Working Paper ProceedingsEngineering Project Organizations ConferenceEstes Park, ColoradoAugust 9-11, 2011 Proceedings EditorT. Michael Toole, Bucknell University

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Linking Societal Cultures, Organizational Cultures and Conflict Management Styles

Authored by

Jiin-Song Tsai and Cheryl S.F. Chi

Linking Societal Cultures, Organizational Cultures and Conflict Management Styles

Jiin-Song Tsai 1 and Cheryl S.F. Chi 2

ABSTRACT

Today cultural clashes in any international project organization have led to an increased emphasis on preparedness on potential conflicts residing in cross-cultural collaboration. Referring to the existing achievement, we propose that the salience of people’s conflict management styles is rooted in the nature of their cultural orientations and is correlated with the organizational culture in their workplace. In this paper, we attempt to elaborate the linkage between organizational culture and organization members’ ways of handling conflicts under typical project context. We start by reviewing some cases of cultural clashes in the context of international construction projects. Next, we explore the linkage from the one in between the orientations of Hofstede’s cultural dimensions (power distance, individualism vs. collectivism, femininity vs. masculinity, uncertainty avoidance, and long-term vs. short-term orientation) and the conflict management styles (collaborating, dominating, compromising, avoiding, and accommodating approaches) further to the different organizational culture categories (pyramid, family, machine, and market) proposed also by Hofstede. Our results are to develop a preliminary framework consolidating the extant research on the applicability of theories of culture typology for better understanding the problems triggered by cultural differences in global projects. This framework is expected to provide research strategy for empirical studies on project management and to help to design proper strategies to reconcile potential cultural clashes for achieving successful joint activities.

Key Words: culture, organizational culture, conflict management style, international project

1. INTRODUCTION Today’s trend of globalization brings up many chances of working together

with people from different places of the world. Noticing the influence of this trend on the project-based industries, Chi and Levitt (2009) empirically examine a phenomenon of “boundaryless careers” (Arthur and Rousseau 1996) in the context of international projects. People qualified for working in a project organization require not only high levels of technical skills and specialized expertise, but good sense of working with others of different backgrounds and dealing with various conflicts that often emerge from the coordination of many temporary workforces involved in the project.

Since project goals, forms, and ways to deliver can be different in various industries and countries (Whitley 2006), international projects are distinctive cases maneuvering under multi-institutional systems that are activated by many different, while often conflicting, logics and practices (Chi and Levitt 2009). This imposes huge challenges for coordination of those associated complex matters besides the

1 Professor, Department of Civil Engineering, National Cheng Kung University, Tainan, Taiwan, ROC. jstsai@mail.ncku.edu.tw 2 Post-doctoral Research Fellow, Center for Industrial Development and Environmental Governance, School of Public Policy and Management, Tsinghua University, China. cheryl.sfchi@gmail.com

requirements to workers and managers for processing large amounts of information (Galbraith 1974). Once the logics embedded in different cultures and divulging in practices by words, gestures, and symbols of all kinds that individuals employ for communication are different, the confusing and misunderstanding lie in information acquisition and comprehension would surely sour the chance of making wise decisions. In consequence, conventional organizational designs that focus on “exception handling” addressing required capacity for information processing are insufficient for supervision and coordination of functionally interdependent activities (Galbraith 1974; Levitt et al. 1999).

Today we are much sensitive to the cultural diversity, and participants of any global project are well aware of many unknown, unforeseen, and uncertain conditions introduced by the elusive, intricate and difficult cultural clashes (Mahalingam et al. 2005). In this paper we attempt to contribute a simple framework for international projects to better understand the cultural difference so as to ease the cultural clashes with proper organizational strategies, although those problems seem to be inevitable. To do this, we begin with cases in the construction industry as examples in this regard specifically due to its long history of using projects to incorporate in numerous participants and stakeholders.

