The Leadership Styles Of Finnish Project Managers

INTERNATIONAL JOURNAL OF

PROJECT MANAGEMENT International Journal of Project Management 22 (2004) 387–396 www.elsevier.com/locate/ijproman

Coping with multicultural projects: the leadership styles of Finnish project managers Marko M€ akilouko

*

Tampere Polytechnic, P.O. Box 21, Teiskontie 33, Tampere 33521, Finland Received 7 February 2003; received in revised form 6 May 2003; accepted 21 August 2003

Abstract Finnish leaders and key personnel of multicultural projects were interviewed about their experiences and perspectives on multicultural project leadership. The team members included Finnish–Chinese, Finnish–European, and Finnish–American cultural combinations. The Chinese team members were mostly from Hong Kong with one team from Beijing. Three multicultural project leadership styles were found. Forty out of forty-seven project leaders indicated a solely task oriented leadership style. The same leaders also indicated cultural blindness, ethnocentrism, parochialism, or in-group favoritism. The seven leaders that indicated almost solely relationshipsÕ orientation, or both task and relationshipsÕ orientation, indicated also cultural sympathy and three leadership strategies to maintain team cohesion and to avoid cross-cultural problems. It is possible that they understand foreign cultures as a social phenomenon and can use that knowledge in leadership. Obviously, the relationships and task orientation are personality traits that have wide consequences for multicultural project management and the choice of leadership style as well as the foreign cultures. Ó 2003 Elsevier Ltd and IPMA. All rights reserved. Keywords: Multicultural; Leadership style; Task orientation; Relationships orientation; Cultural blindness; Ethnocentrism

1. Introduction Multicultural project teams are common in large international companies. Recent mergers in Scandinavia have further increased the number of multicultural project teams in operation in Finnish industry. In practice, there are three basic forms of multicultural team. (1) A project team with members from different cultural backgrounds working in the same country. These teams have expatriate team members or team members that come from ethnic minorities that are culturally distinct. (2) Project teams that are partially or totally dispersed in many countries but meet face-toface. (3) Project teams that have members based in many countries, work together only through electronic medias, and have never met each other. This ‘‘virtual project team’’ has no face-to-face or get-to-know-each-other meetings [1]. *

Tel.: +358-50-5420-134; fax: +358-2647-222. E-mail address: marko.makilouko@tpu.fi (M. M€akilouko).

0263-7863/$30.00 Ó 2003 Elsevier Ltd and IPMA. All rights reserved. doi:10.1016/j.ijproman.2003.08.004

This study concentrates only on the second type of team. The appointed leaders of the project teams are often from the companyÕs home country. Some of the leaders move abroad as expatriates, but it is more common for them to remain in their home country and communicate via electronic media. Without exception, the project teams have frequent face-to-face meetings where personal relationships between team members develop. The benefits of strong personal relationships include improved communication and reduced conflicts. Most of the project teams work on cross-border transfer of technology projects such as banking systems, or are engaged in the development of new technology and applications for IT companies. The metal industry has the longest tradition of using multicultural project teams to procure factories, paper and pulp mills, and in smaller business-to-business projects. In Finland, companies have recently started to use multicultural project teams for a new purpose. Companies that supply global enterprises with engineering, technology, parts or subassemblies have also established multicultural teams to

388

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

serve these enterprises in a coordinated manner. These multicultural companies have a need for knowledge in the field of multicultural leadership. Their experiences have shown that not all multicultural projects go well. In Finland, such failures are usually well reported by the media and several cases are known to exist. In one case, a company disbanded all multicultural teams and replaced them with single nationality teams as a way to solve multicultural project team problems. There has not been enough research on leadership of multicultural teams (excluding virtual teams). Many writers have suggested ideas, but very few have attempted to study this form of leadership, thus the determinants, attributes, and variables are largely unknown [2]. Some studies have focused on leadership traits in multicultural management [3,4] and the team process [5–7]. A more general perspective is available through case studies [8–10]. No studies are available, that clearly show what effective leadership patterns are in multicultural leadership. There are ample studies regarding expatriate leadership, especially in international joint ventures [7,10–14]. The studies concentrate primarily on how expatriates tend to fit their style of leadership to the practices and expectations of the team members in the country they are working in, e.g. coping strategies [14], that concentrates on what contributes to the role of ambiguity, and the effective patterns of conflict management. The multicultural project team is different from the expatriate situation. The expatriates do not clearly deal with the problem of team dispersion. This may happen, but studies do not indicate dispersion as one of the moderator variables. The leaders of multicultural project teams find an array of expectations and practices, often simultaneously with the geographical dispersion of the team. Thus, the project team members may not identify themselves as members of the multicultural team, but representatives of their home organization [7], which complicates the leadership task. The differences in language skills complicate the communication and formation of the team effort [5]. It is possible; even likely, that the multicultural project team presents far more demands on leadership than conventional leadership situations including expatriate leadership. Multicultural leadership is an interesting and challenging subject of research. The researcher has to deal with a research-sample collection problem as project teams work in different countries. There is also the problem of the limited knowledge in this field. We do not yet know how applicable the existing knowledge obtained from other research sample groups is for multicultural leadership. Some claim that these earlier results are universal. The fact is, however, that the assumption of universalism is unverified. For this reason, this study uses the hermeneutic approach and the grounded theory method with qualitative data. The

