INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 22 (2004) 387–396
www.elsevier.com/locate/ijproman

Coping with multicultural projects: the leadership styles of

Finnish project managers
Marko M€
akilouko *

Tampere Polytechnic, P.O. Box 21, Teiskontie 33, Tampere 33521, Finland

Received 7 February 2003; received in revised form 6 May 2003; accepted 21 August 2003

Abstract

Finnish leaders and key personnel of multicultural projects were interviewed about their experiences and perspectives on mul-
ticultural project leadership. The team members included Finnish–Chinese, Finnish–European, and Finnish–American cultural
combinations. The Chinese team members were mostly from Hong Kong with one team from Beijing. Three multicultural project
leadership styles were found. Forty out of forty-seven project leaders indicated a solely task oriented leadership style. The same
leaders also indicated cultural blindness, ethnocentrism, parochialism, or in-group favoritism. The seven leaders that indicated
almost solely relationshipsÕ orientation, or both task and relationshipsÕ orientation, indicated also cultural sympathy and three
leadership strategies to maintain team cohesion and to avoid cross-cultural problems. It is possible that they understand foreign
cultures as a social phenomenon and can use that knowledge in leadership. Obviously, the relationships and task orientation are
personality traits that have wide consequences for multicultural project management and the choice of leadership style as well as the
foreign cultures.
Ó 2003 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Multicultural; Leadership style; Task orientation; Relationships orientation; Cultural blindness; Ethnocentrism

1. Introduction This study concentrates only on the second type of

Multicultural project teams are common in large in-
ternational companies. Recent mergers in Scandinavia
have further increased the number of multicultural
project teams in operation in Finnish industry. In
practice, there are three basic forms of multicultural
team. (1) A project team with members from different
cultural backgrounds working in the same country.
These teams have expatriate team members or team
members that come from ethnic minorities that are
culturally distinct. (2) Project teams that are partially or
totally dispersed in many countries but meet face-to-
face. (3) Project teams that have members based in many
countries, work together only through electronic medias,
and have never met each other. This ‘‘virtual project
team’’ has no face-to-face or get-to-know-each-other
meetings [1].
*
Tel.: +358-50-5420-134; fax: +358-2647-222.
E-mail address: marko.makilouko@tpu.fi (M. M€akilouko).
team. The appointed leaders of the project teams are
often from the companyÕs home country. Some of the
leaders move abroad as expatriates, but it is more
common for them to remain in their home country and
communicate via electronic media. Without exception,
the project teams have frequent face-to-face meetings
where personal relationships between team members
develop. The benefits of strong personal relationships
include improved communication and reduced conflicts.
Most of the project teams work on cross-border transfer
of technology projects such as banking systems, or are
engaged in the development of new technology and
applications for IT companies. The metal industry has
the longest tradition of using multicultural project teams
to procure factories, paper and pulp mills, and in smaller
business-to-business projects. In Finland, companies
have recently started to use multicultural project teams
for a new purpose. Companies that supply global en-
terprises with engineering, technology, parts or subas-
semblies have also established multicultural teams to

0263-7863/$30.00 Ó 2003 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2003.08.004
388 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
serve these enterprises in a coordinated manner. These
multicultural companies have a need for knowledge in
the field of multicultural leadership. Their experiences
have shown that not all multicultural projects go well. In
Finland, such failures are usually well reported by the
media and several cases are known to exist. In one case,
a company disbanded all multicultural teams and re-
placed them with single nationality teams as a way to
solve multicultural project team problems.
There has not been enough research on leadership of
multicultural teams (excluding virtual teams). Many
writers have suggested ideas, but very few have attempted
to study this form of leadership, thus the determinants,
attributes, and variables are largely unknown [2]. Some
studies have focused on leadership traits in multicultural
management [3,4] and the team process [5–7]. A
more general perspective is available through case studies
[8–10]. No studies are available, that clearly show
what effective leadership patterns are in multicultural
leadership.
There are ample studies regarding expatriate leader-
ship, especially in international joint ventures [7,10–14].
