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.