Managing

Managing diversity in diversity in

transnational project teams teams

A tentative model and case study

95
Paul Iles and Paromjit Kaur Hayers
Liverpool Centre for HRD, Liverpool Business School,
Liverpool John Moores University, Liverpool, UK

Introduction
Many organizations believe they can increase their flexibility and
responsiveness in globally competitive market environments through
deployment of transnational project teams, powerful vehicles to develop
innovation and change within international companies and increasingly used
by organizations which have chosen to enter global strategic alliances. Such
teams consist of membership with multiple nationalities, working on activities
that transcend natural borders. Multinational project teams can be considered
transnational[1,2] if they have successfully transcended the cultural,
geographic and managerial barriers to team effectiveness.
For example, many international organizations are using transnational
teams to address problems, integrate processes, and learn new methods. Such
teams may come to serve as a prototype for new organizational forms, but in
many cases human resource management (HRM) has not kept pace with the
needs of such teams, with a failure to develop more flexible approaches.
Examples of such teams include the ways Japanese and US engineers worked
together to develop a “world copier” in the Xerox Corporation, and how
Eastman Kodak formed a team based in London to launch the photo CD
simultaneously in several European countries. Such teams often work on
complex strategic issues across geographical distances and across cultural
barriers[1,2].
Heimer[3] argues that international project teams are where most of the
boundary spanning work in international enterprise goes on, making them a
key factor in organizational success and an important catalyst for individual
and organizational development. In particular, the ability to learn in and
through international project teams is seen as a key developer of a more
international outlook. Project teams also help the organization share
information, knowledge and resources across boundaries, transmit and recreate
corporate culture, and provide examples of best practice[3]. Geographical

Journal of Managerial Psychology,

This article is based on a paper presented to 1996 AMED Research Development Conference, Vol. 12 No. 2, 1997, pp. 95-117.
Civil Service College, Sunningdale, Berkshire, UK, August 1996. MCB University Press, 0268-3946
Journal of dispersal, time differences, communication barriers and cultural diversity,
Managerial however, all make for greater complexity in team development, making
Psychology attention to process important, especially in the implementation stages of a
project. Time spent establishing and developing a working culture – perhaps
12,2 akin to developing an “international microculture” – is seen as vital, requiring
regular feedback and communication and attention to what is acceptable and
96 unacceptable for both individuals and the group. This process demands active
listening, giving space, integrating contributions and giving attention to issues
of trust, disclosure, language and sharing. Geographical dispersion requires
constant information flows to retain commitment, given numerous other
pressures and loyalties. Although electronic communication may supplement
this process, trust often decays over time unless regular face-to-face contact is
maintained[4]. International project teams also have an external as well as
internal face, and sensitivity to organizational politics, external sponsors and
relationships with key stakeholders is required to ensure continued access to
resources[4]. Negotiating success criteria with external people is also a key
issue. Such processes are all influenced by cultural differences, and the ability to
manage diversity becomes a key critical resource.

