Multicultural Management in the Virtual Project Setting

MULTICULTURAL MANAGEMENT IN THE VIRTUAL PROJECT SETTING Carlos Galamba, University of Liverpool Introduction The Virtual Project Setting In today’s globalisation era, effective cross-cultural management of virtual teams is an emerging subject in international business literature and practice. Virtual teaming has a number of potential benefits; not only in terms of human resources flexibility but it can also reduce the operating costs of one organisation. On the other hand, the challenges of such environment should not be undermined.

Many scholars have attempted to analyse the impact of virtual work in a number of factors such as communication, leadership, trust, decision-making and productivity (Symons and Stenzel, 2007), while others were particularly concerned with the management of geographically dispersed units and therefore addressed the challenges of working with time zone differences and culturally diverse groups (Ardichvili et al. , 2006). The findings are very interesting and the business literature appears to agree that the virtual project setting is somehow different from face-to-face working and more important it brings some unique challenges.

This project will review the literature under these headings and explore the critical issues regarding cross-cultural management in the virtual project setting. Based on the theoretical framework for virtual teaming I will attempt to outline solutions and establish a set of best practices for effective international management of such environments. Managing the virtual environment Critical issues The emerging number of virtual teams is a reality in the global market place. The virtual project setting allows organisations to assign the most skilled individuals to projects across the globe, with less concern for travel or elocation expenses, which improves productivity (Rorive and Xhauflair, 2004). However the challenges of managing culturally and geographically diverse teams must not be undermined. Some of the problems and critical issues arise in different areas such as: communication, technology, synergy among team members, culture and time zone differences (Grosse, 2002; Kuruppuarachchi, 2009). In the next pages I will discuss these issues and review the current literature and theoretical framework to outline possible solutions. |COMMUNICATION | |ISSUE |In the bigger picture the most critical factor with regards to communication is the language barrier. Effective | | |communication can be affected when team members speak different native languages. For instance, Bakbone Software, a US| | |company faced communication problems when Japanese workers were employed in their virtual team, due to their flawless | | |English (Alexander, 2000). | |Nevertheless, some cultures prefer a more formal communication than others, and managers must pay special attention to| | |individual needs. There are a number of communication platforms available, such as phone, email, chat and | | |video-conferencing. Selecting the most appropriate method for a virtual project setting is critical for the project’s | | |success. Ardichvili et al. (2006) found significant differences in the preferred methods of communication of Russian | | |and Chinese team members.

The former are comfortable with email communication whilst the second would rather prefer | | |face-to-face or phone calls. These findings seem to support the distinction between high and low-context cultures | | |established by Hall (1981). | |SOLUTION |A valuable strategy to deal with communication challenges can be achieved by understanding and identifying everyone’s | | |strengths and backgrounds. By recognising different levels of expertise, skills and experience among team members, | | |virtual team leaders can distribute the workload accordingly. | |Lipnack and Stamps (1999), posit three basic steps to overcome obstacles to communication: listening skills, respect | | |and patience. | | |TECHNOLOGY | |ISSUE |The available technology is another critical factor for virtual teams. It is essential that an equal access to | | |technology can be guaranteed

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to all team members, otherwise productivity can be compromised (Kuruppuarachchi, 2009). | |Broadband services are not available in every location and some regions may experience slower internet speed than | | |others or may have incompatible networks | |SOLUTION |Ardichvili et al. (2006) posit that the start of the project is crucial and moreover team leaders must choose the most| | |appropriate computer-mediated technology that best suits the needs of team members.

One that can be readily available | | |to all users and therefore potential problems in the use of technology must be identified before the virtual project | | |takes place. | | |CULTURE | |ISSUE |Individualism-collectivism is one of the biggest dimensions of cultural variability.

