Working relationships, what makes projects work

(1)

Working relationships, what makes projects work

A qualitative study on the development factors and effects of working relationships

on project performance in multi-cultural projects

Master thesis, Msc BA Change Management

University of Groningen, Faculty of Business and Economics

(2)

ACKNOWLEDGEMENTS

I would like to thank Cees Reezigt for his help during this research. His swift and constructive feedback was always helpful to me, and through his counsel it was a pleasure to learn how to write a competent thesis. Furthermore, my gratitude goes to my girlfriend, Guusje van Kersbergen, who was always willing to share her thoughts on the thesis, and who had to deal with me when the going got tough. Also, I want to thank Leah Cowan for her feedback regarding English grammar and spelling. Moreover, I am thankful for the opportunity Slawek has given me to conduct my research at his organization. Naturally, I also want to thank all the interviewees for their time and openness. Finally, I am grateful for the financial and emotional support of Wim de Munk and Bernie van Megen. Their positive support gave me extra motivation to give it my all.

ABSTRACT

The dominant rational belief system of project management literature, along with the evidence of frequent project failures were the key motivations for this research. This study examines a more social focus by testing and exploring the factors that influence the development of working relationships in a multi-cultural project team context and by testing and exploring their effects on project team performance. With the help of four unstructured and seventeen semi-structured interviews with project members, the development factors and effects of working relationships suggested by previous literature were tested, and additional ones explored. This resulted in empirical evidence for the majority of development factors from previous literature, the discovery of additional factors such as humor, intensity of collaboration and character, and an overview of the development factor interconnections. Furthermore, the effects of working relationships (such as communication quality, trust, team commitment and job satisfaction) and their influence on project performance were empirically supported and elaborated. Finally, the results show that multi-cultural team diversity encompasses multiple challenges that could be both enlarged or diminished depending on the nature of the working relationships. Overall, this research gives additional weight to the relevance of the social abilities and the ‘fit’ between project members when forming a project team. Also, a common project language, which is mastered by all project members, is found to be a prerequisite for multi-cultural collaboration.

(3)

INTRODUCTION

Within this first chapter, the research topic is introduced. Firstly, the development of the project management field and its current challenges are described. Then, the purpose and the significance of this study are presented. This is followed by the research question and an overview of what will be discussed in this paper.

1.1 Problem Statement

In recent decades academic research on project management has grown exponentially. Bakker (2010) describes an increase of 339% between the decades 1988-1998 and 1998-2008, which also corresponds with the increased number of practitioners who adopted project management (Hodgson, 2002). The main cause for this growth in popularity is threefold: the belief that project management can be a useful tool to manage the increasing uncertainty and complexity of the ever-changing modern world (Clarke, 1999; Hoegl & Parboteeah, 2006); that it can stimulate a learning environment and enhance creativity; that it can assist in delivering more complex products (Hobday, 2000).

(5)

group satisfaction (Basadur & Head, 2001; Byrne, 1997; Carmel, 1999; Grabher, 2002; Phillips & Sackmann, 2002). Thus, getting such multi-cultural project teams to work effectively can prove a major issue (Brett et al., 2007; Earley & Mosakowski, 2000).

In order to overcome frequent project failure several researchers have questioned its underlying rational belief system, and advocate for a theoretical shift towards one that is more focused on the social aspects of project management (Bakker, 2010; Hodgson & Cicmil, 2006; Pryke & Smyth, 2006; Söderlund, 2004). They believe that project performance can be enhanced by changing and influencing human behaviour of all those involved in the project. Other studies have indicated working relationships between team members as one of the key social aspects impacting human behavior (Child, 2001; Patel, Pettitt, & Wilson, 2012; Storck, 2000). Positive working relationships could enable team members to overcome difficulties and bridge the differences between multi-cultural team members (Mannix & Neale, 2005). However, current literature on this subject is far too limited in its efforts, often failing to address the impact of working relationships within a multi-cultural context on project performance (Alojairi & Safayeni; 2009; Connaughton & Shuffler, 2007; Gremler & Gwinner, 2000; Thomas & Megel, 2008).

1.2 Purpose and Significance of the Study

This study explores if greater research emphasis on working relationships within multi-cultural project teams could pose a possible solution to frequent project failure, and if it could tackle the challenges that accompany multi-cultural project teams, thereby enhancing project performance. Furthermore, this study refines the current understanding of the factors that encourage and inhibit the development of working relationships applicable in a multi-cultural context. Also, it presents the first model that provides insights in the interconnections between the multiple development factors.

(6)

within multi-cultural project teams evolve, how they can be developed, and what effect they have on project performance can also enable project managers and project team members to overcome cultural barriers, helping them optimize their project performance (Pauleen, 2003). Moreover, this study questions the traditional process of the project team formation. Currently, the main selection criteria for project members is mainly based on cognitive abilities such as knowledge and competences (Raiden, Dainty, & Neale, 2004). However, by accentuating the importance of working relationships, the emphasis of selection criteria could shift from prioritising competences and knowledge, towards the social abilities of the project member. When this is taken into consideration, team members can be selected according their ability to develop positive working relationships.

1.3 Research Question

The following research question will explore the underdeveloped field of multi-cultural working relationships within project management:

“How do working relationships develop within multi-cultural project teams, and to what extent and through which mechanisms do they effect project performance?”

This study makes three contributions to emerging research on working relationships within multi-cultural project teams. Foremost, a theory is introduced which advances our understanding of the mechanisms through which working relationships effect project performance in al multi-cultural setting. Secondly, this study contributes to earlier research on the development of working relationships by identifying which factors encourage and inhibit the development of working relationships between multi-cultural project members over time. Thirdly, this research will be one of the first in its kind to explore the interconnections of the factors that influence the development of working relationships.

(7)

2. BACKGROUND

This chapter introduces the definition of project teams, follows with an explanation of multi-cultural project teams, elaborating on their benefits and challenges. An explanation of working relationships and their development is also explored, widely discussing the effects of working relationships in a multi-cultural project team context. Finally, the term ‘project performance’ is operationalized.

