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Cultural Considerations in International Construction Contracts

Edwin H. W. Chan1 and Raymond Y. C. Tse2

Abstract: International construction projects involve multinational participants from different political, legal, economic, and backgrounds. As one of the major issues affecting the management of international construction projects, culture deserves wid This paper aims to establish a valid groundwork for further research on the impact of cultural issues on contractual arrangemen causation, and the selection of dispute resolution mechanisms for international construction projects. The paper reviews the ch of international construction activities and discusses the cultural context. It sets the research background for disseminating the two surveys, carried out in Hong Kong and in London and Sydney. The study identifies the important features expected for th of international construction projects and ascertains their significance to further in-depth research.

DOI: 10.1061/~ASCE!0733-9364~2003!129:4~375!

CE Database subject headings: Contracts; Dispute resolution; Hong Kong; International factors; Construction industry.

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Introduction Within the general trend of globalization, worldwide econom cooperation and technology transfer are common practice. I national construction projects are just one of the activities involve multinational participants from different political, lega economic, and cultural backgrounds. According to Lath ~1994!, project procurement and construction disputes are tw the major concerns in the construction industry. Conflict and putes are causing major damage to the industry.

The work of researchers such as Turin~1972!, Aniekwu and Okpala ~1988!, and Ofori ~1984, 1991! show that similar prob- lems are noted worldwide and that the less-developed or de oping countries are the worst hit by the problems. Research been conducted to prevent and resolve construction disput specific countries~Vorster 1993; Diekmann and Girard 199 Cheung 1998; Kumaraswamy and Yogeswaran 1998!. More gen- erally, Simon~1987! argues that to understand real decision m ing, utility maximization is neither a necessary nor a suffici condition for the conclusion reached. The action comes from pirical assumptions, including assumptions about how pe view their world.

Although concerns about cultural issues seem to be discu widely in construction, their formal analysis is infrequent. R search is necessary to minimize the problems in the global text. This paper disseminates the research findings of two se questionnaires carried out by the first writer as part of an ongo

1Associate Professor, Dept. of Building and Real Estate, The H Kong Polytechnic Univ., Hung Hom, Kowloon, Hong Kong SAR E-mail: [email protected]

2Professor, International City University of America, Asian House Hennessy Rd., Hong Kong SAR. E-mail: [email protected]

Note. Discussion open until January 1, 2004. Separate discus must be submitted for individual papers. To extend the closing dat one month, a written request must be filed with the ASCE Manag Editor. The manuscript for this paper was submitted for review and sible publication on February 6, 2001; approved on July 1, 2002. paper is part of theJournal of Construction Engineering and Manage- ment, Vol. 129, No. 4, August 1, 2003. ©ASCE, ISSN 0733-936 2003/4-375–381/$18.00.

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research study, one conducted in Hong Kong during 1998, an other in London and Sydney during 1999.

The aim of this paper is to establish a valid foundation further research on the impact of cultural issues on contrac arrangements, conflict causation, and selection of dispute re tion mechanisms for international construction projects. Follo ing this introduction, the second section reviews the charact tics of international construction activities and discusses cultural contextual factors that contribute to conflict and diffic ties in the management of the international construction proje The third section introduces the research methodology and collection of the two surveys, the fourth section explains the d analysis, and the fifth presents the key observations of the search results and makes recommendations for further stud this area. The paper ends with a general conclusion.

International Construction Activities

Characteristics and Problems

International construction projects are those in which the cont tor, the lead consultant, or the employer is not of the same do cile, and at least one of them is working outside his or her cou of origin ~Stebblings 1998!. The construction industry is comple and multidimensional, and to improve this situation, the ma construction projects in developing countries are often carried in joint ventures with construction companies from develop countries. International collaboration can be of particular ben to less-developed and developing areas. Transglobal econ developments offer an opportunity to develop products using most up-to-date expertise and knowledge in a cost-effective m ner ~Clark and Ip 1999!. International projects are normally fa paced but require a longer time span, and more parties ar volved. Collaboration between the concerned parties requ clear project definition, and each set of objectives under the nition may be subject to changes as the project evolves.

