|
Globalization Challenges in Project
Management
Abdulrazak Abyad
Correspondence:
A. Abyad, MD, MPH, MBA, DBA, AGSF
, AFCHSE
Director, American University of technology
CEO, Abyad Medical Center
Chairman, Middle-East Academy for
Medicine of Aging
President, Middle East Association
on Age & Alzheimer's
Coordinator, Middle-East Primary Care
Research Network
Coordinator, Middle-East Network on
Aging
Email: aabyad@cyberia.net.lb
Introduction
Globalization
is the tendency of firms to extend
their sales or manufacturing to new
markets abroad. For businesses everywhere,
the rate of globalization in the past
few years has been nothing short of
phenomenal. Globalization of markets
and manufacturing is important, in
part because it has vastly increased
international competition. Throughout
the world, firms that formerly competed
only with local firms - from airlines
to car makers to banks - have discovered
they must now face an onslaught of
new foreign competitors. Porous international
boundaries and trans-border flows
of capital have precipitated a relentless
proliferation of multicultural projects
(Ghoshal, 1987).
Globalization has impacted project
management profoundly, and has only
reinforced the trend toward adoption
of the project mode of work organization.
Globalization in project management
means among other matters more projects
executed in the multi-cultural environment.
East-West culture mix is an example
of such a situation, requiring from
the stakeholders quite a different
approach. The spectacular globalization
of firms in the course of the past
decade has been a key challenge for
practitioners and researchers alike
(Bhide, 2000). Strategy researchers
have attempted to pin down the various
alternatives for firms to gain competitive
advantages in international markets
(Ghoshal, 1987). They have also considered
the challenge of managing across borders
and implementing a global strategic
management process. Forming multicultural
teams has been one of the organizational
responses taken by multinational corporations
(MNCs) (Bartlett and Ghoshal, 1989,
1992).
Effect of Globalization on Project
Management
With the advent of globalization,
project management is no longer a
local issue, but an international
affair that is risky in nature (White
& Fortune, 2002). Changes in the
global environment are presenting
organizations with both opportunities
and challenges (Yong & Javalgi,
2007). However, a review of the results
of project monitoring and evaluation
on World Bank projects indicates that
many of the key problems of implementation
lie in the general environment of
the project, and are not under the
direct control of the project manager.
The project management (PM) environment
for international development projects
is also much more complicated than
domestic projects in industrialized
countries (Kwak & Ibbs, 2002).
Project managers should understand
the social, economic, political and
cultural factors that affect the project
environment.
International projects are more complicated
and risky than domestic projects.
Some risks encountered in international
projects are not the same as those
in domestic projects. The cultural
differences issue has been recognized
as one of the main concerns in international
projects management (Parhizgar, 2002).
Although there may also be cultural
differences in a domestic project
team because of the team members'
difference in origin, international
project teams seem to be more easily
influenced by cultural differences
(Thomas, 2002). Kwak (2002) states
that the culture issue is the least
known but the most hazardous in the
context of international development
projects.
Some Issues
in Managing International Projects
Many researchers and practitioners
(Murphy, 2005; Youker, 1992; Howes
& Tah, 2003) are aware of the
challenge of managing international
projects, since international projects
face uncertainties caused by host
country conditions (Ozorhon, Arditi,
Dikmen et al, 2007). Researchers have
previously identified some key factors
that constrain the success of international
projects.
Cultural differences
Large-scale international projects
are of a global nature. Therefore,
a high degree of coordination and
communication is needed. Communication
in the international environment is
complicated by different languages,
cultures and etiquette (Loosemore
and Muslmani, 1999). The internationalization
in project management creates intercultural
communication problems that result
in significant misunderstanding and
conflict. Pheng and Leong (2000) conducted
research on international construction
in China, and determined that cultural
differences are a critical factor
that can actually affect the outcome
of an international project. For an
international project manager, understanding
key concepts in cross-cultural management
and project management is the basic
requirement in the era of globalization.
Muriithi and Crawford (2003) also
argue that Western management concepts
may not be applicable to other cultures
that are not so deeply rooted in the
Western philosophy. They suggest that
appropriate modifications can be made
to current management theories by
studying cultural differences.
Political factors
Khattab, Anchor and Davies (2007)
did a study to examine the vulnerability
of international projects to political
risks. Their study results showed
that political risks are ranked first
by respondents. Other authors also
mention that political interventions
can sometimes decide the success of
foreign-invested firms (Buckley, Clegg
& Hui, 2006). Political risks
are the key risks to successful international
construction contracting. For international
projects, these factors can produce
problems that may not be problematic
in domestic projects. Dikmen, Birgonul
and Han (2007) state that political
risk factors receive the most attention
from researchers in international
projects.
Legal factors.
One of the more difficult aspects
of doing business globally is dealing
with vast differences in legal and
regulatory environments. The United
States, for example, has an established
set of laws and regulations that provide
direction to businesses operating
within its borders. But because there
is no global legal system, key areas
of business law, for example, contract
provisions and copyright protection,
can be treated in different ways in
different countries. Companies doing
international business often face
many inconsistent laws and regulations
(Buckley, Clegg & Hui, 2006).
Economic factors
If you plan to do business in a foreign
country, you need to know its level
of economic development. You also
should be aware of factors influencing
the value of its currency and the
impact that changes in that value
will have on your profits. If you
don't understand a nation's level
of economic development, you'll have
trouble answering some basic questions,
such as; will consumers in this country
be able to afford the product I want
to sell? How many units can I expect
to sell? Will it be possible to make
a reasonable profit? Researchers pay
a great deal of attention to economic
risk factors in international projects
(Dikmen, Birgonul & Han, 2007).
Project management in an Asian
context
The big cultural differences between
East and West lead also to different
approaches in project management,
both at high level of thinking and
general attitudes, as well as at the
level of specific techniques and tools.
Contemporary project management, challenged
by globalization, is looking for new,
more effective methods of managing
projects and managing project-based
organizations.