Transnational project teams, learning and diversity

In recent years there has been increasing focus on the importance of learning in
the business environment, and the international project team is inextricably tied
up with innovation. The recognition that learning occurs in and around the
work of an individual centrally locates the place of learning in organizations
and project teams, and identifies the need to foster strategies that will lead to
enhanced learning and development in a dynamic environment, with learning
seen as a continuous, ongoing activity within individuals, teams and
organizations. Some teams may bring together knowledge and skills from
various units, transfer technology, and spread innovation, such as IBM’s
International Airlines Solutions Centre[1,2].
In many organizations there is increasing use of multinational task forces –
international joint venture teams, global product development teams, strategy
teams, global restructuring teams and even top management teams, often as an
effect of a geocentric, global staffing and career development system.
Organizations interested in developing a capable global managers and wishing
to select, retain and develop employees in many parts of the world will establish
global, geocentric HRM practices, and these are as a result increasingly from
multinational groups[1,2,5].
As an international organization develops, moving from a domestic/
ethnocentric phase through international/ethnocentric and multinational/
polycentric phases towards global/geocentric and transnational/geocentric
phases, becomes increasingly important. The increasingly complex
international environment it is operating in may push it towards global
integration, whereas host government pressure and responsiveness to local
markets and cultures may push it towards local responsiveness. To address this
issue, international companies have sought to go beyond a divisional structure Managing
towards other structures, such as mixed, matrix and network structures. diversity in
Structural change is, however, a very blunt vehicle – building attitudes, skills teams
and relations and communicating a shared vision may be more effective[6].
Matrix forms in many international organizations have proved hard to manage
because of dual reporting leading to conflict and confusion, a proliferation of
channels leading to log jams, overlapping responsibilities producing a loss of 97
accountability and battles over turf and barriers of distance, language, time and
culture which combine to making it very difficult to resolve conflict. Structural
solutions alone seem ineffective, as according to Bartlett and Ghoshal[6] the
most successful international organizations are less likely to be searching for an
ideal structure and more likely to be developing managerial abilities to operate
“a matrix in the mind”.
As Pucik[7, p. 3] puts it “the various dimensions of competitive advantage in
global firms have things in common. They are all embedded in organizational
systems, processes and cultures and they reflect the capacity of a collective of
people to think and act in a fashion that transcends the collective limitations of
an ethnocentric framework. To develop and manage a global organization
implies developing and managing people who can think, lead and act from a
global perspective, who possess a global mind as well as global skills” such
qualities are also important in transnational project teams.
This puts a key responsibility on developing managers and team members
with good interpersonal skills and tolerance of ambiguity. By analysing the
adequacy of organizational structures and processes to manage global
operations in a variety of US, European and Japanese companies, Bartlett and
Ghoshal[6] identified fundamental forces pushing companies towards global
integration, local differentiation and innovative learning. While European
multinationals, with their strong local presence and responsiveness, have
tended to maximize responsiveness, Japanese organizations with their global
scale efficiencies have focused on global integration. Other organizations like
GE, Ericsson or P and G have seemed very good at facilitating innovation.
However, the challenge facing international organizations in the future as they
see it is to build multiple strategic competences simultaneously – “to compete
effectively, a company had to develop global competitiveness, multinational
flexibility and worldwide learning capability simultaneously”[6, p. 16]. To do
this required a new organizational model, the transnational, which was able to
utilize the advantages of the other organizational forms[6].
This discussion has emphasized the value of taking a strategic perspective
based on the challenges of the international environment and the life-cycle stage
of the organization. The importance of national culture has become of
increasing importance as organizations develop, requiring us to pay attention
to the role of cultural diversity in international management. In particular, the
need to develop the flexibility and responsiveness to serve diverse customers
and clients without diluting the resources provided by an integrated core, while
developing structures that transfer ideas and innovation from inside and
Journal of outside the organization is becoming a priority issue that transnational teams
Managerial are being increasingly used to address. Some teams may pursue global
Psychology efficiency, others local responsiveness, others learning; yet others may be
expected to contribute to all three strategic imperatives.
12,2 Diversity is an issue which has often been equated with equal opportunities
and addressed primarily through the legislative impetus, as opposed to what
98 organizations could gain from it. Recent research in the field suggests that the
multiple perspectives diversity offers can build more powerful solutions. A
culturally diverse project team can make use of a diverse range of perspectives
offered by its international team members and their differing technical
expertise. Within cross-functional teams Irvine and Ross Baker[8] suggest that
diversity could encourage greater commitment to the organization and improve
productivity and quality. It has the potential to allow organizations to respond
more effectively to their widely diverse markets and thereby gain a competitive
edge. While it is demanding to manage diverse team members in a project, the
gains should not be ignored in the quest for high performing teams. Training
and development in interpersonal and diversity skills to evolve cultures which
support diverse organizational members may aid the process of building
learning and innovative international project teams and organizations.
However, transnational project management teams are a difficult and
demanding way to operate. They require a broad range of skills, perceptions
and political understanding to travel through uncharted territory where conflict
is the “norm”. While the team requires a degree of autonomy dependent on the
context, it will be subject to power moves, policy violations, complexity and the
need to satisfy multiple stakeholders. Stallworthy and Kharbanda[9] cite a
number of examples where international project teams have run into numerous
obstacles and disasters. However, high performing teams can be extremely
efficient, highly motivated … and generate learning and a high degree of
innovation. Flexibility and responsiveness seems to be the key to effective
cross-cultural project management teams, which have a history of either
performing very badly or extremely well[10]. This requires the development of
a model of effective transnational team performance.

An initial model
The first stage of our model starts by looking at the team environment and the
stages of project management (Figure 1), approached from a contingent
perspective. The “tool kit” describes the sum total of the concepts, theories,
skills and models, both within the team and externally in terms of what it can
access as a team. The model is designed to allow issues of context and
appropriateness to be determined from the multiplicity of what is available,
including team diversity and the resources it offers.
Figure 2 goes on to develop the team process further. It begins initially with
locating and recognizing the wide range of type of work that international
project management teams have undertaken in different industries and
organizations. The model then identifies the specific organizational
 Managing
diversity in
teams

99

Figure 1.
“Tool kit”

environments, contexts, structures and cultures driving projects/multi-projects,

and issues of objectives, structure and team membership. The model developed
here identifies a number of factors as potentially impacting on project team
effectiveness. These include the selection of the project manager, selection of the
project management team, the project team process and the review and
evaluation process. Some multinational teams are formed by senior managers,
others may arise in a more bottom-up fashion from existing or expanded
networks of individuals depending on each other to achieve work objectives. A
major issue is the link between the team’s mission and corporate strategy.
Selecting the project manager(s). The leadership/facilitation role has often
been found to be critical in determining the success of a project[1,2]. Bearing
this in mind, the appointment of the project manager requires a clarity of
objectives and the assessment of environment within which the project will
operate. Within that setting a number of processes/tools could be deployed in
the crucial task of selecting the project manager (Figure 3).
Schroder’s[11] competence model, management/leadership style theories,
and the identification of qualities desired/required for the specific project may
all be useful. Additionally, the project may call for different types of leadership
at different stages of the project, for which matrix models could be used. This
stage should lead in the appointment of a situationally able person(s) (Figure 3).
The team leader will have multiple roles to play, varying across the team’s life
Journal of
Managerial
Psychology
12,2

100

Figure 2.
Developing a conceptual
model for project
management

cycle, such as moving from an advocate role in the early authorization and
resourcing stages to later catalytic roles to integrator roles, focused on mission,
commitment and integration with other teams[2].
No one individual may be equally adept at all three roles, suggesting a
contingency approach to leader selection and reselection and the need for
continual training and development support[2].
Team selection and recruitment. The project team will be expected to deploy
qualities and technical expertise that cannot be filled by the project manager
alone. A variety of tools can help here, ranging from competence models to

Figure 3.
Project manager
selection
assessment centres and personality/preference models such as Belbin[12]. An Managing
important strand with reference to high performance is the identification of the diversity in
need for diversity. The effective management of diversity will be crucial,
particularly where innovation is a high priority, as opening up the work of the
teams
project team to a multitude of perspectives may generate better and stronger
solutions[10]. Diversity as the term used here refers to the different experiences,
ages, gender, expertise, personality, culture, background, etc. of the project 101
team (Figure 4). There are clearly trade-offs for example between local hiring
and the use of expatriates, depending on where the team is based. There is also
a need to include all the technical skills necessary from many functional and
disciplinary backgrounds, including temporary personnel. Staffing strategies
may depend on the strategic objectives of the team[1,2].

