CULTURAL INTEGRATION IN BINATIONAL JOINT VENTURES[1]

M. M. Benitez Codas, CAA Engenharia (BR) - Multisystems Consultores (PY)

ABSTRACT

In bi-national projects, very often, joint ventures of companies from two countries are for Pied, and so it a possible to find in each at least two groups of different cultures. To achieve successfully the project's objectives of these joint-ventures, it's necessary to integrate their different cultures in a unique project's culture.

Transformation of the several cultures toward this PROJECT NEW CULTURE is achieved by the development of a CULTURE PROJECT.

In this paper, we would like to present: a) a methodology for analyzing the different cultures; b) a definition of the main patterns of the NEW CULTURE and c) establish the basis for the CULTURE PROJECT Development.

A CULTURE PROJECT is essential in order to achieve the bi-national project's objectives and it is also a guarantee of success for the development of a correct culture project.

Background

During the implementation stages of Itaipú Binacional - a 12,000MWA hydroelectric project -, it was decided to divide the inspection and expediting of the manufacturing and the delivery of the electromechanical equipment into seven companies for the job. The companies were not of the same size, but had to work with the same technical standards and procedures.

For each aspect of the job a binational joint venture was created, between several Brazilian Companies, a total of seven, and one Paraguayan Company, work participation had to be on an equal basis, although the principles for this division had not been clearly established, and it was left to be decided by the parts in time.

The equipment manufacturers were located mainly in Brazil, another significant part in a third Countries and a small part in Paraguay.

The Paraguayan company therefore had to transfer personnel to Brazil, and spread its work force in seven separate group B. Since the project took place over several yeara, more than 50 families had to be transferred.

The Management Staff and most of the engineers of the Paraguayan company were hired among the Paraguayan living and working in Brazil.Technicians and administrative personnel came mostly from Paraguay,

The Companies

The seven Brazilian companies can be classified in three groups:

a) Traditional Engineering Design Companies, with wide experience in large inspection 6ervices. Five of the companies were more than 20 years old. Four had more than 2,000 employees on their payroll, and more than 50 in the inspection division. The fifth had around 300 employees and an inspection division of around 30 technicians. The five Companies also had experience in overseas inspection. All of them were highly organized companies with a high degree of professional pride.

b) Specialty Engineering Company. A small company with a small number of highly trained and experienced professionals, this company had a non-bureaucratic organization and was run mainly by its two owners. Internationally-related and efficiency-conscious, they perform the work with less people and smaller costs.

c) A New Inspection Services Company, created a few years earlier mainly for this project. This company had its organization developed around the Itaipu Project and was mainly business-oriented. Its success was primarily due to the skills of its managers. People from the other companies were hired specifically for this project. The traditional organizational background to support them was established.

The Paraguayan company was created with the merger of an engineering design company, with some experience in hydroelectric projects and inspection services, and a management consulting firm. The new company's organization was underdimensioned in relation to the enormous task it had at hand; it was also short on personnel to fill the 50 positions required. Two of the managers had been professional Managers in Brazil and had worked with and for some of the seven Brazilian Companies. The other four were qualified professionals but with no experience in managing this kind of project.

The Cultures

Some strong commonalities - bordering on absolute coincidence - Must exist in a project, at least in the pain objective of accomplishing the project. Other commonalities include similar standards of behavior as opposed to common objectives. In Many cases, however a contradictory set of beliefs and behaviors are found. This is particularly true in the case of projects involving countries with sharp differences in their stage of cultural and economic development.

When people from different cultures are integrated in a project, they form a temporary social systern, which because it is new, has no defined system of patterns to indicate proper behavior while working on that project.

A new culture Must be established to face new situations and problems and to help the people who will share the new environment. Since project problems change along the life cycle, this "culture" must also be adjusted to meet the needs of new situations as they come up.[2]

By "culture" we understand a "prevailing pattern of activities, interaction8, In OI, Tn3S, sentiments (including feelings), beliefs, attitudes, values and products (technology), the way people actually behave, the way they actually think and feel, the way they actually deal which each other" [3]

For Cultural Convergence to take place, managers of both parts need to understand the culture of the other part, analyzing the different patterns which compose that culture. This means learning the other country's history, geography, economy, religion, traditions, and politics. This can be called the "academic knowledge" about the other country.