Since project management, as a discipline,
originated in a Western culture, incompatibilities
between project management values
/ beliefs and those of traditional
Asian cultures are to be expected.
A recent paper explores these differences
in the context of Chinese organizations
(Wang & Liu, 2007). Specifically,
the authors look at four contrasting
value/belief pairs, which cover the
major differences between the two
cultures:
• Integration management vs.
doctrine of the mean: This refers
to the contrast between project management
practices - which generally emphasize
integrating opinions, resolving conflicts
and confronting risks - as opposed
to traditional Chinese (and dare I
say, Asian) practices in which confrontations
and risks are avoided as far as possible.
• Horizontal management vs.
strong hierarchy: This refers to the
incompatibility between project management,
which works best in a flat (or project-oriented)
hierarchy, and the strong vertical
hierarchies prevalent in Chinese organizations.
The latter organizational structure
tends to emphasize superior-subordinate
relationships in which "questioning
the boss" is not encouraged.
• Team consciousness vs. family
consciousness project teams are generally
temporary, and tend to emphasize collaborative
work across functions and merit-oriented
performance evaluations. On the other
hand, Chinese culture values long-term
family and kinship relationships.
These are not always compatible with
cross-functional (or even intra-functional!)
collaboration or performance-based
recognition.
• Task orientation vs. boss orientation
in project management getting the
job done is paramount, whereas in
Chinese culture the emphasis is on
keeping the boss happy.
The authors developed a questionnaire
to explore the relative importance
of each of the above value/belief
pairs. Based on the questionnaire,
they conducted a survey involving
respondents from a wide variety of
industries in Yunnan province. The
analysis of the results revealed that
the major cultural barriers to project
management in Chinese organizations
are the last three items: i.e. Strong
hierarchy, family consciousness and
boss orientation. It is interesting
that a majority of the respondents
thought that the doctrine of the mean
was consistent with the integrative
nature of project management. They
also find that the barriers tend to
be larger in state owned organizations
than in private or joint ventures.
Further, within state-owned organizations,
older ones tended to have larger barriers
than younger ones (Wang & Liu,
2007).
The paper noted that project management
training has a critical effect on
lowering cultural barriers: As more
individuals in an organization received
relevant training, the organization
became more supportive of project
management practices. The authors
end with the caveat that their conclusions
are based on the result of a single
(yet representative) survey, and must
therefore be treated as a pilot study
(Wang & Liu, 2007).
The paper articulates and explores
some of the contrasts I have noticed
in my own work with organizations
in different countries; in my opinion,
many of the observations made regarding
cultural barriers to PM practices
apply to (non-Chinese) Asian cultures
as well (Wang & Liu, 2007).
Multinational
Strategic Planning and Cultural Environment
Domestic businesses can make do with
a single, overarching strategic plan
to guide their efforts. International
businesses have to make a choice between
developing a single, comprehensive
strategic plan, different strategic
plans for different markets or a combination
of both. Cultural considerations can
render a strategic plan that is highly
effective in one country, virtually
useless in another (Hall, 1969, 1976).
Even when two people from the same
country communicate, there's always
a possibility of misunderstanding.
When people from different countries
get together, that possibility increases
substantially. Differences in communication
styles reflect differences in culture
system of shared beliefs, values,
customs, and behaviors that govern
the interactions of members of a society.
Cultural differences create challenges
to successful international business
dealings (Cohen, 1997).
Language
In many countries, only members of
the educated classes speak English.
The larger population, which is usually
the market you want to tap, speaks
the local tongue. Advertising messages
and sales appeals must take this fact
into account. More than one English
translation of an advertising slogan
has resulted in a humorous (and perhaps
serious) blunder. Furthermore, relying
on translators and interpreters puts
you as an international business person
at a disadvantage. You're privy only
to interpretations of the messages
that you're getting, and this handicap
can result in a real competitive problem.
Time and Sociability
Americans take for granted many of
the cultural aspects of our business
practices. Most of their meetings,
for instance, focus on business issues,
and Americans tend to start and end
theirr meetings on schedule. These
habits stem from a broader cultural
preference: no-one likes to waste
time. (It was an American, Benjamin
Franklin, who coined the phrase "Time
is Money.") This preference,
however, is by no means universal.
The expectation that meetings will
start on time and adhere to precise
agendas is common in parts of Europe
(especially the Germanic countries),
as well as in the United States, but
elsewhere-say, in Latin America and
the Middle East-people are often late
to meetings.
High- and Low-Context Cultures
Likewise, don't expect business people
from these regions, or business people
from most of Mediterranean Europe,
for that matter, to "get down
to business" as soon as a meeting
has started. They'll probably ask
about your health and that of your
family, inquire whether you're enjoying
your visit to their country, suggest
local foods, and generally appear
to be avoiding serious discussion
at all costs. For Americans, such
topics are conducive to nothing but
idle chitchat, but in certain cultures,
getting started this way is a matter
of simple politeness and hospitality.
If you ever find yourself in such
a situation, the best advice is to
go with the flow and be receptive
to cultural nuances. In high-context
cultures in which personal and family
connections have an effect on most
interactions, include those in business.
The numerous interlocking (and often
unstated) personal and family connections
that hold people together have an
effect on almost all interactions.
Because people's personal lives overlap
with their business lives (and vice
versa), it's important to get to know
your potential business partners as
human beings and individuals.
By contrast, in slow-context cultures
in which personal and work relationships
are compartmentalized, such as those
of the United States, Germany, Switzerland,
and the Scandinavian countries, personal
and work relationships are more compartmentalized;
you don't necessarily need to know
much about the personal context of
a person's life to deal with him or
her in the business arena (Hoftstede,
1991).
Intercultural Communication
Different cultures have different
communication styles. For example,
degrees of animation in expression
can vary from culture to culture.