2.1 Project Teams

Project teams are a composition of flexible, autonomous and knowledgeable organizational actors from different disciplines working together on a complex task over a limited period of time (Bakker, 2010; Grabher, 2002). The time-span of a project can vary between several days, for example, if working on a music video project (Bechly, 2006), to decades, as in military or pharmaceutical projects (Sydow, Lindkvist, & DeFillippi, 2004). Project teams are considered to be a suitable way in which to deal with the changes caused from increasingly turbulent environments (Clarke, 1999; Hoegl & Parboteeah, 2006), and can stimulate a learning atmosphere and enhance creativity to deliver complex products (Hobday, 2000). They are also focused to increase competitive advantage and to accomplish goals efficiently, timely and effectively, to be of benefit to the company and to meet customer satisfaction (Hodgson & Cicmil, 2006).

2.2 Multi-Cultural Project Teams

This section describes grows in multi-cultural project team popularity and mentions several challenges and benefits with the help of three diversity theories.

Due to increasing trends towards globalization, internationalization of business, strategic alliances, mergers and acquisitions it becomes more common that project teams consist of people with different nationalities and cultural backgrounds (Phillips & Sackmann, 2002). These multi-cultural project teams are highly diverse and are therefore believed to face more challenges than mono-cultural project teams (Basadur & Head, 2001; Brett et al., 2007; Earley & Mosakowski, 2000; Ochieng & Price, 2010; Phillips & Sackmann, 2002).

(8)

willing to work and cooperate together. On the contrary, they will be reluctant to work with those with different attitudes, beliefs and values (Rosenbaum, 1986; Williams & O'Reilly, 1998). Brett et al. (2007) discovered that differences in values, norms, habits and traditions lead to differences in team member’s prioritization, interpretation and response to stimuli, making it harder for diverse team-members to cooperate. Furthermore, Joshi and Jackson (2003) describe that it is more difficult for members of minority groups to establish beneficial working relationships, because of the absence of similar team members, resulting in the feeling of isolation. Field research reveals that cooperation with diverse multi-cultural team members can cause misunderstandings and conflicts (Jehn, Northcraft, & Neale, 1999), lower satisfaction (Basadur & Head, 2001), and lessen cohesion (O’Reilly et al., 1989). Second, the social identity and social categorization theory state that people tend to categorize themselves into specific groups, and categorize others as in-group or out-group members, thereby creating ‘us’ and ‘them’ distinctions (Tajfel & Turner, 1986). Members of the in-group are treated with favoritism, whereas those who are part of the out-group are judged according to negative stereotyping. Within multi-cultural project teams, language differences could further enlarge the in- and out-group dichotomy, because people have the natural tendency to speak their native language, which tends to naturally pull other team members with the same nationality and language together (Hansen & Nohria, 2004). As highlighted in the two aforementioned theories, team members will be more attracted to other team members of a similar cultural background and origin as themselves, which, in culturally diverse intragroup relations, is likely to lead to group divisions and difficulties in working. In turn, such discords and segregations tend to result in poor team performance (Mannix & Neale, 2005). The third theory, the information-processing theory, presents a more optimistic perspective. It suggests that the different values, believes and ideas of the team members lead to different perspectives and approaches to problems (O'Reilly, Williams, & Barsade, 1998). Their diversity makes them less likely to lapse into a state of premature coherence, thereby reducing the probability of ignoring alternative solutions or making faulty decisions (Janis, 1972). Thus, through their interaction and a constructive exchange of information emerges, and the team´s creativity and its project performance will be enhanced for the better (Phillips, Mannix, Neale, & Gruenfeld, 2004).

(9)

2.3 Working Relationships

This section defines working relationships and provides an overview of the factors that could encourage or inhibit their development.

Gabarro (1990) defines a working relationship as an interpersonal relationship between two people that has its origin on the work floor. It can vary in stability, mutuality, and efficacy and can evolve into friendship beyond the workplace. Lewicki and McAllister (1998) complement this definition by describing working relationships as a composition of experiences that an individual has with another person in a working context. According to them, the established working relationship will mature when the experiences grow across multiple contexts over a longer period of time. High quality working relationships are characterized by the presence of rapport (Kotlarsky & Oshri, 2005). Bernieri, Gillis, Davis and Grahe (1996) describe rapport as: “the quality in the relation or connection between interactants, especially relations marked by harmony, conformity, accord, and affinity” (p. 113). Rapport is often described as having a ‘click’ or ‘chemistry’ with another person (Tickle-Degnen & Rosenthal, 1990). Working relationships develop when the number of experiences between those involved accumulates over a longer period of time (Lewicki & McAllister, 1998). During these experiences there are several factors that could encourage and/or inhibit the development of high quality working relationships. These are not necessarily independent from one another and could have a reinforcing or diminishing effect on each other. Such factors are described in more detail in the following paragraphs.

(10)

2.3.2 Factor 2: Informal interactions. Informal interactions help people to get familiar with each other, talk about expectations and experiences, and discuss individual interests; all of which help develop a working relationship (Green & Brock, 2005). Situations where such informal interactions may occur include activities such as having a drink after work, talking at the coffee machine or participating in team building activities (Green & Brock, 2005). Informal interactions are especially helpful during the initial contact between team members. It allows them to ‘open up’ to their fellow team members, thereby creating opportunities to establish working relationships (Sackmann & Friesl, 2007).

2.3.3 Factor 3: Leadership. Team leaders can play an important role when the project team is dealing with frequent relational conflict. They can do this by stimulating constructive feedback and confronting discussions in order to reach a win-win solution (Yaun & Jing, 2014). Furthermore, leadership can moderate the negative effects of cultural diversity on the development of working relationships. When, for example, a new multi-cultural project team is composed, the team leader can inform and prepare team members about their future members and their cultural specifics. This may help to develop an open mind-set, prevent segregation into distinct subcultures and dissolve tendencies of negative stereotyping and distrust (Sackmann & Friesl, 2007). Moreover, a team leader can make agreements with the team members about the most appropriate way they can contact each other, about the frequency of contact, and they can also stimulate informal activities to take place (Kozlowski & Bell, 2008).

2.3.4 Factor 4: Trust. High levels of trust can be helpful in developing working relationships, and can even be described as the foundation of positive working relationships (Asherman, Bing, & Laroche, 2000; Karlsen, Græe, & Massaoud, 2008). When team members experience high levels of trust, they are more inclined to engage in working relationships and to disclose more about themselves and their work. This happens because they feel that their assets are not at risk (Nahapiet & Ghoshal, 1998).

(11)

more often have casual encounters at the coffee machine, copier or water cooler (Kiesler & Cummings, 2002).