The construction industry is characterized by immobile and idiosyncratic products that involve significant amounts of resources, uncertainties in its working environment, and costly and socially unacceptable consequences of failure. This nature of the product leads to fluctuating market demand (Gunnarson and Levitt 1982) and a labor market characterized by high-skilled crafts and professionalization (Stinchcombe 1959). The demand fluctuation leads firms to pursue broad regional, or even global, markets employing project-based manner and soliciting specialists from the labor market according to requirements of individual projects through contracting. Subsequently, contracts, rather than express or implied employment contracts with firms, define responsibilities and duties of participants performing specific works in projects. As a result, those specialized crafts and professionals need to cope with non-routine situations and requirements on site, which achieves efficiency, secures safety, and lowers cost.

The characteristics of construction industry naturally lead to the emergence of temporary project-based organization to mobilize the group of hired-guns—a highly-skilled workforce—function well. The history of this kind of practices can trace way back to medieval Europe when building Gothic cathedral was an expensive and multiyear project commissioned by the clergy and royalty of a city, and temporary organization led by ministers usually emerged to manage many itinerant craftsmen, such as English, French or German stonemasons who moved to where cathedrals were being built internationally. After five centuries, technical experts substitute for stonemasons and projects for cathedrals, today’s construction industry continues the similar way around a bigger world as part of globalization.

In the last decade, Taiwan High-Speed Rail (THSR) was built by a private conglomerate under a Build-Operate-Transfer (BOT) contractual agreement of a 35-year operation and 50-year development concession. Since the earlier operation could commence, the sooner the investors could begin to recoup their investments, the THSR project followed a realistic plan with a strict and aggressive schedule. In order to cope with the associated challenges, THSR formed a credible team with a large number of international experts, i.e. freelance expatriates (Chi and Levitt 2009), in important positions to attract international contractors with the best capabilities. The client-side team, as the counterparty, demonstrated compatible capabilities to lead all

the international contractors to reduce the perceived riskiness of their bids. During the high time of construction stage around 2003, the Construction

Management Division (CMD) played the leading role of the team. The peak staffing of this division was once a total of 1,309 employees from 39 nationalities, and 484 of them were international people. These international experts worked in a wide variety of roles as engineers, quantity and quality surveyors and managers. Most of them, although as the minorities, occupied critical positions with decision-making power that directly impacted project performance.

According to the executive vice president of THSR who reflected at the end of 2007, however, about 50% of the international experts did not perform well enough to fulfill the client’s expectation so that their performance was judged to be unsatisfactory. The vice president in charge of the CMD further commented that about 20-30% were not adequately qualified and about 10% should be replaced by local engineers. He also presumed that the project performance could have been much enhanced by resolving most problems of culture clashes in between their dominant western style cultures and the Taiwan Chinese societal culture. He continued explaining that taking the western style was to facilitate smooth communication and coordination between the client and international contractors. This attempt, however, unintentionally discouraged local employees from committing to the project. To fill this gap and to ease the situation, he began to elaborate on Chinese culture to all the international members, especially to those who occupied the critical positions leading the project team.

Indeed, cultural differences at many levels are likely to impact the performance of the project. The THSR project team is an organization composite by multi-nationality members, in which people with multiple cultural mindsets work together under a specific organizational culture that interacts with the surrounding societal culture of the host country. Their dilemma indicates that managing a western style organizational culture across such disparate social cultural context poses a unique challenge. To the THSR team, organizational culture is the basic assumption patterns to cope with their problems of internal integration and external adaptation. It is also the vessel carrying behavioral guidelines for people working together to learn about their attributions, goals, strategies, tactics, and appropriate communication channels (Schein 1992).

Today, people of organizations like the THSR team inevitably face different cultural perceptions regarding work-related uncertainty resulted from the complexity of each activity and the interdependencies in between activities. This challenge would surely lead to an increased emphasis on preparedness of potential conflicts residing in such cross-cultural collaborations. Therefore, understanding how cultural differences affect people’s conflict management style could provide useful knowledge in real practices. Referring to many existing studies as described below, we propose that the salience of cultural orientations should affect the nature of people’s conflict management styles. In addition, the different dominant styles representing groups of individuals’ behaviors as a whole can be important indicators revealing the characteristics of different organizational cultures.