Figure 4.
Team selection

The need to maximize local responsiveness requires team member diversity,

and variety to enable it to attend to local issues across counties, markets and
products and effective different perspectives to be considered. Such teams are
often not only multinational but also multifunctional and multidisciplinary,
requiring a polycentric operation to staffing. The need to maximize global
efficiency and integration requires the co-ordination of activities and a global
focus, often using optional understaffing and a requirement to work with people
outside formal team boundaries. The need to optimize learning, connect units
and institutionalize learning, however, requires network staffing, and the use of
temporary experts augmenting a small core team[2].
The success and effectiveness of the project team, it is hypothesized, will
reflect the level of thinking and planning that went into defining project
objectives, the appointment of the project manager and team selection. These
factors are seen as determining the flexibility and responsiveness of the team in
meeting project goals.
Journal of Team/group process. Team-building tools available to the project team
Managerial include external tools such as outward bound courses, visioning techniques and
Psychology external/internal training led by consultants or even the project manager.
Diversity within team members, while likely to engender better solutions, is
12,2 nevertheless difficult to manage and has been known to lead to poor performing
teams[10]. International project teams are more likely to require high quality
102 team building owing to the cultural diversity present in the teams, in order to
pave the way for fewer communication problems and more effective utilization
of interpersonal and technical skills (Figure 5).

Team building
Teaching/learning modes outward bound centres
coaching, mentoring, supporting consultants (external/internal)
Stakeholders Initial
Project manager Styles
Motivation theories Forming authoritative/
Iteration facilitative
Power politics
Strategic contingent Storming
theories Innovative
Iteration theories/
Conflict/negotiation Norming concepts/
skills Guilding/leading factors
Networking Performing
Leadership theories
Groupthink – tools for avoiding it

Theories for managing emotions and

feelings within the team
Planning, monitoring, control topics – CPA etc.
Organizational strategy, Supplier/contractor/
structure and culture client relations
external environment
Conclusion

{
Figure 5. Matching objectives/outcomes
Documented? Evaluation/reflection
Team process Discussions on learning/experience
What happens next – future projects, team members direction, etc.

