2.5 pages of a passage summarized

Cross-cultural project management for international construction in China

Low Sui Pheng*, Christopher H. Y. Leong

School of Building and Real Estate, National University of Singapore, 10 Kent Ridge Crescent, 119260, Singapore

Received 21 January 1999; received in revised form 16 March 1999; accepted 25 March 1999

Abstract

The need to recognise and manage other cultures is an important component in this era of globalisation. With China poised

to take on a more dominant role in the world economy, there is a pressing need to understand the Chinese style of management. Likewise, foreign project managers who deal with construction projects in China should be ¯uent in cross-cultural management. This paper examines key concepts in cross-cultural management as well as key functions in construction project management with speci®c reference to China. A real life case study of the New Chinese Hotel project in China will be presented to show how

the interaction between cross-cultural management and construction project management can a�ect the outcome of a project. Lessons on the Chinese style of management will be drawn from the case study for international construction ®rms. 7 2000 Elsevier Science Ltd and IPMA. All rights reserved.

Keywords: Culture; Project Management; International; Construction; China

1. Introduction

There is no one single de®nition which encapsulates the term `culture' wholly. It has been referred to as shared values, expectations and norms found within countries, regions, social groups, business ®rms and even departments and work groups within a ®rm[1]. Culture is also that complex whole which includes knowledge, beliefs, arts, morals, customs and any other capabilities and habits acquired by man as a member of society. It is a distinctive way of life of a group of people which forms their complete design for living[2]. It comprises ``the behavioural norms that a group of people, at a certain time and place, have agreed upon to survive and co-exist''[3]. Cross-cultural management then refers to the control and organis- ation of two or more cultures. The involvement of fre- quently large organisations in construction outside

their national boundaries, including the establishment of subsidiaries in other countries, is classi®ed as `inter- national construction'[4].

Each country in which such organisations operate in can have a distinct economic, political, legal, cultural and competitive context which businesses must respond to positively. The problem of integration will obviously occur for a construction ®rm which operates in many di�erent countries. Integration can, however, be a daunting task as it involves maintaining a balance between global e�ciency and being responsive to local cultural di�erence in the host countries. Consequently, to succeed in the international marketplace, construc- tion businesses must deal e�ectively and e�ciently with the diverse cultures encountered. International construction is not an entirely new concept. It has its genesis in the numerous military installations and pub- lic works projects undertaken by colonial governments even before the 20th century. This is particularly true between the two world wars when infrastructural pro- jects were undertaken either by an agency of expatriate engineers who occupied the senior echelons in public

International Journal of Project Management 18 (2000) 307±316

0263-7863/00/$20.00 7 2000 Elsevier Science Ltd and IPMA. All rights reserved. PII: S0263-7863(99)00027-7

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* Corresponding author. Tel.: +65-874-3413; fax: +65-7755502.

E-mail address: [email protected] (Low Sui Pheng).

works departments, or by consulting engineers who sent their representatives to direct and supervise the works of local labour. The operations undertaken by the British Colonial O�ce in Africa, Asia and the Car- ibbean are good examples of overseas construction works undertaken in the past. In the period following the end of World War 2, international construction ac- tivities followed very much the same pattern witnessed between the two world wars. As colonies gained inde- pendence in the 1950s and 1960s, new governments were formed who realised the need for major infra- structural development. This fuelled the demand for experienced builders and designers, the bulk of whom came from developed countries[5]. The scope for inter- national construction in developing countries was also boosted considerably following the emergence of inter- national funding institutions such as the World Bank and the Asian Development Bank. Many contractors from the developed world were involved with construc- tion works funded by these agencies in developing countries. The petrodollar boom in the Middle East and elsewhere in the 1970's also witnessed a marked expansion in international construction activities[6]. In- ternational construction also gained prominence in the newly industrialising economies of Asia, at least until mid-1997 when the Asian currency crisis set in[7].

