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Cultural Diversity Between Usa And Saudi Management Essay

Executive Summary

Many of the multinational construction companies working in the developing countries and particularly in Middle East have been facing problems in managing and executing the work. A major challenge for undertaking the projects in these countries is to adapt effectively to their culture. Cultural differences greatly influence the performance of the project. Therefore for an international project to be successful a unique strategy should be adopted in order to solve the issues related to cultural diversity. This report mainly outlines a strategy that needs to be adopted for; identifying the impact of cultural diversity on individuals operating in different cultural environment and; criteria for selecting individuals to operate in differing cultural environments.

The report is divided into following sections. The first section is the introduction consisting of the background of an American company (Whitehouse Construction Inc) and the key challenges faced by the company while undertaking project in Saudi Arabia. In the second section the cultural diversity between USA and Saudi Arabia is discussed. After comparing the diversity of the countries, the likely impact of cultural diversity on the individuals has been identified in this section. The third section talks about the strategy and criteria for selecting appropriate staff for undertaking this project. The fourth and final section talks about the effective ways for preparing the project team members for cultural shock.

1. Introduction

International companies in many industries all over the world have started realizing that for their business to be successful there needs to be a good understanding of the cultural issues. However this realization appears to be lacking in the international construction industry. According to the Construction Industry Institute (CII) of America survey (Hall, M. 1996), which involved individuals from different aspect of US construction industry, the major concern in international construction was lack of understanding of foreign cultures, ethics and languages. The US overseas construction industry has seen a decline in their share of the global construction market over a decade due to poor understanding and appreciation of, and adaptation to different culture (Hall, M. 1996). Therefore in order to overcome this issue a unique strategy should be adopted and must be implemented by the international companies.

An American construction company ‘Whitehouse Construction Inc’ is a multinational company with a range of overseas activity which is predominantly for American clients in Western Europe. The company has recently been awarded the contract to build a 75 storey hotel and conference centre in Jeddah, for a Saudi Arabian client. The company for the first time will be doing the project in Middle East. The company has decided to select the project team from the company’s US nationals working at home and in Europe. The company is very well aware of the cultural issues that would affect the performance of the project as the company has suffered before due to lack of appreciation of European culture by the project team members. Now the key challenges that the company faces are:-

Selecting appropriate staff for undertaking project in Saudi Arabia.

To ensure that the project team members operate successfully in the new business environment (i.e. preparing project team members for cultural shock).

Now in order to overcome these challenges the company first need to understand the culture differences between USA and Saudi Arabia. After understanding the cultural differences the company then need to identify the potential impact of cultural diversity on the project team members undertaking work in Saudi Arabia. The cultural diversity and its impact are discussed in section 2 of the report.

2. Cultural diversity between USA and Saudi Arabia

Cultural diversity has a great influence on the performance of the project. Therefore managing cultural diversity effectively would have a positive impact on the performance of the project. The following are some of the cultural differences between USA and Saudi Arabia which can have a potential impact on the project team members;

Most of the people in Saudi Arabia are polychronic individuals. They are more flexible in time schedules and give more priority for maintaining relationship and socializing. They usually see time in more holistic manner i.e. many events may happen at a time. On the other hand individual in US are monochronic i.e. they usually prefer to complete one task at a time. They do not give much priority for maintaining relationship and socializing.

Individuals in US adopt a very formal procedure for solving work related problems. On the other hand in Saudi many of the work related problems are solved informally, in social meetings based on interpersonal relationship.

Individuals in Saudi usually focus on short term horizons such as short range goals of profit and efficiency. On the other hand Americans usually focus on long term horizons. They are usually interested in long range goals such as market share and technologic development.

Companies in US usually believe equality in work i.e. men and women are given equal opportunities to work. On the other hand most of the companies in Saudi prefer men employee over women. Women in Saudi play a negligible role in the business world.

US have an individualistic society where people have a tendency to look after themselves only. In this type of society individuals are hired and promoted largely based on the individual performance and achievements. On the other hand Saudi Arabia has a collectivistic society where people usually have a tendency to work in a group and to take care of each other. In this type of society promotions are given on the seniority base.

In Arabic organizations decision making is extremely centralized. All the important decisions are made by the top managers of the organization. In American organizations decisions are diffused throughout the organizations, important decisions are made by lower level manager of the organization.

Impact of cultural diversity on the project team members:

The following are some of the potential impacts of cultural diversity on the project team members and on the activities performed by the project team members;

Most of the Arabic individuals are polychromic. They are very flexible in time schedules. This difference in time orientation has a great impact on the project team members. The project members can usually get frustrated due to difficulty of getting through a meeting agenda. In Saudi Arabia meetings usually begin with an extended socializing time in which time is spent establishing social rapport.

Most of the project team members may experience a culture shock when appointments are not met, workers stop work twice a day for prayers, unusual method of working and inter tribal conflict on work site. The project team members get demoralized due to cultural shock.

Women in the project team may find it very difficult to adapt to the Saudi culture. Any women visiting on business in Saudi needs to be very conservative. Most of the Saudi clients feel reluctant to communicate with the women.

The following are some potential impacts of cultural diversity on the activities of project team members;

It is very difficult for the project team members to negotiate with the clients. Negotiations are extended communication created in dialogue by two sides (Mead, 2005). Most of the Saudi organizations value high context communication style wherein information is in physical context. The Arabs usually prefer indirect style of communication therefore the project team members may find it difficult while negotiating with them as they usually prefer a more direct communication style.