An understanding of group processes such as the phases of forming, storming

norming and performing[13] can be useful in order to analyse the creation and
development of culture and climate within the project team[13]. Motivation
theories and interpersonal skills training may help team members to cope with
and support the emotional climate of a diverse team. The project manager and
other team members need to be aware of and sensitive to what factors could
impact on team members and team performance. Team learning through
mentoring, coaching, supporting and training within the group needs explicit
recognition with a view towards meeting organization needs for the future, as
well as the immediate needs of the specific project.
Teams which recognize and expect there to be enthusiasm within individuals
and teams along with feeling of apathy can create forums for expressing and
exploring such issues so that the team can address the issues raised without
retreating into defensive postures and thereby unblock energies which can be
channelled positively back into the project[4]. Awareness of the potential Managing
existence of “groupthink”[14] and processes which might help alleviate it if it diversity in
occurs means the well-developed project team can be guided down a route teams
which is more able to meet its objectives[14,15].
There is also a range of planning, controlling and monitoring tools available
to the project team such as critical path analysis, often available in the form of
software programmes. The use of the tools will depend on the expertise 103
available and the merits of the tool in the particular situation.
Organizational tools which structure and co-ordinate the work of the team
are both necessary and useful – the challenge is to manage the tension of
structure and innovation so that it does not impact adversely on the objectives
of the project.
A number of factors that can impact on the teams are external as well as
internal, e.g. the industry or global environment, organization structure and
strategy, powerful stakeholders, the state of technology and the role of
suppliers, contracts and clients. Areas of particular relevance to transnational
project teams are negotiation, strategy and conflict resolution skills.
Kezsbom[16] pinpoints sources of project conflict. The understanding of
networking within the whole team is of greater import today in achieving
results quickly and keeping abreast of current knowledge with regard to
technical expertise and to what is happening within the organization outside of
the project team. Clients, suppliers, and other stakeholders can make or break a
project team, and Muellar[17] presents a persuasive argument for networking
and developing skills in the area.
Geographical dispersion may be an advantage (e.g. accelerating product
development by capitalizing on time zone differences) and its disadvantages can
be minimized through fax, teleconferencing, voice mail and e-mail, but it can
also inhibit the development of a cohesive group. Although technological
developments may help, face-to-face interaction is still often felt necessary as
otherwise trust often decays[4]. Electronic systems can help provide a
communications system, but can also help to provide databases and
“organizational memories” and decision support systems through groupware.
In addition to national culture, transnational project teams also need to
consider corporate culture (often related to national culture) and professional
culture (e.g. strong engineering cultures in some companies). Especially where
global efficiency is the major goal, team integration may be paramount, a
process assisted by the existence of a professional culture of shared values[1,2].
Reviewing and evaluation. The conclusion of a project is one of the most
delicate areas to manage successfully, and within that process attention needs
to be given to evaluation of the project. This is often an area that is ignored, as
participants and organizations may not particularly like to spend time on it,
especially if there are other projects to move on to immediately. Many
organizations need to develop a culture of thorough review and documentation
through developing procedures that are not prone to suffer from people’s poor
memories, or from team members who have not been aware of, or who have
Journal of distorted aspects of, their project team experience and learning. Evaluation can
Managerial become a conscious and actively triggered process, allowing both organizations
Psychology and individuals to learn from mistakes and to articulate, document and clarify
what has been learned (Figure 5). Much learning remains at the individual level,
12,2 however, while transnational teams can be the vehicle for diffusing learning
throughout the organization. Such goals are not often operationalized through
104 appraisal and reward systems, however.
Moving from a culture that would seek to apportion blame when things go
wrong to one which focuses on problems is more likely to build organizations
and individuals more willing to make genuine attempts to learn and be more
innovative. Otherwise, teams will be unable to utilize the energies and potential
of their members fully and be retrospective and risk averse in their outlook.
Reflexive journals[18,19] maintained by project team members from the start of
the project and shared in discussions at the conclusion of the project with other
team members at the discretion of the team member may be useful, including
discussion of how the learning and development needs of team members will be
channelled in future projects. The conclusion of the project should not be wound
up without plans and thoughts for future development, and recognition of the
experiences and learning that have taken place in the project.
It is possible to develop a project team profile for individual team members
which reflects the experience and learning taking place as a source for a
personal and individual development profile that documents the development
of skills and experience in project teams. This is useful as a career development
tool, both to the individual in focusing the direction of their career and to the
organization in assessing promotion and development needs and team selection
for future projects. By the same token, it would be useful for individuals who
wish to move on to other organizations. As many organizations are creating
flatter hierarchies, the growth of “career plateaux” for employees may require
such a focus[20].
It is not intended that the processes described in Figure 5 should be viewed
as sequential or linear, but as holistic. The different stages are interwoven and
integrated with earlier and future stages. Different frameworks could be
developed to allow teams and organizations to assess options and strategies,
reflecting power dynamics, the level and quality of technical expertise and the
human resource capabilities available both internally and externally (e.g. new
appointments, contracts, consultants, academics, etc.). The choice of particular
“tools” will be a reflection of context, the underlying philosophy which
underpins the culture and climate of international organizations, and the
cultural backgrounds of individuals who participate in the team, as well as an
awareness of what is available for use and the experience and backgrounds of
individual team members.
In addition to issues of internal fit, discussed above, the team must also pay
attention to external fit with the rest of the organization, a process that is both
evolving and potentially antagonistic, since corporate policies and programmes
may make life difficult for the team.
Managing diversity in transnational project teams Managing
This paper suggests that a “diversity competence” approach may be a useful diversity in
way of enhancing the effectiveness of multicultural project teams. The teams
contention is that diversity competences need to be seen as part of the tool kit
described in Figure 1 for the effective management of multicultural project
teams. If we can identify a profile of required diversity competences, we can
assess and select project managers and team members for specific roles against 105
it, and seek to enhance these competences through training and development.
Such competences are likely to be useful at many points of the international
career cycle and at several points in international project management, such as
the selection of the project manager (Figure 3), team manager (Figure 4) and for
an understanding of team process (Figure 5). There are a variety of approaches
to this area. Some researchers have tried to examine the international pan-
European competences required for different roles and positions. One
influential framework distinguishes “doing” competences (championing
international strategy, acting as a cross-border coach and co-ordinator, acting
as an international mediator and change agent, managing personal
effectiveness) from “being” competences (cognitive complexity, emotional
energy, psychological maturity)[21].
A study of 60 senior international managers found they operated from a
deeper, more holistic, “core” which is difficult to change. This core consists of
three dimensions: cognitive complexity, emotional energy and psychological
maturity[22]. Of particular note here is the identification of cognitive factors,
relating to how successful international managers perceive and categorize the
world. Of note is the emphasis given here to emotional or affective factors:
successful international behaviour is not a matter of purely intellectual or
cognitive understanding alone. In addition the ability to empathize with
someone from a different culture and background is seen as essential in order to
motivate, lead, work with, sell to or negotiate with that person. Such a set of
abilities is often termed “cultural fluency” or “intercultural competence”[23]. In
this paper, we see these as one aspect of what we have described as “diversity
competences” and included in the toolbox in Figure 1, to be used for individual
assessment, selection and development of project managers and team members
(Figures 3 and 4). Later, we go on to explore some crucial diversity competences
at the team level (Figure 5).
Although many companies cite such qualities as relational and interpersonal
skills, motivation, cultural empathy and adaptability as important qualities
contributing to international effectiveness, they rarely seem to assess their
qualities systematically, often using job or technical proficiency as a sole
criterion. Systematic research studies confirm that interpersonal, relational and
motivational factors are associated with success in international assignments.
A review of the (mainly US) literature on effectiveness, concludes that in
addition to job factors like technical and managerial skills, language skills and
the family situation of the expatriate, a range of motivational and relational
attributes were important determinates of success[24]. Such qualities included
Journal of characteristics such as tolerance of ambiguity, behavioural flexibility, non-
Managerial judgementalism, low ethnocentrism, cultural empathy and interpersonal skills,
Psychology as well as interest in host country culture and willingness to acquire new
patterns of behaviour.
12,2 It is debatable whether such attributes can be assessed accurately by
psychometric tests or by simulations in assessment centres, or whether they
106 can be developed by cross-cultural training programmes. However well
developed such “personality” attributes might be, an international manager
will be effective only if they are deployed in behavioural terms. A review of
Danish practice argues that “inter-cultural” competence consists of only three
dimensions[23]. One is “affective” competence; another is “behavioural” (or
communicative) competence (the ability to communicate effectively both
verbally and non-verbally with host country nationals). Of particular interest is
cognitive competence, the ability of successful managers to avoid crude
stereotypes or narrow categorizations, and to divide the world up in more subtle
ways. This capacity seems to echo Ratiu’s work on the ways in which
successful international managers employ tentative, provisional, private
stereotypes rather than the fixed, inflexible, public stereotypes used by less
successful international managers[25].

