2009 PMI Global Congress Kuala Lumpur: Project Stakeholder and Conflict Management In Action

East Meet West
Project Stakeholder and Conflict Management In Action

“Delivering Successful Projects in China”

SoonKheng Khor PMP®
Regional Director, PMI IT & Telecom SIG

NanPhin Lee PMP®
Senior Partner, Asia ICT Project Management


In the past 20 years, there has been a growing interest in the workings of Chinese management and organisations. Recent research has also focused on Chinese leadership. This paper provides a project management practitioner’s perspective of project stakeholder and conflict management, focussing on the Chinese environment. Cultivating the complex web of relationships in projects is already a difficult art to master. It is even more so, in China, where there is a complex and deeply rooted practice of cultivating relationships as a form of currency that can be saved and spent between parties.

China’s open door policy in the eighties had successfully attracted many western organisations and westerners to enter the massive Chinese domestic market or partner with Chinese enteprises in joint projects. The procedures and processes widely adopted by Western trained project management practitioners, are in conflict with the top down approach or people centric system employed by the Chinese. This conflict post various questions such as what are the gaps in both management approaches and how to address these gaps. This paper intends to provide some answers to these gaps drawn from the author’s many years of living, working and observing in Europe, USA and East Asia.

The paper starts by looking at how the world’s de-facto standard in Project Management – the PMI Guide to PMBOK 3rd Edition – addresses project stakeholder and conflict management in the Human Resource and Communications Management knowledge areas. To illustrate the differences between Western Management (based on PMBOK) and Eastern Management approaches, 3 mega airports programs the author had directly involved will be used as case studies, with the PMI PMBOK framework as the under laying framework for analysis.

Based on the author’s extensive experience of managing complex projects in modern day China, he concludes that in order to manage stakeholder and conflicts, and ultimately deliver projects successfully in China, cultivating good Guanxi is essential. Guanxi is a key element in Chinese Culture, and it has been found to facilitate timely approvals, waivers and stakeholders’ support and assistance throughout the project. With the foundation of good Guanxi in place, project managers minimize the risks, frustrations, and disappointments when leading or managing project in China. At a minimum, the tips and experiences shared may able to help Western trained project management practioners to avoid unnecesasary stakeholder issues and conflicts. However, this paper is not intended to justify which management approach is superior to the other .

PMI Congress 2009 KL

PMI Congress 2009 KL

PMI Congress KL 2009
There are compelling reasons to study China’s management practices and to understand the Chinese way of thinking. China’s transformation into a dynamic private sector- led economy and its integration into the global economy have been among the most dramatic economic developments of recent decades. Indeed, China’s growth performance over the last two decades has been spectacular, with GDP growth averaging almost 8 percent.

This paper investigates the dynamism of Guanxi usage in the context of managing projects in China, specifically in the areas of stakeholder and conflict management. By doing so, this paper intends to help project management practitioners already in China or intend to go into the China market especially those from the Western countries, to gain a deeper and more practical insight into the Chinese social network, and to help them make effective cross-cultural adaptation and project decisions in the unfamiliar cultural environment of China.


PMI Project Management Framework

A Guide to PMBOK (PMBOK) 3rd Edition published by Project Management Institute (www.pmi.org) defines a project as a temporary endeavour undertaken to accomplish a unique product, service or result. Projects have defined start and end point and specific objectives that, when attained, signify completion. Projects are unique and only done one time. As such, it is not repetitive or routine work.

Project Management refers to the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements. The focus is to meet stakeholder’s needs and expectations, deliver projects within budget, and complete projects on time. Project management achieve these objectives by organizing, planning, monitoring, controlling, and correcting project activities in a methodical manner throughout the project lifecycle.

The project management framework defined by the PMBOK provides a standard of processes, best practices, tools and techniques for project managers to follow to ensure successful project completion. The PMBOK framework recommends 44 processes that fall into 5 project management process groups across 9 knowledge areas.

The author will use this framework to analyse the similarities, differences and challenges when he discusses the case studies in the later part of this paper. Although the term “Project Management” is coined by the Western world, project management is not a new discipline in China. Project Management has been in existence since the days of the ancient Chinese civilization.