The studies concentrate primarily on how expatriates
tend to fit their style of leadership to the practices and
expectations of the team members in the country they
are working in, e.g. coping strategies [14], that concen-
trates on what contributes to the role of ambiguity, and
the effective patterns of conflict management. The mul-
ticultural project team is different from the expatriate
situation. The expatriates do not clearly deal with the
problem of team dispersion. This may happen, but
studies do not indicate dispersion as one of the moder-
ator variables. The leaders of multicultural project teams
find an array of expectations and practices, often si-
multaneously with the geographical dispersion of the
team. Thus, the project team members may not identify
themselves as members of the multicultural team, but
representatives of their home organization [7], which
complicates the leadership task. The differences in lan-
guage skills complicate the communication and forma-
tion of the team effort [5]. It is possible; even likely, that
the multicultural project team presents far more de-
mands on leadership than conventional leadership situ-
ations including expatriate leadership.
Multicultural leadership is an interesting and chal-
lenging subject of research. The researcher has to deal
with a research-sample collection problem as project
teams work in different countries. There is also the
problem of the limited knowledge in this field. We do
not yet know how applicable the existing knowledge
obtained from other research sample groups is for
multicultural leadership. Some claim that these earlier
results are universal. The fact is, however, that the as-
sumption of universalism is unverified. For this reason,
this study uses the hermeneutic approach and the
grounded theory method with qualitative data. The
study attempts to find what leadership styles and their
determinants or moderator variables emerge in the
context of multicultural project teams.
2. Literature review
2.1. Project leadership
Projects set their own specific framework for leader-
ship. Cleland [15] has summarized the project manage-
ment body of knowledge and found a definition that
applies to this particular field of leadership. The defini-
tion emphasizes the role of leadership as the change
agent even more than we may expect in organizations
with continuing leader and follower roles:
Project leadership is defined as a presence and a process carried
out within an organizational role that assumes responsibility for
the needs and rights of those people who choose to follow the
leader in accomplishing the project results [15].
There is usually a limited amount of time, money,
and other resources, i.e. the project has several con-
straints [16]. Rather than a static organization, the
projects follow rapid life cycles where the organizational
roles change. Because of this, the leader has to change
roles from being a technical expert to a manager, then a
leader and finally, at the end of the project, back to
being a technical expert. The roles may also include
internal argumentation for resources and external clo-
sure of sales [17]. The nature of a project team does not
follow traditional perspectives. Briner et al. [18] suggest
that project teams are divided into a core team and a
visible team. The core team members are permanent
members of the project but usually not on a full time
basis, i.e. they work on other projects at the same time.
The visible team members are temporary members of
the project and leave the project when their expertise is
no longer needed. They too are also rarely full time team
members. Even the project leaders usually have several
projects and teams to lead simultaneously. Despite this
loose nature, project team rather than project group is
the traditional choice of terminology.
The typical loose and rapidly changing structure of a
project team is likely to make project leadership more
challenging. Thus, project leaders may need both task
and relationships oriented leadership styles during dif-
ferent phases of the project to ensure order in the often
chaotic situation of time and financial pressure, and si-
multaneous tasks [19]. The orientations in the project
context can be described as a rational process, outcome
motivation, and social motivation for creating a con-
structive project atmosphere [20]. Many writers espe-
cially emphasize the need for flexibility in the rapidly
changing project environment [18–20]. Despite the lim-
ited time constraint that certainly challenges project
 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
leaders, Kloppenborg and Petrick [17] suggest that
leaders have a key role to play in developing team
characteristics into a collective set of virtues includ-
ing ethics, respect and trust in others, honesty, cour-
age, prudence, and the responsible use and sharing of
power.
2.2. Multicultural leadership styles
Bj€orkman and Schaap [12] have identified that ex-
patriate managers in international joint ventures have
three leadership styles that may apply to the multicul-
tural leadership situation. (1) Didactical leadership
where leaders sell ideas by pointing out how issues have
been solved in other companies and suggests a visit to
these companies. (2) Organization design leadership
where leaders carefully select foreign team members
based on their likely suitability to the existing thinking
in the company. The idea is to pre-empt cultural issues
to the maximum possible extent. The leaders and the
company stick to their traditional ways and do not ad-
just to local culture. (3) Culturally blind leadership
where no attention is paid to cultural differences and
traditional ways and methods are used [10,14]. The
culturally blind leadership style tends to cause severe
problems and the practical disintegration of teamwork.