It is clear from the above history of international construction business that modern-day construction ®rms no longer operate solely in their domestic mar- kets. Consequently, they have to increasingly deal with individuals from other cultures. Project managers from these ®rms must therefore develop skills to interact with individuals whose behavioural attributes are in¯u- enced by other cultural priorities. The following skills are important for project managers in the international marketplace:

. e�ective communication skills;

. e�ective leadership skills;

. good interpersonal skills;

. adaptability and ¯exibility;

. functional/technical strengths

Without these skills, project managers on overseas postings may be hindered by cultural problems which can lead to unnecessary costs/losses to their compa- nies. Nevertheless, while e�ective cross-cultural man- agement can make or break a building project overseas, it is not the only one signi®cant factor which determines the success of the venture. Other factors which are equally signi®cant may include the demand level for construction services in the host country; supply of capital, materials and labour; activities of competitors; national and international economic trends; laws and regulations as well as organisational culture.

This paper focuses on two areas. It will examine key

concepts in cross-cultural management as well as key functions in construction project management with speci®c reference to China. With this background in mind, a real life case study on the New Chinese Hotel project in China will be presented to show how the in- teraction between cross-cultural management and con- struction project management can a�ect the outcome of the project. Lessons on the Chinese style of manage- ment will be drawn from the case study for inter- national construction ®rms. The main areas to be covered in this paper are shown in Fig. 1.

2. Cross-cultural management

Personal relationships are very important in Asian cultures. Asians have a tendency to ®rst develop per- sonal relationships with their business partners before getting down to the speci®cs of negotiation. Family ties and kinship, in particular, feature prominently in Asian business dealings. There is also a tendency to keep relations harmonious by not talking directly about problems. Confrontations are avoided and human relationships are highly valued in Asian so- cieties. In contrast, personal relationships to the Amer- icans are less important when doing business. Americans like to get to the point more quickly and directly even though such an approach may embarrass someone personally and publicly[8]. Cultures with a high social conscience, as in China, prefer to work in teams and to make decisions through group consensus. Other cultures, as in North America, place a high pre- mium on individualism and individualistic reactions. People in these cultures are not inherently team players[1]. Some cultures such as those in Asia, North- ern Europe and South America also emphasize social status which is re¯ected, among other things, in seating arrangements and other protocols based on positions. On the other hand, the North American culture tends to place more emphasis on competence. In cultures where status is important, as in Japan and China, talk- ing about problems directly with a person in public is avoided so as not to embarrass the person or down- grade his status[3]. The time element also holds di�er- ent connotations in di�erent cultures. A monochronic time perspective refers to the treatment of events in an orderly fashion where things are done separately and time is compartmentalised, organised and controlled. It also tends to focus on the present or immediate future and believe that an individual can a�ect future outcomes. Monochronic cultures are prevalent in North European and North American countries. On the other hand, a polychronic time perspective is end- less and where there is plenty of time which has no beginning or end. More importantly, many events can all happen at the same time. This perspective is preva-

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316308

lent in countries in Asia, the Middle East and Latin America. In this context, many topicsÐinvolving both the family and businessÐare discussed concurrently in meetings. Polychronic cultures tend to be more futuris- tic and fatalistic in outlook, believing that one cannot control the future[1].

The key concepts which can be used to explain the cross-cultural experiences described above are dis- cussed in the following sections.

2.1. Organisational and national culture

Every organisation has its own unique culture which is not quite the same as others. Consequently, mem- bers of an organisation need to learn their own cul- ture. These values can be changed when top management introduces new beliefs and attitudes. Although workplace experiences are passed from senior to junior sta�, these may not necessarily be in line with management beliefs. Organisational culture can has a strong in¯uence on the national culture. Where top management is able to build a strong and positive culture which re¯ects the national culture, the behaviour of employees can be rendered more predict- able.

National culture is learnt very early in life when the individual is still unaware of its in¯uence. Or- ganisational culture, on the other hand, is acquired much later in life at a conscious level. Hence, it can be deduced that national culture is more deeply entrenched in the individual than organisational cul- ture. Consequently, it is more di�cult to change one's national culture than organisational culture.