2.3.6 Factor 6: Time pressure. As described by Lewicki and McAllister (1998) working relationships mature over a longer period of time. However, a project setting often has tight deadlines which leave little time for relationship building between colleagues (Pauleen, 2003). This time pressure hinders the ability of team members to get to know each other, which makes it harder to develop a shared understanding and establish trust. This perception makes time a restriction for developing positive working relationships (Jarvenpaa & Leidner, 1999; Patel et al., 2012). On the other hand, the theory of swift trust argues that, due to the time constraints of projects, some amount of trust is immediately present. When team members are newly acquainted they categorize each other on their first impressions of surface characteristics and assign each member a certain level of trust. Based on future interactions these levels can be adjusted, based on the actions of team members (Meyerson, Weick, & Kramer, 1996). Through the perspective of swift trust, time pressure would have no hampering effect on the development of working relationships, or at least one of lesser significance.

2.3.7 Factor 7: Cultural differences. When there is considerable cultural diversity in a team, the team members require more time to understand each other and to become accustomed to an environment of different values, habits and assumptions, which will delay the development of working relationships (DeSanctis & Poole, 1997; Ochieng & Price, 2010; Sackmann & Friesl, 2007). Furthermore, a lack of cultural similarity can lead to misunderstandings, conflicts, task failure and poor decision making, each of which can also have a negative impact on the development of working relationships (Patel et al., 2012; Yaun & Jing, 2014).

(12)

working relationships (Yaun & Jing, 2014). Relational conflicts are more likely to occur when there is a geographical distance between the team members (Hinds & Mortensen, 2005) and when the team is cultural diverse (Jehn et al., 1999).

Each of the aforementioned factors is essential in the development of working relationships. When, for example, team members interact frequently over a long period of time with much face-to-face contact, but encounter frequent and unresolvable relational conflicts, the potential for establishing a positive working relationship is still limited. However, when team members have already worked together in the past, or have substantial knowledge of each other, they would be familiar with one another to a certain extent, hence a working relationship may already have be developed to some degree (Levesque, Wilson, & Wholey, 2001).

2.4 Effects of Working Relationships

In this section the main effects of working relationships among multi-cultural team members are described, beginning with communication quality, followed by trust and team commitment, and concluding with job satisfaction.

2.4.1 Communication quality. Positive working relationships significantly contribute to higher levels of effective communication in project teams (Lau, Sarker, & Sahay, 2000). As working relationships become stronger, communication tends to become easier, more frequent, and more informal, and moves more towards non-work related topics which make for a deeper sense of connection and trust (Holden, Lynch, & O’Toole, 2008). In turn, high levels of effective communication further increases the established working relationships (Burgoon, 1998). Thus, we can conclude that communication and working relationships are reciprocally related, and self-reinforcing.

(13)

2001; Grabher, 2002; Phillips & Sackmann, 2002; Sackmann & Friesl, 2007). However, a shared communication frame will have the positive effect of minimizing hindrances to effective communication, thereby reducing the likelihood of misunderstandings, tensions, and conflicts (Peters & Manz, 2007). Moreover, a shared communication frame is important within a project setting, because the majority of the projects is used for complex tasks where knowledge is considered tacit (Bakker, 2010). Such knowledge is harder to transfer (Dhanaraj, Lyles, Steensma, & Tihanyi, 2004) and makes a shared communication frame even more crucial to success, because it stimulates information and knowledge exchange (Hansen & Nohria, 2004). However, due to tight deadlines, time can restrict the development of a working relationship and thereby act as a limiting factor regarding the development of a shared communication frame (Jarvenpaa & Leidner, 1999; Patel et al., 2012; Pauleen, 2003).

Next to a shared communication frame, the development of working relationships can be helpful in establishing a transactive memory (Moreland, 2006). This is defined as knowledge and awareness of who knows what, within a team or organization (Nevo & Wand, 2005). This transactive memory has been acknowledged as an important aspect of information and knowledge sharing (Orlikowski, 2002). The presence of transactive memory could have a positive effect on project performance and collaboration because it enables a quick match between the knowledge seeker and the knowledge provider (Faraj & Sproull, 2000; Storck, 2000).

In conclusion, positive working relationships amongst team members creates a frame of shared communication and increases transactive memory. This helps develop a thorough understand between each other, helps reduce misunderstandings, tensions and conflicts, and encourages efficient and effective knowledge and information exchange, thereby enhancing the overall project performance.

2.4.2 Trust. As mentioned in the previous paragraph, effective project teams depend on open and effective communication. Trust amongst team members enables open communication, and this, in turn, further increases trust (Smith & Blanck, 2002).

(14)

to share information and knowledge and thereby increase the project performance (Cross & Sproull, 2004; Storck, 2000). If working relationships would be marked by dislike, rivalry or jealousy, team members would not completely open themselves up, due to the fear that others would take advantage of them (Brown, Poole, & Rodgers, 2004; Zahra, Neubaum, & Larrañeta, 2007). Thus, positive working relationships advance information and knowledge sharing, whereas negative working relationships impede it. Secondly, as trust establishes a safe environment, team members can freely express their thoughts and concerns (Knapp, Daly, Albada, & Miller, 2002). This helps them to discuss challenging issues and resolve tensions and conflicts which could otherwise have a negative effect on the project performance (Yaun & Jing, 2014). Hereby, positive working relationships indirectly pave the way for more open communication and better project performance. Thirdly, high levels of trust will increase the problem-solving capacity of the project team, because there is less socially generated uncertainty between the members, and generally greater creativity and productivity. This encourages better collaboration, and there is a greater likelihood that more unique and fitting solutions will be generated by the team (Zand, 1972).

In conclusion, positive working relationships increase trust, which leads to more open communication and therefore helps to increase discussion and resolve tensions or conflicts which may otherwise have a negative effect on project performance. Because such challenges are overcome they will further strengthen the working relationship. Furthermore, trust encourages information and knowledge sharing which has a positive effect on team performance. Finally, it is significant that higher levels of trust and better communication have the effect of both enabling and reinforcing each other.