Expatriate managers are gradually isolated and they
later find that few of their decisions are actually imple-
mented. It is likely that the learning of cultures and the
ability of managers to cope in foreign environments
depends very much on the individual [14]. Some man-
agers are well adjusted; some are sensitive to cultural
differences and take actions to resolve the cultural
problems, while others tend to take no notice of cultures
or the need to adjust to them.
Suutari [21] indicates that few general conclusions can
be made about how expatriate managers cope. On av-
erage, expatriates indicate only few cultural differences
with a high mean deviation. This phenomenon where
leaders do not see foreign cultures has been considered
from several perspectives. The perception of foreign
culture and team members may be guided by schemas,
in- and out-group setting [22], or by projected similarity.
Slevin and Pinto [19] conclude that task orientation, the
need for power, and high cognitive capacity make
leaders inflexible in coping with the demands of the
leadership situation.
Selmer [14] discusses various personality traits that
may be behind the differences in the individualÕs ability
to cope with foreign cultures. Agreeableness, conscien-
tiousness, emotional stability, intellect, and openness or
extroversion could be of help in developing successful
coping strategies. Furthermore, some personality traits
are culture bound [23]. Members of collectivist cultures
may typically behave more ethnocentrically in cross-
cultural situations as they feel loyalty to their own na-
389
tional group of team members [22]. High national scores
in self-enhancement [24] may enhance parochial behav-
ior because of competitive attitudes [25].
The question of failing to see and cope with foreign
cultures is still an unanswered one and needs further
research. It seems that in researching cross-cultural
leadership we need some way to classify the leaders ac-
cording to their level or learning, their personality or
other determinants that may explain the choice of lead-
ership style, returning to the issue of personality traits
and leadership [26].
Bloom et al. [4] studied leaders in European compa-
nies and suggest some common characteristics for mul-
ticultural leaders. These include attempts to manage
international diversity, social responsibility of the em-
ployees, internal negotiation (participation in decision
making), general orientation for people (rather than
task orientation), and attempts to manage between ex-
tremes to find a consensus in the multicultural envi-
ronment. Wills and Barham [3] found that cognitive
complexity, emotional energy, and psychological matu-
rity were common factors in what they called successful
multicultural managers. Managers need cognitive ability
in order to relate with, learn, and understand other
people and cultures. Emotional capacity is needed for
channeling the stress caused by the confusion and am-
biguity of multicultural situations. Psychological matu-
rity means the ability to choose open rather than
defensive coping strategies in foreign cultures.
Several writers have proposed various leadership
styles that could help in solving cultural leadership is-
sues. One of the first suggestions is the cultural syn-
ergy leadership. The goal is to find common ground
among the cultural differences. The leadership should
then be based on these similarities, e.g. fit the cultural
assumptions and expectations of all the cultures
involved.
Schneider [27] has suggested standardization of
management principles such as decision-making, prob-
lem solving, briefing techniques, meeting techniques, and
task delegation. Agreement of basic working procedures
could reduce the amount of confusion and could form a
common ground among differences. When managers
write management principles down on paper, it makes
it much easier to achieve agreements as opposed to
issues such as support, communication patterns, or
feedback.
Snow and Davison [28] suggest three leadership roles
for fully established multicultural teams. (1) Advocate a
role for defining the teamÕs mission and pooling re-
sources. (2) Introduce an integrator role for maintaining
clear mission and performance goals, and coordinating
activity. (3) Use a catalyst role for encouraging and
supporting team members. The three roles could sup-
port the formation of the teams, the teamÕs mission, and
the socialization process of the team members.
390 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
2.3. Finnish leaders
Schwartz [24] found in his study of national values
that Finns, from a cultural point of view, are charac-
terized by relatively high intellectual autonomy, egali-
tarian commitment, and harmony. This could reflect
orientation towards self-transcendence, preference for
cooperation rather than competition, autonomy prefer-
ences in organizing work, trust in followers, and open-
ness for change and ideas. The leadership in general may
be oriented to development rather than maintaining
the status quo. The leaders may also indicate employee
orientation rather than task orientation [29]. At top
management levels, the leaders may emphasize team
spirit, effective communication, open dialogue, and
consensus in making decisions. They also may pay at-
tention to the organization design in detail [30]. An in-
teresting notion is that the Finnish language does not
have an exact translation for the English word Ôleader-
shipÕ but has many words for describing management.