Parties to international projects are also concerned with clarity of local laws and the interpretation of those contracts g erned by local laws. Transglobal collaboration calls for grea

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cultural understanding and sensitivity in terms of personnel m agement by the concerned parties. Human problems are invo such as language, communication, and the understanding of tural differences. It is generally acknowledged that the contex environment of a country or region also influences the const tion industry of each jurisdiction. Based on previous work other researchers, Sheath, Jaggar, and Hibberd~1994! compiled a set of environmental influences associated with construction a list of variables under each of the influence factors. The variab have been used to study the impact of these contextual facto the choice of a project procurement system. Such a contex research approach can be adopted and elaborated for studyin effect of culture on disputes in international construction proje

Cultural Context

The term culture has wide connotations in anthropology and nography. Its meaning is not clearly defined, and even anthrop gists do not agree on one clear and precise definition. Definit differ greatly and are dependent on the theoretical perspective those who offer them. In the management literature, Hofst ~1984! defines culture as ‘‘the collective programming of th mind which distinguishes the members of one human group f other@s#.... Culture, in this sense, includes systems of values values are the building blocks of culture.’’ In the context of co struction management education regarding culture, Loosem ~1999! states that ‘‘it is now accepted that a culture of a society its shared values, understandings, assumptions and goals le from earlier generations. It results in common attitudes, code conduct and expectations that guide behavior.’’

Tso ~1999!, an anthropologist and designer, suggested so parameters that could help to delineate the playing fields for concept of culture, but warned that the definition will shift with the boundaries of the parameters. She suggested that one wil the essence of the term culture within the following fields: ‘‘cu ture describes the social system created by a group of peop starts from the moment that a few people get together regul and begin to establish norms and rules through which they interact and communicate with each other and maintain orde is about patterns of meaning; it is about shared beliefs, val perspectives, and worldviews; it is about shared behavior, p tices, rules, and rituals; it is not limited to groupings by race ethnicity, but can describe a sub-culture within a society designers, for instance; it is often associated with language communication; it is viewed as a mental or cognitive constru created in the minds of people; it is learned; it can be found materials: objects, artefacts, clothing, artwork, and so forth; an can emanate from social institutions and structures, such as ernments, economies, and legal systems, as well as geogr and environmental factors.’’

Today, anthropologists take a relative position toward cultu believing that no one culture is ‘‘better’’ or ‘‘worse’’ than anothe In this paper, we discuss problems related to culture as the w is understood by every man in the street without elaboration. a very general concept within the fields described by Tso~1999!.

In international construction projects, any party involved m be cross-culturally competent. To be competent, Trompenaars Williams ~1999! claim that the transcultural manager should aware of managing in seven dimensions: universalism versus ticularism, individualism versus communitarism, specific vers diffuse, neutrality versus affectivity, inner directed versus ou directed, achieved versus ascribed status, and sequential v synchronic time. These complex psychological and behaviora

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mensions deserve in-depth study in the context of the intern tional construction industry. Construction professionals involve with international projects should at least be able to recognize expectations and behavior of others. Cultural issues are expec to contribute to conflicts among parties to an international proje and increase difficulties in the management of the project~Fellow and Hancock 1994!. ‘‘Without understanding there can be no friendship. If one wishes to understand a people one must iden oneself with them. One must study their language, customs a culture ... and they will be one’s friends’’~Broster 1976!.

Dispute Resolution Processes

With dispute resolution processes becoming international and restricted by frontier, legal system, or national culture, ‘‘cultura unity’’ is disrupted. International arbitration is said to be a ‘‘true clash of legal cultures’’~Shilston and Hughes 1997; Cremade 1998!. To interact with such a legal culture, traditional arbitratio practices have to be modified to incorporate a proactive, flexib and amicable~nonadversarial! process. In awareness of this, prac titioners and commentators have been proposing various sche and innovative practices~Cremades 1998; Uff 1998; Shilston and Hughes 1997!. New legislation such as the Arbitration Act in the U.K. and the Arbitration Ordinance in Hong Kong have bee promulgated to reflect this need. The practice of combined m diation and arbitration adopted in many countries such as Ch has aroused much interest~Chan 1997!. Such a line of thinking leads to fusion of amicable and ‘‘judicialized’’ alternative disput resolution~ADR!.

