Analysis of the Impact of Cultural Differences on Foreign Contractors’ Performance: The Case of Road Construction Projects in Bench Sheko and Sheka Zones, Ethiopia

Abstract

In recent years culture has become one of the most studied topics in project management research. Some studies have investigated the influence of culture at different levels such as national culture, industry culture, organizational culture and professional culture. As a project based industry, the construction industry needs to have more insight concerning cultural issues at the project level and their influence on the performance of construction projects. The general objective of the study is analyzing the impact of cultural differences on foreign road contractor’s performance in the case of Bench Sheko and Sheka zones road construction projects in Ethiopia. The specific objectives of the study are; to determine barriers that foreign road contractors faced due to cultural differences, to determine the effects that barriers caused by cultural differences brought to foreign road contractors’ performance, and to determine strategies to manage barriers that foreign contractors faced due to cultural differences. The research is a descriptive cross sectional exploratory type of research with quantitative approach. Both primary and secondary sources of data are used. A total of 40 questionnaires were distributed to foreign professionals working on road construction projects in Bench Sheko and Sheka zones. The research used purposive sampling technique and analyzed data using statically package for social science & relative important index to rank the barriers caused by cultural differences and the strategies adopted. It was found that cultural differences created different attitude related, communication relate and belief and custom related barriers that negatively affect the performance of foreign road contractors in engaged in road construction projects and neglecting and failure to effectively manage cultural differences can cause different problems like conflict, misunderstandings, and dissatisfactions and weaker team spirits which negatively affect the successful accomplishment of projects with respect to cost, time and quality. Providing training on national culture, assigning cross culturally competent leaders and implementing professionalism are found to be the most important strategies to manage and mitigate the impact of cultural differences on foreign road contractors.