Intercultural competence and international diversity in

transnational project teams
Many organizations have attempted either to ignore or to suppress the cultural
differences presented by multicultural teams. It is often the case that, initially at
least, such teams may present difficulties of communication and
comprehension, perhaps leading to tension, conflict and confusion. However, it
is increasingly asserted that actively managed cultural differences can be an
asset and a resource, especially where an organization needs to devise new
ideas, entertain new perspectives, and expand on existing plans[10]. Diversity
in teams can lead to greater flexibility and openness and the avoidance of the
“group think”. Here homogeneous, cohesive teams may come to suppress new
or challenging ideas through self-censorship or through self-appointed “mind-
guards” labelling any challenge as disloyalty or treachery[14,15]. If cultural
differences are recognized, valued and used to the organization’s advantage,
then greater synergy can result. If this is to be realized, then team members may
need to display both cultural self-awareness and cross-cultural awareness – a
crucial “diversity competence”.
Although diverse teams initially experience difficulties, they can generate
more novel and higher quality ideas[26,27]. Diversity in the top management
team is more likely to lead to changes in corporate strategy, which suggests
that top team diversity in international organizations is likely to lead to greater
innovation and creativity[28]. Cultural diversity at all levels of an international
organization may also lead to greater understanding of diverse markets and
customer preferences. More culturally appropriate marketing and human
resource practices are likely to result, especially in the areas of leadership style,
communications, training, appraisal and recruitment. Employees are more Managing
likely to be attracted to an organization, and more likely to be retained, if they diversity in
see their cultural background valued rather than ignored or disparaged. Many teams
international organizations have therefore recognized that valuing cultural
diversity and incorporating it into the business is likely to be a source of
competitive advantage. Diversity competences may therefore come to play a
key role not only in recruitment, selection, training, development and 107
performance management practices, but in building multicultural teams and
also in cross-cultural negotiations.

Diverse teams: social psychological approaches

Very little published research deals directly with the issue of task groups
consisting of members of diverse national backgrounds[26]. However, there is
evidence from social psychology that national culture affects perceptions,
values and behaviours in many ways[28,29], though people aspiring to work for
multinational companies and recruited and selected to develop careers with
them may differ from the typical national, probably offering more cosmopolitan
backgrounds. Corporate culture and its associated pressures will also have its
effects. Much more research, especially experimental research conducted in
laboratory settings, has explored the role of diversity (more often called
heterogeneity)in group performance[27]. Much research has shown that
personality differences and other aspects of heterogeneity can positively
influence the quality of problem solving in groups. However, other research has
found that homogeneity in groups promotes greater trust, easier
communication and enhanced implementation. It appears that heterogeneity
does not have uniformly positive or negative effects on group performance, but
that its effects may be curvilinear (greater heterogeneity may be helpful up to a
point, and then negative), may vary with the dimension of diversity under
consideration (such as tenure, functional background, and personality type)
and may depend on the nature of the group’s task[26,27].
Adler[10] argues that multicultural teams may suffer both process losses
(mistrust, stereotyping, communication problems, stress), but also enjoy
process benefits (more ideas, better ideas, less groupthink) and therefore have
the potential to perform extremely badly or extremely well, depending on a
variety of factors such as task type and leader behaviour. In addition, some
concept of “cultural distance” or “degree of diversity” may need to be invoked:
groups composed of Arab nationals will not be as diverse as one also containing
Latin Americans, although ways of assessing cultural distance are not yet very
precise, despite the obvious “clusters” that research has found (e.g.
Scandinavian; Latin American)[28,29]. Historical factors in relation to
competition will also need to be considered (e.g. Greeks versus Turks).
Some recent work has explored the impact of task type as a moderating
influence on the relationship between group heterogeneity and performance,
usually focused around the concept of routine. Defined, structured and routine
tasks are often seen as best managed by homogeneous groups; less routine and
Journal of more creative work by heterogeneous groups, as diversity may allow more
Managerial varied perspectives and the consideration of a broader range of options and
Psychology alternatives. Jackson[27] develops this argument, distinguishing between
creative, problem solving and task execution tasks, while Hambrick
12,2 et al.[26] refer to similar distinctions in terms of creative, computational and
co-ordinative tasks. Some groups may move through phases or stages, such as
108 moving from a creative phase (e.g. R&D) to a co-ordinative phase (e.g.
implementation). In creative tasks, with no objectively verifiable correct answer,
there is a need to generate a range of ideas, refine ideas, and reach consensus;
diversity in terms of assumptions, knowledge cognitive schemas and values
may be beneficial to group effectiveness, as different perspectives constitute
resources which help address novel, unstructured tasks. Such diversity may be
less beneficial for computational tasks requiring clear-cut data collection,
analysis and problem solving, while it may actually inhibit performance in
co-ordinative tasks involving elaborate interaction and mutual adjustment due
to the current of strain, mistrust and conflict that may occur[26]. Diversity at
the behavioural level may only incur costs, yielding few benefits, especially in
co-ordinative tasks, while a low level of fluency in a common language may also
impair group functioning, especially for co-ordinative tasks. In general,
diversity poses most difficulties for co-ordinative tasks and offers most benefits
for creative tasks[26].
There are two other approaches from social psychology that may help in the
analysis of such processes: attribution theory and social identity theory.