Drawing upon the premise that project management is not an emerging phenomenon in China, what are the key management practices with regards to issues and conflict management in China ? How does established standards such as PMBOK work in a volatile emerging country, like. China?

Stakeholder & Conflict Management – PMBOK Approach

If you search for the definition of the term “Stakeholder” in Google, you will be surprised by the huge differences in the way this simple word is defined. It perhaps proves – in a way – just how confused people get about Stakeholder Management and how inconsistent the different approaches to it can be! In the context of projects, the PMBOK define stakeholders as the people that have an interest in the project outcome or process. That interest can either be positive (wanting the benefits of the outcomes or process of your project), or negative (seeing the outcomes or process as a hindrance to them).

Project stakeholders may include: project sponsors, steering committee members, business unit and line managers, project team members, end users of the products or services resulting from your project, contractors and consultants supplying services to your project, material and product suppliers departments supplying resources, infrastructure and expertise (such as IT and HR), and sometimes various other groups; such as employees, public interest groups like environmental organizations, strategic partners, journalists, public monitoring bodies or government authorities.

A project manager has to assess and evaluate these positive or negative forces in order to develop a precise stakeholder management plan which can meet various stakeholders’ needs and expectations while not compromising the project basic constraints, i.e scope, time, cost, quality . In this regard, good stakeholder management is a vital element in delivering successful projects.

Communication Planning , Manage Stakeholder and Manage Project Team Processes

PMBOK indicates that a project manager can achieve effective Project Stakeholder and Conflict Management via three processes : Communication Planning Process and Manage Stakeholder Process in the Communication Knowledge Area; and Manage Project Team Process from the Human Resource Knowledge Area.

Communication Planning

Stakeholder Analysis is recommended as a technique in the Communication Planning Process to identify the key people who have to be won over during the entire project life cycle. It involves the following steps:

1. Stakeholder Identification
a. An up-front identification of who the stakeholders are and trying to find answers for following
i. Who will be impacted?
ii. Who are the decision makers and in what area?
b. Who are the subject matter experts ?
c. Whose signature is needed to obtain acceptance or payment ?

2. Plotting Power and Interest Matrix
The next step is to assess their power, interest and the level of influence which will help the project manager prioritize which stakeholders to focus on. It involves trying to understand what sort of influence each stakeholder has and determining how their influence could impact the success or failure of the project outcome when their interest is not protected or agenda not met.

Attempt to assign each stakeholder into the quadrant of a 2 x 2 matrix. This quadrant has Power as the Vertical axis and Interest as the Horizontal axis to provide a clear picture of their relative importance. It allows the project manager to have a clear perspective of the stakeholders that can impact the project outcome, and effectively plan on managing these stakeholders:

a. High power, High Interest
i. these are the people you must fully engage with, and make the greatest efforts to satisfy.
b. High power, Low interest:
i. put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.
c. Low power, High Interest:
i. keep these people adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the details of your project.
d. Low power, Low interest:
i. monitor these people, but do not bore them with excessive communication.

3. Document the Assessment
a. Determine and document how each stakeholder is affected by the project.
b. What are the impacts? When do they occur?
c. How does the impact affect the stakeholder?
d. It is important to determine the extent to which a stakeholder’s problems, needs and interests are impacted by project operations or desired outcomes.
e. Defining the impact on the stakeholders will influence the communications plan.

4. Response to Stakeholder Analysis
a. Determine the support necessary from the stakeholders to ensure the project’s success and what the current position and attitude of each stakeholder is, with respect to the project objectives and expected outcomes.
b. Note that not every stakeholder needs to be an enthusiastic supporter for the project to succeed.

5. Review assessment of each stakeholder and understand the gaps between their current attitude and the desired attitude. Identify what motivates stakeholders and how they can be won.
Manage Stakeholder

The Stakeholder Communication Plan is an important document. It documents how to strategically win stakeholders to support the project, and to close any gaps with the identified stakeholders.