The concept of changing one's organisational culture can be fraught with risks but may be inevitable in some cases, as for example, when the existing in- ternal system has deteriorated or when environmen- tal conditions have changed. Top management must initiate this change. It should also be highlighted that the development and survival of organisational change is not entirely dependent on individuals who make up the organisation. This as evident in cases where people come and go within a company and yet the organisational culture remains[9]. The design of company's goals is therefore a�ected by organis- ational culture. As goals change, organisational cul- ture also changes in tandem.

The organisational culture of an existing company re¯ects the national culture in strong forms. It is logi- cal for members of an organisation to resist plans to impose a culture that does not re¯ect their national values. Hence, an understanding between top manage- ment and employees is critical to avoid unnecessary con¯icts. Where organisational culture is weak and appears to have little in¯uence, workplace values and behaviour provide a clear re¯ection of national cul- tures and values. On the other hand, where an organis- ational culture is strong, the manager cannot take for granted that what he observes in the workplace is typi- cal of a wider context[1]. Cultural control can be achieved by using implicit norms that induce employ- ees of di�erent nationalities to commit to a project. To ful®l the technical requirements, training can be pro- vided to employees by explicitly writing all instructions in manuals. For the non-technical requirements, an emphasis should be placed on developing an awareness

Fig. 1. Theme of paper.

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316 309

of organisational culture and by integrating any new- comer into the company.

2.2. Cross-cultural communications

While certain forms of communication are accepta- ble in one country, these may be considered taboo in another. Hence, while direct physical contacts (for example, a peck on the cheek) may be practised by North Americans, these are not accepted in most Asian countries. The Japanese, for example, will avoid using language which may cause o�ence. However, the Japanese indirectness as evident in their `evasive' man- ner in saying `yes' may actually rebound to their disad- vantage and cause the foreign party to lose face. Cultural values, task as well as situational variables help to determine the norms for communication.

The dichotomy of one-way as opposed to two-way communication can also be an issue in cross-cultural management. One-way communication is characterised by the use of authority by the superior with the subor- dinates providing little or no feedback which may be perceived otherwise as a challenge. This is prevalent in societies where there is a desire to preserve social har- mony and to avoid situations where disagreement may arise. In organisations where one-way communication dominates, attempts by senior managers to involve their subordinates in decision-making may threaten social norms and be resisted. On the other hand, two- way communication is adopted when a company enters a new market and jobs undertaken by employ- ees are no longer routine. Complex and frequently open-ended situations may render the need for man- agers to adopt a more participative style of manage- ment by involving their subordinates in decision- making.

In cross-cultural management, managers should also be sensitive to the non-verbal signals used as these sig- nals may have a signi®cance which is di�erent from what they are accustomed to in their own culture. When perceived wrongly, these signals may be inter- preted di�erently in a di�erent cultural setting. For example, Americans are not comfortable with silence and reserve. Taking time for re¯ection is often seen as evidence of ine�ective management. On the other hand, in Japan, managers dismiss this propensity for action and decision as impulsiveness. For the Japanese, taking quick decisions may signal a poor grasp of the importance of making the decision on hand and an insu�cient reaction. Silence is an indication of deep mutual respect. Hence, close friends in Japan drink silently together. Where formalised exchanges are con- cerned, Americans tends to pay less attention to proto- col. In Japan, however, failure to show respect by carefully exchanging and inspecting business cards can get business negotiations o� to a bad start.

Likewise, the dress code considered appropriate in the o�ce, at meetings as well as in formal and infor- mal social functions should be understood in cross-cul- tural management. In this context, North European managers tend to dress more informally than their Latin American counterparts. While style is important for the latter, Anglo and Asian managers do not want to stand out or attract attention in their dressing[10].

2.3. Cross-cultural dispute resolution

The Japanese generally prefer to resolve disagree- ments through compromise both within their own or- ganisation as well as between other organisations. They also tend to avoid contractual arrangements which emphasise rigid performance criteria. Flexibility is instead focused upon when interpreting contractual agreements. In other countries, cross-cultural dispute resolution can depend on many factors, including:

. level of tolerance of disagreement;

. localised strategies for resolving con¯icts;

. perception of the extent of appropriate intervention by a superior.