2.4.3 Team commitment. Bishop, Scott and Burroughs (2000) define team commitment as the relative strength of an individual’s identification with, and involvement in, a particular team. According to Reade (2003) positive working relationships lead to reciprocal team commitment. He believes that team members are inclined to put extra effort in their work on behalf of the team, because they feel a sense of obligation and responsibility towards the fellow colleagues with whom they have a positive relationships (Reade, 2003). Becker and Billings (1993) described this extra effort as ‘extra-role behavior’, whereby the team member exerts behavior which is not part of their formal job requirement. Furthermore, from the perspective of the social exchange theory team members might feel compelled to support their fellow team members when they have received help or a favor from them (Emerson, 1976).

(15)

2.4.4 Job satisfaction. One of the most used definitions of job satisfaction is presented by Locke (1976); he defines job satisfaction as: “a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences” (p. 1304). The most popular used measure of job satisfaction is the Job Descriptive Index (JDI). It measures the following facets: nature of the work, payment, promotions opportunities, relations with supervisor, and relations with coworkers (Stanton et al., 2002). The latter two facets relate to the working relationships between co-workers and the working relationships between co-worker and the supervisor (Stanton et al. 2002). In their research, Shaikh, Bhutto, and Maitlo (2012) found a significant and strong impact of co-worker relations and superior co-worker relations on job satisfaction, indicating positive working relationships as one of the factors that could have a positive influence on job satisfaction. However, working relationships can also cause job dissatisfaction. When working relationships are lacking, or are considered negative, they can evoke feelings of frustration, irritation and animosity in a team, which could have a detrimental effect on their job satisfaction (Jehn, 1995; Judge, Scott, & Ilies, 2006). It can be concluded that positive working relationships between team members and supervisors can contribute to job satisfaction, where negative working relationships can impede it.

Although many practitioners and researchers presume a significant relationship between job satisfaction and performance, recent empirical evidence shows an erroneous relationship between job satisfaction and performance (Bowling, 2007; Judge, Thoresen, Bono, & Patton, 2001).

2.5 Project Performance

As described in 2.3, working relationships within multi-cultural project teams have several effects on communication quality, trust, team commitment and job satisfaction. In turn, some of them have an impact on project performance. This section gives a conceptualization of project performance.

(16)

& Rai, 2004). Thus, project performance can be only considered as one of high level when both effectiveness and efficiency are of a suitably high enough standard.

(17)

3. METHODOLOGY

This chapter describes the methods used in this study to collect and analyze the data. Foremost, there will be explained why qualitative research was chosen as a research approach. Also the selection process involved in choosing the research site will be discussed. Following, the process of data collection will be explored. Attention is given to the selection of the interviewees, the interview guide, and the interviews themselves. A discussion of the data analysis process concludes this Methodology chapter.

3.1 Research Approach

A deductive and inductive approach was employed during this research. Due to the substantial body of literature that already exists regarding the development of working relationships in traditional teams a deductive approach was chosen to test those factors in a multi-cultural project setting. The inductive approach helped to explore additional factors that affect the development of working relationships and the mechanisms through which working relationships affected project performance. Thus, the research is two sided; exploratory on one hand and theory testing on the other.

(18)

3.2 Research Site Selection and Description

The main requirement for the selection of the research site was the occurrence of an organizational change project in a multi-cultural setting. It was necessary that the project was ongoing or had to have been completed in the recent months to ensure that all the participants could still clearly recall details regarding the collaboration (Boeije, 2010). From the multiple organizations who met this criterion one was selected based on its availability and willingness to cooperate.

The selected research site was a production organization with its headquarters in Germany and several offices and factories spread across Asia, North-America, South-America, and Europe. The project entailed the harmonization of the different decentralized Enterprise Resource Planning (ERP) systems, which it used worldwide. The intended project goal was to implement a central ERP system to provide a clear overview of the financial situation in each country, which in time should add value to the company. The focus of this research was the pilot implementation of the new harmonized ERP system in The Netherlands and Belgium. The project team responsible for this implementation consisted of 38 members with 7 different nationalities, distributed over 3 hierarchical project layers. In total, the implementation took almost 12 months, after the deadline was postponed by 3 months.

3.3 Data Collection

The data were collected in two phases. The first phase consisted of four unstructured in-depth interviews and an analysis of the project document. This helped to obtain background information about the project and its participants, and to choose the right participants for the second phase of data collection, which consisted of in-depth semi structured interviews. In order to retrieve data that would represent the experiences and believes form all members of the project team, an equal number of interviewees were selected from each of the hierarchical project layers (table 1). Furthermore, each of the different perspectives from the project team collaboration varying from positive to negative were selected (table 2). This was done with the help of the project chart, and one of the project managers who was most involved on a personal level. Since the classification of the different perspectives of the project team collaboration was made based upon the interpretation of the project manager, this classification was adjusted when the interviewee proved otherwise during the interviews. An overview of the basic interviewee profiles is presented in appendix 1.

Hierarchical project layer Population project team Sample project team

Project managers 3 3

Project leaders 5 3

Project employees 30 11

Total 38 17

(19)

Perspective project team collaboration Sample project team

Positive 9

Neutral 4

Negative 4

Total 17

Table 2: Selection interviewees based on perspective project team collaboration

Prior to the interviews a Dutch and an English interview guide was developed containing a list of open questions derived from the research question and relevant literature (appendix 2). The main topics were: the development factors of working relationships, the interconnections between the development factors, and the effects of working relationships. The interview guides were pilot tested on clarity, absence of jargon and ease of comprehension. Both test interviewees worked in an international environment and implemented an IT system, one as an IT project leader and the other as a HR project employee.

(20)

3.4 Data Analysis

When the interviews were conducted and the data gathered, several steps were performed to analyze the data. These steps consisted of preparing transcripts, anonymizing the data, developing codes, coding data, defining codes in a codebook, and comparing the coded data (Hennink et al., 2010).

All recordings were transcribed within 48 hours following the interview. Before returning the transcripts to the interviewees, the researcher read and listened to them again to review them for any typing errors. After two reminders, 15 of the 17 transcripts were checked, completed and returned to the researcher who anonymized all the data and begun the coding process. Several deductive codes were already derived from the relevant literature. Other codes were purely obtained from the original data. These so called ‘inductive’ codes are valuable because they reflect issues that are perceived as important from the perspective of the interviewee (Hennik et al., 2010). The first inductive codes were developed when the field notes were analyzed. More explicit codes presented themselves when all transcripts were read for the first time. In contrast, the subtle and abstract codes emerged when the transcripts were read more closely and analytically. During this process several techniques proved helpful in retrieving the codes such as: annotating the data, noticing repetition, and identifying topic changes. The collection of codes were compared with the codes that were found by a peer student. After mutual consent was achieved through discussions, all transcripts were coded with the help of the qualitative data analysis software tool NVivo; this resulted in the coding tree that is presented in appendix 3. Furthermore, all deductive and inductive codes were defined in a codebook as presented in appendix 4. Finally, the code data were compared with each other in order to identify patterns and to clarify what distinct each issue from the other.

