Modeling and Analyzing Cultural Influences on Project Team Performance

Research on international joint ventures (IJV) finds difficulties in managing cross-cultural teams. Our research aims to understand how cultural differences between Japanese and American firms in IJV projects effect team performance through computational experimentation. We characterize culture and cultural differences using two dimensions: practices and values. Practices refer to each culture’s typical organization style, such as centralization of authority, formalization of communication, and depth of organizational hierarchy. Values refer to workers’ preferences in making task execution and coordination decisions. These preferences drive specific micro-level behavior patterns for individual workers. Previous research has documented distinctive organization styles and micro-level behavior patterns for different nations. We use a computational experimental design that sets task complexity at four levels and team experience independently at three levels, yielding twelve organizational contexts. We then simulate the four possible combinations of US vs. Japanese team organization style and individual behavior in each context to predict work volume, cost, schedule and process quality outcomes. Simulation results predict that: 1) both Japanese and American teams show better performance across all contexts when each works with its familiar organization style; 2) the Japanese organization style performs better under high task complexity, with low team experience; and 3) process quality risk is not significantly affected by organization styles. In addition, culturally driven behavior patterns have less impact on project outcomes than organization styles. Our simulation results are qualitatively consistent with both organizational and cultural contingency theory, and with limited observations of US-Japanese IJV project teams.