The findings by Gudykunst (1997) | | |and Hofstede (1980) suggest that team members from collectivist cultures are less ready to trust others than those | | |from individualistic cultures. | | |Chow et al. (2000) established that individualistic and collectivist cultures make a sharp differentiation between | | |in-group and out-group members, with regards to knowledge sharing. For example, Chinese managers are found to be more | | |reluctant in sharing knowledge with an out-group member when compared to Americans. |SOLUTION |With regards to culture, many scholars agree that cultural awareness is the most effective solution to minimize the | | |negative effects of cross-cultural differences (Mead and Andrews, 2009). Ardichvili et al. (2006) emphasise that | | |leadership must facilitate an environment of cultural adaptation in order to create a unique competitive advantage. | | |Therefore it is essential that managers have the ability to channel culturally-determined behaviours and different | | |expectations into rich outputs. | |SYNERGY | |ISSUE |To communicate across cultures it is essential that managers can foster an environment of trust and understanding. | | |Several factors, such as repeated interactions, shared experiences and shared social norms, have been found to | | |facilitate the development of trust (Mayer et al. 1995). Many scholars also argue that face-to-face encounters are | | |irreplaceable when it comes to building trust (Ardichvili et al. , 2006). |SOLUTION |Following Ardichvili et al. (2006) findings, it appears essential that virtual team leaders make personal meetings | | |possible, because face-to-face encounters are one of the most critical factors for trust building, particularly at the| | |beginning of the team’s existence. This has been found to be essential in many cases of virtual teams, like Ericsson | | |in China (Lee-Kelley and Sankey, 2008) and the virtual project of the New South Wales police in Australia (Peters and | | |Manz, 2007). | |Nevertheless, in the virtual project setting, this synergy may be difficult to maintain and it is therefore important | | |that virtual organisations consider activities that indirectly create trust, such as group and individual feedback | | |(Walker et al. , 2002 cited in Ardichvili et al. 2006). | | |TIME ZONE DIFFERENCES | |ISSUE |The problem of working in distant geographical locations arises for example when certain activities need to be | | |synchronized or when real time communication is critical for the project.

Due to time zone differences, users may not | | |be able to exchange information instantly. For example, the US company BakBone software, faced some challenges in the | | |coordination of its Israeli and US teams, because they have a 7 hour time difference between them (Alexander, 2000). | |SOLUTION |Precise coordination processes can help conquer time-related challenges and help increase production outcomes. | | |Planning of schedules and tasks appears to reduce repetition in discussion (Lee-Kelley and Sankey, 2008).

This | | |planning should also be organic, particularly if disruption of planned activities takes place. Additionally, virtual | | |team leaders must ensure that all team members are aware of time-zone differences so that they can plan ahead the best| | |time for communication. | | |Microsoft for example, has overcome some of these issues by using a 24 hour service in some of their virtual teams | | |(Alexander, 2000). | Ethical implications Lee (2009) describes e-ethics as the ethical leadership that is required in the virtual project setting. The need to address ethical issues in virtual teams has increased over the years and appears to be more important in the international business environment. The literature over this subject appears to agree that there is a clear distinction between the issues raised within this new virtual design when compared to more traditional organisations (Lee, 2009).

Therefore, based on the problems and solutions identified before, for the multicultural management in the virtual project setting, I will now attempt to review the ethical implications of such issues. Based on the work developed by Lee (2009) I agree that ethic leadership is ultimately the responsibility of the project manager (p. 457). It is up to the leader to ensure that an ethical environment can be followed by the users at all times, and moreover that environment must be encouraged in the organisational design of the virtual project setting.

Cranford (1996) highlights that the use of computers that are in different geographic locations can affect the communicative behaviour of the users involved. For instance, the absence of face-to-face interactions can encourage a more aggressive and disrespectful behaviour. Therefore it is up to the project leader to control this environment, and monitor any unethical behaviour as it can have a negative effect on trust and synergy among team members.

Moreover, Lee (2009) agrees that it is essential that a code of ethics is available to all users, so that they understand what is acceptable or not in the virtual environment. Another issue identified in the literature regards the potential for social isolation in the virtual community (Lee, 2009), which in turn can affect motivation and commitment to the project. It is up to the project leader to ensure that all users are participative enough and avoid potential morale problems due to the lack of interaction.

The latter has been found to be more noticeable in the virtual environment than in traditional organisations (Lee, 2009). There are a number of other ethical issues in the virtual environment, but the ones identified above appear to be those that are directly linked with working in cross-cultural virtual teams that lack face-to-face interaction. It is essential that leaders can effectively manage the unique ethical issues that arise in the virtual setting; in turn this will increase job satisfaction, efficiency and ultimately improve the service value. Case study BankCo Inc. as a result of a fusion of many multinational companies, as an attempt to create a global brand, with similar corporate identity and global standards. The virtual team members are based in many different countries and come from well distinct cultures, for example Greece, UK, Germany and Singapore. It has been suggested that any poor performance or project delays were not related to the virtual team itself, but moreover were a result of cultural differences and communication problems (Lee-Kelley and Sankey, 2008). For example, some groups considered the excessive number of conference calls to be unproductive and time-consuming.