This may be understood as a support for follower au-
tonomy or as a sign of hierarchy. Both are general ap-
proaches towards organizations with less need for
leadership.
3. Research method
The research question is how does leadership relate to
the multicultural project team and the various combi-
nations of national cultures within the project team. The
data were collected using non-structured interviews. The
sample group comprised forty-seven (47) project man-
agers and key personnel, and seven (7) foreign team
members for triangulation of results. The key personnel
were chief engineers and construction site managers,
who led parts of large projects. The average age of the
interviewees was thirty-four (34) years and each had at
least five (5) yearsÕ experience of working in teams of
different cultural combinations.
The interviewees were selected using the maximizing–
minimizing principle to focus on the leadership style
differences [31]. The maximized differences in the sample
group were the team national culture combination, dif-
ferent industrial sectors, and different companies. Thus,
the teams had different tasks, work histories, ways of
working, and different organizational backgrounds. The
teams included engineering teams in the consulting in-
dustry, engineering teams in the electronics industry,
and engineering, supply, and construction teams in the
metal industry. The minimized differences in the sample
group were the project task, which was for a limited time
and had the constraints of time, money, and scope. All
teams were of the dispersed type with a core team in two
countries and had Finnish team leaders, key personnel
and team members from two countries. The company
head office was in Finland. The organizational position
of project managers and key personnel were also similar.
They were not direct supervisors of their team members
and could not decide salaries, employment, or careers.
Such leaders can rarely use coercion but need to use
persuasion. Thus, the task environment was different but
the differences in task context were minimized.
The project teams comprised three cultural combi-
nations: Finnish–American, Finnish–Chinese, and
Finnish–Northern European. The Chinese team mem-
bers were mostly from Hong Kong with one team based
in Beijing. Cultural selection was based on three be-
havioral and cultural considerations. In the clustering
perspective of the cultures, the compositions present
distinctive differences [32]. Regarding the individualism
and collectivism dimension of cultures, the selection
presents high, medium, and low individuality [33]. Re-
garding the motivational continuums of cultures the
cultures present low, medium, and high in all four al-
ternatives: self-enhancement, self-transcendence, con-
servation, and autonomy [24]. Thus, the cultures should
be distinctive rather than similar allowing comparisons
on a meaningful basis. In each national culture, some
people display strongly their national values while
some are quite far from the national values. Therefore,
it would be ideal to have some way of sorting individ-
ual differences from national culture differences. The
grounded theory approach deals with this under the
saturation principle, i.e. the saturation of observations
can only be achieved in those categories where people
are in close agreement with each other. The categories
with large individual differences should not be saturated.
Together with the maximized differences in the sample
group, this should screen out the individual, the com-
pany, and the industrial sector perspectives and produce
a cultural perspective, as far as possible, for the research
question.
Interviews were non-structured in line with the
grounded theory literature [31]. The perceived leader-
ship style was measured by searching the interviews for
self-reported leadership style dimensions. The method is
similar to the more popular quantitative questionnaires
but relies on interviews. The dimensions that emerged
from the interviews were named according to the names
that are available from literature [34]. Similarly, other
perceived moderator variables and determinants were
recorded. The benefit of non-structured interviews is
that the interviewees guide the research process, thus
potentially giving a nominalistic perspective taken from
inside the research question rather than an outside view.
In addition, those concepts that saturate should be rel-
evant to the research question and as the concepts are
not decided beforehand but emerge from the interviews,
the method follows a hermeneutic research strategy to
the research question. Indeed, hermeneutics is the
strength of the grounded theory [31]. The results are
 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
grounded to the interviews rather than existing literature
to better understand multicultural leadership.