study attempts to find what leadership styles and their determinants or moderator variables emerge in the context of multicultural project teams.

2. Literature review 2.1. Project leadership Projects set their own specific framework for leadership. Cleland [15] has summarized the project management body of knowledge and found a definition that applies to this particular field of leadership. The definition emphasizes the role of leadership as the change agent even more than we may expect in organizations with continuing leader and follower roles: Project leadership is defined as a presence and a process carried out within an organizational role that assumes responsibility for the needs and rights of those people who choose to follow the leader in accomplishing the project results [15].

There is usually a limited amount of time, money, and other resources, i.e. the project has several constraints [16]. Rather than a static organization, the projects follow rapid life cycles where the organizational roles change. Because of this, the leader has to change roles from being a technical expert to a manager, then a leader and finally, at the end of the project, back to being a technical expert. The roles may also include internal argumentation for resources and external closure of sales [17]. The nature of a project team does not follow traditional perspectives. Briner et al. [18] suggest that project teams are divided into a core team and a visible team. The core team members are permanent members of the project but usually not on a full time basis, i.e. they work on other projects at the same time. The visible team members are temporary members of the project and leave the project when their expertise is no longer needed. They too are also rarely full time team members. Even the project leaders usually have several projects and teams to lead simultaneously. Despite this loose nature, project team rather than project group is the traditional choice of terminology. The typical loose and rapidly changing structure of a project team is likely to make project leadership more challenging. Thus, project leaders may need both task and relationships oriented leadership styles during different phases of the project to ensure order in the often chaotic situation of time and financial pressure, and simultaneous tasks [19]. The orientations in the project context can be described as a rational process, outcome motivation, and social motivation for creating a constructive project atmosphere [20]. Many writers especially emphasize the need for flexibility in the rapidly changing project environment [18–20]. Despite the limited time constraint that certainly challenges project

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

leaders, Kloppenborg and Petrick [17] suggest that leaders have a key role to play in developing team characteristics into a collective set of virtues including ethics, respect and trust in others, honesty, courage, prudence, and the responsible use and sharing of power. 2.2. Multicultural leadership styles Bj€ orkman and Schaap [12] have identified that expatriate managers in international joint ventures have three leadership styles that may apply to the multicultural leadership situation. (1) Didactical leadership where leaders sell ideas by pointing out how issues have been solved in other companies and suggests a visit to these companies. (2) Organization design leadership where leaders carefully select foreign team members based on their likely suitability to the existing thinking in the company. The idea is to pre-empt cultural issues to the maximum possible extent. The leaders and the company stick to their traditional ways and do not adjust to local culture. (3) Culturally blind leadership where no attention is paid to cultural differences and traditional ways and methods are used [10,14]. The culturally blind leadership style tends to cause severe problems and the practical disintegration of teamwork. Expatriate managers are gradually isolated and they later find that few of their decisions are actually implemented. It is likely that the learning of cultures and the ability of managers to cope in foreign environments depends very much on the individual [14]. Some managers are well adjusted; some are sensitive to cultural differences and take actions to resolve the cultural problems, while others tend to take no notice of cultures or the need to adjust to them. Suutari [21] indicates that few general conclusions can be made about how expatriate managers cope. On average, expatriates indicate only few cultural differences with a high mean deviation. This phenomenon where leaders do not see foreign cultures has been considered from several perspectives. The perception of foreign culture and team members may be guided by schemas, in- and out-group setting [22], or by projected similarity. Slevin and Pinto [19] conclude that task orientation, the need for power, and high cognitive capacity make leaders inflexible in coping with the demands of the leadership situation. Selmer [14] discusses various personality traits that may be behind the differences in the individualÕs ability to cope with foreign cultures. Agreeableness, conscientiousness, emotional stability, intellect, and openness or extroversion could be of help in developing successful coping strategies. Furthermore, some personality traits are culture bound [23]. Members of collectivist cultures may typically behave more ethnocentrically in crosscultural situations as they feel loyalty to their own na-