Attribution theory
Much research in social psychology has shown that people describe and explain
the “same” events in different ways, especially in the way they attribute
behaviour to causes. The key task of observers is to decide whether a given
action is attributed internally (to the person, e.g. effort, ability, intention) or
externally (to the situation or environment, e.g. luck, task difficulty). Research
has also focused on the attribution of intentions (was the behaviour deliberate?)
and the attribution of dispositions – behaviours that disconfirm expectancies,
such as those based on social group membership, are often held to be more
informative. In addition, the “hedonic relevance” of an action to the observer
also influences the extremity of judgements, whether positive or negative, as
does the degree of personalism or its direction towards the observer. A common
finding has been the “fundamental attribution error”, the tendency to over-
emphasize dispositions and underemphasize situational influences as causes of
behaviour. In intergroup settings, this has been termed the “ultimate attribution
error”[30,31). Just as people tend to assume internal causes for other’s
behaviour, but external causes for their own (unless these are very positive),
explanations of in-group/out-group behaviour may be similarly biased.
Negative behaviour (conflict/delays) by outgroup members may be seen as
internally caused (deliberate, intentional, personality-based), whereas the same
behaviour from ingroup members may be explained externally (e.g.
provocation). Similarly, positive outgroup actions may be attributed externally Managing
(luck, ease of task) whereas positive ingroup actions may be attributed diversity in
internally (effort, ability, etc.). In short, attributions tend to favour the in-group, teams
and group achievement attributions are also often self-serving. The high
performance of women and black people may be attributed by white males to
luck or task easiness; that of white males to effort or ability. Similarly women’s
or black people’s achievements may be explained away as not due to internal 109
causes (e.g. connections, affirmative action, etc.), while white male’s
achievements are often attributed internally.

Social identity theory

Early theories of intergroup conflict tended to focus on “realistic conflict” –
conflict over group competition, with associated group favouritism, out-group
derogation, and greater cohesion within in-groups. Similarly, recipes for
reducing inter-group conflict tended to focus on equal-status contact and the
provision of super-ordinate goals in an atmosphere of institutional support so
as to foster co-operation[30,31]. Inter-group success was often seen to foster
cohesion, and failure a loss of morale. Groups who fail in co-operative tasks
after previous competition, however, often seem to blame outgroups for their
joint failure, while blurring of roles in co-operative tasks may generate less
positive attitudes than maintaining distinctive roles. This suggests that groups
with a common interest in working together may feel more positive towards
each other if they retain some aspect of their group identity in the joint
operation. Similarly, making group affiliations and identities more salient, not
less, in co-operative contact may help participants see each other as group
representatives, not just as individuals and so exceptions to the rule, with
positive feelings failing to generalize to other group members. As Brown[30]
puts it, “it is often helpful if groups can make distinctive contributions to joint
ventures so that their identities are not threatened by the blaming of group
boundaries which may occur in the context of superordinate goals …”[30,
p. 219].
More recently, social psychological research has shown that conflicts of
interest are not necessary to generate in-group bias: the mere fact of group
membership, prior to any realistic conflict, may be sufficient. Cognitive
processes may act to exaggerate differences between groups and enhance
similarities within groups. Stereotyping, though useful in ordering and
simplifying the social world, may attribute negative traits to all members of the
out-group, as well as generate attributional errors favouring the in-group.
Social identity theory also proposes that self-esteem partly derives from group
membership and relative evaluations with other groups. To preserve a positive
identity, group members often search for positive distinctiveness for their
group, taking the form of biased perceptions and discriminatory behaviour.
Those categories most likely to be used by a person are those most “accessible”
at the time (e.g. cultural values, situation) and those which best “fit” the
environment (e.g. proximity, common fate, distinctiveness)[31].
Journal of Although much research in social psychology has focused on majority
Managerial influence and pressures towards conformity, minority influence and innovation
Psychology may be seen if a clear position is advocated consistently in a flexible rather than
a rigid or dogmatic way and in a way that seems free from self-interest[32].
12,2 Again, attribution theory is of relevance here, as majority members are likely to
ask “why are they acting as they do?” This is likely to result in person (internal)
110 attributions, leading majority members to take minority positions and
perspectives seriously. Dogmatic behaviour may, however, be attributed to
crankiness or other idiosyncratic characteristics, leading to discounting of
minority positions. An active minority may act as a catalyst for unsettling
opinion and comfort with ways of thinking, perhaps leading to looking at
things from fresh perspectives and generating more creative solutions. In-group
minorities may be more successful in this respective than outgroup minorities,
however.

Summary
If the potential synergies available from cultural diversity are to be realized,
then team members need to be interculturally competent, able not only to
understand their differences, but also to continue to communicate effectively
across their differences. These diversity competences are likely to involve
empathy, negotiation, the ability to create a shared reality through collective
participation, the open resolution of conflicts, and the ability to use cultural
differences as a resource. Figure 5 shows some of the processes involved in
international project teams, highlighting especially team development phases,
the role of leadership, an understanding of motivation, power, conflict and
negotiation, and networking in international, multicultural context, and the
importance of dealing with culturally diverse stakeholders, clients, contractors
and suppliers. The model also puts forward some relevant development
processes, at both the individual level (coaching, mentoring, supporting) and
team level (team building, outward bound events, use of consultants), as well as
the importance of documentation, reflection and review to team effectiveness.
However, we need to explore required diversity competences further at the level
of the multicultural project team so as to enhance the level of support to such
teams available in the tool kit described in Figure 1. An observational and
interview study of one multicultural project team in action is of assistance here.