In this paper, we attempt to elaborate the linkage to the manifestations of organizational culture upon the ways of handling conflicts to make things done under typical project context. In the following section, we start by exploring the linkage from the one in between the orientations of Hofstede’s cultural dimensions (1980) and the conflict management styles (as originally defined by Blake and Mouton 1964 and later reinterpreted by Rahim 1983) and follow by exploring an extension linkage to

the organizational culture categories also proposed by Hofstede (1994). Our results are to develop a preliminary framework consolidating the extant research on the applicability of theories of culture typology for better understanding the cultural differences. This framework is expected to provide research strategy for empirical studies on project management and to help to design proper strategies to reconcile the possible cultural clashes. In closing, we discuss implications of our research to both academia and practice, and suggest future avenues of exploration.

2. LINKING CULTURE TO CONFLICT MANAGEMENT STYLES Beliefs, values and norms are three cultural ingredients that drive people on

making sense of the situation and the behavior of others (Fiske and Taylor 1991) so as to make choice of appropriate social action (Shank and Ableson 1977). A large body of scholarly work has come up with cultural influences on personal, social, and organizational practices of the unwritten patterns (or unspoken rules) of the social game. One of the most widely referenced approaches for analyzing variations among cultures is Hofstede’s study (1980) of the cultural influence based on four work-related dimensions: power distance, individualism vs. collectivism, femininity vs. masculinity, and uncertainty avoidance. With additional following-up works and data, his model has been updated by adding two more dimensions, long-term vs. short-term orientation and indulgence vs. restraint, to broaden its elaboration (Hofstede et al. 2010). Figure 1 shows a model, rooted in the three cultural ingredients, to characterize different societal (national) cultures by a source on each of the first five dimensions.

Beliefs

Norms

Power Dista

nce

Femininity

VS.

Masculinity

Long-term Orientation

Col

lect

ivis

m

VS.

Indi

vidu

alis

mUncertainty AvoidanceValues

Fig 1 Five-dimension model of culture (Tsai and Chi 2009)

Since “all men are caught in an inescapable network of mutuality,” as Martin

Luther King, Jr. said, once incompatibility of need(s), interest(s), and/or goal(s) among us exists, conflicts emerge. The conflict within such inescapable network (i.e. under the framework of a culture's institutions) definitively needs culture to provide a context for its resolution. Much research has shown that the preferable strategies for handling conflict are clearly affected by culture; e.g. the involvement of third parties (Leung 1987); the reliance on interests, rights, or power in conflict resolution (Tinsley 2001); the treatment of in-group versus out-group members (Leung and Bond 1984); the appropriateness of types of persuasive appeals, directness of communication, and concession patterns (Leung 1997; Ting-Toomey 1985). Therefore, we would specify particular expectations on how conflicts should be preceded for resolution—with profound effects on the styles we learned as participants in the culture.

Indeed, conflict can occur at various levels, from personal to societal. At each

level, culture affects how individual(s) would perceive the situation of conflict and what the favorable approach people would take to handle the consequent social interaction or negotiation (Chan 2010). The success of conflict resolution relies on well managing the interaction of the handling approaches adopted by conflicting parties. According to Follett (1940), Blake and Mouton (1964), and Thomas (1976), Rahim and Bonoma (1979), the types of handling interpersonal conflict can be differentiated based on two basic dimensions: concern for self and concern for others. The first dimension explains the degree (high or low) to which one attempts to satisfy one’s own concern. The second dimension explains the degree (high or low) to which one attempts to satisfy the concern of others. The identified two “concerns” are the basic building blocks of a theoretical framework named the Dual Concerns Model (Rubin et al. 1994). Moore (1996) and Groton (1997) adopted the model and specified the two concerns of personal level by satisfying (1) personal goals and (2) the relationships in resolving conflicts in a project environment. Coupling the two concerns breeds five specific approaches of conflict handling (Rahim 1983; Rahim et al. 2001). Shown in Fig. 2, the five approaches are described below.

1. Collaborating (CLB; high concern for both personal goals and relationships) approach involves openness, exchange of information, and examination of differences to reach an effective solution acceptable to both sides. It is associated with problem solving, which may lead to win-win solutions.

