List of references

List of References

Binder, J. (2008). Global Project Management. Ashgate Publishing Group, UK.

Chapman, C. & Ward, S. (2002). Project Risk Management: Processes, Techniques and Insights. John Wiley & Sons Ltd. England.

Cleland, David L. & Gareis Roland (1994). Global Project Management Handbook. USA: McGraw-Hill, Inc.

Cleland, D.L. & Gareis, R. (2006). Global Project Management Handbook : Planning, Organizing and Controlling International Projects. 2nd edition. McGraw-Hill Professional Publishing, USA. Available in the World Wide Web: <URL:http://site.ebrary.com.proxy.tritonia.fi/lib/tritonia/docDetail.action?docID=10155062&p00=global%20project%20management>.

De Meyer Arnoud, Loch Christoph H., Pich, Michael T. (2002) Managing Project Uncertainty: From Variation to Chaos. (online) MIT Sloan Management Review, 43:2, 60-67. Available in World Wide Web: <URL:http://web.ebscohost.com.proxy.tritonia.fi/ehost/pdfviewer/pdfviewer?vid=3&hid=126&sid=5fa13792-9eda-4769-a069-5686fd7b3c42%40sessionmgr104>.

Doing Business (2011). Doing Business: Measuring Business Regulations. (online) (cited: 06.10.2011). Available on the World Wide Web: <URL:http://www.doingbusiness.org/data/exploreeconomies/hungary>.

Henrie, M. & Sousa-Poza, A. (2005). Project Management: A Cultural Literary Review. Project Management Journal 36:2, 5-14.

Hillson, David. (2009) Managing Risk in Projects. (online) Abingdon Oxon, GBR, Ashgate Publishing Group. 99p.  ISBN 978-0-566-08867-4. Available in World Wide Web: <URL:http://site.ebrary.com/lib/tritonia/Doc?id=10325916&ppg=37>.

Hofstede, G. (1997). Cultures and Organizations: Software of the Mind. 2nd edition. NY: McGraw-Hill.

Hokkanen, S. & Strömberg, O. (2006).  Laatuun johtaminen. Jyväskylä: Sho Business Development Oy.

International Organization for Migration (2011).  About migration.  Available in the World Wide Web: <URL: http://www.iom.int/jahia/Jahia/about-migration/lang/en>.

Karhu, A. (1995). Projektin johtaminen. Helsingin kauppakorkeakoulun avoimelle korkeakoululle. Course material.

Kerzner, Harold (2009). Project Management. 10^th edition. New Jersey: John Wiley & Sons, Inc.

Köster, Kathrin (2010). International Project Management. London ect.: SAGE Publications Ltd.

Madhavan, B. (1993). Project Management for an international environment. Engineering Management Conference. Speech.

PMBOK Guide. (2004). A Guide to the Project Management Body of Knowledge. 3^rd Edition. Project management Institute. USA.

Project Management Institute (2008). A Guide to the Project Management Body of Knowledge (PMBOK Guide). 4^th edition. USA: Project Management Institute, Inc.

Schein, E. H. (1992). Organizational Culture and Ledership. 2nd edition. San Francisco, CA: Jossey Bass.

Turner, J.R. (1992). The Handbook of Project Based Management: Improving Processes for Achieving Your Strategic Objectives. New York: McGraw-Hill.

Turner, J.R. (1999). The Handbook of Project-based management: Improving the processes for achieving strategic objectives. 2^nd Edition.  McGraw-Hill Publishing Company, UK.

Walewski, J. & Gibson, G,E. (2003). International Project Risk Assessment: Methods, Procedures, and Critical Factors. Texas. [online]. Available in World Wide Web: <URL:http://www.ce.utexas.edu/org/ccis/a_ccis_report_31.pdf>.

How did we make it happen...

Team Reflection and Evaluation

The project (this handbook) was well planned in a proactive way. The first meeting was conducted in a timely manner. An initial plan was made efficiently in the first meeting. For example, the group members made the general outlines of the handbook, distributed literature work and planned interviews. Even there were group members who could not attend the first meeting; communication was done well through emails. Moreover, we had two other group meetings; those were also the milestones in the project. One is giving feedback for completed literature on the topics; another one is to plan the empirical study after finishing the interviews. Furthermore, frequent communication through emails and Moodle has been done to edit and complete the handbook.

