Impact of culture differences on performance of international construction joint ventures: the moderating role of conflict management

Abstract

PurposeCultural differences have been frequently cited as a major source of risks for international joint ventures (IJVs). Cultural differences may cause extensive conflicts in technology, norms and emotion among the international joint venture (IJV) partners. The purpose of this study is to explore the interactive effects of national culture differences (NCDs) and conflict management approaches on the performance of international construction joint ventures (ICJV).Design/methodology/approachData were collected using a questionnaire survey method with 143 valid responses. Partial least squares structural equation modeling (PLS-SEM) was used to test the research hypotheses.FindingsIt was found that ICJV performance declined with a high degree of NCDs. The negative effect of NCDs on ICJV performance was mitigated by adopting the cooperative conflict management approach; while it was aggravated by adopting the competitive conflict management approach. The findings may provide an alternative way (i.e. adopting the cooperative conflict management approach rather than avoiding or competitive approaches) to address the cultural conflicts in the multicultural project management teams.Practical implicationsFirstly, as NCD negatively impacts performance of ICJVs, project managers should pay attention to cultural issues and learn how to manage them; Secondly, as cooperative and competitive conflict management approaches have different moderating effects on the relationship between NCD and ICJV performance, project managers must choose appropriate conflict management styles in multination teams. Thirdly, as the avoiding approach has no significant moderating effect on the negative relationship between NCD and ICJV performance, it is important for Chinese partners not to employ avoiding approach to deal with conflicts in ICJV.Originality/valueThis study uniquely adds to the literature on cultural issues in managing ICJVs by integrating the moderating effects of conflict management approaches. The interactive effects of conflict management approaches and national cultural differences on ICJV project performance may contribute to the theories regarding conflict management theory in the context of cross-cultural management.

Organizational behavior in international strategic alliances and the relation to performance – a literature review and avenues for future research

“…However, degree of goal fulfilment can be particularly classified as the achievement of the partnering companies’ goals. These can be objective/financial goals (e.g., sales) or subjective/non-financial goals (e.g., quality of relationship) (Thuy and Quang 2005 ; Thuc Anh et al 2006 ; Chen et al 2009 ; Ho and Wang 2015 ; Liu et al 2017 , 2020 ). Management satisfaction outlines how the partnering companies and the general manager(s) of an ISA evaluate the overall alliance’s performance (Dhanaraj et al 2004 ).…”

Modelling human resource dimension of international project risk management

“…Cultural differences are considered a major source of risks for international joint venture projects and may cause extensive conflicts in technology, norms and emotion among the partners. It is crucial for a project manager to handle cultural diversity in the most effective manner (Liu et al, 2015;Bhoola and Giangreco, 2018;Dandage et al, 2018a;Dandage et al, 2018b;Liu et al, 2020;Jianhua and Wei, 2020).…”

The Effect of Political Skill on Relationship Quality in Construction Projects: The Mediating Effect of Cooperative Conflict Management Styles

“…At the same time, different conflict management styles have different effects on results, and effective conflict resolution strategies are crucial to improving cooperation and performance in work (Ayoko, 2016). Cooperative management is a practical way to strengthen team relationships, while competitive approaches undermine confidence in relationships (Liu et al, 2020;Tjosvold et al, 2005). Tabassi et al (2019) found that integration and avoidance can effectively improve performance through organizational coordination.…”