389

tional group of team members [22]. High national scores in self-enhancement [24] may enhance parochial behavior because of competitive attitudes [25]. The question of failing to see and cope with foreign cultures is still an unanswered one and needs further research. It seems that in researching cross-cultural leadership we need some way to classify the leaders according to their level or learning, their personality or other determinants that may explain the choice of leadership style, returning to the issue of personality traits and leadership [26]. Bloom et al. [4] studied leaders in European companies and suggest some common characteristics for multicultural leaders. These include attempts to manage international diversity, social responsibility of the employees, internal negotiation (participation in decision making), general orientation for people (rather than task orientation), and attempts to manage between extremes to find a consensus in the multicultural environment. Wills and Barham [3] found that cognitive complexity, emotional energy, and psychological maturity were common factors in what they called successful multicultural managers. Managers need cognitive ability in order to relate with, learn, and understand other people and cultures. Emotional capacity is needed for channeling the stress caused by the confusion and ambiguity of multicultural situations. Psychological maturity means the ability to choose open rather than defensive coping strategies in foreign cultures. Several writers have proposed various leadership styles that could help in solving cultural leadership issues. One of the first suggestions is the cultural synergy leadership. The goal is to find common ground among the cultural differences. The leadership should then be based on these similarities, e.g. fit the cultural assumptions and expectations of all the cultures involved. Schneider [27] has suggested standardization of management principles such as decision-making, problem solving, briefing techniques, meeting techniques, and task delegation. Agreement of basic working procedures could reduce the amount of confusion and could form a common ground among differences. When managers write management principles down on paper, it makes it much easier to achieve agreements as opposed to issues such as support, communication patterns, or feedback. Snow and Davison [28] suggest three leadership roles for fully established multicultural teams. (1) Advocate a role for defining the teamÕs mission and pooling resources. (2) Introduce an integrator role for maintaining clear mission and performance goals, and coordinating activity. (3) Use a catalyst role for encouraging and supporting team members. The three roles could support the formation of the teams, the teamÕs mission, and the socialization process of the team members.

390

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

2.3. Finnish leaders Schwartz [24] found in his study of national values that Finns, from a cultural point of view, are characterized by relatively high intellectual autonomy, egalitarian commitment, and harmony. This could reflect orientation towards self-transcendence, preference for cooperation rather than competition, autonomy preferences in organizing work, trust in followers, and openness for change and ideas. The leadership in general may be oriented to development rather than maintaining the status quo. The leaders may also indicate employee orientation rather than task orientation [29]. At top management levels, the leaders may emphasize team spirit, effective communication, open dialogue, and consensus in making decisions. They also may pay attention to the organization design in detail [30]. An interesting notion is that the Finnish language does not have an exact translation for the English word ÔleadershipÕ but has many words for describing management. This may be understood as a support for follower autonomy or as a sign of hierarchy. Both are general approaches towards organizations with less need for leadership.

3. Research method The research question is how does leadership relate to the multicultural project team and the various combinations of national cultures within the project team. The data were collected using non-structured interviews. The sample group comprised forty-seven (47) project managers and key personnel, and seven (7) foreign team members for triangulation of results. The key personnel were chief engineers and construction site managers, who led parts of large projects. The average age of the interviewees was thirty-four (34) years and each had at least five (5) yearsÕ experience of working in teams of different cultural combinations. The interviewees were selected using the maximizing– minimizing principle to focus on the leadership style differences [31]. The maximized differences in the sample group were the team national culture combination, different industrial sectors, and different companies. Thus, the teams had different tasks, work histories, ways of working, and different organizational backgrounds. The teams included engineering teams in the consulting industry, engineering teams in the electronics industry, and engineering, supply, and construction teams in the metal industry. The minimized differences in the sample group were the project task, which was for a limited time and had the constraints of time, money, and scope. All teams were of the dispersed type with a core team in two countries and had Finnish team leaders, key personnel and team members from two countries. The company