Southern Europeans and Middle Easterners
are quite animated, favoring expressive
body language along with hand gestures
and raised voices. In addition, the
distance at which one feels comfortable
when talking with someone varies by
culture. People from the Middle East
like to converse from a distance of
a foot or less, while Americans prefer
more personal space.
Finally, while people in some cultures
prefer to deliver direct, clear messages,
others use language that's subtler
or more indirect. North Americans
and most Northern Europeans fall into
the former category and many Asians
into the latter. But even within these
categories, there are differences.
Though typically polite, Chinese and
Koreans are extremely direct in expression,
while Japanese are indirect. This
example brings up two important points.
First, avoid lumping loosely related
cultures together. We sometimes talk,
for example, about "Asian culture,"
but such broad categories as "Asian"
are usually oversimplifications. Japanese
culture is different from Korean,
which is different from Chinese. Second,
never assume that two people from
the same culture will always act in
a similar manner. Not all Latin Americans
are casual about meeting times, not
all Italians use animated body language,
and not all Germans are formal.
Authority, responsibility and accountability
vary by project, culture and company's
priorities and preferences. For example,
technically and security sensitive
projects tend to be more centralized
and more tightly controlled. Group
decision-making seems to work well
in Japan. But it is not prevalent
in other societies. French companies
show more autocratic behavior while
large and experienced companies in
the USA and most of the Western Europe
exhibit the highest level of management
delegation (Saee, 2007).
Position, rank, authority and respect
are supported in many foreign countries
by informal and formal codes of dress,
behavior and attitudes. While delegation
and participative management are practiced
and supported in the Scandinavian
countries, this is not the case in
many other countries. Clearly these
organizational and operational patterns
significantly affect project management
(Saee, 2005).
Bridging Cultural Barriers in Bicultural
Projects
Managers directly responsible for
intercultural enterprises, while usually
well versed in the technical aspects
of their responsibilities, often lack
the required intercultural expertise,
including foreign language skills.
This situation is not surprising,
since such managers usually earn these
positions as successful technical
specialists who have been rewarded
with ever-increasing responsibilities
over their careers until, ultimately,
those responsibilities cross international
boundaries. Once assigned, they seldom,
if ever, have the time necessary for
the specific cross-cultural training
needed.
All of those involved in these projects
face not only technical challenges,
which are significant in and of themselves,
but also serious complicating factors
of language, culture, individual differences,
and others' situational complexities.
(Victor, 1992; Scollon and Scollon,
1994; Parhizgar, 2002; Thomas, 2002).
These additional challenges must be
met in order to overcome the technical
ones of more direct interest.
Global Team leader challenges
Managers in today's multicultural
global business community frequently
encounter cultural differences, which
can interfere with the successful
completion of projects. Two leading
studies of cross-cultural management
have been conducted by Geert Hofstede
(1991) and Fons Trompenaars (1998).
Both approaches propose a set of cultural
dimensions along which dominant value
systems can be ordered. The dimensions
can be grouped into several categories:
• Relations between people. Two
main cultural differences have been
identified. Hofstede distinguishes
between individualism and collectivism.
Trompenaars breaks down this distinction
into two dimensions: universalism
versus particularism and individualism
versus communitarianism.
• Motivational orientation. Societies
choose ways to cope with the inherent
uncertainty of living. In this category
Hofstede identifies three dimensions:
masculinity versus femininity, amount
of uncertainty avoidance, and power
distance.
• Attitudes toward time. Hofstede
distinguishes between a long-term
versus a short-term orientation. Trompenaars
identifies two dimensions: sequential
versus synchronic and inner versus
outer time.
Two additional categories called socio-cultural
dimensions were proposed by Aycan
et al. (2007) paternalism and fatalism.
In a paternalistic relationship, the
role of the superior is to provide
guidance, protection, nurturing and
care to the subordinate, and the role
of the subordinate, in return, is
to be loyal and deferential to the
superior. Fatalism is the belief that
it is not possible to fully control
the outcomes of one's actions and,
therefore, trying too hard to achieve
something and making long-term plans
are not worthwhile exercises.
In modern business the teams are constructed
from different people from all over
the World. This kind of team is often
referred to as a global team. Barczak,
et al's (2006), article discussed
the four key challenges, which global
team leaders have faced. These key
challenges are following:
1. Team members speaking different
native languages
2. Team members come from different
cultures
3. Team members live and work in multiple
countries.
4. Team members coming from different
companies
This article and its findings are
based on research with over 300 global
teams in 230 companies. Barczak et
al (2006) further discuss these challenges
and how a team leader can meet these
challenges.
Team members speaking different
native languages
When team members are native speakers
of different languages, communicating
and understanding in a team's common
language (usually English) is a challenge.
The level of understanding in English
differs dramatically among the team
members. Thus it is very important
that the team leader emphasizes communication
and ensures that language doesn't
hinder the team. To meet these challenges
when team members are speaking different
native language the team leader must:
• Send critical documents and
material to all team members
• Give time as time need is different
among the team members
• Challenge team members to discuss
between each other
• Communicate (written and verbal)
information until all parties understand
one another
Team members different cultural
backgrounds
The global team consists of team members
with different cultural backgrounds
with more and more different ethics,
values, norms and other cultural aspects.
This sets a challenge on team leaders'
soft skills. These soft skills revolve
around relational issues rather than
technical issues. The relational issues
are affected by the values and norms
that underlie each national culture.
To meet these challenges when team
members are speaking a different native
language the team leader must:
• Be aware of, and sensitive
to, cultural diversity
• Communicate and discuss with
members to motivate them
• Offer cultural diversity by
using face-to-face meetings and discussions
Team members working and living
in multiple countries
The geographical dispersion of the
team members makes it likely that
they have never met, or know each
other only little. This might mean
that the members don't trust each
other, meaning that they are unsure
about others' information, support
and work effort.