The good that a dispute resolution mechanism will do depen on the person using it. The balancing act is dependent upon neutral party appointed for the task. In the process of resolvi disputes on an international construction project, the disputi parties and the neutral party are expected to participate in ‘‘she ding home-grown habits and prejudices’’~Shilston and Hughes 1997!. Singh ~1998! claims that ‘‘in the context of large interna- tional projects where there are several parties of different natio alities involved, ADR offers the immediate attraction of avoidin any difficulties of conflict of laws or jurisdictional problems which may arise. It also allows the parties to reach agreement to how their disputes should be resolved which can take acco of national and cultural differences.’’

In construction disputes, the trend is toward conflict manag ment, with the emphasis on designing a dispute prevention syst to suit each project. This aims to focus on conflict in the ver early stage of a project and to design the most appropriate AD mechanism to be incorporated into the construction contract~Vor- ster 1993!. In addition to the traditionally adapted arbitration many new ADR mechanisms, such as mediation, an execut tribunal, adjudication, a dispute resolution advisor, and a dispu review board, have been developed. In the worldwide compa tive study complied by Fenn et al.~1998!, the preferred choice of ADR mechanisms and their practice in each country were qu varied. For most large international construction projects, one the ADR mechanisms, or a combination of the mechanisms in t form of multitier ADR mechanism, is incorporated into the con struction contracts. This situation deserves vigorous investigat to decipher the relationship between cultural issues and choice dispute resolution mechanisms for international constructi

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Research Methodology

This study inquires into the extent of major differences betwe Eastern and Western cultures in the perception of contractual rangements and of resolving disputes. The study focuses on in national projects involving parties from the U.K. and Hong Kon which have significant differences and similarities that are app priate for this study. As the legal systems and construction ind try institutional frameworks of both countries have the same o gins, some of the side issues, such as differences in legal sys business language, and structure of the construction industry, eliminated from the scenario. Nevertheless, the organizatio culture in the construction industries of the two countries is d ferent, and Hong Kong is unique in terms of project managem and government control of construction work~Walker and Row- linson 1990; Chan and Chan 1999!.

The major difficulty in sampling for research on such a topic that the survey requires the respondents to have special knowledge and experience of the topic. In this study, the grou suitable for sampling had first to be identified to ensure that sponses were based on the respondents’ specialized knowl and genuine experience. Following a literature review on cultu context, this paper identifies the possible attributes of dispute management difficulties in international construction activities. pilot study was carried out to gauge the validity of the research cultural aspects of international construction projects. A simp questionnaire was prepared with a few leading questions on pr lems and phenomena as perceived by the writer to solicit opini from persons with experience in international construction acti ties. Backed by these indications, a more detailed questionn was designed with questions focused to seek more reliable o ions from groups identified within the target sample.

Pilot Study on East-West Cultural Effect, Hong Kong 1998

A single-page questionnaire with five yes or no questions w distributed to about 200 construction professionals attendin public lecture on construction disputes delivered by Professo Uff, an eminent academic and practitioner of construction la during his visit to Hong Kong in June 1998. The occasion pr vided an opportunity to seek quick and valid opinions from target sample, including builders, engineers, surveyors, and c struction lawyers, who had knowledge of the construction indu try and were interested in construction law.

Survey Concerning Dispute in International Project, London 1999

A two-page questionnaire was handed out to about 200 deleg at a construction law annual conference at the Construction L and Management Center, King’s College of London Universi The conference was held in September 1999 and was the 1 annual gathering of experts in construction law. The delega included architects, builders, engineers, construction lawyers, surveyors. The conference provided readily available rand samples and the best focus for a questionnaire survey on research topic.