The critical issues Communication With regards to communication, the authors point out that the excessive number of emails, over a 100 per person per day, was seen as negative by many of the users, particularly in the Greek and UK teams problems (Lee-Kelley and Sankey, 2008). It is suggested that this could be the result of a low-trust culture, where colleagues feel they have to preserve email communication if a dispute takes place, for example. The excessive number of emails also meant that they could not be fully tracked or even read sometimes.

The company used video-conference as a replacement for face-to-face interaction, however staff felt that many of these conference calls were very long and unnecessary (over 8 hours in some cases). As suggested in the literature, the business language used can be a challenge for non native speakers, however this was not the case for the team in Singapore, due to their superior command of the English language. In the case of BankCo Inc. this was actually more problematic amongst Germany, Spain and Italy when they had to communicate in English. Also, despite the business language being English, BankCo Inc. as flexible enough to allow certain groups to discuss problems in their native language when interacting with each other, for example, in Singapore, this allowed easier explanation of concepts. Technology With regards to Technology, there were a number of tools available for communication. However, there were cases reported where users were not familiar with them. For example, with the tool “Test Director”, created to identify and raise problems, many users were duplicating work, by using emails as a secondary way of raising these problems.

The article by Lee-Kelley and Sankey (2008) emphasises that the challenges of technology could be resolved if managers addressed the training needs of the users involved, in a way to improve communication. Synergy among team members In the early stages of the project, it was reported that there was lack of clarity in responsibilities and roles, and therefore people were passing on the problems to others. Also, the authors pointed out that there was no obvious global project leader, which could have been seen by the users as lack of leadership and direction.

The scholars highlight that cultural and temporal issues affected the building of trust. For example the UK and Greek teams showed some frustration by the East tendency to avoid answering a question fully. They also felt they could not rely on their Eastern counterparts to complete tasks, even if they were committed to do so. Senior management acknowledged the problem, and highlighted the need for more interaction and understanding. As a consequence, some positive steps were taken, for example by implementing more face-to-face meetings.

Culture The authors pointed out that there was a difference in the work ethics between the West and the East, for example despite those in the West work very hard, the colleagues in the East worked longer and socially unaccepted hours. Another issue pointed out was the way that members in the team in Singapore would accept all change requests from senior management, even though they did not have the time to complete those tasks. They justified it as being part of their culture to not reject or disappoint any requests from someone higher in the hierarchy.

However, the Western counterparts perceived this as inefficient and pointed out that “these guys are lying continuously” (Lee-Kelley and Sankey, 2008, p. 60). Time zone differences With regards to this issue there were two different sides: some of the virtual team groups were working long hours, for example in Singapore to allow flexibility and problems to be picked up, even out of routine hours. On the other hand, the West assumed that they could then communicate with the East whenever they wanted to, and some problems arose when staff in Singapore was dealing with queries way past midnight.

Conclusion By examining the critical issues regarding global virtual teams, this project offers significant insight to broaden our academic understanding of culturally and geographically distant virtual teams. An emergent perception that arises from this discussion is that the virtual project working has a set of unique characteristics that in turn create new challenges for international management. The findings in the case of BankCo Inc. also suggest that a variety of issues affect cross-cultural virtual teams, but on closer inspection, only cultural differences impacting on conflict and team elations, and time zones differences affecting coordination and communication, may be directly related with the temporal and geographical distance features of virtual teams. Lee-Kelley and Sankey (2008) highlight that the remaining factors, such as trust, technology, and communication are not unique to virtual teams, and can also be found in more conventional organisations. That being said, their presence should not be undermined, as it adds to the challenge found in the virtual project setting. For instance, communication as a traditional team issue can be magnified by cultural diversity and distance.

Based on this discussion, I would consider the following as a set of best practices for the effective management of cross-cultural virtual teams: EFFECTIVE COMMUNICATION ? Leaders must ensure that a functional language is adopted in the virtual project setting, one that fits the level of diversity of the virtual team. ? The organisation must provide guidelines for communication and adequate training with the relevant communication tools. ? Equal access to information must be assured for all members of one team. ? Recognise that technology is an enabler

SYNERGY ? Encourage face-to-face encounters where possible, particularly at the beginning of the team existence. ? Good definition of roles. Leaders must clarify what is expected and what are the responsibilities of all team members and also ensure that members in one team are aware of each other’s responsibilities. ? Set clear, measurable and achievable goals ? Provide constructive feedback VIRTUALLY MINIMIZE TIME-ZONE DIFFERENCES ? Encourage the planning of schedules and tasks. ? Consider the possibility of 24h services. Ensure that all team members are aware of time-zone differences amongst fellow colleagues CULTURAL AWARENESS ? Understand the different backgrounds and distinct cultures of all team members. ? Leaders must be able to predict potential areas of conflict due to cultural differences and prevent them from happening. ? Foster one organisational culture that promotes listening skills, respect and patience among culturally diverse workers. ? Value diversity The future This project identified key areas for cross-cultural management and it represents a step towards more research regarding global virtual teams.