head office was in Finland. The organizational position of project managers and key personnel were also similar. They were not direct supervisors of their team members and could not decide salaries, employment, or careers. Such leaders can rarely use coercion but need to use persuasion. Thus, the task environment was different but the differences in task context were minimized. The project teams comprised three cultural combinations: Finnish–American, Finnish–Chinese, and Finnish–Northern European. The Chinese team members were mostly from Hong Kong with one team based in Beijing. Cultural selection was based on three behavioral and cultural considerations. In the clustering perspective of the cultures, the compositions present distinctive differences [32]. Regarding the individualism and collectivism dimension of cultures, the selection presents high, medium, and low individuality [33]. Regarding the motivational continuums of cultures the cultures present low, medium, and high in all four alternatives: self-enhancement, self-transcendence, conservation, and autonomy [24]. Thus, the cultures should be distinctive rather than similar allowing comparisons on a meaningful basis. In each national culture, some people display strongly their national values while some are quite far from the national values. Therefore, it would be ideal to have some way of sorting individual differences from national culture differences. The grounded theory approach deals with this under the saturation principle, i.e. the saturation of observations can only be achieved in those categories where people are in close agreement with each other. The categories with large individual differences should not be saturated. Together with the maximized differences in the sample group, this should screen out the individual, the company, and the industrial sector perspectives and produce a cultural perspective, as far as possible, for the research question. Interviews were non-structured in line with the grounded theory literature [31]. The perceived leadership style was measured by searching the interviews for self-reported leadership style dimensions. The method is similar to the more popular quantitative questionnaires but relies on interviews. The dimensions that emerged from the interviews were named according to the names that are available from literature [34]. Similarly, other perceived moderator variables and determinants were recorded. The benefit of non-structured interviews is that the interviewees guide the research process, thus potentially giving a nominalistic perspective taken from inside the research question rather than an outside view. In addition, those concepts that saturate should be relevant to the research question and as the concepts are not decided beforehand but emerge from the interviews, the method follows a hermeneutic research strategy to the research question. Indeed, hermeneutics is the strength of the grounded theory [31]. The results are

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

grounded to the interviews rather than existing literature to better understand multicultural leadership. The interviews were processed into a coding tree, which was further axially coded for higher-level concepts. The leadership styles and their dimensions, cultural issues, organization design, and their moderator variables emerged from the interviews using this method. The coding tree was cross-examined for parsimony and internal validity (i.e. the integration of categories). A number of potential concepts from literature were also studied in light of the interviews and the coding tree. Finally, the coding tree was triangulated with the interviews of seven American project team members. Only the concepts that were common regardless of company or industrial sector were retained. Individual concepts and dimensions were retained only when they shed light on the general trends that were found through the saturation of concepts (i.e. the properties of a category).

4. Results The study indicated three distinctive leadership styles that were named after the leadersÕ perception of foreign cultures. 4.1. Ethnocentrism In close agreement with the literature, an ethnocentric leadership style was found and was most common among the project leaders (40 out of 47). The ethnocentric leaders indicate cultural blindness, ethnocentric or even parochial attitudes, and task orientated leadership dimensions. Their leadership concentrated on formal negotiation within the project team, which resulted into project team disintegration. This disintegration was according to the national culture so that Finns worked as their own team and foreign team members as another team. The two separate teams negotiated as separate parties about the practicalities of the project. Often the Ôtwo separate teams approachÕ had become the normal way of working and leaders did not attempt to change the status quo but considered division according to the nationality Ôself-clearÕ and every project was started in that fashion. The leaders reported only task oriented leadership styles. Many of them considered Finnish culture and Finnish team members to be superior in the task context and all project team members from foreign cultures to be inferior. Some noted, however, that there are some foreign team members that are more ÔFinnishÕ by behavior and can be trusted more than others potentially indicating in- and out-group favoritism. Of the 40 ethnocentric project leaders, only 12 pictured themselves as leaders. Others saw themselves as

391

Table 1 Leadership style dimensions of the ethnocentric project leader [41] Dimension

Finnish– European

Finnish– Chinese

Finnish– USA

Internal negotiation Work facilitation Coordination Production emphasis Appealing to superiors Planning Role clarification Lone decision making Criticizing

+ + +

+

+

+ + + +

+ + +

+ indicated dimension in the interviews.

technical specialists, assistants for top management, or handlers of practical project matters. Some said that they are not leaders, and some that they do not believe in leadership. Instead, they concentrated on matters that can be written on paper and sent to other people for execution. Often they sent their information to line managers who then interacted with team members as leaders of the project team. The people in this group included both project managers and project key personnel. However, it is important to note that the style of leading projects or smaller parts of larger projects varied from person to person in all companies. While one project leader interacted with the team members through line managers, other project leaders held team meetings and had direct contacts with team members. This may indicate task orientation or a need for independency, both with minimized people contacts. The ethnocentric leadership style was found regardless of the company, team, organizational position, or cultures (see Table 1). 4.2. Synergy In the context of multicultural teams, a second, less frequent (3 out of 47), leadership style was found. This can be characterized as cultural synergy. The leaders actively attempted to build personal relationships with the project team members. They indicated cultural empathy in their willingness to learn and understand the ways of other cultures. My style is that I donÕt hurry up but start slowly through the technical background. Slowly we get to know each other and build larger perspectives. My style includes quite careful listening to the other side. What kind of people they are and try to learn myself . . . Free-time contacts are important in leadership. It clearly brings you closer to the person (Finnish project leader).