3.5 Quality of the Study

(21)

absence of topics (Boeije, 2010). Furthermore, all representatives of the population were selected as interviewees, with the help of purposive sampling. This enhanced the sampling coverage and maximized the study’s reliability (Baarda et al., 2005; Barbour, 2001). Moreover, all interviews were conducted in the same conditions and in the similar context, namely in the two head offices in Germany and The Netherlands, during working hours, and in the same small office (Van Aken et al., 2012). Finally, overall measures were taken to enhance the potential of replication of the study, for example by providing the reader with a thick description of the empirical data, which gives the reader insight into the relation between raw data and its interpretation (Plochg & Van Zwieten, 2007). Also, the systematic administration of the steps used during the research process is widely explained, which gives a clear picture about the choices that were made during the study (Plochg & Van Zwieten, 2007).

(22)

increased the confidence in the generated explanation (Patton, 1999). In addition, the cases where the theory did not apply were analyzed. This helped to broaden the theory and enhance the fit between the data and the analysis (Patton, 1999).

The second element of validity is construct validity. This is the extent to which an instrument measures what it is intended to measure (Van Aken et al., 2012). It is high when the way a concept is measured corresponds to the meaning of that concept (Van Aken et al., 2012). During this study the language barrier and two telephone interviews were aspects that could lower the construct validity. The language barrier was due to the non-native English language level of the majority of the interviewees, and the non-native German language level of the researcher. For some of the interviewees it was hard to express themselves, which led to several misunderstandings and delays. Whilst most of these misunderstandings were resolved by summarizing and verifying their input during the interview, it is still possible that some information was nevertheless lost in the process. Furthermore, two interviews were conducted over the telephone, due to the fact that they were located too far away to meet face-to-face. This reduced the level of social cues involved, like body language, which can have the effect of lessening the ability to understand one another (Opdenakker, 2006). It was also harder to create a comfortable atmosphere for the interviewee because the interviewer had no view of the situation in which the interviewee was situated (Opdenakker, 2006). This could have negatively affected the degree to which the interviewee may have talked freely and openly (Hennink et al., 2010). During the study, pilot interviews were conducted to ensure that all questions were clear, appropriate, absent of jargon and comprehensible to all the different nationalities interviewed in order to minimize misunderstandings (Hennink et al., 2010). The pilots helped to adjust the sequence of the questions towards a more logical structure, and to formulate concepts in a more understandable manner. They were also beneficial in testing the timeframe of the topic. For example, because the test interviewees were not familiar with the term ‘rapport’, this word was converted to ‘personal bonds’. Furthermore, the interviewer summarized the answers of the interviewee on a regular basis in order to ensure the questions were properly understood, whilst offering the possibility to add and elaborate on the question to gain additional information (Hennink et al., 2010).

(23)

this research also account for other areas, this study must be replicated in other organizations with similar projects, involving people from highly diverse backgrounds.

(24)

4. RESULTS

This chapter starts by presenting the twelve factors that affected the development of working relationships. Their interconnections are illustrated in figure 1, and additional evidence with regard to these interconnections is provided in appendix 5. After discussing these factors, the effects of working relationships will be explored and discussed in detail.

4.1 Development of Working Relationships

The data showed ten factors that had a direct effect on the development of working relationships and two factors that had an indirect effect. This section presents these factors and their effects with the help of statements from the interviewees.

4.1.1 Factor 1: Face-to-face contact. All interviewees stressed the direct effect of face-to-face contact in the formation of working relationships. As a team member reflected: “Face-to-face contact is the best way to develop a bond, because you see each other, and experience the non-verbal communication. This is an important element, because it enables you to check if someone understands what you are saying.”

4.1.2 Factor 2: Informal interactions. Across every interviewee it was evident that informal interactions between project members had a direct positive effect on the development of their working relationship. As a team member explained: “It is very important to talk about private things, because this makes the sympathy towards each other much higher.”

(25)

4.1.4 Factor 4: Trust. The interviewees stressed the important role of trust in the creation of working relationships, they stated it had a direct positive effect on the development of working relationships. As a team member summarized, “The personal bond gets much better if you can trust people. Because you don’t have to question what is said by team members, and you disclose more about yourself.”

4.1.5 Factor 5: Geographical proximity. Every interviewee similarly agreed that it was evident that geographical proximity between project members had a direct positive effect on the formation of their working relationship. As a team member noted, “It doesn’t take much time to come close together when you are in the same room, side by side for half a year, twelve hours per day, from Monday to Friday.”

4.1.6 Factor 6: Time pressure. The data showed that time pressure had a direct negative effect on the development of working relationships. As a team member explained: “It was not really the time to develop personal bonds, because of the work pressure. And in the time we needed it, it was missing.” Another team member confirmed, “The relationship with al team members got better, but it needed time, which we did not have.”

4.1.7 Factor 7: Culture differences. According to the interviewees, cultural differences had a direct inhibiting effect on the development of working relationships. This can be illustrated by the following statement: “Most of the Dutch were the closest with the Dutch and the Germans with the Germans and the Belgians with the Belgians, because they could connect with them the most. I think it was because of the similarities in norms and values.”

4.1.8 Factor 8: Language barrier. The interviewees stressed the directly impeding role that language barriers played in establishing working relationships. As a team member stated, “The relationship with my German colleagues is closer, because there's no language difference.” A German team leader explained this with the following statement: “It is easier to talk with a German, because you can speak in your language and can speak by heart.”

(26)

4.1.10 Factor 10: Character. The data showed that character had both direct a negative and positive effect on the development of working relationships; depending on the similarity of the characters. As a team member explained: “It has to do with the characters too. In our team the team members had a click with each other, we were all the same kind of people, which helped in developing a bond. I think it would have been different when the click was not present, than it would have been harder.” Furthermore several users described that the IT people had a different character then their colleagues from their discipline, as a Sales project member noted: “We are all Sales people, thereby more the social kind if you compare it with the IT guys. IT very focused, very closed people, introvert. That sometimes gives challenges in developing a relations.”

