Effects of Cultural Factors on Cost Performance of Multinational Construction Organizations

Abstract

Purpose: This study examines the effects of cultural factors on cost performance of multinational construction project organisations with a view towards identifying the most effective cost performance variables affected by the influence of cultural practices. Purposive sampling technique was adopted in deterring the number of construction professionals identified in construction companies with international market experience involved in the delivery of building, civil, and heavy engineering construction projects within the south-east geopolitical zone of Nigeria.

Outline: A well-structured questionnaire was used to sample respondent’s opinion. Data analysis was through frequencies, percentile, and Mean Item Score (MIS).

Findings: Research findings proved that irrespective of the positive effects of educational culture which improves cost performance by ensuring that projects are executed at estimated cost and within client’s budget (Mean = 4.34) and the result of effective communication culture which ensures value for money and return of customer as project is designed to suite client’s budget while maintaining standard quality delivery (Mean = 4.16), political culture tends to have mixed effect on cost performance as project design cost, labour, material and equipment cost, profit and overhead cost, etc. (Mean = 4.30) is found to be responsible for cost overruns of construction projects.

Research Implication: The study recommends among others that multinational construction organisations pay great attention to the political style practiced in the host community / country in which they operate.

Country : Nigeria

1 ANUMUDU Anthony C.2 IGWE Jude C.3 NWANKWO Lazarus C.

  1. Federal University of Technology, Owerri, Nigeria
  2. Federal University of Technology, Owerri, Nigeria
  3. Federal University of Technology, Owerri, Nigeria