In this case, assertiveness is valued more highly in a culture that is both individualistic and masculine in outlook. Consequently, con¯icts are resolved by thrashing them out in the open. Non-assertiveness is associated with an admission of defeat by this group of people[11].

2.4. Cross-cultural negotiation

Problems at the negotiation stage can be inevitable when a company from a developed country is trying to access the market in a developing country. These pro- blems occur because managers from the developed country tend to assume the responses and behaviour of their clients in the developing country without really understanding what they want and what they can o�er. Unnecessary con¯icts consequently arise[5]. The problems encountered in the negotiation stage may be magni®ed further when the cultural climate in both countries is diversely di�erent, consequently leading to a breakdown in communications.

3. Project management in China

As with many other developing countries, China is still dependent on the developed countries for capital and technology in many sectors of its econ- omy. Its human resource is underdeveloped as insu�cient funds are set aside for establishing train- ing and education centres. A signi®cant proportion of the Chinese population, particularly those in the

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316310

rural areas, are largely unskilled. Because of its past closed-door policy, growth areas in human resource as well as technology were sti¯ed in China.

Like other sectors in the Chinese economy, the con- struction industry is also dependent on foreign capital, technology and expertise. This is particularly true in mega infrastructural and sophisticated industrial pro- jects where the Chinese lack the track records. There are, however, several characteristics which foreign pro- ject managers must be aware of when they function in the Chinese construction industry. Some of these characteristics are highlighted below.

. Trust and mutual respect are important values in the Chinese community. Foreign project managers should not therefore impose too much of their power and authority over their Chinese counterparts but should instead emphasise trust and mutual understanding.

. Family businesses are still very dominant in China and there is a heavy reliance on family contacts both locally and internationally. When negotiating a deal with a Chinese construction company, the foreign project manager should be prepared to face a horde of subcontractors who are connected in one way or another to the main Chinese contractor. There must be tactfulness and diplomacy in dealing with situations of this nature. It is important for the foreign project manager not to complain or jeopar- dise anybody's position within the company, because the bond and mutual trust between the main Chinese contractor and subcontractors is di�- cult to break.

. There are also constraints in the use of international standard forms of contract in the Chinese construc- tion industry. This is because little or no provision at all is included in these forms to provide for amendments in order to suit local conditions. The contract documents used are frequently lengthy and refer to standards, codes and speci®cations which are not readily available and if available, are often applied rigidly. The situation for the foreign project manager is made worse by the language barrier. The local Chinese advisors do little to help, and prefer to rely on provisions in these documents either as a means to ducking the issue, or in the belief that this is the only way to achieve high quality standards. Foreign project managers should therefore be extra vigilant when dealing with procurement matters in the Chinese construction industry.

. The Chinese also tend to concentrate more on the pro®t element and other related ®nancial matters such as credit terms and cash ¯ow arrangements. Consequently, designs and construction methods are chosen out of sheer economic convenience. As a result, negotiations with the Chinese on resource al-

location can be an uphill task for the foreign project manager.

. Bureaucracy and bribery are still prevalent in China in spite of the recent e�orts made by Jiang Zie- ming's government to eradicate these ills. The approvals of numerous government/provincial departments need to be obtained before a construc- tion project can commence. This is particularly so for projects with foreign equity participation. Along the way, connections at the right places, kickbacks, etc. have been known to help hasten the application process. While not condoning these practices, the foreign project manager will need to learn how best to deal with them discreetly.

4. Case studyÐthe New Chinese Hotel

The key concepts in cross-cultural management as well as construction project management in the context of China are examined above. A real life case study of the New Chinese Hotel project is presented below to highlight how cross-cultural management and con- struction project management interact to a�ect the outcome of the project. It will also, in the process, show up the Chinese style of management as a re- sponse to inputs made by foreign investors from the U.S.A. For reasons of con®dentiality, the names, lo- cations and dates of events annotated in the case study below have been changed to preserve the anonymity of all the parties involved.

