ANALYSIS AND EVALUATION OF THE INFLUENCE OF A NON-HOMOGENEOUS CUSTOMER OF AN INTERNATIONAL COMPANY IN LINE WITH THE PROJECT MANAGEMENT 17.Stefan Bader – Milan Fekete – Jaroslav Huľvej
Abstract
The increasing globalization of markets, permanently shortened innovation cycles and increasing competition pressure provoke companies to offer their products to an aspiring markets. Most companies use successfully the classic project management in order to conduct the orders within the company internally. But, what will happen if the classic applications related to project structure plan, milestone plan, etc. are influenced by parameters which cannot be foreseen? Which variables disturb this well-established instrument of the project management? The aim of this study is to ascertain specifically what kind of roles and behaviors the project manager needs to handle in order to successfully cope with two difficult cultures, namely an industrial company located in Germany and the United Arabic Emirates.
Keywords: cultural, intercultural competence, project management, influencing disturbance, non-homogenous customer
JEL Code: L14
18.Introduction
The purpose of business enterprises is the provision of services on the market. Usually, this is done in repetitive, standardized routine processes, the so-called line work. The line organization of companies is tailored to these works. Its design aims at optimization (division of labor and specialization) of known tasks and work procedures to obtain a marketable cost level. In addition to the routine work, innovation processes are essential for the long-term success of a company. Innovation tasks can affect an individual department and are handled as a special task derived from innovation processes. They are controlled in the subordinating and reporting conditions, and with the procedures of line organization. Many innovation tasks require a different approach from well-integrated procedures of the line organization, because they involve special requirements. In this case, we are talking about projects (Kraus – Westermann, 2010).
The sequence is predominantly unified. Three parameters - cost, schedule, and quality - form the framework in which the project is executed. Grimm (2009) indicates that a one-sided optimization always leads to the burden of the other two factors. Kuster (2011) confirmed that none of these factors can be changed without having an influence on the other two factors. For standardized products, which are always delivered to the same customer base, the influence parameters are low or almost constant, because the customer behaves homogeneously. Homogeneous here means that only the lot size or purchased quantities can change in time or no agreement on price is achieved.
The extreme opposite are projects that are subjected to the customer influence, arbitrary changes and fluctuations. Although these have an impact on the three elements, however, there are much more difficult to assess, because the parameters that are changed, are not known in advance. For the opposite side of the contract, the customer, thus, appears inhomogeneous. The customer is different and therefore not predictable. Who makes the assumption here that only a common language is defined, more mistakes he or she makes. It is not enough, all generated documents just into English language to translate, because in addition to another language, intercultural backgrounds also play sometimes stronger role than the language barrier.
So, how the inhomogeneous customer can be distinguished from a homogeneous? In general, the statement is that a homogeneous customer orders a standard product that was previously offered by listing price and delivery time. Thus, all the boundary conditions are manifested. Once we depart from these conditions and that has an impact on the cost, quality and the lead time, we can speak about the inhomogeneous customer.
These negative effects arise out of the disturbances caused by inhomogeneous customers. Here is a list of possible disturbances that may affect a project:
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Change of the lot size
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Change of the delivery schedule
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Change of the payment schedule
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Modification of the contract
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Change of the warranty periods.
The aim of this paper is the analysis and evaluation of the influence of the non-homogeneous customer and based on that to determine the appropriate roles and behaviors of the project manager that should perform in order to efficiently handle international projects.
19.1 Empirical research
Expert interviews
As the main empirical research, the questionnaire procedure for interview with experts was applied in order to get a feedback. The questionnaire was drawn up specifically based on the authors’ experiences. Fifteen participants altogether were asked in the interview and were chosen in a way that they cover almost the entire range of projects they were involved in, from the start-up difficulties, through production problems, to activities in the customer's country.