2. Dominating (DOM; high concern with personal goals but low concern with relationship) approach is identified with win–lose intention or with forcing behavior to win one's position.

3. Compromising (CMP; moderate concern for both personal goals and relationships) approach involves give-and-take whereby both sides give up something to break even the total lost and make a mutually acceptable decision.

4. Avoiding (AVD; low concern for both personal goals and relationships) approach is to put the problems on hold, and is sometimes associated with withdrawal, buck-passing, or sidestepping actions to reach a no-deal outcome.

5. Accommodating (ACM; low concern with personal goals but high concern with relationships) approach is associated with attempting to play down the differences and emphasizing commonalities with yielding attitude to satisfy the concern of the other side.

The five approaches are recognized in view of their reference behavioral attitudes in the process of resolving a conflict. These distinct strategic attitudes refer to people’s intention toward conflicts: problem-solving, forcing, breaking-even, holding, and yielding (Tsai and Chi 2009). Their effectiveness is upon deriving an atmosphere that can bring about wishful results. Table 1 presents the distinctions among the five approaches and their relationships with the handling attitudes.

Dominating Collaborating

Avoiding Accommodating

Concern for RelationshipsC

once

rn fo

r Goa

ls

Compromising

Fig. 2 Conflict management styles: The five conflict handling approaches

(Tsai and Chi 2009)

Table 1 Five Conflict Handling Approaches (Tsai and Chi 2009)

Literature clearly suggests that cultural orientations affect conflict management styles. A survey conducted by He et al. (2001) finds that individualistic and masculine orientations are related to dominating favorite. Another survey (He et al. 2002) shows that masculinity would lean toward adopting dominating and collaborating approaches, while uncertainty avoidance and power distance predict the adoption of two of the five conflict approaches respectively: collaborating and avoiding approaches for the former, and the dominating and accommodating approaches for the latter. The data also depicts that cultures that feature collectivism, high power distance, and femininity would favor accommodating and avoiding approaches.

Linking up the cultural orientations with people’s conflict management styles, Tsai and Chi (2009) summarized the above and other studies’ findings, including Lewicki et al. (1992), Sternberg and Dobson (1987), and Ting-Toomey (1985), creaming off a correlation between cultural orientations in Hofstede’s five dimensions and the conflict handling approaches (Table 2). Figure 3 shows this found correlation in a diagram demonstrating how people’s tendency against conflict varies with orientations of different cultures.

Table 2 Influences of Cultural Orientations to Conflict Handling

Approaches (Tsai and Chi 2009)

Fig. 3 Cultural orientation diagram: Correlation between cultural

orientations and conflict handling approaches (Tsai and Chi 2009)

3. LINKAGE TO ORGANIZATIONAL CULTURE At societal level, culture embedded in our daily lives identifies our uniqueness

of “who we are”, and at organization level, it (i.e. organizational or corporate culture) manifested upon various formal and informal practices in a work place clarifies our distinctness of “how things are done here in order to succeed”. For project members, the culture provides a context to learn about their attributions, goals, strategies, tactics, and other important matters like appropriate communication channels. Without clear ideas about to these, we may easily get lost when conflicting matters arise, and the working climate would soon tense due to adopting “wrong” attitudes and practices to handle conflicts. This problem is in fact about our reactions based on the perceptions of what the organization we participate should be like and what we should behave within. Hence, we attempt to build a simple model to identify the appropriate ways to succeed in accordance with the organization’s attribution that we belong to. In this model, we enhance the existing linkage in between the conflict management style and the societal culture by its connection to the organizational culture.

Many existing typologies in the literature are proposed to describe the classifications of ideal cultures to represent the characteristics of different organizations (Ankrah and Langford 2005). Among them, Hofstede’s model (1994) is a commonly seen one (shown as Figure 4) classifying four typical culture types:

pyramid, family, machine, and market (as described below) by employing two cultural dimensions: power distance and uncertainty avoidance.