The project team members may find it difficult to design the building due to cultural differences. The design of the building requires the understanding of Saudi culture. The factors that need to be considered while designing a building in Saudi is the religious observance, position of women in the society and Koranic symbolism (Hall, M. 1996). Therefore in order to design a building the project team member first need to understand these factors and then implement on their design.

Due to cultural differences the project team members need to understand the legal issues and contract system and most importantly they should be capable of solving the legal issues by adopting the Saudi practices.

3. Strategy and criteria for selecting appropriate staff for the project

The company ‘Whitehouse Construction Inc’ has decided to select the project team from the company’s US nationals working at home and in Europe. Now since the project team members are US nationals they are likely to face issues related to cultural diversity. Therefore in order to overcome these issues the company should adopt a unique strategy and criteria for selecting project team members. The strategy of the company should be to prepare the project team members for cultural shock so that the project team members can operate successfully in the new business environment.

Jordan and Cartwright (1998) identified three stable personality factors and four core behavioural competencies criteria required for selecting project team members undertaking work in new business environment;

Personality Attributes:-

Openness to experience: The project team members should be broad minded and should appreciate the cultural differences. An openness to change is required by the project team members to endure inevitable hardship and frustrations.

Extroversion: The project team members should be extroversive. The project team members should be participative in cultural aspects.

Low anxiety/ neuroticism: The project team members are required to be emotionally stable and should be capable of withstanding and recovering from cultural shock.

Competencies:-

Relational abilities: The project members should posses’ abilities to interact with the host country nationals and maintain good business relations with the host nationals.

Cultural sensitivity: The project team members should be flexible and should be able to switch effectively into host culture. The team members should be able to understand the global nature of the business and recognise cross border opportunity.

Linguistic ability: The project team members should be able to understand the host culture language and should be able to respond to host culture influences.

Ability to handle stress: The project team members should be able to handle stress effectively in the changing cultural environment. They should be prepared mentally for handling work related cultural issues.

The company must select only those project team members who have the above qualities. Apart from selecting appropriate project team members the company should also organize a pre-departure development program which includes training of the selected project team members and motivating them to operate in a new business environment.

4. Preparing project team members for cultural shock

As discussed in the above sections, the project team members are likely to experience a cultural shock. Culture shock occurs when an individual’s cultural expectations come into conflict with the living styles and expectations of new culture. The most appropriate way of preparing the project team member for culture shocks is to give them cross culture training before sending them to new business environment.

Cross cultural training:-

The cross cultural training in general can be defined as “Any intervention aimed at increasing an individual’s capability to cope with and work in foreign environment” (Zakaria, 2000). The training involves methods like lecture, simulations etc which are used to make the project team members familiar with the new business environment. The training must be consistent with company’s strategy and policies. The cross culture training aims at achieving three related outcomes (Mead, 2005). It teaches;

About the other culture:

What values are important within other culture.

How the culture is reflected in significant historical, political and economic data.

How culture value are expressed in behaviour

How to adjust other culture

Non evaluative attitude towards other culture.

Skills in predicting when the culture will be a factor in influencing behaviour.

Skills in weighing the significance of culture as against other factors in influencing.

Factors relating to job performance within other culture.

Cross cultural training have a positive impact on the individual performance. The training also helps the project team members to operate successfully in new business environment. The training has numerous advantages for both the project team members and the company. The following are some of the advantages of cross cultural training;

It helps to reduce the stress and cultural shock which often lead to failure of project team members

The training helps the project team members to operate successfully, hence reducing time and monetary losses which would have incurred due to failure in delivering the project.

For a company, cross-cultural training is an investment that pays, yielding the benefits of increased productivity, successful business relationships, and the avoidance of costly misunderstandings.

Apart from giving training to the project team members the company should also motivate the team members by giving; (Mead, 2005).

Fair compensation;

Continued employment on return;

Support at post and on return;

Enhanced promotion prospects.

These factors would help in improving the project team member’s performance which would indirectly benefit the company in the form of increased productivity and efficiency.

Recommendations

It is recommended that the company should follow the same selection criteria as discussed in the section 3 of the report. This would help the company in selecting an appropriate staff which can effectively and efficiently work in a new business environment.

It is also recommended that the company must organize a pre-departure program which should involve cross- cultural training. A well structured cross-cultural training will help the project team members to prepare for coping with the changes in the working styles, beliefs and values they are expected to face while working in different cultural environment.

It is also recommended that apart from organizing pre-departure development program, the company should motivate the project team members by promising them to give fair compensation and promotion opportunities.

It is also recommended that the company should also motivate dependents as they do have strong needs for emotional maturity, and abilities to adjust in a different cultural environment. If the dependents are demoralized and experiences cultural shock than that could directly affect the work of project team members. Therefore it is very essential for the company to motivate dependents by providing training in how to live in the culture and compensations.

Conclusion

It can be concluded that although cultural diversity has a great impact on the performance of the project team members, the issue can be solved by adopting a unique strategy for selecting an appropriate staff and by preparing the project team members for cultural shock. Preparing the employees for a foreign assignment is mutually beneficial to the company and the project team members. For the team members, a well delivered training can help in managing with the new situations, while for the company this helps in getting the best of the team members in terms of work output through maintaining the morale and motivation of the project team members.


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