4.1. The parties involved

Asian Properties Company (APC) is owned by the Asian Development Corporation (ADC) and Wedd In- ternational Corporation, both of whom are U.S.A. based companies. ADC, formed in April 1979 and owned by the Legreb Group of Companies and the Eastern Region Construction Company, specialised in consortiums, joint ventures and compensation deals in China. The Yangtze River Tourist Service Bureau (YRTSB) is a state-owned organisation charged by the Chinese government to promote and regulate nation- wide travel in China. The organisation structure for this case study is shown in Fig. 2. The following calen- dar of events took place as part of this case study involving the construction of a new hotel.

4.2. Late 1970's

China announced a new open-door policy that wel- comed and actively sought out foreign capital to ®nance modernisation projects in the country. In the

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316 311

early stages of this relatively liberal policy, joint ven- tures emerged as one of the most common structures for procuring foreign investment projects. This mode of procurement allowed Chinese partners to gain the much needed management skills and access to new technologies.

4.3. 1988

The Legreb Group, the US based pioneer with more than 30 years of experience in project development in the former USSR and East European bloc of countries, extended its businesses into China.

4.4. Late 1988

ADC engineered a consortium to establish APC for the Legreb Group's entry into China. APC thereafter assembled a project team which comprised several team members with diverse interests related to this venture.

4.5. February 1989

APC succeeded in securing letters of intent from both the YRTSB and the municipal government for the development and construction of the proposed hotel project. To APC's dismay, letters of intent were discovered to be neither binding nor conclusive in China. APC realised that both YRTSB and the mu- nicipal government were still discussing proposals with their other prospective partners. At this juncture, APC acknowledged that it is important to negotiate directly with the key decision-maker and to structure an attrac- tive o�er which appeals to the Chinese. Two China experts from the APC team immediately went to work on this task. After delving through layers of Chinese bureaucracy, they ®nally identi®ed the Secretary-Gen- eral of YRTSB as the government o�cial who holds the decision-making power.

4.6. May 1989

A formal joint venture agreement was ®nally signed with YRTSB. Although binding, the document was

Fig. 2. Organisation structure of case study.

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316312

subject to the terms of a ®nal contract to be negotiated within ®ve months. The size, class and site of the hotel as well as the method for co-operation, the sharing of pro®ts and losses and the period for joint operations were outlined in the agreement. The duration of the project was set to be 10 years, after which APC would relinquish all rights of ownership to YRTSB at the end of this period. APC has a 49% equity share in the joint venture with YRTSB for the New Chinese Hotel. Payments of loans as well as the repatriation of pro®ts were also established in the contract. All these devel- opments were, however, taking place at a time when Chinese commercial law was still not well established in the country. Foreign partners were therefore scepti- cal over the methods used by the Chinese to enforce `mutual discussion or agreement'. Nevertheless, APC in its enthusiasm to conclude negotiations and begin the project, dismissed this reservation and proceeded to ®nalise the contract.

4.7. October 1989

The ®nal joint venture contract was signed. YRTSB and APC drafted contracts in both the Chinese and English language which were binding. Nonetheless, the perfect translation of contractual documents was im- possible to achieve. Although both parties certi®ed that the agreements carried the same contents, numer- ous discrepancies were still present when the contracts were signed.

4.8. Mid-1990

Misunderstandings concerning the construction of the hotel occurred. When the Chinese confessed their lack of expertise in construction project management, their American counterparts interpreted this confession to mean that the Chinese wanted the hotel to be built on a turnkey basis and proceeded to hire a foreign contractor to undertake the entire building project. When the Chinese expressed their unhappiness over the turnkey proposal, the APC team then realised that there was a serious communication gap in the working relationship with their Chinese counterparts. In actual fact, YRTSB was looking forward to working with the foreign contractor in this project to help facilitate tech- nology and skills transfer.