To meet these challenges when team
members are speaking different native
languages the team leader must:
• Try to keep face-to-face meeting
at the beginning and keep often progress
meetings
• Try to have social face-to-face
happening at the beginning to ensure
the collaboration
• Vary timing of meetings to
accommodate different time zones
• Engage all team members during
the team meetings and emphasise proactive
discussion/communication
Team members from different companies
The global teams usually need the
support/tools/employees to participate
in the team. This sets challenges
as the cultural and organizational
differences can vary a lot.
To meet these challenges when team
members are speaking different native
languages the team leader must:
• Give team members time to get
to know each other
• Identify together with the
team members mutual interest and needs
• Have team members work together
and interact socially by facilitating
continual interaction
Middle-East
Medical Group
Middle-East Medical Group, which owns
and operates a number of hospitals
in the Middle East, has recently suffered
from profit falls. They have planned
to expand and make the business more
profitable. They approached me in
order to help in devising a strategy
for them to expand and to be more
profitable. I took the job and I am
including initial analysis. The strategy
that I will follow includes: increasing
the productivity of labor, diversification
into new product lines, and searching
for new markets abroad.
Hospitals face intense demands to
lower costs, improve quality and expand
access to a growing uninsured population.
While these multifaceted demands can
result in critical consequences to
millions of people, health care managers
often have difficulty tackling these
demands due to their lack of familiarity
with management best practices. As
Fetter (1991) states, "attempts
at applying industrial concepts to
hospital management date back to the
early 1900s. As a result, healthcare
managers frequently lack fundamental
knowledge relative to healthcare-specific
management to call upon as a platform
for success when they face critical
project decisions (Carden& Egan,
2008). To further complicate matters,
hospital organizations are qualitatively
different from other business organizations.
Changing reimbursement policies, as
well as private and public quality
and access regulations constantly
challenge the ability of hospitals
to survive and even thrive competitively
(Langabeer, 2008). The hospital industry
has many stakeholders, each with a
unique agenda (Herzlinger, 2006).
Additionally, insurance reimbursement
practices (Langabeer, 2008), government
regulations (Herzlinger, 2006) and
high cost structures hinder the capability
of a hospital to compete and prosper.
It is critical that the headquarters
of Middle East Medical Group coordinate
the transactions undertaken within
the group in three key dimensions:
capital flow, product flow, and knowledge
flow (Gupta & Govindarajan, 1994).
The creation and use of knowledge
across the MNC units is, according
to Gupta and Govindarajan (1994) and
Madhok and Phene (2001), the most
important flow in an MNC. The management
of knowledge is even claimed to be
the ultimate source of competitive
advantage of the modern MNC, as it
has the greatest ability to differentiate
advantageously the corporation from
other corporations (Grant, 1996; Spender,
1996).
Consequently, the most important role
of headquarters is to enable, facilitate,
and coordinate the corporate-knowledge
stocks and flows (Gupta & Govindarajan,
2000).
Given the heterogeneity of countries,
every business unit creates knowledge
necessary to meet the demands of its
local environment. This leads each
unit to gradually create and utilize
location-specific and unit-distinctive
knowledge. (Forsgren, Johanson, &
Sharma, 2000). The global competitive
advantage of the corporation rests
upon the capacity to tap into the
location-specific knowledge and assimilate
it advantageously into global knowledge
available throughout the corporation
(Bartlett, Doz, & Hedlund, 1990).
The ability to exploit the local knowledge
places great demands on adopting organizational
forms that support global knowledge
creation and sharing (Gupta &
Govindarajan, 2001; Snell, Snow, Davison,
&Hambrick, 1996). Consequently,
we believe that an essential objective
for Middle-East Medical Group becomes
the use of different organizational
forms that allow and promote creation
and sharing of knowledge.
It is important that within the MMC
setting, specialists from various
functional areas across the organizations
located in different geographical
areas work together jointly and in
ad hoc project teams from inception
to completion of projects for which
they are wholly responsible. These
project teams are empowered to act
on behalf of their company (Peters,
1994). Meanwhile it is argued that
international project teams are where
most of the boundary spanning works
in international enterprise goes on,
making them a key factor in organizational
success and an important catalyst
for individual and organizational
development. In particular, the ability
to learn in and through international
project teams is seen as a key developer
of a more international outlook. Project
teams also help the organization share
information, knowledge and resources
across boundaries, transmit and recreate
corporate culture, and provide examples
of best practice (Iles & Paromjit,
1997).
As with many managerial responsibilities,
the management of an international
project involves planning, organization
and control of a large number of complex
factors, activities and their interrelations.
Managing them simultaneously and giving
them all equal attention is virtually
impossible. However by adapting the
Pareto rule of separating out the
important few from the trivial many
helps to focus attention on the key
factors which are critical for achieving
success (Morris, 1996). For MMG to
be successful in expanding and building
new hospitals in the region is to
follow the advice of Pinto & Slevin
(1987) who identified the following
factors as being critical to the success
of the projects:
1. Project Mission. This involves
determination of a clearly defined
project's goals and mission by management
with clear indications that the project
is necessary and why;
2. Competent project manager,
a skilled project leader who possesses
the essential interpersonal, technical
and administrative competencies;
3. Top Management Support. No
project is likely to succeed unless
it enjoys the full support of the
senior management within the organization.
Thus acquiring support for the project
whilst communicating top management
support for the project to every employee
within the organization is critical;
4. Project Plan. All activities
surrounding the projects have to be
meticulously planned for and the necessary
resources required to carry out the
project have to be fully allocated.