1. For each stakeholder, think through the levels of support required from them and the roles they should play. Think through the actions required from them.
2. Next, identify the messages to convey to these stakeholders to persuade them to support and engage with the project.
3. Identify actions and communications required to win and manage the support of these stakeholders. With the time and resource available, plan how to manage the communication to and the input from stakeholders.
4. Focusing on the high-power/high-interest stakeholders first and the low-interest/low-power stakeholders last, devise a practical plan that communicates with people as effectively as possible and that communicates the right amount of information in a way that neither under nor over-communicates.
5. Finally, determine the best time to communicate with the identified stakeholders.

As the project goes through its lifecycle, the project manager must be observant and sensitive to changes such as the introduction of new stakeholders, change of priorities, assumptions turning invalid, and any changes in stakeholders’ needs and priorities after they have learn more about your project. This is especially pertinent to projects that span many months or years. Hence, stakeholder management is not a one – time exercise but a continuous effort throughout the entire project life cycle.

Manage Project Team

Team Conflict Resolution
Conflict is commonly understood as “a situation of competition in which the parties are aware of the incompatibility of potential future positions and in which each party wishes to occupy a position which is incompatible with the wishes of the other.” A project level conflict is commonly seen at the early stage of a project due to different understanding, interest, constraints or preferences of each stakeholder. Sometimes, conflicts at early stage of project can be constructive and healthy, as stakeholders are given opportunities to raise their concerns, constraints , assumptions, needs and expectations from the project. Ideally, this paves the way for innovative win-win solutions to created to satisfy the majority of stakeholders needs and expectations, in an open and transparent manner. . Project conflicts can force people to confront underlying issues or possible defects in a solution and choose a better approach. As such, constructive conflict with a proper resolution can be healthy.

Source of Conflicts in Project:
Work Priorities
Personnel resources
Technical opinions / Issues
Administrative procedures
Cost allocation
Change of requirements

Reasons causing escalating Project level conflict to Personal Conflict:
High Stress Environment
Ambiguous roles
Multiple bosses
Cultural differences

Conflict management within a team environment requires the ability to solve problems, set goals, compromise, settle personality differences, and resolve conflicts. Techniques to manage project level conflict include:
• Confrontation (directly face a conflict),
• Compromise (use a give-and-take approach),
• Smoothing (de-emphasize areas of differences and emphasize areas of agreement),
• Forcing (The win-lose approach)
• Withdrawal (to retreat or withdraw from an actual or potential disagreement)

However, if conflict is not managed properly or not allowed to be discussed openly or only surface up at middle or tail end of the project, it can be detrimental to the project. When this occurs, it threatens team cohesiveness, team relationships, and interpersonal connections. As a result, the problem remains, energy is taken away from more important activities or issues, morale of teams or individuals is destroyed, and groups of people or teams are polarized. Sometimes, the searching for resolution to a project level conflict become too personalise or when differences in personalities or culture are involved, a project level conflict can escalate EASILY to become personal level conflict which could have blow the impact out of proportion !!

Issues Management

Effective Project Management is not possible without proper handling of changes and uncertainties. PMBOK recommends the project manager use the Risk Identification process in the Risk Management Knowledgement Area during the project planning phase. This is to identify uncertainties and develop appropriate risk response measures. These are documented and monitored during project execution. Project Issues will arise, often because a risk identified early was not managed properly, or the risk response measures was not effective, or the project team failed to identify the risk /uncertainties in the early stage of the project .

Every project issue identified should be formally communicated, documented, monitored, assigned, reviewed and resolved. It is the project manager’s duty to review and determine whether or not the issue is directly related to the project, e.g. Scope, Deliverables, Schedule and Resources, to determine the actions necessary to resolve the issue and allocate those actions to members of the project team until final issue resolution. Depending on the environment and the customer’s needs and expectations, most organizations have an accepted way of dealing with issues. Formal approaches include the establishment of a Project Steering Committee, Project Working Committee or Change Control Board.

However, when a project level issue failed to be resolved in a professional manner, it is possible to see the issues snowball to become a personal level issue between two or more individuals involved in the dispute or issues resolution process. Sometimes, informal approaches to address this include leveraging on relationships and resolving issues at the individual level.

How does Stakeholder Management work in China?

In order to be able to objectively analyse the topic and provide tips for surviving in China’s unique project environment, the author will leverage on the experiences of three complex mega projects in China that he was directly involved in, as case studies.