Survey Concerning Dispute in International Project, Sydney, Australia, 1999

The same questionnaire was distributed to about 50 delegates plenary meeting of the Council of International Construction R

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search and Documentation~CIB! W87 Commission on Post Construction Liability and Insurance, held in September 1999 the University of Technology, Sydney, Australia, and was commission’s annual meeting. The delegates included archit builders, engineers, construction lawyers, insurance brokers, surveyors. Most of the commission members were also mem of the CIB W103 Commission for Construction Dispute and Ma agement. The conference delegates provided valid samples fo questionnaire survey on the research topic.

The data from the 1998 survey are analyzed and presente this article, and the data from the 1999 surveys carried ou London and Sydney were analyzed with more advanced statis tools to find out the correlations between questions and impor variables. The results of this analysis are presented in detail in following section.

Analysis and Results

Data Analysis of Pilot Study in Hong Kong, 1998

Of the 51 respondents from the 200 sample targets~representing a response rate of 25.5%!, over 60% indicated that they had exp rience in international construction, and about 25% were se personnel. The opinions can safely be regarded as reflecting practical experience in international construction disputes tha volved cultural issues in Hong Kong. The data have to be view with the knowledge that in recent years over 10 large construc projects were completed or being carried out in Hong Kong, w many international parties attracted to the region. The key po of the survey results were 1. Over 75% of the respondents found that international c

struction projects had a greater chance of having dispute 2. Over 75% of the respondents found that cultural differen

among parties from different nationalities contributed to d putes in international projects;

3. Over 80% of the respondents found that Westerners Asians have different attitudes toward disputes in inter tional projects; and

4. Over 75% of the respondents found that Westerners Asians have different attitudes toward resolving disputes international projects.

The results provide a good indication of potential areas further research. The broad questions needed to be probe more detail in the follow-up surveys.

Data Analysis of Surveys in London and Sydney, 1999

Return Rate of London Survey About 200 copies of the questionnaire were distributed to conference delegates in London, of which 26 were returned, resenting a 13% response rate for this group. Most of the q tionnaires were returned during the conference, but some w returned by post. Only one copy was answered by a respon who did not have direct involvement in international construct projects, and that copy was not included in the data analysis

Return Rate of Sydney Survey About 40 copies of the questionnaire were distributed to the c ference delegates in Sydney. To make up for the views of As members who were absent from the plenary meeting, 7 co were sent to experts in Hong Kong known to have direct invol ment in international construction contract disputes. Among

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Table 1. Answer Scores of London and Sydney Questionnaire Surveys

Questions S N R1 ~%!

~a! S5 Average score~1 if Yes, 21 if No. zero otherwise! Q.1. Have you ever been involved with international projects? 1 38 NA Q.2. International projects have more chances to give rise to dispute in comparison with domestic

contract work 0.263 38 61

Q.3. Cultural differences among all parties involved in project of different nationalities contribute to dispute in international projectsf

0.711 38 79

Q.5. In comparison with Westerners, Orientals~ethnic Chinese! have different attitudes toward resolving contract dispute in international projects.~Note: most respondents indicated in Q.6 that Orientals prefer informal methods.!

0.447 38 66

Q.9. In comparison with domestic construction contracts, do you find mediation with a neutral third party to facilitate negotiation has a less important role in resolving disputes on international projects?

20.053 38 39

~b! S5 Level of importance~1 is most important!