We made this happen by good teamwork and mutual respect as a team. We created an atmosphere of freedom of expression. We had the willingness to learn from each other besides contributing to the team. There is also a group member taking great initiative and responsibility for the handbook, which has been greatly appreciated by the rest of the group members. Deadlines and work distribution were made clearly and everyone knew the importance of finishing the distributed work on time. On the other hand, even when communicating through e-mails and Moodle had some time delay, we planned the project so proactively that it did not affect the completion of the project on time. The only problem arose during the project was the length of the written work. Everyone did such a detailed and deep investigation and analysis of their part of the work that we had to deal with a text overload and had to decide which part of the text should be left out of the handbook in order to provide a good quality work. This raised some problems within the group, but with effective and respectful communication the problem was eliminated by the end of the project work.

We learned the importance of being on task and keeping the deadline in the project. Communication is truly important to the success of the project. Thus all the project members need to be well-informed. The diverse nationalities of the group also help us to learn how to manage diversity and respect different opinions.

Conclusions

4. Conclusions

The goal of the handbook was to find critical factors which lead to success or failure in international project management. According to existing theory in the field, critical factors are related to the following themes: the general nature of project, culture, time, cost, communication and cooperation, people, risks and quality. It is important to see whole picture of the project but also recognize these factor in each phase. When these critical factors are seen, it is much easier avoid mistakes and find opportunities. The factors found in the literature were contrasted with the answers of two interviewees in the empirical research.

Culture and communication seems to be the biggest challenges in international project management according the interviewees, but that does not mean that cost, risk and quality issues are not important. Actually, culture and communication are linked closely to cooperation and people, which may cause difficulties to say what the critical factors exactly are. The interviewees explained that language and cultural differences bring challenges to fluent and effective communication and there might be differences in work ethics and attitudes as well. These can easily cause misunderstandings in cross-cultural projects. In addition, working culture and manners of behavior in working environment can also differ and be problematic. The project manager needs to have a good understanding and awareness of possible challenges set by culture and adjust to these. The key to that is learning, understanding and respecting the foreign culture and people. Time and cost management were also identified as crucial in international project management by both theory and the respondents. Furthermore, both of those issues were closely linked to risks, and it was suggested that usually there is a higher level of risk in international projects as well as more unforeseen risks.

All in all, the outcomes of the interviews mostly match with the suggestions in the theory. The only remarkable difference was the ways of ensuring quality in international projects, since the literature emphasizes somewhat different points than the interviewees. Multinational companies appear to apply their own quality guidelines and policies regardless of the location of the project. Additionally, the research found some interesting differences between the interviewees’ opinions and the theory regarding the time management issues: holiday differences are not such a big challenge as it is described in the theory, in case appropriate planning is applied beforehand. Furthermore, receiving permissions can take even double time compared to domestic projects, and the bigger the cultural difference, the more time is needed. However, some activities can even be speeded up abroad and can actually shorten the time needed. In many topics, beyond support for the theory, we also gained additional information and details, mainly from practical examples. 

 Figure 4. The conceptual framework of the conclusions.

Empirical study and findings

3. Empirical study

In order to be able to compare the theory of international project management with the real life practice, an empirical study was conducted by interviewing two international project managers. The interviewees were chosen from two different multinational companies. The interviews were conducted by e-mail and were based on an interview guide which can be seen in the Appendix. The first interviewee (referred to as “interviewee 1”) is Mikko Närvä, Global Sourcing Manager from Vacon, a company supplying variable speeding AC drives. The second one (“interviewee 2”) is Emil Benedek, who works as a Production Planner at Audi Hungaria Motor Kft. The objective of the interviews was to acquire a real life picture of international project management in practice, in order to be able to compare it with the previously explained theoretical background. In the following, the results of the interviews will be analyzed and contrasted with the theory.

3.1. Empirical findings - the comparison of theory and practice

The empirical research resulted in similar and also somewhat different findings than those in the literature review. These similarities and differences are presented in the following paragraphs with supporting examples.