The expert interviews were carried out in the period from 2013 to 2014. The company areas, from which experts were involved in the interview, were: planning, scheduling, purchasing, controlling, development, construction, shipping, production, sales, quality assurance, accounting, and project management. The data collection was carried out in the following points to consider:
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Determining the possible deviations from the ideal process
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Identification of the influential disturbances
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Determination of cultural influence
The findings of the expert interviews are intended for the development and design of a pattern approach for roles and behaviors of the project managers they should have and perform specifically in international projects.
What differentiates successful projects from less successful or failed projects? Scheurer (2002) notes that successful projects are influenced more by the people working on them as by the applied techniques. He defines success as: "Being successful also means being willing to allow new thinking. The willingness to change us themselves - constantly every day. Each participant shall rise from the depths of his gray everyday life and be inspired to new ideas and goals. Naturally, the intercultural competence plays an important, unfortunately often underestimated role. Once different cultures collide each other, technology and functionality of the ordered product will be immediately subordinate to the cultural aspects. The only solution here is an internationally experienced project manager."
2.1 Requirements on the successful project manager
For the selection and suitability of an international project manager, the following qualifications play an important role:
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professional expertise
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good social skills
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intercultural competence.
The first request covers much, in social skills the certain instinct being sensitive to interpersonal processes is notably lower, and in the third point, it often remains only a pitiful remnant left, if at all (Hoffmann, et all., 2004).
Kerzner (2008) requires that a project manager should have more authority than is actually required for its area of responsibility. It requires neither a single fighter nor an all-rounder, to succeed. Continuous and especially structured project work that has been thought out in detail in advance is an important guarantee.
Who wants to work successfully as a specialist or manager in a foreign country, he or she should see the new culture not only from a visitor perspective without deeper personal commitment, as it would be sufficient, for example, for a traveler, but he or she should in many ways in light of his or her own cultural experience in the home country deal with the peculiarities of the foreign culture (Reimer-Conrads - Thomas, 2009).
The project manager has to perform many different roles (see Figure 1). In addition to all these roles, a successful project manager should never lose sight of an important feature: his or her authenticity. Relatively quickly the Arabs would notice this in case, the project manager would not behave authentically and the Arabs get this acknowledged with suspicion.
Once a project manager has determined that the target is at risk, he must act. To leave the danger zone, he must identify and determine appropriate measures and how these can be implemented. The power of measurement enforcement is carried out thanks to his or her authority and exercise of power. In many cases, the project leader will identify a measure that costs the least to him. Since the project is usually measured only financially regarding success, the procedure is legitimate. It can then be that the cheapest version brings him into conflict with his values and standards, or even with compliance.
However, it is also often noted that the job description of a project manager is immeasurably expanded. It is unacceptable that for production errors, for quality defects, delivery delays, for wrong deliveries, etc., only the project manager is considered solely and exclusively responsible.
Fig. 1: Roles of the project manager
Source: Kraus, G. – Westermann, R., 2010. Projektmanagement mit System
One project manager controls, moderates, and manages to him entrusted project. Then he writes delivery notes, performs customs clearance, handles negotiations with suppliers, leads price reductions, helps in the production, prepares packages for shipping, then something will go wrong in the process. The reason for this is that either the job description does not exist or that some colleagues intend to push the project manager to the forefront to distract his awareness of their, perhaps, ignorance or convenience. In such a case, the project manager must immediately provide an explanation to his or her supervisors and keep it in writing for future. Following are important several job descriptions of project manager.
Analysis
For the successful, fast start as a project manager, it needs to be firstly analyzed, what are the conditions and assumptions of the project:
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Clarification of the project contract, the contractors, their culture and value proposition
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Clarification of stakeholder; Who are the real decision-makers?
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Definition of the strategic project goals
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Implicit, by the client and other stakeholders unspoken project objectives
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Product vision and initial product specification
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Available resources and local features
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Size of the budget
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The actual area of responsibility and the scope of negotiation of the project manager
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Relationship of the project team members to their line manager.
Innovation
In addition to innovation, imagination, and constant new thinking, the project manager can create or maintain the harmony in the project again. The new ideas are virtually the drivers of changes. A successful project manager is the master of project organization and marketing. Behind that is understood that you constantly keep a close contact with the project team.
