Global Project Management

Project Management
10. Global Project Management

Today we learn to apply the project management framework to IT
projects within a global context

Gray & Larson, 2006, Ch’s 12 and 15.

Concepts we will cover
Project Partnering Cultural Dimensions Framework
Key Practices in Partnerships Working in Different Cultures
Types of Contracts Selection and Training
Contract Changes Successful Partnering
International Projects Sustaining Relationships
International Assignments Celebrating Success
Environmental Factors Partnering Failures
Cross Cultural Factors The Art of Negotiating
Cross-Cultural Orientations Customer Relations

Project Partnering is a process of
transforming contractual arrangements
into a cohesive, collaborative team
that deals with issues and problems
encountered to meet a customer’s
needs

Assumptions
1. the traditional adversarial relationship between the owner and contractor
is ineffective and self-defeating
2. that both parties share common goals and will mutually benefit

Advantages
Advantages

Reduced administrative costs
Reduced administrative costs
Better resource use
Better resource use
Improved communication
Improved communication
Improved performance
Improved performance

Disadvantages
Disadvantages

?

These things help

Existence of
common goals

High costs of the
adversarial approach

Shared benefits of
the collaborative
approach

These things don’t

Conflicting goals

Lack of trust

Highly formal
relationship

Pushing people before
they are ready

It’s not as easy as it sounds

Sub Client End
Contractor Performing organisation organisation Customer

Consider this scenario

Goal alignment?

Sub Client End


Maximise customer
revenue, Reliable margin, on time and satisfaction Cheap and
minimise budget, generate more work & minimise convenient
costs risk

Sub Client End


Maximise customer
costs risk

Conflict!

Sub Client End

The sub contractor wants to use existing
systems and processes, which may help
the P.O.’s ability tothis scenario but
Consider manage costs,
might restrict it’s ability to generate
goodwill through lack of flexibility.

Maximise customer
costs risk

Conflict!

Sub Client End

The P.O. wants to manage it’s delivery to be on
time and on target.
This helps the client minimisescenario
Consider this risk, but decreases
flexibility. New customer requirements will be
harder to implement.

Maximise customer
costs risk

Conflict!

Sub Client End

The client organisation wants to maximise
customer satisfaction, which may lead to trying to
include Consider this scenario
all possible client requirements.
This will probably make the solution too
complex for most customers who want a
cheap and convenient solution.

Maximise customer
costs risk

Conflict!
Conflict!
Conflict!

Sub Client End

Collaborating isn’t always easy.

Key Practices in Partnerships
Partnering Relationships Traditional Practices

Mutual trust forms the basis for Suspicion and distrust; each party is
strong working relationships. wary of the other.
Shared goals and objectives Each party’s goals and objectives,
ensure common direction. while similar, are geared to what is
best for them.
Joint project team exists with high Independent project teams; teams are
level of interaction. spatially separated with managed
interactions.
Open communications avoid Communications are structured and
misdirection and bolster effective guarded.
working relationships.
Long-term commitment provides Single project contracting is normal.
the opportunity to attain
continuous improvement.
Table 12.1 Project Partnering Framework
(Gray & Larson, 2006, p384)

Key Practices in Partnerships
Partnering Relationships Traditional Practices

Objective critique is geared to Objectivity is limited due to fear of
candid assessment of reprisal and lack of continuous
performance. improvement opportunity.
Access to each other’s Access is limited with structured
organization resources is procedures and self-preservation taking
available. priority over total optimization.
Total company involvement Involvement is normally limited to
requires commitment from CEO project-level personnel.
to team members.
Integration of administrative Duplication and/or translation takes
systems equipment takes place. place with attendant costs and delays.
Risk is shared jointly among the Risk is transferred to the other party.
partners, encouraging innovation
and continuous improvement.

Figure 12.1 Project Partnering Framework

Fixed Price
Fixed Price Cost Plus
Cost Plus

Types of Contracts

Fixed Price
Fixed Price Cost Plus
Cost Plus

AKA
AKA AKA
AKA
Lump Sum
Lump Sum Time and Materials
Time and Materials

Types of Contracts

The contractor lowest bid agrees to
The contractor lowest bid agrees to
perform all work specified in the
perform all work specified in the
contract at a fixed price.
contract at a fixed price.