As the most crucial challenges, communication and culture came up several times in both of the interviews and in the theoretical background as well. The interviewees seemed to agree that those are the biggest challenges in international projects and thus need the most attention. The issues are very much interconnected, and the interviewees suggested that a basic knowledge and understanding of the local culture is necessary for effective communication. The importance of face-to-face communication is emphasized by the interviewees at the beginning of the project, when people might be unfamiliar to each other and trust starts from a relatively low level. According to the interviewees trust is both a cause and a consequence in this case. Trust increases motivation, contributes to work efficiency and helps the project gain good outcomes.  Then again, motivation brings good work and good work performance brings trust- good work is thus the basis of trust. It was also mentioned in the interviews that while communication does happen through different means, things should also be written down to eliminate misunderstandings. It was mentioned in the interviews that even if English language is the common language of international projects, having basic knowledge of local cultures and languages that are involved in the project can be of great help. One of the interviewees also mentioned intercultural trainings that would explain the cultural differences as a solution to be considered. This applies to the suggestion in theory that says conflict resolution approaches in international projects need to be chosen depending on the national culture, the organizational culture and the individuals involved.

Both the theory and interviews explained that international projects can take more time than domestic projects. For instance communication is one of the time-consuming issues. Some new aspects, which were not emphasized in theory about time management issues, emerged in the interview. For example, getting permissions can take even double of the time compared to domestic ones. Moreover, the bigger the cultural difference, the more time is needed. Yet, it was also mentioned in the interviews that some activities can even be speeded up abroad and can actually shorten the time. However, unlike stated in the literature, holiday differences do not seem to be that big of an issue or challenge, because they are easy to plan according to the respondents.

Costs that are crucial and came up in interviews are customs duties into sites, transportation, currency rate fluctuations and travelling expenses.  The literature review also mentioned that the costs of local permits, registrations and any other documents, add to the required budget as well. Currency rate fluctuations seemed to be the biggest issue and hardest to plan for or control, both in interviews and in theory.

In the topic of quality there were contradictions between the theoretical background in the literature and in the perceptions of the interviewees. Multinational companies appear to apply their own quality guidelines and policies regardless of location. Thus, contradictory to what the theory review suggested, taking different quality perceptions of people across nations into account do not seem to play a crucial role for companies in real life. In fact, the interviewees did not take any stance on the possible differences of quality perceptions. As in theory, quality assurance of potential partners also came up in the interviews. A set of tools for assurance, audits and verification tests were mentioned. This indicates that there are several different techniques and processes in each phase of the project by which quality is ensured. Also the connection of time resource and quality was brought up. One should never need to rush, since lack of time might really worsen the quality.

The level of risk is related to the level of uncertainty and in international projects the uncertainty is higher because of their nature. Carefully analyzing and identifying risks is therefore extremely important in international projects. In managing risk, it was emphasized that it is vital to know each site where the project runs and consult the local people of the sites. Also, it was mentioned that one should be aware of the fact that no risk can be fully accurately foreseen. The most important thing here is hence to have identified the possibility of all potential, unpleasant occurrences in order to have some ideas of possible tools to be used and in order to be prepared for acting quickly when needed. The most crucial risks were connected to differences in culture and currency fluctuations. One of the interviewees also pointed out that international projects have more unexpected risks than domestic ones. The interviewees also gave a few practical examples of risks in their past projects. Interviewee 2 shared that in his projects the biggest risks are usually related to trying new technologies, since without earlier experience of these technologies, one cannot know what to expect.  Interviewee 2 also shared that in one case he spent great amounts of money in buying a tool for measuring effectiveness of a machine. Later, however, it had turned out that the fault percentage of the tested machine was extremely low and so the spending of money on the measurement tool had been unnecessary. In this case the company had thus overestimated the risk. Nonetheless, the interviewee stated that they certainly learned their lesson and so these kinds of mistakes are not totally useless after all. Interviewee 1 said that risks in his projects are generally caused by hurrying and not verifying enough.

