Factors influencing the success and failure of British construction companies working in joint ventures with Saudi partners

This thesis describes the results of research analysing the degree of success of joint venture management teams between British multinationals and Saudi local companies in the field of the construction industry in relation to cross-cultural barriers in general, and specifically to projects and management teams in these specific projects. It examines differences in cultural styles, problem- solving styles and trust structure styles, and compares the overall ideal perception of various companies in the construction industry of these three management styles with what are perceived by the companies as their actual styles. The research began with considering the importance of the international management group's selection and appointment as difficulties will increase in relation to the cultural and other differences between the parties. Cultural styles have been defined as how performance (in this case of international joint venture managers) is affected by the societal culture in which the person has been brought up. This applies to all three aspects, as well as the specifically termed 'cultural style'. It is considered that the selection and appointment of the most suitable managers is very important in the joint venture contract internationally as all other control measures have little effect once a totally unsuitable manager has been appointed. Selection criteria should be based on appropriate combinations of styles, and training designed to eliminate or modify shortcomings. On the basis of a literature search and extensive interviews with expert managers in construction industry international joint ventures with Saudi partners, five hypotheses on the effect of culture on degree of success and the possibility a quantitative model to determine degree of success were formulated. The research methodology involved the extensive collaboration of experienced managers in many of Britain's biggest firms in the construction industry with past or present involvement in joint-venture projects internationally and specifically between Saudi and British companies. A number of questionnaires were used to obtain data and a model for examining the degree of success of joint ventures in the construction industry involving the three styles mentioned earlier was finally developed. The model involves three different levels, trust structure, culture and decision making. Overall at the first level there needs to be right levels of trust etc., even to start the business successfully. On the second level there should be the right balance of culture, and at third level the most effective team should have the right mix of decision making styles. Each company was examined for its degree of success at each level. Two sets of figures were obtained from various companies-actual perception for each company and perception of ideal for each company. The next step was to find the difference between the actual and the ideal mean, the actual and the ideal of each company, the ideal of each company and the ideal mean respectively (3-approaches). Thus for each company the degree of success in each style can be observed for possible use in training or selection. Although actual success can be viewed for instance from the financial side, i.e. in terms of profitability, or in terms of market conditions, appropriate structure of organisation, the degree of success or failure in this research is viewed as the match between ideal and actual situations in the cultural elements of the model as perceived by the respondents. The first two levels were found to be crucial to the start-up and continuation of the business respectively (effectiveness), the third level is important but not always crucial and thus is concerned with efficiency rather than effectiveness. When the combined results of the three approaches are examined qualitatively it can be seen that only five companies achieved overall success and this could be viewed as bare success; for the other 10 companies overall lack of success in terms of the approaches overall is indicated. This general view matches quite dosely the separate overall results for each approach, quantitative and qualitative, and each level qualitative. There were no indications of a high degree of success overall for any company. The need for systematic selection and training is thus indicated by these results. Future research might investigate the use of this model in psychometric testing as a basis for such selection and/or management training in the industry to prepare for joint venture work internationally. It might also find use in other industries for international work.