Complex Mega Projects
China’s current appetite for mega projects seems insatiable, and from its development plans – long term. This is not surprising given the country’s past limited investment in transport infrastructure and its recent phenomenal economic growth, fast motorisation and urbanisation rates and widespread modernisation efforts

Complex mega projects are characterised by a degree of disorder, instability, emergence, non-linearity, recursiveness, uncertainty, irregularity and randomness, and dynamic complexity where the parts in a system can react / interact with each other in different ways. Detailed long-term planning is therefore impossible. Applying traditional project management approaches with their focus on long-term planning, rigid structures, precise work breakdown structure definition, and elaborate control rules in these project environments will be counter-productive.

Anatomy of Complex Projects :

High Contract Value, High Profile and Multiple Parties. Complex contractual arrangements and administration.

Multiple products and services are identified and assembled into a complete solution. No individual or team can create the entire product, and no individual project manager can oversee the entire project directly. Multiple sub-project efforts are required.

Complex coordination mechanism and procedures involved. Long Implementation timetable and high expectation, tight schedule, no room for failure.

Technical :
Mission and sometime “life and safety” critical. Can be innovative without many reference success stories. Typically requires different set of rules and guidelines.

Case Studies Background:
Three High Profile – Multi-billion – Complex Mega Programs in China :
• Shanghai Pudong International Airport (China) Project (1998 – 2001)
• Guangzhou International Airport (China) Project (2002 – 2004)
• Beijing International Airport (China) Project (2005 – 2008)
Traditionally, airports operate in an environment where the airport system is disintegrated. Information created by the different departments is shared or exchanged through primitive means such as calling a meeting, using a telephone or fax, sending a memo, exchanging computer diskettes, etc. These approaches are inefficient and prone to errors.
To streamline information flow, and improve efficiencies, three International Airports in China adopted the concept of Airport Operational Database (AODB). This calls for the systems integration of the silos of information sitting in disparate legacy IT systems. The objective was to allow information to be communicated and exchanged seamlessly; thus improving efficiency, competitiveness and strengthening the bottom line.

The PMBOK ® 3rd Edition dedicates many pages to the importance of human resource and communication management. However there was only scant reference to the influence that culture has on the human behaviour. The exposure draft of PMBOK 4th Edtion which is due for release in 2009 places more emphasis on the importance of cultural awareness to highlight the need for the project manager to understand the potential cross-cultural issues arising from the global projects, global teams or virtual team project environment. The author’s personal experience in managing mega projects in China supports his viewpoint that it is not enough to simply understand the global standard and best practices. As Ramaprasad and Prakash (2003) have noted, much of it focuses on global knowledge from a Western viewpoint, with little about the interplay of local knowledge and culture. Part of the key to project success in a foreign country is to acknowledge, understand and incorporate that country’s ‘silent language’ (Milosevic 1999; Hall & Hall, 2003). To be able to interpret, understand and communicate in a country’s silent language, a project manager who is leading and managing project in China must at minimum, gain an understanding of following dimensions which is applicable to China and most parts of the Asia Pacific region :

Importance of Guanxi

Ambiguous Thinking – Concept of Shade
Base on this concept, the ideal state is not one of the extremities, but a balance between black and white or yin and yang. The key focus is to achieve a state of balance, harmony, equilibrium and steadiness. This sometimes result in ambiguities, lack of clarity (instead of clear cut). In the Chinese business environment, this is acceptable and issues are resolved from the perspective of balance and equilibrium instead of absoluteness of right or wrong. As an example, it can be observed that in most instances, a Chinese project team member or business associate, will never provide a definite answer to a question, preferring to leave some room for ambiguity.

Power and Authority
The ‘power distance’ is high in China, compared to Western culture. The Chinese are still receptive to dominant, dictatorial bosses and authoritative figures. Hence, project manager are expected to be decisive, firm and assertive.

Business in China is governed by the centuries-old custom of getting things done through “Guanxi”. “Guanxi” literally translates to “relationships”, although in the Chinese cultural context, its meaning and practical application is much richer and encompassing.