Q.4. Parties of an international project prefer to use which of the following dispute resolution mechanisms to resolve disputes: Negotiation for commercial settlement between parties of a contract 1.694 36 64 Engage third neutral party to facilitate negotiation 2.485 33 27 Retain adjudicator to give ruling 3.80 30 10 Retain dispute resolution board to give ruling 4.313 32 0

Arbitration 3.816 38 11 Multitiered dispute resolution mechanism specifically designed for project 3.667 33 3

Q.7. Rank factors contributing to disputes in international projects Contract arrangements are not appropriate for project 3.314 35 34 Local government intervention 4.848 33 6 Cultural clash among parties involved in project 3.257 35 34 Unlike domestic market, no need to worry about long-term business relationship 5.028 36 Not familiar with local environment~e.g., power supplies and infrastructure supports! 4.514 35 9 Difference in legal system and interpretation of law 4.886 35 3 Different economic muscles 5.242 33 0 Noncooperation of local residents 7.324 34 3 Capability in project management 4.889 36 14

Q.8. Rank factors causing disputes in international projects: Tender has NOT been properly prepared and assessed 2.946 37 22 Scope definition NOT clear 2.50 36 28 Inadequacy of technical specification 3.243 37 11 Unrealistic obligations for parties under contract 3.556 36 14 Local government policy is NOT compatible with international practice 5.265 34 9 Incompetence or unfairness of contractor administrator 4.118 34 15 Dispute resolution mechanism is NOT integrated in contract 6.063 32 0

N5 number of respondents; R%15 percentage of respondents who ranked the corresponding factor 1.

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total 47 questionnaires sent out, 13 copies were returned, most of the respondents in this group were Asian. All return copies were valid, representing a 27% response rate for group. The scores for both surveys are presented in Table 1.

In questions 2, 3, 5, and 9, the scores are based on the fol ing counting system: 1 if yes,21 if no, and 0 otherwise.

Suppose that the frequency for the above three options isf y , f n , f o , respectively; then the weighted average score ( f y2 f n)/( f y1 f n1 f o). If the answer is neutral~not in favor of yes or no!, then the expected value of the average score should close to zero.

In questions 4, 7, and 8, the level of importance of the fact ~ranked from 1,2, . . . ! was calculated using the following for mula:

S5 (k f k / ( f k for k5 1,2, . . . (1)

where f k is the frequency of the response who has givenk to the factor, andk ranges from 1~most important! to 2, 3,.... Note that the indexS cannot be less than one.

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The average scoreS can be used to compare the importance each factor. The factors in questions 4, 7, and 8 in the survey w ranked using the importance index. The general picture is given Table 1, which shows the average score of respective factors

Interpretation of Scores • All the respondents in this sample have been involved w

international projects. • International projects have more chances to give rise to d

putes in comparison with domestic contract works~with an average score5 1 0.263); 61% of the respondents ranked th as factor 1.

• The majority of the respondents indicated that cultural diffe ences among all parties involved in the project did contribu to disputes~with an average score5 1 0.711). About 80% of the respondents ranked this as factor 1.

• There was also a strong indication that Orientals~ethnic Chi- nese! prefer informal methods for resolving contract dispute

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Table 2. Ranking for Question 4 Subject to Conditions in Questio

Question 2

Question 4 Yes No

Parties to international project prefer to use which of the following dispute resolution mechanisms to resolve disputes:

Negotiation for commercial settlement between parties to contract

1 1

Engage third neutral party to facilitate negotiation 2 2 Retain adjudicator to give ruling 4 3 Retain dispute resolution board to give ruling 6 6 Arbitration 5 5 Multitiered dispute resolution mechanism specifically designed for project

3 4

Note: To determine association between two variablesx and y, we apply Spearman’s rank-order correlation:r 5 12 6S(x2 y) 2/N(N22 1), where N is sample size; rank correlation5 0.989.

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Table 4. Frequency of Questions 2 and 3

Question 3

Answer Yes No Indifference Total

Question 2 Yes 21 1 1 23 No 7 2 4 13

Indifference 2 0 0 2 Total 30 3 5 38

Note: x 25 26.6; number of degrees of freedom5 23 25 4; x 2( p , 0.05)5 9.49; x 2( p, 0.01)5 13.28.

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in international projects in comparison with Westerners~with an average score5 1 0.447); 66% of the respondents ranke this as factor 1.