As well, there have to be ways of
monitoring of its progress in terms
of the specific stage deadlines. Managers
have to consider: if the plan is workable;
if the amount of time and money, and
people allocated is sufficient; if
the funds are guaranteed; if the organization
will carry through the project;
and if there is flexibility in the
plans allowing for over-running the
schedule;
5. Client Consultation. A detailed
understanding of your client requirement
is a must for a project manager, and
thus regular meetings between client
and the project manager are deemed
necessary at all stages of the project;
6. Competent project team. Recruitment,
Selection of competent staff backed
by their training is critical in order
to ensure the success of the project;
7. Technical Task. Technical
skills have to be matched with the
right people in terms of qualifications
and expertise;
8. Client Acceptance. Gaining
acceptance from one's client for any
given project is critical. Thus a
project manager needs to develop a
sound selling strategy at an early
phase of the project in order to sell
the project to the client. Developing
a good interpersonal relationship
with client is deemed necessary so
that the project manager can negotiate
with the client where appropriate
(Jackson 1992);
9. Monitoring and Feedback.
Obtaining feedback throughout the
project from key individuals is necessary
to ensure a quality outcome for the
project. This obviously involves establishing
sound monitoring procedures to capture
systematic feedback on all aspects
of the project;
10. Communication. The concept
of communication in project management
refers to the spoken and written documentation,
plans, and drawings used in the processes
of an international project.
11. Trouble - Shooting Mechanisms.
A system or set of procedures capable
of tackling problems when they arise,
trace them back to the root cause
and resolve them. All team members
should act as "look-outs"
for the project, and all team members
should monitor the project, and when
a problem is identified by a team
member, action needs to be taken at
once to remedy the problem (Jackson
1992).
Regional project management plans
are subject to the same threats and
opportunities as domestic ones. However,
there are a number of additional constraints
that shape objectives, goals and strategies.
Factors such as political instability
and risk, currency instability, competition,
pressures from national government
and nationalism can all interfere
with project management planning (Smith
& Haar, 1993). Strategy development
of MMG therefore requires that the
companies:
• Evaluate opportunities, threats,
problems and risks;
• Assess the strengths and weaknesses
of its personnel to carry out the
job;
• Define the scope of its global
business involvement;
• Formulate its global corporate
objectives;
• Develop specific corporate
strategies in the organization as
a whole (Saee, 2007).
Overall, the project manager needs
to develop a thorough understanding
of the environmental factors that
will impinge upon the individual project
though the countries in the region
are similar yet there are major differences
which need to be taken care of including:
• Knowledge of geography about
the country in question;
• Finance
• Local politics which has a
bearing on the successful completion
of a project;
• National culture, developing
an understanding of the host culture
is crucial, which obviously has a
major impact on the way a project
is conducted.
• Local laws can vary considerably
and influence the resources needed
for a
Project. For instance, in Francophone
African countries, local labor law
allows employees to take three days
leave of absence when a close relative
dies. With large families this can
cause serious disruption to staff
availability (Saee, 2007).
Mission and Overall Strategy of
the Middle East Medical Group
The mission of the group is to improve
the health of the community and the
world by setting the standard of excellence
in medical education, research and
clinical care. The Corporate strategies
that will be followed by MMG in their
expansion will include joint venture,
professional meeting, trade show and
governmental relationship.
One strategy to expand that, that
can be followed by MMG includes investment
in joint ventures with local companies.
Joint ventures provide an already
established clientele and help corporations
circumvent national laws that restrict
foreign ownership (Stocker et al.
1999). A second recommendation is
to be involved in a trade show approach,
through which corporations organize
conventions or presentations at professional
meetings to build interest in the
group. A third and newer strategy
for corporations to expand in international
markets involves the use of their
own governments to influence international
trade organizations such as the World
Trade Organization (Stocker et al.
1999).
The commercialization of public healthcare
systems is taking place globally.
One dimension of healthcare commercialization
is the growing role of multinational
healthcare companies. Increasingly,
companies view healthcare services
as part of a global marketplace, with
healthcare provision, high technology
healthcare equipment, health insurance
and pharmaceuticals as sub-markets.
The national and regional contexts,
within which multinational companies
operate, also, influence expansion
strategies (Lethbridge, 2005).
Opportunities for private healthcare
company expansion depend on the existence
of payment systems. A process of costing
and pricing of different elements
of healthcare underpin commercialization.
These processes are facilitated by
the use of information technology
(IT) to provide systems for charging,
collecting payments and organizing
pricing systems. Often the first phase
of commercialization involves the
development of these IT systems. Many
companies are involved in the process
of developing a financial infrastructure
for healthcare. Therefore it is critical
for MMG to develop an extensive IT
network and infrastructure linking
the various projects with the same
country and in the Region.
The aim of development of the group
is to have 22 hospitals in all the
Arabic countries to become the largest
healthcare provider in the region.
The hospital services are predominantly
high technology, tertiary services.
In addition there is a need to diversify
into a range of healthcare products
and services. There is a need to develop
and run nursing and hospital management
colleges, pharmacies, diagnostic clinics,
home based health services, elderly
care services, medical transcription
services, managed care administration
and telemedicine. Furthermore establishing
a joint health insurance company will
improve the overall operation of the
group. It is as important to build
the IT services and project management
consultancy.
Another development will be to build
state of the art diagnostic and imaging
centers featuring advanced diagnostic
imaging systems that are essential
in the diagnosis and treatment of
cancer as well as cardiovascular and
neurological diseases.
It is critical for the success of
the business operation to attract
larger numbers of patients to the
entire MMG. In addition it is necessary
to position itself towards the market
for high-income patients, and to be
the prime destiny for medical tourism
in the region. The Group must not
only discover and learn better ways
of delivering health care and conducting
medical education and research, but
also disseminate that knowledge internationally.
MMG is the vehicle through which we
can deliver what we know about practicing
medicine, teaching medical and nursing
care, and performing research.