4.9. End-1990

Construction works for the proposed hotel began in end-1990. Dissatisfaction arising from cultural con¯icts was frequent during this stage. At one stage, the Chi- nese complained that the drawings provided by the architectural ®rm based in Los Angeles did not include detailed shop drawings. Then again, architects in

China supply both working as well as shop drawings, while architects in the US provide only the working drawings. The project was planned to be completed within 24±26 months. However, numerous construc- tion delays caused the project completion date to be extended by two years after the original deadline. The progress of construction was slow because of poor pro- ject management and the exceptionally low skills level of Chinese labour. The Chinese construction workers, most of whom were originally farmers from the rural areas, experienced much di�culty in delivering accep- table standards of building quality as well as in learn- ing new construction technology. In addition, the state-owned China Construction Company (CCC), which acted on behalf of YRTSB, was slow in making critical decisions which were necessary to avoid project bottlenecks. The construction management team, made up of both American engineers and several YRTSB appointed members, was less e�ective than expected. The di�erences in cultures between the two organis- ations were serious enough to aggravate progress further. This was because insu�cient time and atten- tion were paid to identify such cultural problems during the negotiation stage.

4.10. End-1991

By then, the US$72 million construction fund secured through a syndicated loan was exhausted. APC then proposed more money be borrowed in order to continue with construction works. YRTSB, how- ever, refused to do so because the Chinese government will not approve further requests for additional fund- ing. As a result of this disagreement, construction work stopped. Attempts to resolve this impasse based on the principle of `mutual trust' failed.

4.11. Early 1992

On knowing that the failure of the joint venture would lead not only to adverse publicity but also serious ®nancial losses and loss of face, YRTSB resumed negotiations with APC. Eventually, YRTSB agreed to foot all additional costs needed to complete the project. In return, APC agreed to postpone the completion of the hotel until the end of 1994.

4.12. December 1994

YRTSB uno�cially opened the New Chinese Hotel in order to avoid paying damages to APC as speci®ed in the new agreement.

4.13. 1996

APC was denied the right to repatriate pro®ts back

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to the US because of a serious shortage of capital ex- perienced by YRTSB. APC demanded to withdraw from the partnership with YRTSB.

4.14. 1997

After a bitter negotiation process lasting two years, APC reached an agreement with YRTSB to be com- pensated ®nancially and to reduce its equity interests in the hotel to just 10%. YRTSB will control the remaining equity interests in the hotel.

5. Lessons and conclusion

The sequence of events in the APC±YRTSB case study in China suggests that the management of an in- ternational building project requires not only an understanding of key concepts in cross-cultural man- agement but also in project management. Construction project management is not only about time, cost and quality control, it is also about human resource man- agement. This is particularly crucial when team players from di�erent nationalities come together to work in another country. The lessons which can be learnt from the APC±YRTSB case study in China are examined below.

5.1. Organisational and national culture

Traditional Chinese businesses are frequently built to revolve around family ties. The business is usually set up by a family and family bureaucracy dictated by the patriarch will usually prevail in its dealings with others. The rules and culture of the business as well as trade secrets are often passed down from father to son. In this context, APC did try to understand the Chinese culture by bringing two China experts into its team for advice. The China experts understood cor- rectly that the Chinese regard modesty as a virtue and abhors aggressive salesmanship. APC was therefore advised to adapt to Chinese customs, regulations and methods of working to the best of its ability. While an awareness of organisational culture must be brought to the attention of all employees, the foreign project manager has a crucial role to play in integrating cul- tural diversities among di�erent team players.

The national culture in China also portrays the family. Consequently, family loyalty is an important component in the Chinese society. From being young, the Chinese are instilled with the notion that the family (i.e. China in the wider context) is an important component in their society. To safeguard this notion, foreign investors may therefore feel that the decision- making process in China is painstakingly long and characterised by a maze of bureaucracies. Nevertheless,

APC was able to identify the Secretary-General of YRTSB as the key decision-maker within the bureau- cratic maze. This helped APC to secure the project.

5.2. Cross-cultural communications

It is crucial to appreciate the di�erent styles of com- munications in cross-cultural businesses. Failure to do so may lead to misunderstanding as in the APC± YRTSB's hotel project. In this case, the Chinese con- fession over their lack of experience in construction project management was wrongly interpreted to mean a turnkey project where the turnkey contractor will provide all design, construction and installation ser- vices. Foreign ®rms in China frequently do not pay enough attention to what their Chinese partners asked for and what they can o�er[12,13]. Consequently, they entered into alliances which do not suit either of their interests in the long term.