• However, the results suggest that mediation with a neutral party to facilitate negotiation is irrelevant to resolving dispu in international projects. The score is not different from ze and is not sufficient to justify any other explanation. There no significant comparison with domestic construction dispu

• In question 4, respondents indicated that parties of an inte tional project prefer to use negotiation for commercial set ments~average score5 1.694); 64% of the respondents ranke this as factor 1. The next preferred option was to engag neutral 3rd party to facilitate negotiation~average score 5 2.485).

• In question 7, cultural clashes~average score5 3.257) and in- appropriate contract arrangements~average score5 3.314) were the two most important factors contributing to disputes international projects.

• In question 8, which related to contractual matters, the resp dents indicated that unclear scope definition was the main tor causing disputes in international projects~average score 5 2.50), followed by improper tender arrangements~average score5 2.946).

Table 3. Ranking for Question 7 Subject to Conditions in Question

Question 2

Question 7 Yes No

Rank factors contributing to disputes in international projects Contract arrangements are not appropriate for project

1 2

Local government intervention 8 4 Cultural clash among parties involved in project 2 1 Unlike domestic market, no need to worry about long-term business relationship

4 6

Not familiar with local environment~e.g., power supplies and infrastructure support!

7 3

Difference in legal system and interpretation of law 6 5 Different economic muscles 5 8 Noncooperation from local residents 9 9 Capability in project management 3 7

Note: See note to Table 2; rank correlation5 2 0.350.

Statistical Analysis

Rank Correlation Study

To know whether the views of the construction industry on the factors contributing to disputes in international projects are asso ciated with their preferred resolution mechanism, a rank correla tion study is employed. In Tables 2 and 3, the order of each facto in questions 4 and 7 are ranked according to the responden answers to question 2. The rating is given as a number from 1, 3 . . . , where 1 is the most significant. In Table 2, the rank-orde correlation is 0.989, which suggests that the ranking of the factor in question 4 does not depend their answers to question 2. How ever, the rank-order correlation in Table 3 is20.35, which indi- cates that the ranking of the factors in question 7 would be dif ferent when the respondents have different views on question 2

Statistical Findings

The results imply that those who believe that internationa projects have more chances to give rise to dispute tend to agr with the rank order in question 7~that is, cultural clashes and inappropriate contract arrangements are the two most importa factors contributing to disputes in international projects!.

Correlations Between Questions

Tables 4 and 5 show the frequencies of questions 2 and 3 an questions 3 and 5, respectively. For instance, it is possible that th respondents who viewed international projects as having mor chances to give rise to disputes than domestic contract wor would agree/be neutral/disagree that cultural differences contrib ute to disputes in international projects. We categorize the an swers to the questions as yes, no, and indifferent, respective Therefore, the following hypotheses are proposed:

In Table 4, the null hypothesis is that the relative frequency o yes, no, and indifferent in question 2 is the same for the relativ frequency of yes, no, and indifferent in question 3. The alternativ

Table 5. Frequency of Questions 3 and 5

Question 3

Answer Yes No Indifference Total

Question 5 Yes 17 3 5 25 No 8 0 0 8

Indifference 5 0 0 5 Total 30 3 5 38

Note: x 25 23.8; number of degrees of freedom5 23 25 4; x 2( p , 0.05)5 9.49; x 2( p, 0.01)5 13.28.

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hypothesis is that the relative frequency of yes, no, and indiffe in question 2 is not the same for the relative frequency of yes and indifferent in question 3.

In Table 5, the null hypothesis is that the relative frequenc yes, no, and indifferent in question 3 is the same for the rela frequency of yes, no, and indifferent in question 5.

The alternative hypothesis is that the relative frequency of no, and indifferent in question 3 is not the same for the rela frequency of yes, no, and indifferent in question 5.

The chi-square test can be applied to the 33 3 matrix in Tables 4 and 5 and is known asx 25 S( f o2 f e)

2/ f e , where f o and f e represent the observed and expected frequencies respectivel chi-square value in Table 4 is 26.6 and in Table 5 is 23.8. compare the obtained chi-square value with the critical va Therefore, we need a chi-square value of at least 13.28~9.49! to reject the null hypothesis at the 0.01~0.05! level of significance As our obtainedx 2 in both cases exceeds the critical values, must reject the null hypothesis.