4.1.11 Factor 11: Leadership. Interviewees explained that leadership had an indirectly positive effect on the development of working relationships. Leadership influenced factors such as humor, relational conflicts and to-face contact. For example, a team leader tended to stimulate the face-to-face contact, as he reflected: “I always said ‘We need to sit face-face-to-face with each other, at all times’.” More interconnections are described in appendix 5.

4.1.12 Factor 12: Intensity of the collaboration. The data indicated that the intensity of the collaboration had an indirectly positive effect on the creation of working relationships. Interviewees stated that it enhanced other factors such as face-to-face contact, informal interactions and trust. For example, the intensity of the project forced team members to interact, as a project manager reflected: “When people work very intensively on certain goals there is an intensification of contact. Right here you have teams sitting together in the same room, on the same table solving the issues. Working with a person in such a way has an impact.” More interconnections are further described in appendix 5.

(27)

Figure 1: Reinforcing or diminishing effect between development factors of working relationships.

4.2 Effects of Working Relationships

The data analysis showed four main effects of working relationships. The effects that were identified include communication quality, trust, team commitment, and job satisfaction. This section presents these effects in greater detail, complemented by interviewee statements.

4.2.1 Communication quality. The data showed that there were several mechanisms through which working relationships affected communication. First, working relationships had an impact on lowering the threshold for communication. Second, working relationships created a shared communication frame. Third, working relationships helped to establish a transactive memory.

(28)

assistance. This is illustrated by a different team member: “(…) when I have the feeling that I can contact somebody I can solve problems faster and better.” Contrarily, all interviewees stated that, when the working relationship was classified as negative, they would experience a higher communication threshold. As a team member reflected: “To communicate with a person you have a bad relationship with, there is always some degree of stress involved. If I would have a problem I would doubt whether to contact him or maybe don’t contact at all and try to figure it out myself.” Some team members, who had a negative working relationship coped with this by avoiding the other. A team member explained: “I am more inclined to send an email instead of making a phone call or walking towards them, because I don’t feel comfortable talking to them even though I know this creates more distance between us.”

According to the interviewees the initial communication threshold was higher when team members had a different cultural background. In these situations the presence of positive working relationships accelerated the rate of the threshold breakdown, as explained by a team member: “In the beginning I didn´t know him and he has a different nationality, with different norms and values and he speaks another language. I think I was cautious and reserved in the first communication. This passed when we got to know each other and got the opportunity to develop a bond.” On the contrary, interviewees stated that when working relationships where classified as negative they tended to enlarge the pre-existing higher communication threshold that was created by the presence of different cultures. As a team member reflected: “I am more cautious in what I write or say to the ones I am not close with. Because I know that they can interpret my words in an offensive way, because of the language barrier.”

(29)

understand each other so well.” This can be harmful for the project, as a team members explained: “(…) when people find it hard to understand each other it leads to time and energy losses.”

It was evident from the interviews that it was harder to create a shared communication frame with team members from a different nationality than with people from a similar nationality. As a team member explained: “There was a lot of misunderstanding, because of the language problems. You want to say something and think you have the right word and they interpret it completely different. This sometimes leads to misunderstandings and frustrations.” The presence of positive working relationships moderated those negative effects. As a team member reflected: “When I have a strong bond with my team member I can cope better with his irritations. It is easier to put his irritations into perspective, and I would simply explain it again.” Although it takes longer, it allowed them to establish the shared communication frame. Contrariwise, negative working relationships enlarged the challenges of creating a shared communication frame in a multi-cultural team. This is illustrated by the following statement of one of the team members: “There is a language barrier which makes it harder for me to understand him and when I don´t like him “What do you think?” I try to reduce our conversation to the absolute minimum, because it costs me too much energy.”

(30)

environment where project members were more inclined to participate in open communication with fellow project members. Furthermore, the data showed that working relationships had the capacity to moderate conflicts. Finally, the interviewees described a relation between communication and trust.

Open communication. All interviewees stressed the important role of working relationships in the development of trust, which in turn created more open communication. As a team member explained: “A good relation with colleagues creates a safe environment where I can talk freely with my fellow project members.” Another team member elaborated on this, as he reflected: “When there is a strong bond, I trust the other more, which makes it easier to talk about things I need to get off my chest, because I know they will not hold it against me.” This established a safe and trustful environment, stimulated open communication and was beneficial for the project. As a team project leader reflected: “(…) it is easier to have a discussion with people who have a different opinion or to give negative feedback, because you’re in a safe and trustful environment. This helps in solving problems, stimulates the collaboration and increases creativity.” Furthermore, a team member noted: “(…) it saves a lot of time because I don’t have to explain every decision I have made.” When a working relationship was labeled as negative, such a trustful environment was in turn not created, leading to several challenges. As a project leader pointed out: “open communication is much harder, because they don’t feel comfortable or are afraid to share.” A project manager noted another negative effect for the project, he stated: “when the relationship is not very close, and a solution is suggested by the mistrusted party they would be opposed to the solution without considering it. This led to a growing amount of escalations of the unsolved problems.” This was explained by a project leader: “Because of the mistrust the problems get bigger instead of going into the details and try to find a solution.” A project manager concluded: “if you have no trust in each other, the project will fail because you lose a lot of energy when you are not working in one direction.”

Positive working relationships were especially important in a multi-cultural setting, as explained by a team member: “In the beginning I was suspicious towards my German colleagues. This disappeared when our bond became closer. Now the suspicion is gone and we have full disclosure.”

(31)

and the strong personal bonds are helpful because I can speak my mind when something is troubling me. Otherwise it could lead to an explosion or conflict.”

Trust – communication. The data indicated that trust and communication are reciprocally related and self-reinforcing. As a team leader stated: “Open communicate is much harder, because they don’t feel comfortable or are afraid to share.” Another team member concluded: “Trust is the prerequisite for open communication, it really helps to open up and to share information which is good for the project.”

4.2.3 Team commitment. The third main effect that was brought forward by all the interviewees concerned was that of team commitment. The interviewees stated that working relationships evoked extra-role behavior. Also, they stressed the importance of working relationships in creating a group identity.