The word consists of two characters, guan关and xi系. Guan originally meant a lock or a door; its extended meaning is “to close up.” Thinking metaphorically, inside the door you may be “one of us” but outside the door your existence is barely recognized. In addition, guan can refer to “doing someone a favor.” For instance, guan xin关心 means “showing solicitude for,” guan huai关怀“showing loving care for,” and guan zhao关照, means “illuminate” or “looking after” or “support.”

Xi系 means to tie up and extend relationships, such as kinship (shi xi世系) and directly-related members of one’s family. It implies formalization and hierarchy. Whilst the word primarily applies to individuals, the concept can also be used similarly with organizations (e.g., xi系means “department”).

In practice, Guanxi, refers to networks of informal relationships and reciprocal exchanges of favours that dominate business activity throughout China and much of the Asia Pacific where the Chinese diaspora is spread out. It involves the obligation of one party to another, built over time by the reciprocation of social exchanges and favours. If one has “Guanxi” with another, one will be quick to do a favour, act on another’s behalf and depending on the depth of the relationship, do anything necessary for the other party. By establishing this type of relationship with someone, the other party is implicitly agreeing also to be available to reciprocate when the need arises. In such a way “guanxi” can be considered as a type of currency that can be saved and spent between the two parties. Like money, it is a resource that can also be also be exhausted, so one must be sensitive not to overextend the “guanxi” that has been established. The Chinese businessmen mentality is very much one of “You scratch my back, I’ll scratch yours.” It is an important concept to understand if one is to function effectively in Chinese society.

“Guanxi” is based on reputation, trust and personal relationships. It involves constant trade-offs between resources, budget and timeline to ‘give’ what the buyer ‘really’ wants ethically. The term ‘Guanzi’ has been often loosely translated as ‘relationship’ in Western literature. However, ‘relationship’ and ‘Guanxi’ are not exactly the same. While a relationship between two parties can be established purely based on the common interests of the parties involved and may not be commercially motivated, Guan Xi is established on the basis of family connections, common backgrounds or long lasting friendships and in pursuance of personal or organization interest and benefits. Also, Guanxi is very much contextual in nature.

Someone is described as having good Guanxi if their network of influence could assist in the resolution of the problem currently being spoken about. The most common response to indicate acceptance of an apology in the Mandarin language is méi guānxi (沒关系) which literally translated means “doesn’t have implications”.

Principles of Guanxi Cultivation

According to Luo, Y.D. (2000), there are seven important principles underlying Guanxi cultivation, utilization and maintenance:

1) Guanxi is transferable.
First, Guanxi is transferable. If A has Guanxi with B and B is a friend of C, then B can introduce or recommend A to C or vice versa. Otherwise, contact between A and C is unlikely. For this reason, formal business correspondence usually will not receive a reply until direct personal contact has been established. The success of transferability depends on how much satisfaction B feels about his Guanxi with both A and C. Transferability also means that Guanxi is different from friendship. Affection is important but not a prerequisite for Guanxi, whereas affection is necessary for friendship. Only strong Guanxi relations contain affection and, hence, friendship. Weak Guanxi partners, however, are not necessarily friends.

2) Guanxi is reciprocal;
A person who does not follow a rule of reciprocity by refusing to return favor for favor will ‘lose face’ and be seen as untrustworthy. Nevertheless, exchanges often favor the weaker partner. At the individual level, Guanxi links two persons, often of unequal rank, in such a way that the weaker partner can call for special favor for which he does not have to reciprocate equally. This reciprocity explains another distinction between Guanxi and friendship.

3) Guanxi is intangible;
It is established with an expectation of an unlimited exchange of favors. It is maintained over the long run by an unspoken commitment to others in the network. People who share a Guanxi relationship are committed to one another by an invisible and unwritten code of reciprocity and equity. Disregarding this commitment can seriously damage one’s social reputation, leading to a humiliating loss of prestige or face.

4) Guanxi is utilitarian rather than emotional;
Guanxi bonds two persons through the exchange of favors, rather than through sentiment. This relationship does not have to involve friends, though that is preferred. Guanxi relations that are no longer profitable or based on mutual exchange are easily broken. Because of this principle, individually-embedded Guanxi can easily extend to organizationally-embedded connections. Employees earn benefits such as bonuses, commissions, and promotions when they transfer personal Guanxi to the organization. Organizations also benefit from each other’s Guanxi exchanges. Returns are favored when the resources and skills of two parties are complementary and both parties strategically need each other.

