
both the locales encounter 10-15% postponement
for finishing their
endeavours in time, with 5-10% cost overrun, as in
Table This finding shows that Indian construction
companies are outperformed and less efficient in
completing projects on scheduled budget and time
TABLE2: Percentage of Delay
Table3: Percentage of Cost Overrun
V.CONCLUSION
The impacts of cultural diversity in the
workplace can be both favorable and unfavourable.
Some negative effects include dysfunctional
conflicts, lost productivity, and difficulty to achieve
harmony in group settings. Positive effects include
a strong knowledge base created by a variety of
cultural experiences, an in-house resource of
cultural trainers and informers, and a greater
tendency to expand the business in foreign cultures.
For the most part, the effects of cultural diversity in
the workplace depend upon how well they are
being managed by the organizational leaders. With
proper strategic planning, top management can
enhance the positive effects and reduce the
negative effects of cultural diversity in the
workplace. With an aim to explore the
interconnection between the culture followed by
the organizations and its impacts in Indian
construction companies, the case study from the
selected study area, i.e. companies in Hyderabad
and Vijayawada regions reveals that a connection
exists between organizational culture followed by
the construction organizations and the impacts due
to it, mostly in terms of postponement and cost
overrun, in their development endeavours. By the
information gathered by questionnaire survey from
the respondents of the enterprises of the selected
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study area (40% response rate from Vijayawada
regions and 41.2% response rate from Hyderabad),
and analysing the values by “T-test”, it was
revealed that statistically the sample mean scores
do not differ much in between the two selected
regions. The survey results also propose that the
type of culture followed by an organizational is
related with the postponement and cost overrun of
the construction companies. The results indicate
that there is a 10-15% of postponement of the
ventures with 5-10% cost overrun in both the
selected study area regions.
5.1 FUTURE SCOPE
This study has focused on one
organization that operates in Hyderabad and
Vijayawada and the findings are therefore not
generalizable for all organizations and cultures. It
would be interesting to conduct a study to further
do a research on cultural diversity within
organizations and compare more than one
organization, preferably from different industries.
Since there are different states in India and the
national culture differs in different regions, the
authors of this thesis propose a study where
organizations from different regions of Hyderabad
was investigated to get a more generalizable result.
Culture is difficult to generalize, therefore it would
be interesting to conduct a research considering
different subcultures in Hyderabad and Vijayawada
This research has primarily used Hofstede's cultural
dimension and Trompenaars‟ time orientation to
understand cultural differences between India and
Sweden and it is suggested to use even other
cultural theories to analysed the cultural
differences.
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