In conflict management, social skills can be considered to have key importance. In preventing them from occurring, building trust and “problem-sharing culture” emerged as the main factors. The project manager needs to be aware of differences in local cultures, because he carries the ultimate responsibilities. He has to have understanding of the host country’s culture to be able to react to issues in correct ways by adjusting. Also he has to realize that he cannot change the culture. The theory discusses important characteristics of an international project manager such as culture sensitivity, open-mindedness and respect for differences. These qualities can be seen to cover the qualities called for by the interviewees. One of the interview questions was aimed at choosing project team members. In both examined companies, former experience and past performance dominated as selection criteria.

As for stakeholder expectations, frequency seems to be the keyword in basically everything: in communication, feedback and information sharing as well as in monitoring etc. The important things according to interviewees are to always know what is going in the overall process, which can naturally only be reached via sufficient monitoring. While interviewee 2 gave an example of “looking at the big picture” by making a balance between the external and the internal environment, he also emphasized the importance of supporting individual activities in the project. Support of management can also be needed in building trust among stakeholders. The above mentioned points are mainly in accordance with what the theory suggested, but again, the interviews provided extra information.

Theoretical background

2. Theoretical background

2.1 Culture

In international projects, it is vital to understand the major stakeholders as well as possible, including their social identity. The stakeholders’ behavior is embedded in a context, and an important part of it is their national culture. Hofstede (1997: 5 cited in Köster 2010: 78) defines culture as „the collective programming of the mind which can distinguish the members of one group or category of people from another”.  The „collective programming” refers to deeply rooted values, attitudes and behaviors. According to Hofstede (1997), culture is learned usually when people are young and easy to educate. The culture remains unconscious. In international projects, a person needs to be conscious of his culture and needs to be able to view other cultures as different instead of perceiving it better or worse. (Köster 2010: 78-79.) National culture is not the only force shaping individual behavior, attitudes and norms. The culture of the particular organization that the individual works for can also affect the way of thinking and behavior of a person. Organizational culture is defined as „ a pattern of shared basic assumptions” (Schein 1992: 12 cited in Köster 2010: 51). In other words, it is the way things are done in an organization. Organizational culture is not as deeply embedded in an individual as national culture, but it has a large effect on people working in it. The third type of culture that should be mentioned is the professional culture. This includes certain methodology, standards and ethics prevalent in a given profession, for example medical doctors, lawyers, software developers etc. It can also be a feature of particular organizational functions such as Sales and Marketing or Research and Development departments and people working in those. Functional cultures in firms can be referred to as sub-cultures and these can be part of national cultures. Moreover, large organizations usually have sub-cultures in their subsidiaries because the national cultures can have an impact on organizational cultures. For instance, the organizational culture of Lufthansa will differ in the headquarter in Germany and its Brazilian subsidiary. (Köster 2010: 79-80.)

All these features affect the management of international projects and make it even more complex. These cultural issues arise in all aspects and phases of project management for example in time, cost, quality and risk management among others. Thus, it is crucial in international projects to take these cultural issues into consideration and manage projects accordingly.

2.2 Time management

International projects are more complex than national projects, therefore more time is needed for planning, communicating and coordinating them than in the case of local projects. (Köster, 2010.) This indicates that the critical path of projects will be assumingly longer than in case of domestic projects. In the following, critical issues that may cause longer critical path are introduced.

Extra time is needed first of all for local adaptations, for instance gaining information about the different national legal legislations, requirements and regulations, getting knowledge about and acting according to the local cultures and adapting to the local institutional system and bureaucracy. These kind of adaptations need extra time in case of an international project. (Köster 2010; Project Management Institute 2008.) Moreover, because of the cultural differences, the length and frequency of meetings and appointment sessions can as well differ in countries. Furthermore, extra time might be needed for team building activities due to the complexity of projects and the possible diversity of teams. (Köster 2010.) For the same reason, more time is needed for the adaptation of collaborative tools such as the technical details of meetings and discussions. It is important to note that even though the high technical development might help to connect people from all around the world, it can be time-consuming and complicated to coordinate online meetings when the managers live in different time zones (Binder 2008). Another issue worth considering is the problem of different public and religious holidays and vacation times all over the world. While creating a schedule it has to be taken into consideration that people in different countries spend their holidays at very different times of the year. Moreover, not all countries have their dates according to the Gregorian calendar, thus international project managers cannot forget to think about the lunar calendar for instance while planning schedules for a project. (Köster 2010.)