The project team interaction was often based on informal and direct interaction between team members rather than formal negotiations between two cultural groups. Meetings within the project team were held but

392

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

Table 2 Leadership style dimensions of the synergistic project leader [41] Dimension

Finnish– European

Finnish– Chinese

Maintaining good relationships Flexible decision making Autonomy delegation Interaction facilitation Moral character (equality) Internal negotiation Circuitous approach Controlling (reporting discipline) Role clarification

+ + + + + +

+

+

+ + +

+ indicated dimension in the interviews.

the reported purpose was to tie personal relationships while agreeing on basic project practicalities. The relationships were seen as the primary motor for intra-team communication. The project leaders pictured themselves as leaders of people. The group included both project managers and project key personnel. The leaders did not indicate culture blindness or ethnocentrism. Instead, they were aware of many practical differences between cultures. These include the different needs for autonomy, communication differences, and Confucian philosophy in the case of Chinese team members. Confucianism was evident in the circuitous style of communication. The leadership dimensions concentrated almost entirely on relationshipsÕ orientation, especially with leaders of Finnish–Chinese teams who indicated that their main task was to interact with people and they do not need technical competences. The synergistic leadership style was found only in connection with Finnish–European and Finnish–Chinese teams. All possible efforts were made to find synergy in Finnish–American teams but none was identified (see Table 2). 4.3. Polycentrism A third leadership style was also found that was infrequent (4 out of 47) and was not indicated in the literature. This is characterized as cultural polycentrism. The leaders did not attempt team building or especially developed interaction between team members. Instead, they often acted as a link between the team members according to the cultural division. The team members were allowed to keep their old way of working that they were used to in the home countries. The leaders were confident that they understand how people from both cultures think and could integrate the team without team members being fully aware of their differences. They thought this a faster and safer way of meeting the project objectives than any other leadership style. My most important and perhaps the most difficult task is being a link between Finns and Chinese . . . Being a link is something

like, when the Chinese hardly say anything direct, I would know how to interpret that so the Finns understand it. And when instructions come from Finland to China it is often quite direct text. This has to be interpreted to the Chinese so that they understand it in the right way (Finnish leader).

If the team worked mostly in the same office, the leaders chose one of the two cultures with its methods of planning, delegating, degree of autonomy, and conflict resolution. In the studied cases, it was always the foreign culture rather than Finnish culture. The leaders were aware of practical differences between cultures but had also a feel of how to translate their knowledge into action. Some considered this leadership style to be a next step from leadership that is characterized as synergy. An integral part of this style of leadership was the selection of team members and planning how the team works together including superior–follower relationships, reporting systems, and work process. . . .We started project planning meetings where all people wrote down their interdependencies with internal and external groups. Those were put on the wall and then we looked what software engineers need from the hardware engineers, purchasing and factory, and what the factory needs from us (Finnish project leader).

An important notion is that the other two types of leader did not actively design their organization or the work process but agreed on what was given from higherlevel managers. The synergistic leaders also did not plan the interaction but relied on the net of personal relationships. The polycentric leaders indicated both relationships and task oriented leadership styles. More relationshipsÕ orientation was found among leaders of Finnish–European and Finnish–Chinese project teams. The Finnish– European leaders were oriented towards team membersÕ autonomy and varied the degree of autonomy according to individual skills and experience. The Finnish– Chinese leaders were oriented more towards harmony and interpersonal balance. The leaders of Finnish– American teams were more often oriented towards transformal leadership but frequently used punishment such as firing some team members for insubordination (see Table 3).

4.4. Leadership styles The three leadership styles are conceptually depicted in Fig. 1. The axial coding indicated that the results might indicate a learning track towards higher leadership versatility. The leadership dimensions tend to increase cumulatively. The size of the boxes and their overlapping is intended to picture this cumulative tendency where some leadership dimensions are common with the next leadership style.

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

393

Table 3 Leadership style dimensions of the polycentric project leader [41] Dimension

Finnish–European

Finnish–Chinese

Finnish–American

Maintaining good relationships Interaction facilitation Flexible decision making Autonomy delegation Conflict management Informing Circuitous approach Respect for elders Decision participation Initiating structure (planning, organizing, coordinating) Rewarding Work facilitation Production emphasis Providing vision Turning mistakes into learning Providing constructive feedback

+ + + +

+ +

+ +

+

+ + +

+ +

+

+ + + +

+ + + + + + +

+ indicated dimension in the interviews.