Role of Entrepreneurship in Middle-East
Medical Group
Mounting evidence suggests that the
entrepreneurial activities of subsidiaries
play a key role in determining the
success of their parent multinational
corporations (MNCs). In today's fast
changing environments, multinational
corporations (MNCs) need to be innovative
in order to sustain their market positions
and competitive advantages (Bartlett
& Ghoshal; 2000; Chiesa, 1999;
Dunning, 1994). MNCs face considerable
pressure to quickly and effectively
respond to local market needs, while
achieving global efficiency (Prahalad,
1999). This has led some MNCs to recognize
the need to leverage innovation that
occurs within their subsidiaries to
meet global needs. Consequently, some
MNCs have expanded the definition
of their subsidiaries' missions while
giving them greater freedom to pursue
their goals. Modern subsidiaries differ
in the scope of their operations,
goals, strategic postures, and organizational
cultures. These differences can increase
subsidiaries' innovativeness, willingness
to take risks, and ability to engage
in entrepreneurial activities.
Some subsidiaries have seized the
opportunity created by ongoing changes
in the global marketplace by pursuing
innovative ventures and engaging in
radical innovation (Dunning, 1994;
Ghoshal & Bartlett, 1988; Poynter
& White, 1989; Roth & Morrison,
1992). These subsidiaries have also
become more proactive in their operations,
reaching the market with innovations
well ahead of their rivals (Birkinshaw,
1998, 1999; Birkinshaw, Hood &
Jonsson, 1998). For example, Philips'
subsidiary in Canada created the company's
first color TV; Philips of Australia
created the first stereo TV; and Philips
of the UK created the first TV with
teletext capabilities. Philips' headquarters
encouraged innovation in their subsidiaries
and later leveraged them for the global
network (Lightfoot, 1992).
Corporate context refers to the strategic
directives of the HQ and the control
mechanisms used by the headquarters
to evaluate managerial performance.
Strategic directives can be in the
form of a global mandate that defines
the sphere and nature of a subsidiary's
activities (Roth et al., 1991; Roth
& Morrison, 1992). Birkinshaw
(1998) suggests that a subsidiary's
strategic mandate can intensify entrepreneurship
by increasing the subsidiary's access
to multiple resources and knowledge
bases within the MNC's network. In
addition, control mechanisms as well
as the autonomy provided to the subsidiary
can increase the amount of discretion
the subsidiary's managers have in
initiating and supporting various
innovative projects (Nobel & Birkinshaw,
1998; Prahalad, 1999; Roth & Morrison,
1992). Greater autonomy empowers subsidiary
managers, which can increase their
willingness to take risks and support
entrepreneurship (Lumpkin & Dess,
1996; Zahra & Covin, 1995). Consequently,
the corporate context is likely to
influence entrepreneurship within
subsidiaries.
Local environmental context refers
to the market characteristics that
the subsidiary faces in its local
domain. It refers to the environmental
dynamism and complexity, political
conditions, economic imperatives,
legal entities, and socio-cultural
influences that is essentially local
in nature (Rosenzweig & Singh,
1991). Bartlett and Ghoshal (1993)
note that changing local conditions
place unique pressures on subsidiary
managers to be responsive to the opportunities
that exist in their immediate environment.
Also, Porter (1986, 1992) suggests
that subsidiaries facing sophisticated
demand conditions and competitive
national environments have to engage
in more entrepreneurial activities
such as initiating strategic renewal,
developing new products or processes,
or spawning new ventures in order
to compete in the dynamic local markets.
Consequently, the local environmental
context can spur entrepreneurship
within subsidiaries.
The role of subsidiaries within the
MNCs' networks has undergone significant
changes in the recent past (Bartlett
& Ghoshal, 2000; Roth & Morrison,
1992). These changes have increased
pressures on subsidiaries to become
more entrepreneurial (Prahalad, 1999).
However, little empirical research
has examined the factors that determine
variations in subsidiaries entrepreneurial
activities (Wright, 1999).
Middle-East Medical Group need to
use strategic mandates judiciously
within the
Organizational network to provide
enabling conditions for entrepreneurial
behavior. The HQ
Should be cognizant of the resource
availability at the subsidiary level
as well as the capabilities in scanning,
acquiring, and utilizing information
available within the MNC network,
from varied national innovation systems,
and from different health care providers.
Such knowledge flows could be directed
by information systems or effective
human resource practices and personnel
transfers in order to foster innovation.
MMG need to stress the importance
of its various hospitals, facilities
and subsidiary's autonomy and its
use of strategic controls for enhancing
entrepreneurship. There is a need
for MMG executives to design effective
structures that provide the subsidiary
with autonomy while maintaining effective
coordination with the headquarters.
Strategic controls can also promote
the subsidiary's willingness to engage
in entrepreneurial activities. These
controls should be connected to the
group culture and value system, making
it possible to promote a long-term
orientation in the MMG's operations.
Finally, the HQ may need to be aware
of the importance of local managers'
perceived
environmental turbulence. Therefore,
to spur entrepreneurial behavior,
environmental characteristics should
be considered along with other factors
affecting location
decisions, the nature and scope of
subsidiary mandates, and the choice
of control mechanisms.
Conclusions
Culture is a broad concept encompassing
a myriad of human institutions composing
a particular society, along with various
behavioral conventions, artifacts,
and other important geographical,
ethnic, economic, and political influences
thatstrongly influences the behavior,
attitudes, and relationships of the
members of a particular society.Global
project management can succeed through
effective leadership, cross-cultural
communication, and mutual respect.
Without them, it is destined to fail.
International projects that use effective
cross-cultural teams can provide a
source of experience and innovative
thinking to enhance the competitive
position of their companies, and to
resolve potential communication barriers.
Multi-cultural projects are becoming
the norm. More and more projects are
being executed successfully using
multicultural teams. To achieve project
goals and avoid potential risks, project
managers should be culturally sensitive
and promote creativity and motivation
through flexible leadership.
Action informed by theory, has focused
on the detrimental effects of economic
globalization on health and health
care, as well as alternative projects
that aim toward improvements in health
conditions (Waitzkin 2000, 2001).
Opposition to policies, which generate
adverse effects on health and health
services, has increased worldwide.
Linkages between economic globalization
and health deserve more critical attention.
A growing network of professionals
and advocates has drawn attention
to the new policies affecting health
and health services that derive from
the new conditions of global trade.