The interviews were processed into a coding tree,
which was further axially coded for higher-level con-
cepts. The leadership styles and their dimensions, cul-
tural issues, organization design, and their moderator
variables emerged from the interviews using this meth-
od. The coding tree was cross-examined for parsimony
and internal validity (i.e. the integration of categories).
A number of potential concepts from literature were
also studied in light of the interviews and the coding
tree. Finally, the coding tree was triangulated with the
interviews of seven American project team members.
Only the concepts that were common regardless of
company or industrial sector were retained. Individual
concepts and dimensions were retained only when
they shed light on the general trends that were found
through the saturation of concepts (i.e. the properties of
a category).
4. Results
The study indicated three distinctive leadership styles
that were named after the leadersÕ perception of foreign
cultures.
4.1. Ethnocentrism
In close agreement with the literature, an ethnocentric
leadership style was found and was most common
among the project leaders (40 out of 47). The ethno-
centric leaders indicate cultural blindness, ethnocentric
or even parochial attitudes, and task orientated leader-
ship dimensions. Their leadership concentrated on for-
mal negotiation within the project team, which resulted
into project team disintegration. This disintegration was
according to the national culture so that Finns worked
as their own team and foreign team members as another
team. The two separate teams negotiated as separate
parties about the practicalities of the project. Often the
Ôtwo separate teams approachÕ had become the nor-
mal way of working and leaders did not attempt to
change the status quo but considered division according
to the nationality Ôself-clearÕ and every project was
started in that fashion. The leaders reported only task
oriented leadership styles. Many of them considered
Finnish culture and Finnish team members to be supe-
rior in the task context and all project team members
from foreign cultures to be inferior. Some noted, how-
ever, that there are some foreign team members that are
more ÔFinnishÕ by behavior and can be trusted more
than others potentially indicating in- and out-group
favoritism.
Of the 40 ethnocentric project leaders, only 12 pic-
tured themselves as leaders. Others saw themselves as
391
Table 1
Leadership style dimensions of the ethnocentric project leader [41]
Dimension Finnish– Finnish– Finnish–
European Chinese USA
Internal negotiation + + +
Work facilitation +
Coordination +
Production emphasis +
Appealing to superiors +
Planning +
Role clarification + +
Lone decision making +
Criticizing +
+ indicated dimension in the interviews.
technical specialists, assistants for top management, or
handlers of practical project matters. Some said that
they are not leaders, and some that they do not believe
in leadership. Instead, they concentrated on matters that
can be written on paper and sent to other people for
execution. Often they sent their information to line
managers who then interacted with team members as
leaders of the project team. The people in this group
included both project managers and project key per-
sonnel. However, it is important to note that the style of
leading projects or smaller parts of larger projects varied
from person to person in all companies. While one
project leader interacted with the team members
through line managers, other project leaders held team
meetings and had direct contacts with team members.
This may indicate task orientation or a need for inde-
pendency, both with minimized people contacts.
The ethnocentric leadership style was found regard-
less of the company, team, organizational position, or
cultures (see Table 1).
4.2. Synergy
In the context of multicultural teams, a second, less
frequent (3 out of 47), leadership style was found. This
can be characterized as cultural synergy. The leaders
actively attempted to build personal relationships with
the project team members. They indicated cultural em-
pathy in their willingness to learn and understand the
ways of other cultures.
My style is that I donÕt hurry up but start slowly through the
technical background. Slowly we get to know each other and
build larger perspectives. My style includes quite careful listen-
ing to the other side. What kind of people they are and try to
learn myself . . . Free-time contacts are important in leadership.
It clearly brings you closer to the person (Finnish project
leader).
The project team interaction was often based on in-
formal and direct interaction between team members
rather than formal negotiations between two cultural
groups. Meetings within the project team were held but
392 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
Table 2
Leadership style dimensions of the synergistic project leader [41]
Dimension Finnish– Finnish–
European Chinese
Maintaining good relationships + +
Flexible decision making + If the team worked mostly in the same office, the
Autonomy delegation + leaders chose one of the two cultures with its methods
Interaction facilitation + +
Moral character (equality) +
Internal negotiation +
Circuitous approach + the foreign culture rather than Finnish culture. The
Controlling (reporting discipline) + leaders were aware of practical differences between cul-
Role clarification + tures but had also a feel of how to translate their
+ indicated dimension in the interviews.