Polycentric Leadership Styles

Initiating Structure Including Staffing, Planning, Delegating and Reporting

+

Synergistic Leadership Style

Personal Human Relationships

+ Ethnocentric Leadership Style

People Oriented Leadership

Internal Negotiation

Task Oriented Leadership

Fig. 1. Conceptual relations between leadership styles [41].

4.5. Cultural notions The national cultures caused several notions in addition to more typical cultural differences that today tend to be well known. Finnish–American teams suffered from frequent, even constant, conflicts within the project team. This was created by several overlapping reasons. Almost all projects were organized in the form of a matrix where each team member had at least two supervisors. For the Americans this may have created confusion as to whom they should report, where to direct information, and whom to ask for decisions. The Finns may have been better informed or were used to matrix type organization and experienced little confusion. This could also be a cultural issue since some writings indicate that matrix organization may be difficult for Americans [35]. Finns and Americans may have been used to different kinds of project work. Finnish leaders (ethnocentric

leadership style) organized the project work against Ôschoolbook instructionsÕ [17] with minimum pre-planning and process organization. They jumped almost directly into implementation, which resulted in maximum design flexibility and team member autonomy. This was considered to be a strength because of the much faster project start and the ability to make quick design changes during the project. However, it may have created more confusion among Americans. They may not have been used to or adequately informed about this type of project management. This could also be a cultural issue as some studies indicate that Americans may expect leaders to take charge rather than give initiative away to the team members [36–38]. Americans indicated role ambiguity and that they were never sure how things were supposed to be handled. On the other hand, Finnish project leaders and key personnel indicated that in their opinion Americans lacked initiative and understanding about the project as a whole. Communication patterns were also different and caused tension. Finnish communication may have been right to the point with no softening. As a result, they may have appeared unpleasant, harsh, and even insulting. One suggested reason was their language skills, i.e. some Finns apparently did not master polite forms of English language. The following quotation is one perception of communication differences within a team: They say that Finnish people are direct . . . I think we are a little more political. More political if someone does bad job . . . I have worked with the Finns for a long time so I am used to them. So they didnÕt really affect me that much. I knew what to expect. And then . . . I have learned to appreciate a lot of the things they do. At first it is harsh, but then I saw the effectiveness of it (American project team member).

Of the several overlapping reasons for team conflicts, the most important may have been communication. The

394

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

following quotations are an example how a team leader and an American team member both feel insulted due to the unawareness of different communication patterns. This may create an unintentional cycle of conflict. The Americans are over confident . . . If you say that it is not exactly like you said, they get angry. They are bully and think that America is the best place. They know everything (Finnish project leader). The Finns they get here and they do the technical things and they donÕt understand why the fuss about human relations. I am here to do my job . . . why should I bother with the feelings of the other guy (American project team member).

It is possible that Finnish leaders with an ethnocentric leadership style also insulted the Chinese team members [13]. However, as dividing the project team according to the cultural lines was considered normal, the withdrawal of Chinese team members as a result may only have helped to maintain the status quo and passed without notice. The leaders of Finnish–European and Finnish–Chinese project teams (synergistic and polycentric leadership style) tended to improve their personal relationships with the team members as a way of improving communication and reducing project problems. The leaders of Finnish– American teams (polycentric leadership style) increased their personal position of power. Some of them were able to negotiate more power while some were not successful. Only those projects where the project leader was able to decide wages, employment, bonuses, and influence team member careers, were able to maintain team cohesion. In these cases, no team division according to cultures was reported. It may be that in multicultural management the cultures are differentiated in the same basic styles as the leaders were found to orient themselves – task orientation and relationshipsÕ orientation. Finnish–European and Finnish–Chinese team may require more relationshipsÕ orientation while Finnish–American teams may require more of a balance between task and relationships and possibly transformational orientation.

5. Conclusions and discussion Where do the findings lead us? Earley and Mosakowski [6] left open two questions. First, what leads to strong perceptions of acculturation in some circumstances? Second, what traits are relevant to particular individuals and how might organizations use this information to design effective teams? Certainly, it seems that Finnish project leaders that indicated a relationships oriented leadership style in the non-structured interview also had a positive perspective to multicultural project teams. They had more empathy towards cultures and team members. They attempted to improve communication through a network of personal