Statistical Findings

Hence, the views of respondents on question 2~international projects have more chance for dispute! and question 5~Orientals have different attitudes toward resolving disputes in internati projects! would depend on their views on question 3~cultural differences contribute to dispute in international projects!.

Key Observations and Recommendations

Key Observations of Research Results

Combining the surveys carried out in 1998 and 1999, the foll ing are the key observations of the research results: 1. Cultural differences contribute to disputes in internatio

projects. Those who believe this tend to take the view Orientals have different attitudes toward resolving cont disputes in such projects. This also suggests that those believe that cultural differences contribute to disputes in ternational projects tend to agree that such projects more chances to have disputes.

2. Irrespective of whether the project is international or not, preferred dispute resolution~DR! mechanisms in order o priority are • Negotiation for commercial settlement~the obvious

choice!; • Engagement of a neutral third party to facilitate nego

tion; and • Multitiered DR mechanisms.

3. The most significant factors contributing to disputes in in national projects are • Contractual arrangements that are not appropriate; an • Cultural clashes.

4. The least significant factors contributing to disputes in in national projects are • Noncooperation from local residents; and • Local government intervention.

5. For contractual matters, the most significant factors con uting to disputes in international projects are • Project scope definitions that are not clear; and • Tenders that are not properly prepared and assessed.

6. For contractual matters, the least significant factors con uting to disputes in international projects are

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• DR mechanisms that have not been integrated into the con tract; and

• Local government policy that is not compatible with inter- national practice.

Recommendations for Further Study

From the literature review and the results of this study, the writers recommend further study of the following aspects of conflict management and contractual arrangement related to cultural i sues: • As cultural diversity exists within a country or region, it will

be more appropriate for further research to focus on the two cultural syndromes: collectivism and individualism.

• Many publications~Low 1996; Chan 1997; Singh 1998! advo- cate that collectivist cultures prefer mediation and procedure with animosity reduced. This position might overlook the fact that because of their ‘‘group value,’’ collectivists have very different ~almost opposite! attitudes toward opponents who are ingroup or outgroup members when dealing with conflicts, particularly when the conflict is full-fledged. Further study may help to understand procedural preferences and contractu arrangements when dealing with international construction conflicts.

• People of two different cultures have different tolerances for uncertainty avoidance~Hofstede 1997!. Such considerations should be taken into account to study the contractual arrange ments that contribute to disputes in international projects.

• Project scope definition and tender assessment are factors th cause disputes. This general conclusion may apply to domest and international construction projects and warrants furthe study to investigate the underlying criteria that apply only to international projects.

• An appreciation of the factors that influence international con- struction projects calls for a more comprehensive study of con textual factors, which include the general nature of construc tion projects, socioeconomic characteristics of internationa projects, international legal culture and the institutional setup for dispute resolution, and international sociocultural differ- ences in perceiving and resolving disputes. A very demandin integrative research process will be required to investigate a the influential factors and their correlations.

Conclusion

Cultural differences can do substantial damage to the organizatio of an international construction project. This study has illustrated the views of construction professionals on the extent to which culture influences disputes and the choice of dispute resolutio mechanisms. It provides good groundwork for understanding th influential forces that affect international projects. Cultural diver- sity in international projects cannot be avoided or ignored. A bet ter understanding of influential cultural factors will help to reduce and manage conflicts in international construction projects. Rec ognizing and sensibly manipulating cultural differences could allow improvements in the efficiency and profitability of interna- tional projects. For future research on managing internationa construction projects, account should be taken of the influence o the behavior, values, beliefs, and cultural background of the pa ticipants.

Acknowledgments

The first writer thanks Professor J. Uff for permitting him to conduct the survey in his seminars and conferences. He is als

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grateful to all participants in those seminars and conferences to the delegates of the W87 Plenary Meeting in Sydney, 19 who responded to the questionnaire survey.

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