It is important to learn about a country's
culture and use your knowledge to
help improve the quality of your business
dealings. Learn to value the subtle
differences among cultures, but don't
allow cultural stereotypes to dictate
how you interact with people from
any culture. Treat each person as
an individual and spend time getting
to know what he or she is about.
References
Aycan, Z., Al-Hamadi, A.B., Davis,
A., et al (2007). Cultural orientations
and preferences for HRM policies and
practices: the case of Oman. International
Journal of Human Resource Management,
18(1), 11-32.
Barczak, G., McDonough, E.F., Athanassiou,
N. (2006). So you want to be a
global project leader? Industrial
Research Institute, 28-35
Bartlett, C.A., & Ghoshal, S.
(1993). Beyond the M-form: Toward
a managerial theory of the firm. Strategic
Management Journal, 14 Winter Special
Issue, 23-46.
Bartlett, C.A. & Ghoshal, S. (2000).
Transnational Management. 3rd Ed.
New York, McGraw Hill.
Bartlett, C. A., Doz, Y., & Hedlund,
G. (1990). Managing the global firm.
London,
Routledge.
Bartlett, C. A., & Sumantra G.
(1989). Managing across borders: The
transnational solution. Boston, MA:
Harvard Business School Press.
Bartlett, C.A. & Sumantra. G.
(1992). Transnational management:
Text, cases, and reading in cross
border management. Boston, MA: Irwin.
Bhidé, A.V. (2000). The Origin
and Evolution of New Businesses, New
York: Oxford University.
Birkinshaw, J. (1998). Multinational
subsidiary evolution: Capability and
charter change in
foreign-owned subsidiary companies.
Academy of Management Review, 23,773-796.
Birkinshaw, J. (1999). The determinants
and consequences of subsidiary initiative
in multinational corporations. Entrepreneurship:
Theory & Practice, 24(1), 9-36.
Birkinshaw, J. & Hood, N. (1998).
Multinational subsidiary evolution:
Capability and charter
change in foreign-owned subsidiary
companies. Academy of Management Review,
23,
773-795.
Buckley, P. J., Clegg, J., & Tan,
H. (2006). Cultural awareness in knowledge
transfer to China-the role of guanxi
and mianzi. Journal of World Business,
41 (3), 275-288.
Carden, L., & Egan, T. (2008).
Does our literature support sectors
newer to project management? The search
for quality publications relevant
to nontraditional industries. Project
Management Journal, 39(3), 6-27.
Cohen, R. (1997). Negotiating Across
Cultures: International Communication
in an Interdependent World. Washington,
D.C.: United States Institute of Peace
Press.
Chiesa, V. (1999). Technology development
control styles in multinational corporations:
A case study. Journal of Engineering
& Technology Management, 162,
191-206.
Dikmen, I; Birgonul, M.T., Han, T.
(2007). Using fuzzy risk assessment
to rate cost overrun risk in international
construction projects.. International
Journal of Project Management, 25
(5), 494-505.
Dunning, J.H. (1994). Multinational
enterprises and the globalization
of innovatory capacity.
Research Policy, 23. 67-88.
Fetter, R.B. (1991). Diagnosis related
groups: Understanding hospital performance.
Interfaces, 21, 6-26.
Forsgren, M., Johanson, J., &
Sharma, D. D. (2000). Development
of MNC centers of excellence. In U.
Holm & T. Pedersen (Eds.), the
emergence and impact of MNC centres
of excellence (pp. 45-67). London:
MacMillan.
Ghoshal, S. (1987). Global strategy:
An organizing framework. Strategic
Management Journal, 8, 425-440.
Ghoshal, S. & Bartlett, C. (1988).
Creation, Adoption, and Diffusion
of Innovations by
Subsidiaries. Journal of International
Business Studies, 19, 365-388.
Grant, R. M. (1996). Toward a knowledge-based
theory of the firm. Strategic Management
Journal, 17(Winter Special Issue),
109-122.
Gupta, A. K., & Govindarajan,
V. (1994). Organizing for knowledge
flows within MNCs. International Business
Review, 3:443-457.
Gupta, A. K., & Govindarajan,
V. (2000). Knowledge flows within
multinational corporations. Strategic
Management Journal, 3:443-457.
Gupta, A. K., & Govindarajan,
V. (2001). Building an effective global
business team. Sloan Management Review,
Summer: 63-71.
Hall. (1976). Beyond Culture. New
York: Anchor Press/Doubleday
Hall, E.T. (1969). The Hidden Dimension.
New York: Anchor Press/Doubleday Doubleday.
Herzlinger, R. (2006). Why innovation
in health care is so hard. Harvard
Business Review, 84(5), 58-66.
Hofstede, G.H. (1991). Cultures and
Organizations: Software of the Mind.
Berkshire, England: McGraw-Hill.
Howes, R. & Tah, J.H.M. (2003).
Strategic management applied to international
construction. London: Thomas Telford.
Iles, P.H., & Paromjit K .(1997)
Managing diversity in transnational
project teams. Journal of Managerial
Psychology; 1997, 12(1), 95-118.
Jackson, S.E. (1992). Team composition
in organizational settings: issues
in managing an increasingly diverse
workforce. In Worchel, S., Wood, W.
and Simpson, J.A. (Eds), Group Process
and Productivity, Sage, Newbury Park,
CA.
Kwak Y.H., & Ibbs, C.W. (2002).
Project management process maturity
PM 2 model.
Journal of management in engineering,
(18), 3, 150-155.
Khattab, A., Anchor, J., Davies, A.
(2007). Managerial perceptions of
political risk in international projects..
International Journal of Project Management,
25 (7), 734-743.
Kroeber, A.L., & Kluckhohn, C.
(1954).Culture: A Critical Review
of Concepts and
Definitions. New York: Random House.
Langabeer, J. (2008). Hospital turnaround
strategies. Hospital Topics, 86(2),
3-10.