relationships or integrated the team by acting as a communication link in the role of a cultural interpreter. At the same time, project leaders that indicated solely task-oriented leadership dimensions choose to maintain or seek team division based on culture. They also indicate more conflicts, perception defects, and cultural blindness. It seems that ethnocentrism may be connected to a leadersÕ task orientation and the favored approach towards multicultural team members is in- and outgroup setting with trustees and non-trustees. For international companies it is important to realize that leaders with relationshipsÕ orientation may be better in multicultural leadership. This finding somewhat contradicts the current assumption that both task and relationshipsÕ orientations are required in different phases of the project life cycle or in leadership in general. One potential explanation for the clear distinction between task and relationships orientated leadership style may be the learning process of foreign cultures. Cultures as a social phenomenon can be learned and understood through relationships with people [39]. Leaders with relationshipsÕ orientation may be naturally interested in building such relationships and can increase their knowledge about other ways of patterned thinking and behavior in the social context [40]. As the number of the ethnocentric leaders is high (40 out of 47), it would still seem also possible that many leaders choose personal influence as their response to project problems [19,40]. When the problems do not disappear, they finally may end up with solely task oriented leadership dimensions. Only a few leaders chose improved relationships or organization design as their response to project problems. In addition, the leaders, in response to stressful project problems, may have chosen mental avoidance as their strategy to cope with the situation, which resulted in in- and out-group setting and finally into task orientated leadership [14]. Potentially, the high number of ethnocentric leaders can be partially explained by the limited international experience of the studied companies. The project leaders were the first generation of Finnish multicultural leaders. The companies established their first foreign offices in the 1980s. Multicultural teams were first formed in the early 1990s. Several project leaders indicated that top management had little first hand experience of international operations. As a result, some top management decisions were perceived to be detrimental to their projects and were sometimes changed when the situation could be pointed out. Thus, ethnocentric leadership may be a part of the learning process of multicultural leadership. Under this perspective, ethnocentrism may be gradually reduced in project management. Of the three indicated leadership styles, synergy and polycentrism have their foundation in the leadersÕ personal interest in human relationships and cultures.

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

Synergy concentrates on the leadersÕ personal relationships with team members. The network of relationships forms the basis for effective communication. Polycentrism concentrates on avoiding problems that may arise from cultural differences. This is done by linking between the cultures or by preferring one culture. All polycentric leaders engaged in organization design with the aim of avoiding multicultural problems. This requires understanding of typical multicultural problems, their reasons, and how organization design can be used to avoid those problems. It seems that the most effective alternative for multicultural leadership may be avoiding the problems beforehand. The polycentric leaders reported the lowest number of project problems. The study has certain implications for multicultural companies. First, it seems that relationships oriented project leaders may have a higher potential for leadership success since they tend to be able to maintain project team cohesion. Second, the leaders could be guided to study and learn about foreign cultures, and to avoid avoidance concentrated coping strategies that may prevent this learning. Third, increased personal influence as a response to project problems may feel tempting but leaders should be guided to choose other strategies such as coaching team members, increased team effort, and organization design. Fourth, organization design can potentially be used to mitigate multicultural problems. This was found effective in the form of a project managersÕ increased position of power.

References [1] Jarvenpaa SL, Leidner DE. Communication and trust in global virtual teams. Organ Sci 1999;10(6):791–816. [2] Holden NJ. Cross-cultural management: a knowledge management perspective. Harlow: Pearson Education; 2002. [3] Wills S, Barham K. Being an international manager. Eur Manage J 1994;12(1):49–56. [4] Bloom H, Calori R, de Woot P. Euro management: a new style for the global market. London: Kogan Page; 1994. [5] Davison SC. Leading and facilitating international teams. In: Berger M, editor. Cross-cultural team building: guidelines for more effective communication and negotiation. London: McGraw Hill; 1995. p. 158–79. [6] Earley PC, Mosakowski E. Creating hybrid team cultures: an empirical test of transnational team functioning. Acad Manage J 2000;43(1):26–49. [7] Li J, Xin K, Pillutla M. Multi-cultural leadership teams and organizational identification in international joint ventures. Int J Human Res Manage 2002;13(2):320–37. [8] Pheng LS, Leong CHY. Cross cultural project management for international construction in China. Int J Project Manage 2000;18:307–16. [9] Lin B-W, Berg D. Effects of cultural difference on technology transfer projects: an empirical study of Taiwanese manufacturing companies. Int J Project Manage 2001;19:287–93. [10] Black JS, Porter LW. Managerial behaviors and job performance: a successful manager in Los Angeles may not succeed in Hong Kong. J Int Bus Stud 1990;22(1):99–113.

