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Managing cultural and perceptual distance to enhance project success A case study and business tool development at Royal HaskoningDHV

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Last Updated: 11-2021

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Organizational culture plays a vital role in relationships during (inter-)organizational project collaborations. Historically, construction companies put more emphasis on tangible assets (e.g. budget, schedule, and quality) over the intangible assets during project collaborations (e.g. relationships, trust, and future prospects). Focusing on these intangible assets contributes to project’s success in which the human capital side is of utter importance. Cultural and perceptual differences could be beneficial because they allow for different
perspectives on a project. However, more often they result in confusion, conflict and
frustration that hinder project performance and success.

To give insights in these aspects, this study aims to develop a business tool which is focused on the combined effect of organizational culture perceptual distance during interorganizational project collaborations. The tool focused on 1) cultural differences – which are characteristics of organizations at large, and 2) on perceptual distance – which pertains to different views between collaborating parties in a project.

By means of a literature review, organizational culture, perceptual distance, project
performance and project success are analyzed. Two case study projects are used to answer the surveys based on the questions from the Organizational Culture Assessment Instrument (OCAI) and Perceptual Distance Monitor (PDM). In addition, in-depth interviews are used to validate the survey results and the usability of the developed business tool.

The results show that the most common clashes in culture and perceptual distance can be related to the extent of being organized, vision of project managers and the difference in perception regarding results, communication, flexibility, and information provision. The constructed business tool offers project managers a comprehensive and combined instrument for assessing cultural and perceptual distance, which was previously unavailable and will benefit collaborative project outcomes. By using the tool, project managers in the construction industry, on both sides of the collaboration, can encourage teams to take the collaborative relationship to new heights by generating a positive contribution to each other’s expectations of project performance and satisfaction. Greater emphasis on the importance of the relationship will ultimately lead to a successful, long-term, and sustainable collaborative strategy that provides the necessary transformation in the construction industry.

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