1. Adhocracy2. Mutual adjustment3. Support staff

GREAT BRITAIN

1. Simple structure2. Direct supervision3. Strategic apex

CHINAUSA

GERMANY

1. Professional bureaucracy2. Standardization of skills3. Operating core

1. Full bureaucracy2. Standardization of process3. Techno-structure

FRANCE

Power DistanceHighLow

Unc

erta

inty

Avo

idna

ce

Low

High

TAIWAN

MARKET FAMILY

MACHINE PYRAMID

Fig. 4 Hofstede’s organizational culture model (Hofstede 1994)

1. Pyramid type organization (high level for both power distance and

uncertainty avoidance) is very structured and formalized. Procedures describe everything how everyone can and must do the work. The most important thing to the organization is keeping operational process smoothly to ensure its best efficiency. In such organization, all the members hold together formal rules and policies, and their leaders make decisions.

2. Family type organization (high power distance but low uncertainty avoidance) is a friendly place with people like a large group of relatives (a tribe). Leaders are advisors or fathers-guardians for others. Values of tradition and loyalty unite all the members. Mutual commitment level (between anyone and the organization) is very high.

3. Machine type organization (low power distance but high uncertainty avoidance) focuses on the outcomes; the most important for all the members is to achieve the set goals. Organization highly concerns about its reputation and success. Long-term benefits of organization are perceived through competition, measurable objectives and performance.

4. Market type organization (low level for both power distance and uncertainty avoidance) is very a dynamic, creative place in which members highly value entrepreneurship and leadership. In the organization, leaders are characterized by innovation and courage to risk-taking, and members are encouraged to take individual initiative. Success is associated with the unique and new ways or results. The most important thing to the organization is to keep leading others.

This model embraces the favorable structure and the mechanism for coordinating activities commonly adopted by organizations with the associated cultures. It couples the Mintzberg’s five configurations of organizational structure as well as the five mechanisms for coordination (Mintzberg 1983) with the quadrants of the power distance-uncertainty avoidance diagram.

Power distance indicates the extent to which people accept the unequal distribution of power. Uncertainty avoidance refers to people’s discomfort with uncertain or unstructured situations, and preference for predictability and stability. These two together does in particular affect our thinking about organizations as well as the preference for form of organizational structure that are critical to organizational effectiveness. Hofstede argues that both of them affect the function of an organization, at least both the control of decision making and the planning process. Firstly, he indicates that the higher power distance the higher rank members control the decision

making, while the lower power distance the more trust in subordinates. This implies the correlation between power distance and an important factor of organizational operation: centralization. High centralization in an organization means less amount of participative decision making. Secondly, he points out that the higher uncertainty avoidance the higher demand for detail in planning and the enforcement of controlling process and the higher reliance on qualified specialists. As a result, clear standardizations of both the work process and the skill requirements of workers are often the main issues to many things. This implies another positive correlation between uncertainty avoidance and one more important factor: formalization. High formalization in an organization means high predictability, orderliness, and consistency. Therefore, the influence of the two Hofstede’s cultural dimensions on the function of organization is the options ranging from centralizing decision making with formalizing coordination to informal coordination with greater individual responsibility (Mintzberg 1983).

Differences in each factor vary among differing countries. For instance, Taiwanese or Japanese tend to have multiple layers of hierarchy and to be highly centralized and formalized for coordination, while American prefer using flatter organization structures and medium centralization levels. Taking the THSR mentioned above as an example, this international project adopted a Western (British/American) style organization despite the majority of its employees were local Taiwan Chinese. In their culture, larger power distance and stronger uncertainty avoidance are associated with greater centralization and formalization. Organizations are usually taller, more hierarchical pyramid structures (Hofstede 2005). In contrast, the THSR project organization is a flatter Western organizational structure with a less distinctive hierarchy. The Western approach to project management usually involves a matrix of two competing hierarchies: a functional hierarchy and a project hierarchy. This requires tolerance for ambiguity, which is very uncomfortable to most local employees.

On the other hand, power distance and uncertainty avoidance affect people’s favorable approaches for resolving conflicts too. In the THSR project team, local employees tend to pay greater attention to group harmony, maintaining face, and relationships with all involved when dealing with conflicts. Consistent with their conceptions, they would try to avoid direct debate or confrontation and always try to get through conflicts quietly. Again, in contrast, their Western managers and coworkers may encourage open discussion on disagreements and conflicts in order to get problems resolved quickly. As a result, the dominant Western approaches for handling enormous conflicts in the THSR project unintentionally became the key issue that discouraged local employees from teamwork involvement.