Extra-role behavior. The data showed that working relationships affected the extra-role behavior of the project members. As stated by a team member: “If you are doing work for project members who you have a close connection with, it is easier to put an extra effort in it.” A team member described how this extra-role behavior arises: “Because of good relations the people have another feeling to you, they would say: “He is a good guy, he helped me and I will help him.”” Extra-role behavior has a positive impact on the project, which is illustrated by a statement of a project leader: “If you have a positive connection with the people, it would be a really big bonus for the project, because they are willing to take that extra step.” On the other hand, when working relationships are lacking the team members are less committed to each other, and are hence less willing to put in an extra effort. As a team member noted: “Bad personal bonds can demotivate colleagues and make people do only the minimal amount expected from them, but not fight for the project. To be present, but not wanting to be present.” It can also express itself in behavior such as a team member noted: “Obstruct decisions or say it is not my thing and therefore I will not help you.” One team member stated: “I don’t want to do that work for that person, because I don’t like him. So I leave it on the desk and will do that at the end.”

(32)

names of the characters and played the tune when we started the working day. This helped to create a team spirit.” One team member gave the following example of their group identity: “If there is a problem caused by our team and a team member would point the finger, then he would divide our team. Our team response would be: “It’s a problem with our team.” By making an individual problem, a team problem, the whole team was committed to solve the problem.”

The data showed that some of the teams experienced diffuse group identity due to the presence of multiple cultures. Because of the language problem people were more inclined to pull towards team members who spoke the same language, and developed a working relationship with them. For example, a German team leader illustrated: “It is easier to have dinner with a German because you sit here all day, 10-12 hours together and then, in the evening, you can speak in your language and can speak by heart.” These diffuse working relationships sometimes led to diffuse group identity, as is noted by a Dutch team member: “My team leader didn’t speak English, and mainly developed bonds with Germans in the group. Therefore he was automatically more committed to the Germans.”

4.2.4. Job satisfaction. The fourth main effect involved the degree of job satisfaction that project members experienced. The data indicated that working relationships had an effect on the experienced job satisfaction.

According to all the interviewees, a positively labeled working relationship increased the amount of job satisfaction experienced. As a team member noted: “When you get up in the morning and you go to the firma and there are a lot of funny guys, ready to talk and laugh, you would have a good feeling.” A project leader member confirmed this statement: “When you have a good personal relationship, it is more fun, because you have personal contact and can joke around.” This increased job satisfaction can be positive for the project, as a team leader described: “When everyone is going to their work while feeling happy, the productivity generally increases.”

However, when the working relationships were experienced as negative, the job satisfaction reduced. As a team member stated: “When you have bad personal relations it creates a bad working climate. There is a negative energy and you cannot concentrate on your work and you are not satisfied.” Such a negative energy indeed impeded the project performance, as one project leader noted: “Some people became ill because of the tensions between persons, causing delays in the project.”

(33)

5. DISCUSSION AND CONCLUSIONS

This final chapter, discusses the discussion and conclusions of this research. Firstly, the main findings are presented, which lead to a proposed model. Then, the theoretical and practical implications of this study are discussed. The paper will close with an enumeration of its limitations, and offer several suggestions for further research.

5.1 Discussing the Findings

The central question during this study was as follows:

“How do working relationships develop within multi-cultural project teams, and to what extent and through which mechanisms do they affect project performance?”

Regarding the first part of the research question, previous literature presented multiple factors that could encourage and/or inhibit the development of working relationships. Even though these factors apply to traditional mono-cultural teams the results of this study are largely consistent with previous research. This study provides empirical evidence for the following factors that encourage the development working relationships directly: (1) face-to-face contact, (2) informal interaction, (3) trust, and (4) geographical proximity. These findings are in line with the articles of Oertig and Buegri (2006), Green and Brock (2005), Karlsen et al. (2008), and Kiesler and Cummings (2002). Additionally, leadership has proven an indirect encouraging factor on co-factors such as: relational conflict, face-to-face contact and informal interactions, as was suggested in the articles of Yuan and Jing (2014), and Kozlowski and Bell (2008). Furthermore, the results offer support for several factors which directly inhibit the development of working relationships: 1) time pressure, (2) cultural differences, (3) relational conflicts, and (4) language barrier. These factors are confirming the ones stated by Pauleen (2003), Ochieng and Price (2010), Yaun and Jing (2014), and Lauring and Klitmøller (2014).

(34)

interacting with fellow team members who speak a different language or have another cultural background, team members are more reserved and sometimes even suspicious. Therefore this study suggests that a multi-cultural context will inhibit the direct presence of trust advocated by the theory of swift trust. Other literature states that cultural team diversity will delay the development of working relationships (Ochieng & Priece, 2010; Sackmann & Friesl, 2007). Even though the results support this statement, they describe the impact of cultural diversity on the development of working relationships as limited. This study found that the delays in the development of working relationships are especially attributed to the language barrier. Moreover, this research found no confirmation of several factors presented by previous literature, that would indirectly effect the development of working relationships. For example, none of the interviewees described that geographical distance or cultural differences evoke relational conflicts, which contradicts with the article of Hinds & Mortensen (2005) and Jehn et al. (1999). Furthermore, no evidence was found regarding the statement of Sackmann and Friesl (2007), who described that leadership indirectly encourages the development of working relationships by influencing the factor ‘cultural differences’.

In addition to the development factors described in previous literature, this research found several new development factors and explored the interconnections of all the development factors known in this research. The interconnections are graphically presented in figure 1, and additional evidence is provided in appendix 5. Regarding the new development factors, the results show a direct and encouraging effect of humor on the development of working relationships. Also, character proved to be a direct and encouraging or inhibiting factor, depending on the ‘fit’ between the team members. Furthermore, the results indicated the intensity of the collaboration as an indirect and encouraging effect on the development of working relationships by positively influencing face-to-contact, informal interaction and trust.

When focusing on the second part of the research question, literature about the effects of working relationships indicated communication quality, trust, team commitment and job satisfaction as important effects which could all, except for job satisfaction, affect project performance. This research provides empirical evidence for most of these factors, adds several nuances and elaborations on them, and presents additional sub-effects.