The "academic knowledge" about the other group is formed of such information as :

- educational level

- professional experience

- experience on this kind of project

- knowledge of language

- foreign group country way of life

It must be clearly understood that one of the most serious problems occurs when one culture is "transported" frog it original "habitat" to a new one with all the difficulties that this change implies.

More important than this "academic knowledge" is the "informal knowledge" which includes feelings, beliefs, informal actions and interactions, group norms and values of the other culture , from which important guidelines can be drawn for defining a probable pattern of behavior.

The data base of the "informal knowledge" of the other culture, can be carried out systematically with the help of a form a like the one shown in Figure l.

The Cultural Pattern Evaluation

To obtain an overall definition of the patterns of group behavior it is necessary to analyze the attitude of the group toward various factors involving teamwork. To compare one group's behavior with the other, the relative intensities of attitudes are quantified as shown in Figure 1 and the analyzed patterns descriptions were as follows:

Å) People may be gregarious or individualistic. The maximum value for this pattern is for the gregarious group oriented attitude.

B) The group is composed of people with a technological background or liberal arts background, as most projects deal with technology, the maximum value is for the technological background.

C) Group Behavior may be formal or informal. As binational projects need information carefully registered, the maximum value is given to the formal behavior.

D) Groups may be democratic or autocratic in organizational relationship. The democratic is best suited for a binational project therefore, this attitude has the maximum value.

E). The international background of the group is an important factor if the project deals with international suppliers and Contractors of third countries. If group experience is mainly national that can be a negative factor. Maximum value is given to groups with major international experience.

F) Specific experience in similar projecs is also a valuable asset. Maximum value is assigned to those groups having, substantial experience on Similar projects,

6) Group relationship may vary from emotional to rational; maximum value is assigned to the rational attitude.

H) Attitudes may also vary from nationalistic to international. Maximum value is given for tendency toward on international attitude. But sometimes nationalism could be very useful to motivate special

efforts.

Commonalities and Differences

In Figure l, are shown the results of the evaluation of both cultures. The managers designed the CULTURE PROJECT based in the following statements :

a) Commonalities in patterns A, C, E and H to be reinforced and explored adequately,

b) Differences in patterns D and G to be the Management Team concern, because of extreme differences,

c) Differences in pattern B and F to be reduced by intensive on job training of Group 1 members by the Group 2 individuals. Training program designed by the management together with the group members.

In Figure 2, main characteristics of the seven joint ventures are compared. Only one of the joint ventures shows no persistent problems and conflicts.

THE CULTURE PROJECT FOR JOINT-VENTURE 4

The objective of the CULTURE PROJECT for this joint venture was to develop a new unique Culture integrating the new group members into one strong and homogeneous group of individuals working together in an atmosphere of freedom and responsibility.

The project Culture was developed around the commonalities of both groups, disclosed in the previous analysis. In other projects other, desirable traits can be developed if and when necessary. Success is the most important factor to be used toward a new culture, the successful completion of an intermediate work because of the group effort must be used as an example of how the project "culture" must always be.

The Results of The Project Culture

The project culture in the case of Joint-venture 4, took a year to implement, and the joint-venture work and internal relationship was reviewed and updated every six months.

The project culture was based on a concise Project Procedures Manual which showed the who, what, why, when, whose, and how of project-related activities. Most important however, was team work developed by the project managers, and the efforts made to take into account the other side's point of view.

The everyday motto was "BINATIONALITY IS THE PERNAMENT EXERCISE OF GOOD WILL", as stated by Prof. Enzo Debernardi at the beginning of the Itaipú project.

The work was highly rewarding as shown by the successful results and high quality of the job performed. People of both groups left the project as good friends and with more experience and capacity than at the beginning.

Acknowledgments:

To the fine Paraguayan and Brazilian professionals who worked in the Joint-venture 4, from cooks to managers, that Trade possible the wonderful results achieved.

To Paul C. Dinsmore who insisted that this experience should be written to made available for other bi-national projects.

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[1] Presentado en The INTERNET World Congress on Project Management, Florence Italy, June 16^th  19^th 1992

[2] DINSPORE, Paul C., Human Side of Project Management, AMACOM, New

Yok it) (3rd edition)

[3] FRENCH, Wendell L and BELL Jr, Cecil H., Organizational development, Prentice Hall, New Jersey, 1978.