2.3 Cost management

The cost estimating, cost budgeting and cost control processes are more complex in case of an international project as well. While working on those issues, special attention should be paid to currency conversation rates since those can fluctuate widely during the project implementation and by affecting the actual costs of particular local services and other activities, can affect the outcomes of the project itself. Great currency fluctuations can cause serious extra costs that can change the needed budget for delivering the project in time. (Köster 2010.)

Then, during the process of an international project the project managers have to think about the additional travelling expenses, because „an international project with geographically dispersed stakeholders means a lot of travel activities” in order to enable face-to-face meetings when needed. Additionally, the more sites are involved in a project, the bigger the costs might get because of the above mentioned additional costs. Some sites might require a bigger budget than others, depending on the local situation, economical differences, prices, wage levels etc. (Madhavan 1993.) The costs of local permits, registrations and any other documents add to the required budget as well. Thus, the project manager has to gain knowledge about the local bureaucracy level and system, and estimate the costs of the project according to the local needs. Information about local costs can be found for instance on the internet (Doing Business 2011).

Naturally, the above mentioned issues does not only make the cost estimation and budgeting processes more complicated in international projects, but the cost control planning and implementation as well. Since cost management becomes more complex in an international context, the monitoring and control of that becomes complicated as well. The project manager has to consider more determinants and has to deal with more sudden and wide-ranging changes in needed monetary resources. And at the same time, it is harder and more-time consuming to react which can lead to even bigger changes in costs.

2.4 Managing quality

Quality as a concept is ambiguous and consists of several parts. Therefore, it is technically impossible to give an all-encompassing definition of it.  Several representations of quality, however, define good quality as being fit for purpose, meeting specifications or fulfilling customer expectation (e.g. Karhu 1995, Turner 1999). Furthermore, contemporary definitions of quality are generally centered upon a prevention approach to avoiding defects (Cleland & Gareis 2006).  Part of the difficulty of defining quality is due to the fact that what we understand by quality, greatly depends on who we ask. Even if certificates such as ISO standards composed by international organization for standardizations unify the differing perceptions people have of quality, quality expectations might vary considerably among different countries. Köster (2010) gives an example: When purchasing a TV, people in some less developed countries might be happy with any defect-free product, whereas in other, more “advanced” economies, the expectations might also contain additional services such as maintenance. In other words, different countries might define the levels of quality differently and hence, place the same products into quality categories of different label. Moreover, different interest groups of a project are likely to put stress in respect to quality on different matters. (Karhu 1995, Turner, 1999; Hokkanen & Strömberg 2006.)

The elements determining quality can be examined via several different models. According to Turner (1999), the quality of the project takes shape through fife elements: quality of product itself, quality of the management process, quality assurance, quality control, and attitudes. In international projects the second, third and fourth element might be seen as critical points. Quality of management processes deals with developing general guidelines of the project procedures. Having people with different cultural backgrounds, values and learned practices it might be difficult to reach consensus on these. The third and the fourth elements that deal with the means of managing and monitoring quality might emerge as challenges especially in international projects conducted in several physical locations. In this kind of setting, continuous monitoring of processes is difficult and thus, so might be preventing possible mistakes and correcting them right after the moment of occurrence. To centralize the control and to ensure quality aspect is sufficiently kept in mind throughout the project, some projects choose to establish a specific quality organization (Karhu 1995).

Cleland and Gareis (2006) state that along with detailed planning, qualification of participants is the key issue in the success of international projects. This goes also for external partner organizations. In case an international project chooses to use vendor or other partner organizations located in different countries, it is therefore vital to first assure oneself that the capabilities and quality levels of the potential partners-to-be are in accordance with the aims of the leading organization. Several specific contracts should be signed and even a distinct quality program might be a good idea. In this way, it can be ensured that co-operation with these partners is suitable, will produce desirable outcomes and will help the project team bring value to its customers. (Cleland & Gareis 2006)