(35)

communication frame. The results also show evidence that negative working relationship inhibit the development of a shared communication frame. This costs energy and time, because team members find it harder to understand each other, thereby affecting the project performance in a negative way. In relation to transactive memory, the results were in line with the article of Faraj and Sproull (2000). They described that the presence of positive working relationships would make it easier for team members to match the knowledge seeker and its provider, thereby increasing project performance. This study adds to the article of Faraj and Sproull (2000) by noting that the presence of transactive memory will save time, and hence increase the efficiency of the project. Furthermore, this study indicated that negative working relationships inhibit the development of a transactive memory. This affects the project performance in a negative way, since important information might be missing or team members would do incorrect or superfluous work. Moreover, this study found the communication quality is affected by working relationships through the recently discovered sub-effect ‘communication threshold’. This research adds to previous literature by providing empirical evidence that positive working relationships will lower the communication threshold. This enhances the team’s problem solving capacity, because positive working relationships remove communication barriers when asking for assistance, and thus have a positive effect on the project performance. When working relationships are negative the communication threshold will be higher, because team members will experience greater stress in their communication, thereby not seeking for assistance when problems occur, and preferring to contact them by phone or email instead of face-to-face. This decreases the problem solving capacity and creates more distance between team members.

(36)

In relation to the third effect of working relationships, team commitment, this research found empirical evidence for the article of Reade (2003), which stated that positive working relationships increased team commitment, and would even lead to extra-role behavior. This study adds to this by describing that when a working relationship is considered negative the team members will be less committed and less willing to put in an extra effort. This would have a negative effect on team performance, since people are demotivated and do not feel sufficient ownership for the project. Furthermore, the results show new insights in the effects of working relationships on group identity. It appears that positive working relationships increase the feelings of group identity.

Regarding the fourth effect of working relationships, job satisfaction, this study provides empirical evidence for the article of Shaikh et al. (2012), which states that positive working relationships will lead to a higher degree of job satisfaction. It also highlights that negative working relationships lead to job dissatisfaction, as was suggested by Jehn (1995) and Judge et al. (2001). However, this research contradicts the statements of Bowling (2007), who describes that there is no relation between job satisfaction and project performance. As the results of this study suggest, a higher degree of job satisfaction would lead to more productive team members. The empirical evidence states that negative working relationships have a negative effect on project performance. They create a bad working climate with negative energy, which make it harder to concentrate and would heighten the probability that more people would get ill, thereby causing delays in the project.

(37)

Regarding the effects of working relationships in a multi-cultural context, this study found that positive working relationships could minimize the challenges of cultural diversity, whereas negative working relations would enlarge the challenges. Foremost, positive working relationships accelerate the communication threshold breakdown, moderate frustrations and irritations that could make it difficult to create a shared communication frame, and dissolve suspicions and prejudices towards another culture. On the contrary, negative working relationships would expand the pre-existing communication threshold and enlarge frustrations and irritations, which would make it harder to create a shared communication frame, increase suspicion due to the mental distance, and diffuse the group identity. Thus, this study provides empirical evidence for the article of Mannix and Neale (2005), which states that working relationships could enable team members to overcome multi-cultural challenges by bridging the differences between multi-cultural team members. In addition to this, this research shows that by bridging these differences the negative effects of the multi-cultural challenges on project performance can be contained, and thus making working relationships a means which can contribute to the reduction of project failure mentioned in the first introduction.

(38)

Figure 2: Proposed integrated model of working relationships

5.2 Theoretical Implications

(39)

revealed as a development factor, which indirectly effected other factors such as face-to-face communication, informal interaction and trust in a positive manner.

Secondly, this study contributes to the existing literature regarding the effects of working relationships. Its findings support other authors’ work on the subject, regarding the significance of communication, trust, team commitment and job satisfaction, as emphasized by Faraj and Sproull (2000), Hansen and Nohria (2004), Jehn (1995), Judge et al. (2001), Knapp et al. (2002), Reade (2003), Shaikh et al. (2012), and Yaun and Jing (2014). Furthermore, this study delved deeper by taking into account the nature of sub-effects and their importance. This paper even discovered new sub-effects of working relationships such as communication thresholds and group identity, and went to link them to project performance.

Another important contribution evoked through this research involves the theory of swift trust. This study shows that the theory of swift trust is not applicable in a context of cultural and language differences. These differences lead to increased caution and greater suspicion in interaction, which inhibit the direct presence of trust. This study also adds to the continuous discussion about the relation between job satisfaction and project performance, demonstrating evidence that a high degree of job satisfactions has positive effects on project performance, and a low degree of job satisfaction a negative effect.

Finally, this research provides an important contribution to research regarding team diversity, since it found empirical evidence for the similarity attraction theory and the social categorization theory. No support was found for the information-processing theory, which states diversity can increase creativity and problem solving capacity. Most importantly, this study confirms the suggestions of Mannix and Neale (2005) regarding the function of working relationships in a multi-cultural context. Working relationships appear to play an important role in overcoming the multi-cultural challenges by bridging the differences of multi-cultural team members.

5.3 Managerial Implications

(40)

of great importance for the project success that the team members get along well on personal level. Moreover, this study emphasizes the inhibiting role implicated when language barriers arise, since most of the delays in the development of working relationships are especially attributed to the language barrier. Hence, this typifies a common project language as a prerequisite for multi-cultural project collaboration. To ensure that this prerequisite is adhered to, organizations should provide compulsory language courses to potential project members when they have the ambition to initiate or take part in multi-cultural projects. Overall, this study advocates the importance of investing in the development of working relationships, especially in a multi-cultural context. The presented overview of the development factors and their interconnections provide managers and team members with useful information on how to effectively develop those working relationships between project members to the best of their advantage.

5.4 Research Limitations

(41)

values, norms attitudes, beliefs, and habits, are not so different from each other. It can be suggested that the conclusions gained in this study may well be diverge and show different trends when analyzing a more culturally diverse and varied team and/or setting.

5.5 Future Research Directions

Whilst study provides evidence for multiple factors that may impact the development of working relationships, it does not claim that it reveals the complete picture of the development factors for working relationships. Therefore, it can be employed as a useful platform from which to perform further research regarding the exploration of other development factors, since it is likely that more factors may influence the development of working relationships. Moreover, the new development factors identified such as humor, character and intensity of collaboration should be verified and further tested by additional research. Since this study provides the first model regarding the interconnections between the development factors, it acknowledges the undeveloped state of this model. Further research would be helpful in verifying those interconnections and to explore additional links between the development factors of working relationships.

Working relationships, what makes projects work