Also it provides a more profound understanding of the managerial implications in the virtual project setting. One can argue that the use of virtual teams contribute to a borderless world, however a new set of borders appears to emerge from this particular environment. One that is well distinct from other, more conventional multinational corporations. This project demonstrated that the durability and future of the virtual project setting relies heavily on both the organisational capabilities and the individuals, and moreover that organisations cannot depend solely on their members to attain the organisational goals.

Future research is encouraged to address the unique challenges of such organisational design, and contrast the effective leadership styles when face-to-face contact is hardly present. References ? Alexander, S. (2000) Virtual Teams Going Global, InfoWorld, 22(46): 55-56. ? Ardichvili, A. , Maurer, M. , Li, W. , Wentling, T. & Stuedemann, R. (2006) ‘Cultural influences on knowledge sharing through online communities of practice’, Journal of Knowledge Management, 10 (1), pp. 94–107 ? Cranford M. (1996) ‘The social trajectory of virtual reality: substantive ethics in a world without constraints’.

Technol Soc; 18(1):79–92. ? Jarvenpaa, S, & Leidner, D (1999), ‘Communication and Trust in Global Virtual Teams’, Organization Science, 10, 6, pp. 791-815, ? Kuruppuarachchi, PR (2009), ‘Virtual team concepts in projects: A case study’, Project Management Journal, 40, 2, pp. 19-33 ? Lee, M. R. (2009) ‘E-ethical leadership for virtual project teams’, International Journal of Project Management, 27 (5), pp. 456-463 ? Lee-Kelley, L, & Sankey, T (2008), ‘Global virtual teams for value creation and project success: A case study’, International Journal Of Project Management, 26, 1, pp. 1-62 ? Mead, R. & Andrews, T. G. (2009) International management. 4th ed. Chichester, England: John Wiley & Sons. ? Peters, L. M. , & Manz, C. C. (2007). ‘Identifying antecedents of virtual team collaboration’. Team Performance Management, 13(3/4), 117–129. ? Rorive, B. et Xhauflair, V. , (2004), “What binds together virtual teams? Some answers from three case studies”, in Reddy, S. (Ed. ), Virtual teams: concepts and applications, India, ICFAI University Press, pp. 132-140. ? Symons, J. & Stenzel, C. 2007) ‘Virtually borderless: an examination of culture in virtual teaming’, Journal of General Management, 32 (3), pp. 1-17 ? Hall, E. T. (1981), Beyond Culture, NY: Anchor Press/Doubleday. ? Lipnack, J. and Stamps, J. (1999), `Virtual Teams’, Executive Excellence, Vol. 16, No. 5, pp. 14-15. ? Grosse, C (2002), ‘Managing Communication within Virtual Intercultural Teams’, Business Communication Quarterly, 65, 4, pp. 22-38 ? Mayer, R. C, Davis J. H. , Schoorman F. D. (1995). An integrative model of organization trust. Acad. Management Rev. 20 (3), pp. 709- 734 ? Hofstede G. 1980), Culture’s Consequence: International Di€erences in Work-related Values, Beverly Hills: Sage Publications. ? Gudykunst, W. B. 1997. Cultural variability in communication. Comm. Res. 24 (4) 327-348. ———————– OPENING CASE: BANKCO INC. BankCo Inc. is a large consumer bank that is truly global, with branches in more than 100 countries (Lee-Kelley and Sankey, 2008). By being present in distinct geographic areas (Africa, Europe and Middle East), this is a great example of a virtual organisation that faced unique challenges and more important, it includes all of the critical issues identified above.

Team relations and communication were affected by both time zone and more important, cultural differences. Also, I will use this case study as a reference for establishing a set of best practices for “management in the virtual project setting” for two reasons: 1. It incorporates cross-cultural management of geographically and culturally distant units. 2. The company achieved an outstanding level of success in terms of budget, time and value delivery.

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