Case study: Raleigh International

A group of eight international managers from different parts of Europe and
North America engaged in the 1994 international management challenge for the
youth development charity Raleigh International were filmed, observed and
interviewed as part of the “People” Unit of the Open University MBA course
B890 “International Enterprise”[33-35]. The aims of the project were both to
help Raleigh organize community and conservation projects for young people
in Botswana by drawing on the global management experience of the
participants and to help the participants, and their sponsoring organization
learn more about multicultural teams and crosscultural negotiations by Managing
working on a “real-life” project. The team consisted of four male and four diversity in
female managers drawn equally from the public/charity sectors (the UN, the teams
Red Cross, the British Council, the Gradua Institute in Prague) and the
private/commercial sectors (Hewlett-Packard, Statoil, BP, Lever Brothers). One
manager was African-American (Michael), another Czech (Pavia) another
Scandinavian (Jorgen) and another North American (Michelle). The others were 111
British (Anne, Graham, Douglas, Keith). The Raleigh director, David, was also
British.
The two-week programme consisted of several phases:
• A prior two-day team building/outdoor development programme held at
a management college in the UK.
• A three day stop-over in Zimbabwe to orient the group to Raleigh’s work,
including a project to build a house for a Save the Children Fund
community health worker.
• A briefing from the Raleigh client (David) in Botswana.
• Sub-group meetings in the capital, including a radio station appeal and a
meeting with the vice president.
• An assessment of three potential community/conservation projects in
Botswana (a rhino sanctuary, a wilderness school and a community
hall/bus stop in a remote village).
The team, however, appeared to leave for Africa unclear about their goals,
ground-rules and ways of working. Shock at the rather basic accommodation
offered to them in Zimbabwe created more doubts over Raleigh’s performance.
At the initial orientation with Raleigh, David raised more doubts when he
stressed how much he had accomplished previously in a short time, with
success defined in numerical terms (“109 meetings in 21 days, 40 meetings in
five days …”). Presented with a large folder of objectives and details, a split
began to emerge in the team, not on national but on sectoral lines. A private
sector group (75 per cent male) wished to press on with the task, whereas the
public sector group (75 per cent female) wished to hang back to discuss the
plans in more detail.
This split remained an issue for the whole two-week period. For Graham, one
of the private sector managers:
The group had a lot of complementary skills but were not actually pulled together … if
someone says “process” once again, I’m going to ring their bloody neck … I’m just totally
frustrated, I wanted to go home last night, we got given this task that really didn’t look that
difficult … most of the group wanted to run away from it.
Some of the public sector managers disputed the implication that they were
afraid of the task and had backed away from it. Stressing the volume of detail
and the number of unknowns in the task, Douglas argued that:
Journal of It’s more fools in, a lot of time and energy can be saved by actually standing back before you
launch in.
Managerial
Psychology While he was supported by Anne, who claimed:
12,2 It wasn’t that at all, I wasn’t frightened by it.
Despite these internal tensions, the group as a whole felt satisfied with their
112 work for Raleigh – an illusion cruelly shattered by David:
Being honest with you, and in terms of the feedback l got yesterday, I’ve got some file notes
and some file notes which frankly are not much use to me because they’re very vague, the
names are unclear, it doesn’t give numbers and they’re not much use … really what we’re
looking for is strategic advice from you … the only person really who’s given that to me is
Graham … unless you come back and actually give us some useful additional suggestions its
been a waste of time for us.
The team eventually recommended that all three projects they had assessed
should be supported, and Raleigh eventually seemed reasonably satisfied with
the outcome, accepting the team’s recommendations. As David put it:
When you did arrive, I think it would be fair to say we did have some fears because I think
what slightly preoccupied us … was that when you arrived in-country we both assumed that
you’d be rested as a team … we were quite surprised to see that I think you were quite tired
and also that as a group you seemed more interested in focusing in on group issues and
dealing with your tiredness … than actually finding out from us what our needs were … it
rang early warning bells … what I can say is really that hasn’t happened.
The members of the team also seemed to feel that they had learned some
valuable lessons both about teamwork and negotiations in a multicultural
setting and about themselves as international managers. As Anne put it:
What’s important in being an international manager … it reinforced the humility bit quite a
lot and also for me personally managing ambiguity … we’re not managing ambiguity terribly
well as a team.
Graham continued to stick to his view that the team ran away from the task, as it
started to define our rules for the customer … I think we missed a great opportunity to really
see what was going on … we basically decided to take no risk at all.
Douglas stressed both the significance of the time deadline and the necessity of
valuing and managing diversity; for him the group:
hadn’t yet resolved how people with different approaches would resolve these tensions …
different preferences for tackling tasks or clarifying objectives … so I think when conflict was
at its height it was when we were under maximum time pressure … yet we hadn’t got a modus
operandi in terms of how people with different styles would work together.
Michael on the other hand seemed more positive about what he’d learned; for
him, the number one lesson was:
learning to appreciate the differences among your various team members … you know the
United States is international, at my plant we have Africans, we have African-Americans, we
have Whites, we have Orientals, we have Hispanics, the whole spectrum, and even though we’re
all Americans, we still have different backgrounds and you need to leverage those so I think I am
hopefully more sensitive to that, and looking at myself hopefully I am more sensitive to the way
I come across to different people because things aren’t always the way I see things.
Diversity processes in transnational project teams Managing
The Raleigh case illustrates the key role of a variety of competences in effective diversity in
multicultural project teams, including: managing stress, managing risk, teams
managing ambiguity and humility. What is of particular interest here are five
key diversity competencies, namely:
(1) cultural awareness: understanding the differences in the team (cognitive 113
competence);
(2) communicative competence: communicating across the differences[36];
(3) cognitive competence: acknowledging stereotypes;
(4) valuing differences: cognitive, communicative and affective competence;
(5) gaining synergy from the differences: cognitive, communicative and
affective competence[36].