395

[11] Shenkar O, Zeira Y. Role conflict and ambiquity of chief executive officers in international joint ventures. J Int Bus Stud 1992;23(1):55–75. [12] Bj€ orkman I, Schaap A. Outsiders in the middle kingdom: expatriate managers in Chinese-Western joint ventures. Eur Manage J 1994;12(2):147–53. [13] Li J, Tsui A, Xin KR, Hambrick DC. Building effective international joint venture leadership teams in China. J World Bus 1999;34(1):52–68. [14] Selmer J. Coping strategies applied by Western vs. Overseas Chinese Business Expatriates in China. Int J Human Res Manage 2002;13(1):19–34. [15] Cleland IC. Leadership and project management body of knowledge. Int J Project Manage 1995;13(2):83–8. [16] Cicmil SJK. Perspectives: critical factors of effective project management. The TQM Mag 1997;9(6):390–6. [17] Kloppenborg TJ, Petrick JA. Leadership in project life cycle and team character development. Project Manage J 1999;30(2):8– 13. [18] Briner W, Geddes M, Hastings C. Project leadership. Aldershot: Gower Publishing Company; 1990. [19] Slevin DP, Pinto JK. Project leadership: understanding and consciously choosing your style. Project Manage J 1991;22(1):29– 47. [20] Jessen SA. The nature of project leadership. Oslo: Scandinavian University Press; 1992. [21] Suutari V. International differences in leadership ideologies of managers. University of Vaasa, 1993. [22] Boski P, Van de Vijver FJR, Hurme H, Miluska J. Perception and evaluation of polish cultural feminity in Poland, the United States, Finland, and the Netherlands. Cross-Cult Res 1999;33(2):131– 62. [23] Teerikangas S, Riekkinen V, Immonen S, J€arvenp€a€a E. Toward a theoretical framework on understanding and managing the impact of culture on international business encounters. In: Proceedings of Regional Conference, 7–11 July, International Association for Cross-Cultural Psychology, Winchester, UK, 2001. [24] Schwartz SH. The universal content and structure of values: towards an understanding of national differences. In: Kim U et al., editors. Individualism and collectivism: theory, method, and applications. London: Sage Publications; 1994. [25] Morris MW, Williams KY, Leung K, Larrick R, Mendoza MT, Bhatnagar D, Li J, Kondo M, Luo J-L, Hu J-C. Conflict management style: accounting for cross-national differences. J Int Bus Stud 1998;29(4):729–48. [26] Silverthorne C. Leadership and personality: a cross-cultural evaluation. Pers Indiv Differ 2001;30:303–9. [27] Schneider A. Project management in international teams: instruments for improving cooperation. Int J Project Manage 1995;13(4):247–51. [28] Snow CC, Davison SC. Use transnational teams to globalize your company. Organ Dyn 1996;24(4):50–68. [29] Lindell M, Arvonen J. The Nordic management style in a European context. Int Studies Manage Organ 1996;26(3):73–91. [30] Kakabadse A, Myers A, McMahon T, Spony G. Top management styles in Europe: implications for business and cross-national teams. In: Grint K, editor. Leadership: classical, contemporary and critical approaches. New York, NY: Oxford University Press; 1997. p. 179–89. [31] Glaser BG, Strauss AL. The discovery of the grounded theory. Chicago, IL: Aldine Press; 1967. [32] Ronen S, Shenkar O. Clustering countries on attitudinal dimensions: a review and synthesis. Acad Manage Rev 1985;10(3):435– 54. [33] Gudykunst WB. Culture and intergroup process. In: Bond MH, editor. The cross cultural challenge to social psychology. London: Sage Publications; 1988.

396

M. M€akilouko / International Journal of Project Management 22 (2004) 387–396

[34] Bass BM. Bass & StogdillÕs handbook of leadership: theory, research and managerial applications. New York, NY: Free Press; 1990. [35] Mead R. International management: cross-cultural dimensions. Oxford: Blackwell Publishers; 1994. [36] Laurent A. The cultural diversity of western conceptions of management. Int Studies of Manage Organ 1986;13(1–2):75– 96. [37] Bennis W. The end of leadership: exemplary leadership is impossible without full inclusion, initiatives, and cooperation of followers. Organ Dyn 1999;28(1):71–80. [38] McFarlin DB, Sweeney PD, Cotton JL. Attitudes toward employee participation in decision making: a comparison of European and American managers in a United States multinational company. Human Res Manage 1992;31(4):363– 83.

[39] Clackworthy D. Training Americans and Germans in conflict management. In: Berger M, editor. Cross-cultural team building: guidelines for more effective communication and negotiation. London: McGraw Hill; 1996. p. 91–102. [40] Fiedler FE. The contingency model and the dynamics of the leadership process. In: Berkowitz L, editor. Advances in experimental social psychology. New York, NY: Academic Press; 1978. p. 59–112. [41] M€akilouko MI. Leading multinational project teams: Formal, country specific perspective. Publications 343, Tampere University of Technology, Tampere, 2001. Dr. Marko M€akilouko has 10 years of experience in international projects. After his project management career he has become a researcher on multicultural project leadership. Currently he works at the Tampere Polytechnic as a program manager.