The effects of cultural diversity on project success

Abstract

The purpose of this Master's thesis is to examine the role of cultural diversity, and more specifically, the role that cultural differences have on the success of international projects in Finnish organizations. The study focuses on how the current fields of project and diversity management address cultural diversity. Furthermore, the aim is to identify why and how cultural diversity influences project success.

The research design of this study utilizes a multiple case study method. The empirical data is based on six semi-structured interviews, which gather data of the reflections and experiences on cultural diversity in a project context. The respondents were employees of five large international organizations operating in the construction and information technology fields in Finland. The projects examined are high complexity and medium and high technology projects.

The empirical findings illustrate strongly that cultural diversity influences project success both positively and negatively. The main cultural dimensions affecting the success of cross-cultural projects identified were power distance, uncertainty avoidance, individualism versus collectivism, and the significance of time. The financial effects of cultural diversity on project success were not measured but the results to performance were evaluated by examining the qualitative data from the empirical study. The data demonstrated that international collaboration and cultural diversity are more beneficial to project success than the domestic operations in the past.