2.5 Managing risks

Risks need to be well managed especially in international projects because they are usually highly complex and involve huge investments. Possible risks can be for instance natural-, technical-, partner-, financial- or political events. In addition, laws and regulations make it even more complicated. A high degree of complexity also leads to high potential risks, which can be seen as financial losses. Risk management plays a huge role in managing international projects. There are two kinds of risks that can exist, risk that can be anticipated and risk that cannot be foreseen. The classic methodology of project management deals with the risks that can be anticipated. Those risks can be usually identified or modeled, but are not entirely known. The probability of risk to happen and its impact to the project can be calculated. (Köster, 2010:98)

However, because of their nature, international projects often face emergent risks. This is connected with uncertainty. High uncertainty means that future events cannot be foreseen, and they cannot be factored into the overall project planning. In international projects, such events could be a bankruptcy of a partner or a supplier, a radical drop in demand triggered by a distance cause, adversarial attitudes by local authorities after new officials have been appointed, or a coup d’état. Emergent risk might also emerge if stakeholders of international projects get a better understanding of their actual needs, or that the original needs of stakeholders have been misunderstood or misinterpreted, for example due to cross-cultural misunderstandings. In addition, one special risk in international projects is corruption. The success in international projects depends highly on having an effective approach in place to handle both types of risks.  (Köster, 2010:99)

In international projects there are most probably different meanings and attitudes towards risks by people from different backgrounds and cultures. Those differences can turn into project inherent risks and lead to unidentified external risks, the project manager needs to be aware of these cultural differences and include them in his or her project planning. There can be differences between people from different national cultures when considering equality versus hierarchy, embracing risk versus avoiding risk and individuals versus group orientated behavior. (Köster 2010:100)

Figure 3. Issues to consider in risk management in international projects. (Köster 2010.)

2.6 Communication

Intercultural communication is crucial in international projects. Different communication styles need to be adapted in low-context or high-context cultures. Since cultural dimensions have great impact on communication, it is very important to choose appropriate communication modes in international projects (Köster 2010). Because of the cross-boundary nature of international projects, there is diversity in natural and functional languages, which may have a big influence on international projects. Stakeholders and the project team should have the ability to communicate in a common language to a reasonable level. However, intelligence and competence should not be judged according to the language proficiency. Upgrading language skills and improving communication skills will solve the language diversity dilemma in the long term.

To have efficient and smooth communication, it is essential for the project management team to determine communication protocols and all project members to agree on basic communication guidelines. Meanwhile, it is necessary to understand the cultural connotations between different languages to ensure the accuracy of communication and minimize misunderstanding. Managing international projects requires effective use of modern communication technology for different communication modes. In international projects, communications are often done by email, long-distance phone call, teleconference, video conference and so on. Advanced technology will enhance the efficiency of the communication. However, different time zones and public holidays in different regions are factors need to be considered when in communication.

2.7 Cooperation

Establishing trust is one of the most difficult issues in cooperation when managing international projects. Trust must be built between the project manager, the project team and the customers. According to Köster (2010: 283), trust-building activities in international projects could be “overcoming prejudices, providing informal interaction opportunities, exploring similarities, bonding the international project team and proving context”.

Conflict management is another critical issue in the cooperation of complex international projects. Conflict is usually caused by “scarce resources, scheduling priorities and personal work styles” (Project Management Institute 2008: 239). Conflict resolution approaches in international projects need to be chosen depending on the national culture, the organizational culture and the individuals involved. It’s challenging to solve conflicts, however, successful conflict management would create greater work productivity and better working relationships.

2.8 People Management

2.8.1 The project manager

The international project manager plays an evolutionary role in international projects. The international project managers need to be transformational leaders, adapting different leadership styles in different circumstances. Since leadership is much more complicated and challenging when managing international projects, the project manager has to possess cross-cultural knowledge, global organizing and communicating skills, technical competence. Effective international project managers often have key characteristics such as “adaptability, authenticity, empathy, context- and cultural- sensitivity, courage, enthusiasm, initiative and innovativeness, personal stability, open-mindedness, patience and persistence, respect differences” (Köster 2010: 233).