Lethbridge J. (2005) Strategies of
Multinational Health Care Companies
in Europe and Asia
Lightfoot, R. (1992). Philips and
Matsushita: A portrait of two evolving
companies. Harvard
Business School Case 392-156.
Loosemore M, Al Muslmani HS. (1999).
Construction project management in
the Persian
Gulf: intercultural communication.
International Journal of Project Management,
17
(2), 95-100.
Lumpkin, G.T. & Dess, G.G. (1996).
Clarifying the entrepreneurial orientation
construct and
linking it to performance. Academy
of Management Review, 21, 135-172.
Madhok, A., & Phene, A. (2001).
The co-evolutional advantage: Strategic
management
theory and the eclectic paradigm.
International Journal of the Economics
of Business, 8, 243-256.
Morris, C. (1996). Quantitative approaches
in business studies, 4th edition.
Pitman
Publishing,
Muriithi, N., Crawford, L. (2003).
Approaches to project management in
Africa: implications for international
development projects. International
Journal of Project Management, 21(5),
309-320.
Nobel, R. & Birkinshaw, J. (1998).
Innovation in multinational corporations:
Control and
communication patterns in international
R&D operations. Strategic Management
Journal, 19, 479-496.
Ozorhon, B., Arditi, D., Dikmen, I.,
et al (2007). Effect of host country
and project conditions in international
construction joint ventures. International
Journal of Project Management, 25
(8), 799-806.
Paarhizgar, K.D. (2002). Multicultural
Behavior and Global Business Environments.
New York: International Business Press.
Peters T (1994). The Tom Peter Seminar,
NY: Random House
Pheng, L.S; Leong, C. H.Y. (2000).
Cross-cultural project management
for international construction in
China. International Journal of Project
Management, 18(5), 307-317.
Pinto, J.K., & Slevin, D.P. (1987).
Critical Success Factors in Successful
Project
Implementation. IEEE Transactions
on Engineering Management, 3(1).
Porter, M.E. (1986). Competition in
global industries. Boston, MA: Harvard
Business School
Press.
Porter, M.E. (1992). Capital disadvantage:
America's failing capital investment
system. Harvard Business Review, 705,
65-82.
Porter, M.E. (1998). Clusters and
the new economics of competition.
Harvard Business Review, 766, 77-90.
Poynter, T. & White, R. (1989).
Achieving worldwide advantage with
the horizontal organization. Ivey
Business Quarterly, 542, 55-70.
Prahalad, C. (1999). Transforming
internal governance: the challenge
for multinationals.
Sloan Management Review, 403, 31-39.
Rosenzweig, P. M & Singh, J.V.
(1991). Organizational environments
and the multinational
enterprise. Academy of Management
Review, 16: 340-361.
Roth, K., Schweiger, D. & Morrison,
A. (1991). Global strategy implementation
at the business unit level. Journal
of International Business Studies,
22, 369-402.
Roth, K. & Morrison, A. (1992).
Implementing global strategy: Characteristics
of global
subsidiary mandates. Journal of International
Business Studies, 23, 715-736.
Saee, J. (2005). Managing Organizations
in a Global Economy. South Western
-Thomson
Learning, USA.
Saee, J. (2007). Contemporary Corporate
Strategy: Global Perspectives, Routledge
Publishing (Francis Taylor Group of
Publishing) -UK, USA & Canada.
Scollon, R. and Scollon, S.W. (1994).
Intercultural Communication: A Discourse
Approach.
Cambridge, MA: Blackwell.
Smith, L.A. & Haar, J. (1993).
Managing international projects, In
the AMA Handbook of project management,
Dinsmore P.C. (Ed), New York: American
Management Association.
Snell, S. A., Snow, C. C., Davison,
S. C., & Hambrick, D. C. (1996).
Use transnational teams to globalize
your company. Organizational Dynamics,
Spring, 50-67.
Spender, J.C. (1996). Making knowledge
the basis of a dynamic theory of the
firm. Strategic
Management Journal, 17(Winter Special
Issue), 45-62.
Stocker, K., Waitzkin, H., Iriart,
C. (1999). The Exportation of Managed
Care to
Latin America. New England Journal
of Medicine.340, 1131-36.
Thomas, D.C (2002). Essentials of
International Management: A Cross-Cultural
Perspective. Thousand Oaks, CA: Sage
Publications, Inc.
Trompenaars, F. & Hampden-Turner,
C. (1998). Riding the Waves of Culture:
Understanding Diversity in Global
Business. McGraw-Hill, New York.
Victor, D.A. (1992). International
Business Communication. New York:
Harper Collins
Publishers, Inc.
Waitzkin, H. (2000). The Second Sickness:
Contradictions of Capitalist Health
Care,
Rev. ed. Lanham, MD: Rowman and Littlefield.
Waitzkin, H. (2001). At the Front
Lines of Medicine: How the Health
Care System Alienates Doctors and
Mistreats Patients … And What
We Can Do About It. Lanham, MD: Rowman
and Littlefield.
Wang, X. & Liu, L. (2007). Cultural
barriers to the use of Western project
management in Chinese enterprises:
Some empirical evidence from Yunnan
province. Project
Management Journal, 38(3), 61-73.
White, D. & Fortune, J. (2002).
The Project specific formal system
model. International
Journal of Managing Projects in Business,
2 (1), 36 - 52.
Wright, R. W. (1999). International
entrepreneurship: Globalization of
emerging businesses.
Research in Global Strategic Management,
7. Stamford, CT: JAI Press.
Young, R.B. & Javalgi, R.G. (2007).
International marketing research:
A global project
management perspective. Business Horizons,
50, 113-122.
Youker, R. (1999). Managing international
development projects--lessons learned.
Project Management Journal, 30 (2),
6.
Zahra, S. & Covin, J.G. (1995).
Contextual influences on the corporate
entrepreneurship performance relationship:
A longitudinal analysis. Journal of
Business Venturing, 10,
43-58.
|