5) Guanxi is contextual;
It involves interactive conduits between people. Cultivating Guanxi is completely context-specific. The giving of the same gifts will have three interpretation and outcomes:

eg Mr A gave a red packet with cash money of RMB10.00 to the boss

Context A: After finding out that the boss and spouse just had a baby
This is an accepted part of the culture of gift-giving. The red packet and money may be translate as a meaning of good luck and as a token of your care and love to the family and new born .

Context B: You are up for a promotion
The behaviour and red packet might be seen as instrumental. The boss may warn you not to do that again.

Context C: Your shiftless brother-in-law needs a job
It might be considered a bribe. The Guanxi you have developed might be destroyed due to your act.

Because Guanxi development is contextual, its construction and application is more an art than a science. Realizing the importance of Guanxi and understanding its principles are easy; finding and implementing an appropriate approach to fulfilling Guanxi relations is difficult.

6) Guanxi is long-term oriented;
Members of Confucian societies assume the interdependence of events, understanding all social interactions within the context of a long-term balance sheet. Every Guanxi relationship is regarded as a kind of stock to be put away in times of abundance and plenty, but brought out in times of need. It is developed and reinforced through continuous, long-term association and interaction. By contrast, social transactions in the West are usually seen as isolated occurrences, with great emphasis placed on immediate gains from the interaction. Some Guanxi relationships never end, but continue from generation to generation if continuously maintained.

7) Guanxi is essentially personal.
Lastly, Guanxi is personal. Guanxi between organizations is initially established by and continues to build upon personal relationships. When the person who brought a Guanxi connection leaves, the organization loses
the Guanxi as well. In other words, Guanxi has no group connotation. This principle largely explains the difference between Guanxi and inter-organizational networking in Western countries. Although personal attachment may facilitate inter-partner cooperation and mitigate inter-firm conflict, interpersonal relations are not a prerequisite for inter-firm networking in the West.

Rule by Law or Rule by Guanxi – Experiences from Chinese Projects

Chinese business ethics are built on the basis of Guanxi, which places relationships above other considerations; sometimes including an employer’s code of conduct and even the law. Perhaps even more confounding to Western businesses, the obligations of Guanxi can bridge time and distance, sometimes being invoked even when two people have not seen one another for many years.

Conventional project management practices which are largely based upon western management philosophies, rely heavily on formal documented agreements. The premise is on managing by the ‘Rule of Law’ and using the contract to establish project parameters, terms and conditions and to prevent conflict, hence making stakeholder management easier. It depends on an expensive and relatively inflexible legal system to enforce contracts. However, in China, personal relations are more important than written contracts. Contract is rarely referred to, or only at a minimum. Worst still most terms and conditions spelt out in the contract will incorporate the concept of Shade and Ambiguities Thinking mentioned earlier, in direct contrast to the level of clarity and transparency that characterise western management thinking.

Many expatriate project managers working in China complain about the amount of time and effort required to cultivate good Guanxi, by way of exchange of gifts, favours and hospitality. The fact is that, at its heart, Chinese culture is far more relational than Western culture, and this difference is especially pronounced in the business world. Western business culture is transactional with its emphasis on cost reduction and efficiencies, while Chinese business culture is relational and based largely on a code of honor and respect, which needs to be cultivated continuously over time.

Expatriate project managers conducting business in China must first understand that they are subject to some Chinese cultural ideals and norms of behavior that are uncommon in the West. They also must recognize that Chinese employees regard foreign business practices as alien and unnatural, just as foreigners may regard Guanxi as unethical.

Kohls (1981) and Marquardt and Kearsley (1999) discussed the differences between Western and non-Western cultures that can be used to clarify the impact of diverse values on motivation and training. Table1 identifies areas in which a clash of cultural values may result in conflicts that can impact project outcomes negatively using a minus sign (-).

