Cross-Cultural Challenges of Managing 'One Belt One Road' Projects

The Experience of the China-Pakistan Economic Corridor

Arshia Mukhtar, Ying Zhu, You-il Lee, Mary Bambacas, S.Tamer Cavusgil

• Editorial: Routledge
• Año: 2022
• ISBN:
  9781000570267
• Edición: 1
• Categoría: Betriebswirtschaft
• Categoría: Internationale Wirtschaft

The China Pakistan Economic Corridor (CPEC) is a flagship program of China's 'One Belt One Road' initiative, created to boost economic cooperation between China and Pakistan with significant political and economic implications in the region. This book looks at critical issues when developing capabilities of cross-cultural management, adaptation and adjustment through cross-cultural understanding and network building from the CPEC case study.

The book highlights the importance of acculturation experience, cross-cultural networking, networking behaviour ( guanxi vs. hawala ), and factors influencing cross-cultural adjustment, which would enhance the overall performance of 'One Belt One Road' projects in general. It looks at how the Chinese and Pakistani employees' national cultures affect their behaviour while working on the CPEC projects. The book offers insights into what cross-cultural adjustments are effective in creating improved individual and organizational performance.

In an increasingly globalized world in which the practice of working with people from multiple cultural background is more of a norm, this book will be a useful reference for those who are interested to achieve success in multi-cultural settings.

1 Introduction

DOI: 10.4324/9781003240815-1

1.1 Introduction

With the influence of globalization, cross-country trade and investments are resulting in increased cross-cultural exchange activities, economic integration, cultural diffusion, workforce diversity and the emergence of cross-cultural assignments (Ran & Huang, 2019; Shu et al., 2020). Emerging market multinational enterprises (EMNEs) are also establishing offshore investment projects in a number of emerging economies (Buckley & Tian, 2017). However, due to their relatively short history compared to advanced MNEs, EMNEs have not gained sufficient experience in managing several challenges, including dealing with different cultural and economic contexts and ways in which business and people may be managed in these changing contexts (Wang & Varma, 2019). Hence, developing the capabilities of general cross-cultural management and cross-cultural adaptation and adjustment through cross-cultural understanding and network building has become very important for EMNEs’ business success (Chen, 2019).

Experts working in the international human resource domain have emphasized the need for EMNEs to select and retain employees who can work efficiently in a cross-cultural environment and are well adjusted to the host country (Caligiuri, 2000). Recruiting well-adjusted employees who can work easily in new cross-cultural assignments is a challenge for most organizations. These employees must have adequate support from their colleagues and organizations for their adjustment to different cultural environments. Unless organizations themselves are also able to adjust to new work and cultural environments, employee adjustment will not be possible.

In order to achieve and maximize economic benefits and competitiveness, many countries have entered into free trade agreements (Mukhtar & Hongdao, 2017). Pakistan has entered into various free trade agreements with several countries, including Sri Lanka, Malaysia, Iran, the United Arab Emirates, Afghanistan, Mauritius, Turkey, the US, the European Union and China (Pakistan, 2018). Pakistan plays an important strategic and economic role in the Asian region and enjoys strong economic relations with these countries (Mukhtar & Hongdao, 2017). China and Pakistan, in particular, have had a strong history of positive diplomatic (Sino-Pak) relations since 1950 (Mahdi, 1986). Both countries entered into free trade negotiations in April 2005 and signed a free trade agreement in July 2007 (Ministry of Commerce, 2018). The China-Pakistan Free Trade Agreement (CPFTA) (originally concluded in 2006 and came into effect in July 2007) was strengthened through the China-Pakistan Economic Corridor (CPEC) agreement in 2015 (Mukhtar & Hongdao, 2017). As a part of China’s Belt and Road Initiative (BRI), the CPEC aims to increase economic growth in the region as well as to create a win-win outcome for China and its participating countries (Hali et al., 2015). The positive outcome of this collaboration for China and Pakistan is threefold: promoting economic development, bridging socio-cultural ties and developing social and human capital (Ahmad et al., 2017).

Besides the benefits and opportunities, the CPEC offers a kaleidoscope of challenges for companies, including EMNEs operating under the CPEC. In addition to the challenges of security and political instability, these companies face several operational challenges in carrying out these projects (Jacob, 2018). Though formal agreements have been signed, operational challenges need to be tackled on a daily basis. One such issue is the interaction between employees with different national cultures (Chen et al., 2018). The effect of national culture on culturally diverse organizations is evident as it affects different levels of the organization as well as individual employees (Pizam, 1993). Consequently, managers need to understand the importance of national culture and its effects on employees working in culturally diverse work environments (Nazarian et al., 2017). In order to build strong cross-cultural collaboration, employees should have the capacity of relationship-building across nationalities for social support with trustworthy social networks (Burt & Wang, 2019; Bader & Schuster, 2015).