Cultural awareness
The case shows the importance of being aware of cultural differences[35]. For
example, the Raleigh director, David, used extremely quantitative criteria to
measure his effectiveness (how many meetings in how few days); other cultures
may use more qualitative criteria. Some cultures are very task-oriented, others
more relationship-oriented. It was noticeable that Michael, from the most task-
oriented of all cultures, the USA, tended to take the lead, chair meetings, and try
to push the group along. As he said:
I can see where I might have tried to impose something on the rest of the group, just for the
sake of meeting our time commitment.
When the team engaged with local people in assessing the need for a village
bus-stop, they also began with the very task-oriented question “why do you
want a bus-stop?” As Adler[35] points out, this may be a very offensive way of
approaching people from relationship-oriented cultures, discounting their need
to build positive relationships prior to working on task issues. As Michelle put
it:
having conversations and negotiations with the people here are very measured, very thought
through. Everyone in terms of the people we met in the village came to a consensus … But the
one aspect that I was challenged on is, you know, taking my Western stuff on just getting in
there … I went up to them and said “Do you mind if I take a look at your clinic?” whereas what
I should have done is squat down, pat the dog a little, asked them you know “did it rain last
night?” … and I didn’t do any of that so when I asked them the question they kind of sat there
and I thought they didn’t understand … but they understood it perfectly, they were just telling
me that I was rude … so that there was a challenge to learn the culture … to slow down and
you know kind of just quietly find your way.

Communicative competence: communicating across the differences

The key role of language and communication, including non-verbal
communication is identified by the Czech manager Pavia who said:
Journal of I couldn’t add anything to this, because I didn’t understand at all … I felt so tired, but I even
wasn’t able to follow the conversation … I am able to think in my own language … but just
Managerial thinking in a different language is so … that’s why my performance or my presentation is very
Psychology low … I can’t exactly say what I would like to say, because I can’t find the right words. So that
I feel slightly frustrated …
12,2
However, other team members seemed not to ask her what she thought, whether
114 she agreed, or how she saw things, and did not particularly try to pull her in to
discussions. They seemed to assume that her silence signified agreement,
which it did not necessarily imply.

Cognitive competence: acknowledging stereotypes

Mutual stereotyping and negative attributions in multicultural project teams
and in inter-cultural negotiations is a common phenomenon. Although this term
is often associated with negative connotations, it is a universal and necessary
process oriented towards reducing the confusion of the world into meaningful
categories[27-29]. However, what is important for cross-cultural interactions is
that stereotypes are acknowledged and made explicit, open and shared – not a
process apparent in the Raleigh example[34].

Valuing diversity
Often, programme designers in cross-cultural training programmes often posit
“tolerance of diversity” as a prime objective. “Tolerance” seems too passive a
word for a process of valuing differences and using them as a resource and
asset. In the Raleigh case study, the introductions in the UK failed to give early
legitimation to the acknowledgement and positive valuing of diversity and
difference[34]. As a result, team members appeared to look for similarities
quickly and things in common, not differences – such as we’re all in Africa
together, we’re all foreigners, we all have a job to do[24]. This attention to the
forces drawing them together may have blinded them to their differences and to
ways of using them to their advantage. In many cases team members appeared
to assume agreement where none existed, taking silence and disengagement as
signifying assent. As Michelle put it:
Some people were very quiet and I think they were unhappy, they kind of sat there and
projected unhappiness rather than vocally expressing unhappiness … I was ready to just
cruise, and I did withdraw a couple of times … because I was frustrated like Graham was.
We have already noted the considerable sectoral (public/private) differences in
team member’s orientations to task and process emphases.

Obtaining synergy
As a result, given the lack of significant drivers for the group (their jobs or
careers did not depend on their effectiveness) cultural synergy did not appear to
be achieved in the Raleigh project. Figure 6 hypothesizes that this is only
achievable if members of a multicultural project are sufficiently “interculturally
competent” at the affective, cognitive and communicative levels and can master
the earlier steps so as to enable communication and integration across
 Managing
diversity in
teams

115

Figure 6.
The effects of team
diversity on
performance

acknowledged differences and explicit stereotypes to occur in a climate which

values diversity rather than seeking to ignore, suppress or disparage it. Such
skills are more likely to be developed using experiential methods such as
multicultural team building, multicultural outdoor development, and cross-
functional project teams and the team-building and action learning projects in
Raleigh International[5,36-38]. These development strategies can target not just
individuals, but also teams and organizations, and are methods which focus not
just on cognitive awareness and problem solving, but also on more open-ended
experiential personal and self-development processes (affective and
communicative competence)in a multicultural setting while also dealing with
“real” issues related to job, career and organizational life.
The model presented in Figure 6 argues that diversity in multinational teams
may confer both process losses (as identified by social identity and attribution
themes in their discussion of categorization, identity, the search for
distinctiveness, and negative attributions and stereotyping, amplified by team
failure) and process gains (the variety of perspectives and resources offered and
the potential for creativity and avoidance of group think, amplified by equal
status co-operation in a successful task in a positive climate of diversity). The
model also identifies a variety of external, environmental factors impinging on
this process (natural, corporate and professional cultures[37], geographical
dispersion, complexity and the strategic imperatives of the organization and
team) and also argues for an appreciation of the key role of the project team
leader and of team members diversity and intercultural competences, which
may make all the difference as to whether the process gains are realized in
practice.
Journal of References
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