The THSR team’s painstaking efforts against cultural differences reveals that clarifying cultural orientations is crucial for building a human system since the culture provides meanings and guidelines for behavior (Scott 2008). In this regard, we build a simple model (Fig. 5) for clarifying the culture as well as suitable conflict management styles in an organization by linking up the Hofstede’s model (1994) and Tsai and Chi’s model (2009) in the power distance×uncertainty avoidance matrix. This model consolidates various theories showing the extensible influence of cultural differences, which is useful in helping to organize and interpret a wide variety of organizational phenomena. To an international project, this model implies that organizational culture is influenced on national culture where organization is operating, so that different organizational culture types are dominating in enterprises from different countries. It provides valuable guideline before setting a proper

organizational culture according to the leaders’ (or the majority) cultural orientations as well as their tendency against conflicts.

CMP FAMILY

ChinaUSA

PYRAMIDJapan, Taiwan

MARKET

Great BritainMACHINE

Germany

LPD; LCTLow power distanceLow centralization

LUA; LFMLow uncertainty avoidance

Low formalization

HUA; HFMHigh uncertainty avoidance

High formalization

HPD; HCTHigh power distanceHigh centralization

MASMasculinity

FEMFemininity

CLTCollectivism

IDVIndividualism

DOM

AVD

CLB

ACM

Fig. 5 Correlation of Societal culture, Organizational Culture and Conflict

Management Styles

It is worth noting that earlier studies, such as Knapp et al (1988), may critique the little implication of organizational theory in conceptualizing interpersonal conflict management styles. They indict the two dimensional framework (Fig. 2) offering little guidance upon which organizational variables are likely to influence conflict styles (or strategies). Filling this gap, the present model correlates the conflict management styles with important cultural dimensions: power distance and uncertainty avoidance and brings in the linkage of two important organizational variables: centralization and formalization. This unique linkage well cast the conflict management styles in an organizational context.

4. CONCLUSIONS Globalization has led to increased attention being paid to cultural diversity and

its influences on personal, social, and organizational practices. Today’s managers of international projects usually have a general awareness of cultural clashes and the preparation for the according conflicts in their daily interactions with others. Their team members, like those of THSR project, are mostly highly skilled, temporary, craft workers from different countries. For making these people work well, Bourdon and Levitt (1980) suggest some superb strategies to coordinate such temporary workforces. According to Mahalingam (2005) and Orr (2005) arguments, these strategies must align with the culture of organization; otherwise it will either stall or fail. The implication of cultural diversity makes the case that management practices are highly culturally embedded (Hofstede 2007). Practices in one culture may not have the same impact in another, and insights gained in one context are unlikely to be transferable to elsewhere. In addition, organizational culture is influenced on societal culture where organization is operating.

For better understanding of the cultural diversity and its influences, this paper proposes a simple model delineating a conceptual framework. This model and others alike can help clarify both the nature of organizational culture and the impact of societal cultures on individuals. In this model, we cast the interpersonal conflict management styles within an organizational system, so that it can contribute to practices as well as future research in a number of ways: 1. The model consolidates various theories on culture for better understanding the

problems triggered by cultural differences, especially in international

organizations where multi-institutional systems that are activated by many very different, while often conflicting, logics and practices embedded in various cultures.

2. The model is a tool in helping to understand and interpret the phenomena across different cultures. It is useful for adopting proper strategies to reconcile the cultural differences for a joint activity to be successful. It is also useful to inspire research strategy for empirical studies on project management.

3. The model illustrates typical conflict management styles of individuals of different cultures since cultures provide meanings and guidelines for people to properly behave and people would tend to respond with the most habitualized styles in accordance with their cultures.

ACKNOWLEDGEMENT The authors wish to thank anonymous reviewers for their valuable comments.

We also thank the financial support from the National Science Council project number NSC 99-2211-E-006-189-MY3.

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