5.3. Cross-cultural dispute resolution

The APC±YRTSB joint venture eventually failed despite e�orts taken by APC to manage cultural diver- sities. This appears to be caused by the failure to establish a proper decision-making process as well as a method for resolving disputes. In general, the larger the cultural gap between the two parties, the greater will be the strain on negotiations. The Americans in APC adopted the western style of expression which tended to be highly assertive. On the other hand, the Chinese have tended to be less ®rm in expressing their views. Consequently, if there is a substantial di�erence between their respective cultural frames of reference, it is common for negotiations to take a legalistic stance to compensate for ambiguities and misunderstandings. While technical legalities may seem to ®ll the ambigu- ity gap momentarily, these only serve to diminish trust. Consequently, negotiations begin to take on an increasingly adversarial style[14]. The fact that discre- pancies exist in the two versions of the contract in the APC±YRTSB case study creates a potential area for dispute. APC, however, chose to ignore this problem and agreed to settle disputes through mutual discus- sion. In this case, a proper set of guidelines on the methods for resolving disputes should have been agreed upon during the early stages of the negotiation. These should cover the following issues:

. the level where decisions are to be taken

. the degree of consensus required

. the extent of involving managers in resolving the dispute

. a form for expressing dissenting opinions

. a form for resolving impasses

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316314

. the acceptable length of time to come to an agree- ment.

5.4. Cross-cultural negotiations

The Chinese often emphasise the attributes of friend- ship, mutual interests and the importance of mutual trust during the initial stages of negotiation. After these attributes are built up in the later stages of nego- tiation, the Chinese would often use these to corner their potential partners in giving them the best possible terms[12]. In this context, the Chinese would also evaluate relationships in a utilitarian manner to re¯ect the value of a business proposal made by their foreign partners.

In conclusion, the management of international building projects is increasingly proving to be more important in this era of globalisation. Project man- agers working in international building projects should, together with other members of their teams, identify prevailing cultural di�erences and adopt appropriate measures to achieve project performance. In the case of China, the case study indicates that foreign project managers should recognise the Chinese style of management when dealing with their Chinese counterparts.

Acknowledgements

The contributions by Teo Puay Leng, Vincent Bene- dict, Wee Keng Jee, Stephanie Wong and Bennard Yap are gratefully acknowledged.

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Dr Low Sui Pheng is Associate Professor and Course Director of the

BSc(Building)(Hons) Programme at the School of Building and Real

Estate, National University of Singapore. He received his Bachelor,

Masters and Doctoral degrees from the National University of

Singapore, the University of Birmingham and the University of

London respectively. A Chartered Builder by profession, he is a

Corporate Member of the Chartered Institute of Building, the Associ-

ation for Project Management, the Chartered Institute of Marketing

and an Associate of the Chartered Institute of Arbitrators. Dr Low

has published more than 200 papers and eight books in construction

project management and economics and is acknowledged internation-

ally as an authority in the application of ancient Chinese strategies

for international construction marketing and management. He has

consulted widely in the region in Singapore, Malaysia and Indonesia.

Dr Christopher Leong is Senior Lecturer and the Programme Direc-

tor of the MSc (Project Management) Programme at the School of

Building and Real Estate, National University of Singapore. He has

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316 315

a BSc(Building)(Hons) from the University of Singapore, an

MSc(Construction Management) from Loughborough University,

and a PhD in Planning Studies from the University of London. He

is a Professional Associate of the Royal Institution of Chartered Sur-

veyors, an Associate of the Chartered Institute of Arbitrators, and a

Fellow of the Society of Project Managers as well as the Singapore

Institute of Surveyors and Valuers. His work experience includes

contract management with the Public Works Department, Singapore,

and project management with a private property development organ-

isation. Dr Leong lectures and consults widely in the areas of con-

tracs and project management for both local and overseas

organisations.

Low Sui Pheng, C.H.Y. Leong / International Journal of Project Management 18 (2000) 307±316316