the reported purpose was to tie personal relationships
while agreeing on basic project practicalities. The rela-
tionships were seen as the primary motor for intra-team
communication. The project leaders pictured themselves
as leaders of people. The group included both project
managers and project key personnel. The leaders did not
indicate culture blindness or ethnocentrism. Instead,
they were aware of many practical differences between
cultures. These include the different needs for autonomy,
communication differences, and Confucian philosophy
in the case of Chinese team members. Confucianism was
evident in the circuitous style of communication. The
leadership dimensions concentrated almost entirely on
relationshipsÕ orientation, especially with leaders of
Finnish–Chinese teams who indicated that their main
task was to interact with people and they do not need
technical competences.
The synergistic leadership style was found only in
connection with Finnish–European and Finnish–Chi-
nese teams. All possible efforts were made to find syn-
ergy in Finnish–American teams but none was identified
(see Table 2).
4.3. Polycentrism
A third leadership style was also found that was in-
frequent (4 out of 47) and was not indicated in the lit-
erature. This is characterized as cultural polycentrism.
The leaders did not attempt team building or especially
developed interaction between team members. Instead,
they often acted as a link between the team members
according to the cultural division. The team members
were allowed to keep their old way of working that they
were used to in the home countries. The leaders were
confident that they understand how people from both
cultures think and could integrate the team without
team members being fully aware of their differences.
They thought this a faster and safer way of meeting the
project objectives than any other leadership style.
My most important and perhaps the most difficult task is being
a link between Finns and Chinese . . . Being a link is something
like, when the Chinese hardly say anything direct, I would know
how to interpret that so the Finns understand it. And when in-
structions come from Finland to China it is often quite direct
text. This has to be interpreted to the Chinese so that they un-
derstand it in the right way (Finnish leader).
of planning, delegating, degree of autonomy, and con-
flict resolution. In the studied cases, it was always
knowledge into action. Some considered this leadership
style to be a next step from leadership that is charac-
terized as synergy. An integral part of this style of
leadership was the selection of team members and
planning how the team works together including supe-
rior–follower relationships, reporting systems, and work
process.
. . .We started project planning meetings where all people wrote
down their interdependencies with internal and external groups.
Those were put on the wall and then we looked what software
engineers need from the hardware engineers, purchasing and
factory, and what the factory needs from us (Finnish project
leader).
An important notion is that the other two types of
leader did not actively design their organization or the
work process but agreed on what was given from higher-
level managers. The synergistic leaders also did not plan
the interaction but relied on the net of personal rela-
tionships.
The polycentric leaders indicated both relationships
and task oriented leadership styles. More relationshipsÕ
orientation was found among leaders of Finnish–Euro-
pean and Finnish–Chinese project teams. The Finnish–
European leaders were oriented towards team membersÕ
autonomy and varied the degree of autonomy accord-
ing to individual skills and experience. The Finnish–
Chinese leaders were oriented more towards harmony
and interpersonal balance. The leaders of Finnish–
American teams were more often oriented towards
transformal leadership but frequently used punishment
such as firing some team members for insubordination
(see Table 3).
4.4. Leadership styles
The three leadership styles are conceptually depicted
in Fig. 1. The axial coding indicated that the results
might indicate a learning track towards higher leader-
ship versatility. The leadership dimensions tend to in-
crease cumulatively. The size of the boxes and their
overlapping is intended to picture this cumulative ten-
dency where some leadership dimensions are common
with the next leadership style.
 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396 393

Table 3
Leadership style dimensions of the polycentric project leader [41]
Dimension Finnish–European Finnish–Chinese Finnish–American
Maintaining good relationships + + +
Interaction facilitation + + +
Flexible decision making +
Autonomy delegation + + +
Conflict management +
Informing +
Circuitous approach +
Respect for elders +
Decision participation +
Initiating structure (planning, organizing, coordinating) + + +
Rewarding +
Work facilitation + +
Production emphasis +
Providing vision +
Turning mistakes into learning + +
Providing constructive feedback +
+ indicated dimension in the interviews.