Disadvantages
Disadvantages
Fixed Price
Fixed Price • More difficult and more costly
• More difficult and more costly
to prepare (for client)
to prepare (for client)
• The risk of underestimating
• The risk of underestimating
project costs (for contractor)
project costs (for contractor)

Contract adjustments
Contract adjustments
• Re-determination provisions
• Re-determination provisions
• Performance incentives
• Performance incentives

Types of Contracts

Contractor is reimbursed for all
Contractor is reimbursed for all
direct allowable costs (materials,
direct allowable costs (materials,
labor, travel) plus prior-negotiated
labor, travel) plus prior-negotiated
fee (set as a percentage of the total
fee (set as a percentage of the total
costs) to cover overhead and profit.
costs) to cover overhead and profit. Cost Plus
Cost Plus
Risk to client is in relying on the
Risk to client is in relying on the
contractor’s best efforts to contain
contractor’s best efforts to contain
costs
costs

Controls on contractors
Controls on contractors
• performance and schedule
• performance and schedule
incentives
incentives
• costs-sharing clauses
• costs-sharing clauses

Types of Contracts

When working under a contract change must
be controlled.

Week 4

The contract Change Control
Systems must link to project
change control systems

Process by which a contract’s authorized scope (costs and activities) may be
modified:
– paperwork
– tracking systems
– dispute resolution procedures
– approval levels necessary for authorizing changes

If you don’t include change control system provisions in the original
contract, what will happen?

Classes of International Projects

Domestic
Overseas
Foreign
Global

Done at home for clients at home
Domestic
(e.g. my day job)

Doing work for local clients in a foreign country
Overseas (e.g. mining project for Australian firm in New
Guinea)

Done in a foreign country for clients in that country
Foreign
(e.g. a project for Microsoft performed in the USA)

Done by a team located around the world
Global
(e.g. Siemens global product development team)

Issues in International Management

Environmental factors
Global expansion
Challenges
Selection and training

International Assignments

Positives Negatives
Increased income Absence from home and friends, and family
Increased responsibilities Security risks
Career opportunities Missed career opportunities
Foreign travel Difficulties with language, culture, and laws
New lifetime friends

Figure 15.1 Environmental Factors Affecting International Projects

Legal/Political

Political stability
National and local laws and
regulations
Government, state and local
bureaucracies
Government interference or
support
Government corruption

Security

International terrorism
National and local security
Local crime and kidnapping
Risk management

Geography

Climate and seasonal differences
Natural obstacles

Economic

Gross domestic product (GDP)
Protectionist strategies and
policies
Balance of payments
Currency and exchange rates
Inflation rates
Local labor force: supply,
educational
and skill levels

Infrastructure

Telecommunication networks
Transportation systems
Power distribution grids
Unique local technologies
Educational systems

Culture

Customs and social standards
Values and philosophies
Language
Multicultural environments

Environmental analysis in action

Figure 15.2 Assessment Matrix Project Site Selection

Figure 15.3 Evaluation Matrix Breakdown for Infrastructure

Organisational culture
models

Week 4

Culture is a
system of shared
norms, beliefs,
values, and
customs that
bind people
together,
creating shared
meaning and a
unique identity

Cultural Differences

Geographic regions
Ethnic or religious groups
Language
Economic

What do we call it when someone has a belief
that their cultural values and methods are
superior to others?

What do we call it when someone has a belief that
their cultural values and methods are superior to
others?

Ethnocentric Perspective

What do we call it when someone has a belief that
their cultural values and methods are superior to
others?

Ethnocentric Perspective

You find it when people are conducting business in your terms; stereotyping
other countries
It manifests as ignoring the “people factor” in other cultures by putting work
ahead of building relationships

You (and I) need to make
adjustments when dealing with
people from other cultures.

Relativity of time and
punctuality

Culture-related ethical
differences

Personal and professional
relationships

Attitudes toward work and life

Relation to Nature: How people
relate to the natural world
around them and to the
supernatural

Time Orientation: The culture
focus on the past, present, or
future

Activity Orientation: How to
live: “being” or living in the
moment, doing, or controlling

Basic Nature of People:
Whether people viewed as good,
evil, or some mix of these two

Relationships Among People:
The degree of responsibility one
has for others

Note: The line indicates where the United States tends to fall along these issues.

Figure 15.4 Kluckhohn – Strodtbeck’s Cross-Cultural Framework

Cultural Dimensions Framework
Individualism versus collectivism
Identifies whether a culture
holds individuals or the group
responsible for each member’s
welfare
Power distance
Describes degree to which a
culture accepts status and
power differences among its
members
Uncertainty avoidance
Identifies a culture’s willingness
to accept uncertainty and
ambiguity about the future
Masculinity-femininity
Describes the degree to which
the culture emphasizes
competitive and achievement-
oriented behavior or displays
concerns for relationships

Where are we on this
grid?

