Impact of culture differences on performance of international construction joint ventures: the moderating role of conflict management

Abstract

Purpose Cultural differences have been frequently cited as a major source of risks for international joint ventures (IJVs). Cultural differences may cause extensive conflicts in technology, norms and emotion among the international joint venture (IJV) partners. The purpose of this study is to explore the interactive effects of national culture differences (NCDs) and conflict management approaches on the performance of international construction joint ventures (ICJV). Design/methodology/approach Data were collected using a questionnaire survey method with 143 valid responses. Partial least squares structural equation modeling (PLS-SEM) was used to test the research hypotheses. Findings It was found that ICJV performance declined with a high degree of NCDs. The negative effect of NCDs on ICJV performance was mitigated by adopting the cooperative conflict management approach; while it was aggravated by adopting the competitive conflict management approach. The findings may provide an alternative way (i.e. adopting the cooperative conflict management approach rather than avoiding or competitive approaches) to address the cultural conflicts in the multicultural project management teams. Practical implications Firstly, as NCD negatively impacts performance of ICJVs, project managers should pay attention to cultural issues and learn how to manage them; Secondly, as cooperative and competitive conflict management approaches have different moderating effects on the relationship between NCD and ICJV performance, project managers must choose appropriate conflict management styles in multination teams. Thirdly, as the avoiding approach has no significant moderating effect on the negative relationship between NCD and ICJV performance, it is important for Chinese partners not to employ avoiding approach to deal with conflicts in ICJV. Originality/value This study uniquely adds to the literature on cultural issues in managing ICJVs by integrating the moderating effects of conflict management approaches. The interactive effects of conflict management approaches and national cultural differences on ICJV project performance may contribute to the theories regarding conflict management theory in the context of cross-cultural management.

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