leadership style) organized the project work against

Ôschoolbook instructionsÕ [17] with minimum pre-plan-
Initiating Structure Including
Polycentric Leadership Staffing, Planning, Delegating ning and process organization. They jumped almost
Styles
and Reporting directly into implementation, which resulted in maxi-
mum design flexibility and team member autonomy.
+
Synergistic This was considered to be a strength because of the
Leadership
Style
Personal Human Relationships much faster project start and the ability to make quick
design changes during the project. However, it may have
+
Ethnocentric created more confusion among Americans. They may
Leadership Internal Negotiation not have been used to or adequately informed about this
Style
type of project management. This could also be a cul-
tural issue as some studies indicate that Americans may
People Oriented Task Oriented expect leaders to take charge rather than give initiative
Leadership Leadership away to the team members [36–38]. Americans indicated
role ambiguity and that they were never sure how things
Fig. 1. Conceptual relations between leadership styles [41]. were supposed to be handled. On the other hand,
Finnish project leaders and key personnel indicated that
4.5. Cultural notions in their opinion Americans lacked initiative and under-
standing about the project as a whole.
The national cultures caused several notions in ad- Communication patterns were also different and
dition to more typical cultural differences that today caused tension. Finnish communication may have been
tend to be well known. Finnish–American teams suf- right to the point with no softening. As a result, they
fered from frequent, even constant, conflicts within the may have appeared unpleasant, harsh, and even insult-
project team. This was created by several overlapping ing. One suggested reason was their language skills, i.e.
reasons. Almost all projects were organized in the form some Finns apparently did not master polite forms of
of a matrix where each team member had at least two English language. The following quotation is one per-
supervisors. For the Americans this may have created ception of communication differences within a team:
confusion as to whom they should report, where to di-
They say that Finnish people are direct . . . I think we are a little
rect information, and whom to ask for decisions. The more political. More political if someone does bad job . . . I have
Finns may have been better informed or were used to worked with the Finns for a long time so I am used to them. So
matrix type organization and experienced little confu- they didnÕt really affect me that much. I knew what to expect.
sion. This could also be a cultural issue since some And then . . . I have learned to appreciate a lot of the things they
writings indicate that matrix organization may be diffi- do. At first it is harsh, but then I saw the effectiveness of it
(American project team member).
cult for Americans [35].
Finns and Americans may have been used to different Of the several overlapping reasons for team conflicts,
kinds of project work. Finnish leaders (ethnocentric the most important may have been communication. The
394 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
following quotations are an example how a team leader
and an American team member both feel insulted due to
the unawareness of different communication patterns.
This may create an unintentional cycle of conflict.
The Americans are over confident . . . If you say that it is not
exactly like you said, they get angry. They are bully and think
that America is the best place. They know everything (Finnish
project leader).
The Finns they get here and they do the technical things and
they donÕt understand why the fuss about human relations. I
am here to do my job . . . why should I bother with the feelings
of the other guy (American project team member).
It is possible that Finnish leaders with an ethnocen-
tric leadership style also insulted the Chinese team
members [13]. However, as dividing the project team
according to the cultural lines was considered normal,
the withdrawal of Chinese team members as a result
may only have helped to maintain the status quo and
passed without notice.
The leaders of Finnish–European and Finnish–Chi-
nese project teams (synergistic and polycentric leadership
style) tended to improve their personal relationships with
the team members as a way of improving communication
and reducing project problems. The leaders of Finnish–
American teams (polycentric leadership style) increased
their personal position of power. Some of them were able
to negotiate more power while some were not successful.
Only those projects where the project leader was able to
decide wages, employment, bonuses, and influence team
member careers, were able to maintain team cohesion. In
these cases, no team division according to cultures was
reported. It may be that in multicultural management the
cultures are differentiated in the same basic styles as the
leaders were found to orient themselves – task orienta-
tion and relationshipsÕ orientation. Finnish–European
and Finnish–Chinese team may require more relation-
shipsÕ orientation while Finnish–American teams may
require more of a balance between task and relationships
and possibly transformational orientation.