Language
The contact takes place about the language and the information being exchanged. The language, verbal or gestures, have an impact on the project. Anyone who thinks the opposite side will impress by using a part of more terms and thereby will act more competent, will be disappointed. From this reason, a so-called terminology list is created before the project begins. In that list, all important parts with the correct name of the project are listed. This undoubtedly facilitates communication. The list must be agreed between the parties and, at best, even countersigned. The principle for translations is: uniqueness before ambiguity. This terminology list should be maintained by the project manager and visible for all participants in the joint project procedure.
Negotiations
A very commonly applied form of interpersonal communication is the negotiation. There cannot be only the factual content of the project, but also an interpersonal and emotional issue. Such meetings take place between two or more persons. Negotiations may be conducted from different positions and with different attitudes. However, the aim of negotiation should be to maintain a forward-possible solution for all parties, so that further cooperation is possible. This is in projects often a challenging task, because there are naturally many trade-offs and differences of interest.
Language is the most important part of international negotiations. "There are many issues or topics that can be discussed in negotiations. In the Arab world, the following four points have crystallized out:
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to achieve a particular purpose
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to convince people
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to appease conflicting interests
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to reconcile different views.
Protocol Leader
Another instrument of efficient meeting is the protocol. The project manager is mostly assigned as secretary. To avoid misunderstanding or misinterpretation, but also any other decisions than in the meeting agreed and fixed in the protocol, it has been proven, either after each agenda item or at the end of the meeting, to formulate the essential decisions together, then to print them, and lastly from both sides to countersign and distribute. While protocols in Europe will be sent to all participants in the draft phase in order to obtain their release, this practice has not prevailed in the Arab world. Here, an example reflects why the project manager should be involved from the outset in the project. He might make decisions in such negotiations because there is no time left for laying questions anew. He would lose face, extremely weaken his position and soften its already built-up relationship.
Behaviors
The new media such as e-mail, Internet, telephone and videoconferencing have become standard tools. E-mails are gladly used for distributing documents (shipping documents, custom documents, etc.), or telephone calls for short agreements. However, once critical and important issues should be coordinated, the Arabs consist on a personal conversation. The non-verbal peculiarities previously listed would not come to light in an e-mail or a telephone conference.
However, the importance of these special features is high. It is recommended a dose application of these electronic aids. A project manager who is curious and open, shows this willingness to learn from other cultures, creates much faster and successfully a stable basis of trust with the opposite side.
Hoffmann / Schopper / Fitzsimons (2004) recommend: "Pay attention to differences in the attitude, in the facial expressions, gestures, but also in the voice and in the statements of the other person. You can learn from it and understand the new culture faster. You will also learn to develop a new paradigm, or possibly to change your thought patterns and, thus, to make your behavior more flexible. These measures contribute to the development of your own social competence and team building." Of course, some problems in the project will not be 'explained away' by even such a clever communication behavior or it is not enough to have an understanding of the other culture. In parallel to this, skills need to be developed that complement the intercultural communication to get the project a success.
More alien the involved cultures are, the more commitment must the project manager apply for the development, maintenance and further development of all-round inner obligations in order to bring up the project. One has to free himself from his thoughts that only just the way how your work is done is the right procedure. International projects have a lot more problems to solve them than national projects. Currency risk, communication problems, climatic conditions, time shifting, legal system, working hours, holidays, just to name a few. However, they provide the project manager the chance to learn about a foreign country with its people, and its culture. Also it helps to deal with the historical heritage of the nation. This way, many behaviors can be better understood.
Culture Translator
The biggest threats to the international project management lurk in intercultural cooperation. There, very rapidly misunderstandings and conflicts are formed. Here, an experienced and well-trained project manager can make a difference. Thus, a so-called “Cultural Agent” can significantly improve the situation. This fulfills two tasks by perfectly translating the foreign language and also the actions, customs, rites, etc. he or she translates with comments. This cultural interpreter can also control translations and attack immediately if errors in translation are made. This can often happen.