IRJIET, Volume 8, Issue 6, June 2024 pp. 17-25

doi.org/10.47001/IRJIET/2024.806003

References

  1. Aaron, K. K. (2010). Two theses on corporate social responsibility failure in Niger-Delta Nigeria. In Aaron, K. K. & George, D. (Eds.), Placebo  as medicine:  the poverty  of  development intervention  and  conflict resolution strategies  in  the  Niger-Delta  region  of  Nigeria  (pp.  158–177).  Port-Harcourt, Nigeria:  Kemulea Publications.
  2. Abeysekera, V. (2002).Understanding ‘culture’ in an international construction context. in Fellows, R. and Seymour, D. (Eds), Perspectives on Culture in Construction, CIB Report, vol. 275, pp. 39-51.
  3. Ajayi, O. M., Ogunsami, O. E., Ajayi, A. K and Ofili, C.M. (2010). Factors Affecting Performance of Contractors on Construction Projects in Lagos State. Proceedings of the Construction, Building and Real estate Research Conference of the Royal Institute of Chartered Surveyors, Paris 2-3 September 2010.
  4. Ali, H.A.E.M., Al-Sulaihi, I.A., and Al-Gahtani, K.S. (2013).Indicators for measuring performance of building construction companies in Kingdom of Saudi Arabia. Journal of King Saud University – Engineering Sciences, vol. 25, pp. 125–134.
  5. Ankrah, N. A., and Langford D. A. (2005). Architects and contractors: a comparative study of organisational cultures. Journal of Construction Management and Economics. Vol. 23(7), pp. 595-607.
  6. Ankrah, N.A., Proverbs, D., and Debrah, Y. (2009). Factors influencing the culture of a construction project organisation: An empirical investigation. Engineering, Construction and Architectural Management, vol. 16(1), pp. 26-47. DOI 10.1108/09699980910927877.
  7. Aswathappa, K. (2008). International business (3rd ed.). New Delhi, India: Tata McGraw Hill.
  8. Babalola, I.H., Oluwatuyi, O.E., Akinloye, L., and Aiyewalehinmi, E. (2015). Factors Influencing the Performance Of Construction Projects In Akure, Nigeria. International Journal of Civil Engineering, Construction and Estate Management. ISSN 2055-6578(Print), ISSN 2055-6586 (online). Published by European Centre for Research Training and Development UK (www.eajournals.org), Vol.3, No.4, pp.57-67, October 2015.
  9. Bajaj, S., Garg, R. and Sethi, M. (2018). “Total quality management: a critical literature review using Pareto analysis”, International Journal of Productivity and Performance Management, Vol. 67 No. 1, pp. 128-154.
  10. Bako, Y.A., Ogunremi, G.D., and Bako, Z.F. (2019). The Effect of Cross- Cultural Management On the Performance of Multinational Companies in Nigeria. Proceedings of the 16th iSTEAMS Multidisciplinary Research Nexus Conference, The Federal Polytechnic, Ilaro, Ogun State, Nigeria, 9th – 11th June, 2019. Pp. 133-144. www.isteams.net - DOI Affix - https://doi.org/10.22624/AIMS/iSTEAMS-2019/V16N2P17.
  11. Bitamba B.F. and An S.H. (2020). Study On Factors Affecting The Performance Of Construction Projects In The Democratic Republic of the Congo. South African Journal of Industrial Engineering May 2020 Vol. 31(1), pp. 12-25.
  12. Brochner, J. Rosander, S., and Waara, F. (2004). Cross-border post-acquisition knowledge transfer among construction consultants. Construction Management and Economics, vol. 22(4), pp. 421-427.
  13. Cebeci U. and Beskese A. (2002). An approach to the evaluation of quality performance of the companies in Turkey. Managerial Auditing Journal, vol. 17(1/2), pp. 92-100.
  14. Chan, E. H. W., and Tse R. Y. C. (2003).Cultural Considerations in International Construction Contracts. Journal of Construction Engineering and Management, vol. 129(4), pp. 375-381.
  15. Chen, P., and Partington, D. (2004). An interpretive comparison of Chinese and Western conceptions of relationships in construction project management work. International Journal of Project Management, vol. 22(5), pp. 397-406.
  16. Cheung, S.O., Wong, P.S.P., and Lam, A.L. (2012).An investigation of the relationship between organisational culture and the performance of construction organisations. Journal of Business Economics and Management, vol. 13(4), pp. 688-704.
  17. Edwin H. W. Chan and Raymond Y. C. Tse (2003).Cultural Considerations in International Construction Contracts. Article in Journal of Construction Engineering and Management. August 2003.
  18. Ehigiamusoe Kizito (2013). The Link between Money Market and Economic Growth in Nigeria: Vector Error Correction Model Approach. Published under Research Gate, 1st January, 2013.
  19. Halverson, C.B and Tirmizi S.A. (2008). “Effective Multicultural Teams: Theory and Practice”, Springer Science Business Media B.V., pp 5-7.
  20. Heizer, J. and Render B. (2006). Principles of Operations Management. Pearson Prentice Hall.
  21. Hillebrandt, P.M. (2000). Economic Theory and the Construction Industry, 2nd Edition. Macmillan, Basingstoke.
  22. House, R. J., Hanges, P. W., Javidan, M., Dorfman, P., and Gupta, V. (Eds), (2004). “Culture, leadership, and organisations: The GLOBE study of 62 societies”, Beverly Hills, CA: Sage.
  23. Ingosi, J. M., and Juma, D. (2020). Influence of organisational culture on project performance. A case of non-governmental organisations in Nairobi County, Kenya. The Strategic Journal of Business and Change Management, vol. 7(4), pp. 262 – 281.
  24. Jakobsen, J. (2010). Old problems remain, new ones crop up: political risk in the 21st century. Business Horizons, vol. 53(5), pp. 481–490. https://doi.org/10.1016/j.bushor.2010.04.003.
  25. Kim Du, Y., Han, S. H., Kim, H. and Park, H. (2008).Structuring the prediction model of project performance for international construction projects: A comparative analysis, Expert Systems with Applications.
  26. Kothari, C. R. (2004). Research Methodology; Methods and Techniques.(2nd Edition). New Delhi: New Age International.
  27. Lane, H. W., Maznevski, M. L., DiStefano, J. J., and Dietz, J. (2009). “International management behavior: Leading with a global mind-set, (6th ed.)”, Oxford: Blackwell Publishers.
  28. Ling, F Y., and Hoi, L. (2006). Risks faced by Singapore firms when undertaking construction projects in India. International Journal of Project Management. Vol. 24(3), pp.261-270.
  29. Love P.E.D. and Heng L. (2000). Total quality management and the learning organisation: a dialogue for change in construction, Construction Management and Economics, vol. 18 (3), pp. 321-31.
  30. Low, S. P., and Leong, C. H. Y. (2000).Cross-cultural project management for international construction in China. International Journal of Project Management, vol. 18(5), pp. 307-316.
  31. LuongHai Nguyen and Tsunemi Watanabe (2018). Project Organisational Culture Framework in Construction Industry. http://dx.doi.org/10.5772/intechopen.78628.
  32. Masovic, A. (2018). Socio-Cultural Factors and Their Impact on the Performance of Multinational Companies. ECOFORUM, [Volume 7, Issue 1(14), 2018.
  33. McAdam R. and Kelly M. (2002). A business excellence approach to generic benchmarking in SMEs, Benchmarking: An International Journal, vol. 9 (1), pp. 7-27.
  34. Nguyen LuongHai and Watanabe Tsunemi (2017).The Impact of Project Organizational Culture on the Performance of Construction Projects. Journal of Sustainability, vol. 9, pp. 781; DOI:10.3390/su9050781 www.mdpi.com/journal/sustainability Published: 9 May 2017.
  35. Oakland, J.S. (2000). Total quality management – Text with cases, 2nd edition, Butterworth-Heinemann.
  36. Olaniyan, O. D. (2015). Effect of Boko Haram insurgency on The Nigerian education system. Journal of Research, vol. 24(2), pp. 1–9.
  37. Phua F. T. T. and Rowlinson.S. (2003). Cultural differences as an explanatory variable for adversarial attitudes in the construction industry: the case of Hong Kong. Construction Management and Economics, vol. 21(10), pp. 777–785.
  38. Piwowar-Sulej, K. (2021). Organisational culture and project management methodology: Research in the financial industry. International Journal of Managing Projects in Business, vol. 14(6), pp. 1270-1289.DOI 10.1108/IJMPB-08-2020-0252.
  39. Serhat S., Ramazan K., and Bülent S. (2016).Factors Affecting Multinational Team Performance.12th International Strategic Management Conference, (ISMC 2016), pp. 28-30, Antalya, Turkey, October 2016.
  40. Teerajetgul, W. and Charoenngam.C. (2006). Factors inducing knowledge creation: Empirical evidence from Thai construction projects Engineering, Construction and Architectural Management, vol. 13(6), pp. 584-599.
  41. Trehan, M., and Trehan, R. (2009). Government and Business, V. K. Enterprises, New Delhi, pp. 53.
  42. Zhang, Shuibo, and Liang, Xueguang (2008). Culture Studies in International Construction Contracting: an Overview. International Conference on Multi-National Construction Projects “Securing high Performance through Cultural awareness and Dispute Avoidance” Shanghai, China. November 21-23, 2008.