5. Conclusions and discussion
Where do the findings lead us? Earley and Mosa-
kowski [6] left open two questions. First, what leads to
strong perceptions of acculturation in some circum-
stances? Second, what traits are relevant to particular
individuals and how might organizations use this in-
formation to design effective teams?
Certainly, it seems that Finnish project leaders that
indicated a relationships oriented leadership style in the
non-structured interview also had a positive perspective
to multicultural project teams. They had more empathy
towards cultures and team members. They attempted to
improve communication through a network of personal
relationships or integrated the team by acting as a
communication link in the role of a cultural interpreter.
At the same time, project leaders that indicated solely
task-oriented leadership dimensions choose to maintain
or seek team division based on culture. They also indi-
cate more conflicts, perception defects, and cultural
blindness. It seems that ethnocentrism may be connected
to a leadersÕ task orientation and the favored approach
towards multicultural team members is in- and out-
group setting with trustees and non-trustees. For inter-
national companies it is important to realize that leaders
with relationshipsÕ orientation may be better in multi-
cultural leadership. This finding somewhat contradicts
the current assumption that both task and relationshipsÕ
orientations are required in different phases of the pro-
ject life cycle or in leadership in general.
One potential explanation for the clear distinction
between task and relationships orientated leadership
style may be the learning process of foreign cultures.
Cultures as a social phenomenon can be learned and
understood through relationships with people [39].
Leaders with relationshipsÕ orientation may be naturally
interested in building such relationships and can in-
crease their knowledge about other ways of patterned
thinking and behavior in the social context [40]. As the
number of the ethnocentric leaders is high (40 out of 47),
it would still seem also possible that many leaders
choose personal influence as their response to project
problems [19,40]. When the problems do not disappear,
they finally may end up with solely task oriented lead-
ership dimensions. Only a few leaders chose improved
relationships or organization design as their response to
project problems. In addition, the leaders, in response to
stressful project problems, may have chosen mental
avoidance as their strategy to cope with the situation,
which resulted in in- and out-group setting and finally
into task orientated leadership [14].
Potentially, the high number of ethnocentric lead-
ers can be partially explained by the limited interna-
tional experience of the studied companies. The project
leaders were the first generation of Finnish multicultural
leaders. The companies established their first foreign
offices in the 1980s. Multicultural teams were first
formed in the early 1990s. Several project leaders indi-
cated that top management had little first hand experi-
ence of international operations. As a result, some top
management decisions were perceived to be detrimental
to their projects and were sometimes changed when the
situation could be pointed out. Thus, ethnocentric
leadership may be a part of the learning process of
multicultural leadership. Under this perspective, ethno-
centrism may be gradually reduced in project manage-
ment.
Of the three indicated leadership styles, synergy and
polycentrism have their foundation in the leadersÕ per-
sonal interest in human relationships and cultures.
 M. M€akilouko / International Journal of Project Management 22 (2004) 387–396
Synergy concentrates on the leadersÕ personal relation-
ships with team members. The network of relationships
forms the basis for effective communication. Polycen-
trism concentrates on avoiding problems that may arise
from cultural differences. This is done by linking be-
tween the cultures or by preferring one culture. All
polycentric leaders engaged in organization design with
the aim of avoiding multicultural problems. This re-
quires understanding of typical multicultural problems,
their reasons, and how organization design can be used
to avoid those problems. It seems that the most effective
alternative for multicultural leadership may be avoiding
the problems beforehand. The polycentric leaders re-
ported the lowest number of project problems.
The study has certain implications for multicultural
companies. First, it seems that relationships oriented
project leaders may have a higher potential for leader-
ship success since they tend to be able to maintain
project team cohesion. Second, the leaders could be
guided to study and learn about foreign cultures, and to
avoid avoidance concentrated coping strategies that
may prevent this learning. Third, increased personal
influence as a response to project problems may feel
tempting but leaders should be guided to choose other
strategies such as coaching team members, increased
team effort, and organization design. Fourth, organiza-
tion design can potentially be used to mitigate multi-
cultural problems. This was found effective in the form
of a project managersÕ increased position of power.
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Dr. Marko M€akilouko has 10 years of experience in international
projects. After his project management career he has become a re-
searcher on multicultural project leadership. Currently he works at the
Tampere Polytechnic as a program manager.