Social networks (pool of social contacts of an individual, i.e. the number of people who support work or personal life) as well as networking (ways through which contacts are made and utilized) can help organizations and individuals manage and interact in the work environment effectively (Durbin, 2011). Over the years, social scientists have established theories of social networks and highlighted the role of boundary spanners, actors, social exchanges, social networking and network dynamics at the individual and organizational levels in competitive environments, strategic alliances and international assignments (Ahuja et al., 2012; BarNir & Smith, 2002; Birley, 1985; Blau, 1964; Burt, 1992; Durbin, 2011; Gulati, 1998; Lin, 2001; Sharafizad & Coetzer, 2016).

However, many publications based on social network research have ignored the HR literature (Soltis et al., 2018) and its integration in cross-culture management issues. The literature lacks a holistic approach towards structure (social networks) and behaviour (networking behaviour) in the cross-cultural domain. Network support for employees is integral to their adjustment to new jobs with entirely new work and cultural environments (McEvily et al., 2014; Sharafizad & Coetzer, 2016). According to Pustovit (2020), further research is required to determine the cultural influence of different countries on the development of ties among employees, and consequently adequate adjustment being implemented. Essentially, in-depth investigation is required to determine the role of contextual factors in cross-cultural assignments and provide clarity on the role of culture, individual characteristics and behaviours affecting these networking behaviours and structures simultaneously.

In light of the above, researchers need to visualize the role of different types of social networks and their impact on organizational performance parameters in order to understand the combined effect of structural and behavioural aspects of social networks. Furthermore, the influence of employees’ national cultures on social network development and networking and the effect on cross-cultural adjustment of employees require further investigation. Researchers need to understand the fixed (e.g. based on innate traits or attributes) versus malleable (e.g. learned through effort in new culture) views of people with regard to networking (Kuwabara et al., 2020). Though some research has been undertaken on the mutual collaboration and mutual detrimental effects of network types and networking behaviours (McEvily et al., 2014; Soda & Zaheer, 2012), these aspects need to be understood in detail at all levels of cross-cultural management. The cost of premature return of an expatriate due to poor adjustment in new assignments can be as high as US$198,000, and termination of an international assignment is disastrous for cross-cultural projects (Wang & Varma, 2019). It is thus important to investigate employee adjustment for the sake of the success of multi-million-dollar CPEC projects.

1.2 Research Issues and Questions

This book addresses the aforementioned issues using a mixed method approach in order to gain a comprehensive understanding. In particular, this study identifies the types and importance of social networks, and networking behaviours among both Chinese and Pakistani employees working in projects under the CPEC. The role of cultural, contextual and individual factors influencing employee adjustment and achievement of certain outcomes has been explored. Moreover, the role of employee adjustment in the achievement of positive outcomes, such as communication satisfaction, project performance goals and conflict management, has also been analysed.

As a result of this mixed method research, this research offers valuable insights into cross-cultural management studies as it compares networking behaviour across the two different Asian cultures of China and Pakistan within the working environment of the CPEC projects. It is hoped that the fragmented social network literature will be enriched by bridging the gap between the structural and behavioural views of networks from the separate perspectives of host and home country employees, and a measurement of social network characteristics and networking behaviour. The underpinning social exchange and social network theories will also be enriched by highlighting condition-driven networking behaviour and employee cognitive reconstruction in a cross-cultural setting.

The main aim of this book is to identify the role of social networks and networking behaviours among both Chinese and Pakistani employees working within the CPEC projects in Pakistan and the effect on employee adjustment and project outcomes in the cross-cultural work environment. This research focuses on companies in the energy, infrastructure (public sector development, transport and construction) and telecom sector of the CPEC in which Chinese and Pakistani employees are working together. More specifically, this research has four major aims:

• Identify and explore how employees’ national cultures affect their behaviours while working in these projects;
• Identify the commonalities and differences between both countries’ social networking processes and the adjustments which are required in these social networks for employees to effectively interact in a cross-cultural work environment;
• Establish how organizations enable individuals engaging in cross-cultural interaction to be effective and to achieve positive outcomes, as well as the role of social networks and networking in cross-cultural adjustment; and
• Understand the influence of employee adjustment and social networking on project outcomes in cross-cultural work environment.

Given the significance of this research, the relevant research questions are developed in line with four specific aims of this research listed earlier.

Regarding the first aim of this research, the two key questions are:

• RQ1: How do different national cultures (Pakistani and Chinese) affect employees’ interaction at workplace under the CPEC?
• RQ2: How do different national cultures (Pakistani and Chinese) affect employee social networking behaviours?

Regarding the second aim, further two key questions are:

• RQ3: What types of social networks and networking behaviours do prevail among employees working within the CPEC projects?
...

Índice

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• List of illustrations
• List of authors
• Preface
• Acknowledgements
• List of abbreviations
• 1 Introduction
• 2 Regional Political Economy and the CPEC
• 3 Interviews Findings
• 4 Survey Results
• 5 Conclusion
• Appendices
• Index