2.8.2 Managing the international project team

Human Resource Management is the major managerial difficulty when managing international projects. A successful international project team should have strong commitment towards the project, high team spirit and effective communications. According to Thamhain and Nurick (1994: 19-20), professionally stimulating work environment, good program leadership, qualified personnel, technically and organizationally stable environment are four major considerations.

Building an effective team has always been crucial determinant of project success and a challenge to project leaders. Staffing the project team should be based on clear criteria and detailed job descriptions. Clarification and transparency can help avoid conflicts later in the project. It is important that key players possess proper language, communication and technical capabilities and even have some similar talents to the project manager. Team members must feel professionally comfortable by being properly introduced to the group about their roles, strengths. Trust and teamwork between project members are essential.

2.8.3 Stakeholders

“Identifying stakeholders and understanding their relative degree of influence on a project is critical” (Project Management Institute 2008: 24). It is crucial to manage the stakeholders’ expectations to increase the support and minimize the negative impact of them in international projects. Meeting their expectations could be so challenging because their interests and objects are considerably different. The quantity of the stakeholders in international projects is often higher compared with domestic ones, therefore sufficient communication is essential. It is truly important to keep the customers updated and build trust to avoid dissatisfaction.

Introduction

1. Introduction 

The word “project” can quite obviously be considered a buzzword of today. Working in projects as a form of completing tasks, has clearly gained more and more popularity in recent decades. The world around us is continuously growing more global, which in turn brings international co-operation and international projects into the focus of attention. Today, numerous businesses are conducted globally and a multinational company might have subsidiaries in dozens of different countries. Furthermore, moving from one country to another has increased remarkably. (International Organization for Migration 2011).

Consequently, it is not unusual these days to have people with greatly varying cultural backgrounds, values, habits and skills working in the same projects. Moreover, as a result of rattling technical development in the past decades, the members of a working group do not necessarily have to be physically on the same continent to be able to work together on a project. However, even if diversity and other aspects brought by internationality can at their best be great assets and make working easier, internationality is bound to set a number of challenges for a project group to overcome. (Henrie, Sousa-Poza 2005).

In this work, the challenges faced in international setting are divided into seven categories. The challenges that an international project group commonly face were examined from the perspectives of the general nature of projects, culture, time, cost, communication and co-operation, people, risks and quality. In order to reflect on the theory found in the literature, two interviews were conducted with international project managers from two different countries. Their answers were analyzed and compared with the literature. Thereafter, conclusions were made based on the comparison of the theory and the interviews.

Figure 1. Characteristics of International Projects. (Köster 2010.)

1.2 International projects

Globalization has brought its own challenges for project management. Opposite to non-international or standard projects, international projects can cross several national borders and members of the teams come from several different nationalities: international projects are multicultural. International projects differ from standard projects mainly in the following fields: purpose, scope, the main stakeholders and risk intensity. Multinational companies use international projects to gain new stakeholders and to extend to new geography areas. When they have more stakeholders in different countries it is easier to influence decision-makers. Via international projects it is possible to increase the global market share, market power, and global political power or global effectiveness. Nowadays, it is common to transfer production to cheaper countries cutting manufacturing costs. That may be seen as an attempt to acquire efficiency gains. The goal of international projects can also be to access to scarce and unique resources such as workforce, minerals, oil and water. International project may reduce risks sharing different phases of the project to partners around the world, for instance. (Köster 2010:12-14.)

 Figure 2. The main purposes of international projects. (Köster 2010.)

The scope of international projects differs from standard projects as well: many locations, countries, organizations and headquarters are involved in international projects. When the scope is bigger, the complexity is larger as well and the organization’s survival could be critical if projects cannot be managed, due to the strategic importance of projects. International projects are riskier than standard projects because there is more complexity in the environment, stakeholders and multitudes of interfaces. Because of the bigger scope, changes and difficulties are harder to forecast so they can be sudden and unpredictable. (Köster 2010:12-16.)

Welcome!

Welcome to our blog where we discuss the most critical issues in international project management. We hope you will gain an interesting insight into the topic and you share your comments with us. Have fun :)

The members of the group are:
Heini Vehmas q90120
Man Yang u96724
Melinda Benedek t94888
Tiia Keisala q90008
Tiina Yli-Hynnilä q90130