Figure 15.5 Sample Country Clusters on Hofstede’s Dimensions of
Individualism – Collectivism and Power Distance

Relying on Local Intermediaries

Translators
Social connections
Expeditors
Cultural advisors and guides

Culture Shock
The natural psychological
disorientation that people
suffer when they move
into a different culture

Coping with Culture Shock

Create “stability zones” resembling
home
Modify expectations and behavior
Redefine priorities and develop
realistic expectations
Focus on tasks and relish
accomplishments
Use project work as a bridge until
adjusted to the new environment
Engage in exercise, meditation,
relaxation, and keep a journal

Figure 15.5 Culture Shock Cycle

Selection and training for overseas jobs
Selection and training for overseas jobs

Selection Factors

Work experience with
cultures other than
one’s own
Previous overseas travel
Good physical and
emotional health
Knowledge of a host
nation’s language
Recent immigration
background or heritage
Ability to adapt and
function in the new
culture

Areas for Training

Religion
Dress codes
Education system
Holidays—national and
religious
Daily eating patterns
Family life
Business protocols
Social etiquette
Equal opportunity

Learning Approaches to Cultural Fluency
Information-giving—learning of information or skills from a lecture-type orientation
Affective—learning of information/skills that raise the affective responses on the part
of the trainee and result in cultural insights
Behavioral/experiential—a variant of the affective approach technique that provides
the trainee with realistic simulations or scenarios

Successful partner relationships begin
with the search.

And just like you have to develop a
team, you have to develop partner
relationships.

Selecting
Voluntary, experienced,
willing, with committed
top management.
Team
building Project
managers

Expand the partnership
Project commitment to include
stakeholders other key managers and
specialists

Build a collaborative
relationship among
the project managers.

Good people are hard to find.

So are good business partners.

If you find good
partners you want
to stick with them

ips!
T Establish a “we” as
st ic opposed to “us and them”
n ta attitude toward the project
Fa
3 Co-location: employees from
different organizations work
together in same location
Establish mechanisms that will
ensure the relationship
withstands problems

ti ps
at
gre Problem resolution
o re
4 M
Continuous improvement

Joint evaluation

Persistent leadership

Figure 12.2 Project Partnering Charter

It is important to Celebrate Success

At major milestones and the ended of the project

Conduct a jointly review of accomplishments and disappointments.
Hold a celebration for all project participants.
Recognize special contributions

It’s about
reinforcing
positive behaviour

Figure 12.3 Sample Partnering Evaluation

Partnerships
fail
regularly.

Senior
management
don’t support you

Cultural differences are forgotten or ignored

The wrong measurements
are applied

The wrong
incentives are in
place

Negotiation: Art or science?
Negotiation: Art or science?

Project management is NOT a contest.

(Usually…)
Everyone is on the same side—OURS
Everyone is bound by the success of the project
Everyone has to continue to work together

Principled
Negotiations call
for
Separating the people from
the problem
Focusing on interests, not
positions
Inventing options for
mutual gain
And whenever possible, use
objective criteria to help
you achieve your goals

If pushed, don’t push back
Ask questions instead of
making statements
Use silence as a response to
unreasonable demands
Ask for advice and encourage
others to criticize your ideas
and positions
Use Fisher and Ury’s best
alternative to a negotiated
agreement (BATNA) concept to
Warnings for dealing with work toward a win/win
Warnings for dealing with scenario
Unreasonable People
Unreasonable People

So what makes a customer happy?
So what makes a customer happy?

The negative effect of
dissatisfied customers is far
greater than positive effect of
satisfied customers
(Richins 1983)

The negative effect of
dissatisfied customers is far
greater than positive effect of
satisfied customers
(Richins 1983)

In today’s modern
communications environment
that message can travel faster
and wider
(Hoch, 2006)

Every customer has
performance expectations
and perceptions
(Parasuraman 1991)

Satisfaction is a perceptual
relationship!

Perceived performance
Perceived performance

Expected performance
Expected performance

Project managers must be skilled at
managing both customer
expectations and perceptions

Your checklist;
 Don’t oversell the project; better to undersell
 Develop a well-defined project scope statement
 Share significant problems and risks
 Keep everyone informed about the project’s progress
 Involve customers early on decisions about project
development changes
 Handle customer relationships and problems in an
expeditious, competent, and professional manner
 Speak with one voice
 Speak the language of the customer

Review
• Successful project partnering reduces costs, increases resource
utilization, improves communication and performance.
• Types of contracts include; Fixed-Price or Cost-Plus. A contract
change control system is important.
• Issues affecting international projects include; economic, legal,
security, infrastructure, culture, and geography.
• Issues for project expatriates include; dealing with culture shock,
and local services and amenities.
• Training is required in understanding foreign cultures such as;
religion, dress, education, family life, eating, holidays …
• Successful partnerships require; team building, negotiating, and
managing customer satisfaction and expectations.

BetterProjects.net

Source of Cover picture is unknown.
It arrived in an email. I thought I’d use it anyway.


Global Project Management

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