Figure 1: Value Differences between Western and Non-Western Cultures
Western Cultural Values Non-Western Cultural Values Impact on Project Management.
Individualism Collectivism/Group +
Achievement Modesty X
Equality/Egalitarianism Hierarchy –
Winning Collaboration/Harmony +
Guilt (internal self-control) Shame (external control) X
Pride Saving face X
Respect for results Respect for status/Ascription +
Respect for competence Respect for elders –
Time is money Time is life –
Action/Doing Being/Acceptance –
Systematic/Mechanic Humanistic –
Tasks Relationship/Loyalty –
Informal Formal –
Directness/Assertiveness Indirectness –
Future/Change Past/Tradition –
Control Fate –
Specific/Linear Holistic +
Verbal Non-verbal +
(+) = Positive impact of combining both values on outcomes (-) = Negative impact of combining both values on outcomes (culture clash) (X) = No direct impact on outcomes
Adapted from Kohls (1981); Marquardt and Kearsley (1999)

Scenario 1
An overseas Chinese Project Manager observed this in his Shanghai project office. Shanghainese girls are well known for their beauty and fashion sense. He noted that only the female workers stayed back after 5pm to continue working. This got him perplexed. Could it be that the male staff was not committed to their work? Or could it be that the female workers were trying to get close to him?

Scenario 2
An European seller PM, has discovered that a daughter of a buyer was ‘rumored’ to have joined the project team as a member. This occurred during the last stage of contract negotiation…

Scenario 3
A Seller PM was not very happy with the manner he was being treated by the buyer PM who strongly believe in the adage “Customer is always RIGHT”. In one of the meetings, one of them banged his fist on the table to show his disagreement. This triggered an equally angry response from the other. It was clear who actually started the “table banging exercise”. SK heard more than 10 BANGS !! Within a few hours, the Steering Committee consisting of representatives from the buyer and seller side heard the news. …

Scenario 4-10
Due to space constraint, only three scenarios are published. You may contact the author if you are interested to know more scenarios and how each of these scenarios was handle by Rule by Law and Rule By Quanxi Project Manager respectively.


Globalization is leading to a growing number of international projects. In these projects, cultural differences can either be a source of creativity and enlarged perspectives, or they can be a source of difficulties and miscommunication. In addition, multi-cultural project teams are becoming the norm. More and more projects are being executed successfully using multicultural teams. To achieve project goals and avoid potential risks, project managers should be culturally sensitive in the environment they operate, and promote creativity and motivation through flexible leadership.

Based on the author’s extensive experience of managing complex projects in modern day China, he concludes that in order to manage stakeholder and conflicts and ultimately deliver projects successfully in China, cultivating good Guanxi is essential, as it facilitates timely approvals, waivers and stakeholders’ support and assistance throughout the project. With the foundation of good Guanxi in place, project managers minimize the risks, frustrations, and disappointments when doing business in China.


Project Management Institute. (2004) A guide to the project management body of knowledge (PMBOK®) (2004 ed.). Newtown Square, PA: Project Management Institute.

Article in a Journal
Anbari, F. T., Khilkhanova, E. V., Romanova, M. V., & Umpleby, S. A., “Managing Cultural Differences in Projects”, Proceedings of the International Project Management Association 18th World Congress on Project Management, [CD], Budapest, HU, June 18-20, 2004.

Luo, Y. D. (2000). Guanxi and business. Singapore: World Scientific Publishing, Co. Pte Ltd.

Kohls, L. R., Developing Intercultural Awareness: A Learning Module Complete with Master Lesson Plan, Content, Exercises, and Handouts, The Society for Intercultural Education, Training and Research, Washington, DC, 1981.

Marquardt, M. J., & Kearsley, G., Technology-Based Learning: Maximizing Human Performance and Corporate Success, St. Lucie Press, Boca Raton, 1999

Ramaprasad, A., & Prakash, A.N. (2003). Emergent project management: how foreign managers can leverage local knowledge. Int. J. of Project Management, 21(3), 199—205.

Hall, E. T., & Hall, M. R. (1990). Understanding Cultural Differences. Intercultural Press.

Milosevic, D.Z. “Echoes of the Silent Language of Project Management,” Project Management Journal, 1999, 30(1), 27-39.

Electronic Resources of a printed periodical
Fretty, P. (2005, October) Empowering Executive Decisions. PMNetwork [Electronic Version] Retrieved on October 18, 2005 from http://www.pmi.org/info/PIR_PMNetempowering.pdf

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