Project Documentation
This is a project-based repository for all documents obtained during the project. The access must be guaranteed for all project participants and as fast as possible as the basis for the project schedule. For future projects, corresponding data should remain available. Thus, the documentation makes the comparability of projects possible, resulting in planning data and ensures learning outcomes for other projects. The structured storage of all project-relevant documents occurs in the project order. This applies twofold. Once, the hardware in the form of printed documents, further, in electronic form on the project procedure with limited access authorization only for the project team. The first option is meaningful, if something must be quickly looked up or if the project is selected for an audit. It is, of course, natural that the structure in both forms of organization must be identical. The care of both forms of organization is the responsibility of the project manager. For each project, the same document structure should be used as a basis and be modified only for specific projects.
21.Conclusion
In this paper, the roles and behaviors of the project manager in handling with non-homogenous customer were showed to lever the regulation mechanism of project management. This is not obvious from the project beginning. Things, circumstances, and parameters change - some with huge implications for the project. These can successfully be equalized or neutralized by the presented roles and behaviors.
Based on the results of the questionnaire, it could be proved that compliance with the cultural standards to which weak preparation for the culture of the other side can be the main reasons for failure of the internationally-focused projects. The next work could be to expand the list of these roles and behaviors on different culture types.
22.References
GRIMM, R. (2009) Einfach komplex. Neue Herausforderungen im Projektmanagement. Wiesbaden, Deutschland: VS Verlag für Sozialwissenschaften. ISBN 978-3-531-16893-7.
HOFFMANN, H.-E. / SCHOPER, Y.-G. / FITZSIMONS, C. J. (2004) Internationales Projektmanagement. Interkulturelle Zusammenarbeit in der Praxis. München, Deutschland: Deutscher Taschenbuch Verlag. ISBN 978-3-423-50883-3.
KERZNER, H. (2008) Projektmanagement – Ein systemorientierter Ansatz zur Planung und Steuerung. 2. Deutsche Auflage; Übersetzung der 9. englischsprachigen Auflage von Beate Majetschak und Judith Muhr. Heidelberg, Deutschland. ISBN 978-3-8266-1666-2.
KRAUS, G. / WESTERMANN, R. (2010) Projektmanagement mit System. Organisation, Methoden, Steuerung. 4. überarbeitete und erweiterte Auflage. Wiesbaden, Deutschland: Gabler Verlag | Springer Fachmedien. ISBN 978-3-8349-1905-2.
KUSTER, J. / HUBER, E. / LIPPMANN, R. / SCHMID, A. / SCHNEIDER, E. / WITSCHI, U. / WÜST, R. (2011) Handbuch Projektmanagement. 3. erweiterte Auflage. Berlin/Heidelberg, Deutschland: Springer Verlag. ISBN 978-3-642-21242-0.
REIMER-CONRADS, T. / THOMAS, A. (2009) Beruflich in den arabischen Golfstaaten. Trainingsprogramm für Manager, Fach- und Führungskräfte. Göttingen, Deutschland: Vandenhoeck & Ruprecht. ISBN 978-3-525-49147-8.
SCHEURER, M. B. (2002) Intelligentes Projektmanagement. Planen, Wagen, Gewinnen. Stuttgart/München, Deutschland: Deutsche Verlagsanstalt. ISBN 978-3-421-05592-0.
The paper was written in the framework of the SUPER - ERASMUS+ 2015-1-SK01-KA203-008915 project.
Contact
Stefan Bader
Comenius University Bratislava
Odbojárov 10, Bratislava 820 05, Slovak republic
baders@gmx.de
Milan Fekete
Comenius University Bratislava
Odbojárov 10, Bratislava 820 05, Slovak republic
milan.fekete@fm.uniba.sk
Jaroslav Huľvej
Comenius University Bratislava
Odbojárov 10, Bratislava 820 05, Slovak republic
jaroslav.hulvej@fm.uniba.sk
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