The challenges of managing
cross-cultural virtual project
Margaret Oertig and Thomas Buergi
University of Applied Sciences, Basel, Switzerland
Purpose – This paper seeks to present the challenges reported by project leaders of cross-cultural
geographically distributed, or virtual project teams operating within the matrix organisation of ABC, a
multinational company based in Switzerland.
Design/methodology/approach – The research is qualitative and exploratory, taking the form of
inductive thematic analysis.
Findings – The key themes reported to be of signiﬁcance were the challenge of leadership, managing
virtual aspects of communication and developing trust. Sub-themes consisted of managing the task,
managing people, managing language and cultural issues and, lastly, managing the matrix.
Practical implications – These include attention to the selection of leaders, continued facilitation of
face-to-face communication in a virtual age and investment in language and intercultural training.
Originality/value – Future research might investigate the complementary perspective of line
management and take up the theme of high ﬂuctuation of team members and leaders.
Keywords Trust, Teammanagement, Cross-cultural management, Teambuilding, Virtualorganizations
Paper type Research paper
Globalisation has led to many changes in the nature of project team work. Many
international companies have projects spanning a variety of nationalities, involving
great geographical distance and a range of time zones. Academic scholarship has
reported on the increasing number of geographically distributed project teams
working within matrix organisations, and it is assumed that their work is very
difﬁcult. Scholars report that matrix forms are hard to manage and diversity has been
known to lead to poor performing teams (Iles and Kaur Hayers, 1997). Virtual
teamwork is more complex than working face-to-face (Heimer and Vince, 1998) and site
speciﬁc cultures and lack of familiarity are reported to be sources of conﬂict (Hinds and
Bailey, 2003). Vakola and Wilson (2004) warn that the importance of the human
element and the way that people co-operate with each other should not be taken for
This study aims to investigate the perceptions of project leaders at the cutting edge
of this virtual trend. This paper presents an empirically-based study of the
perspectives of project leaders in ABC, a multinational company with headquarters in
Switzerland, on the greatest challenges they have to manage when leading
The current issue and full text archive of this journal is available at
The authors gratefully thank the senior management of ABC for their kind permission to
conduct this research, as well as to the interviewees in project management who generously
shared their expertise with us.
Team Performance Management
Vol. 12 No. 1/2, 2006
qEmerald Group Publishing Limited
cross-cultural virtual project teams. In ABC, working in geographically distributed
project teams within in a matrix organisation is the norm. The project leader and the
project manager usually lead the team from either the USA or Switzerland and may
not be based in the same location. Team members are mainly based in the USA,
Switzerland and Japan. The team may work together virtually for a period of three to
ﬁve years, meeting face to face on average once a year. A core team consists of the
project leader, project manager and a further ﬁve to eight project team representatives
(PTRs) from various functional areas, e.g. technical development or marketing. The
project teams deliver the products under time pressure. The line functions provide the
staff and budget and have the authority. In addition to the core team, other
representatives from various line functions can join the team permanently or
temporarily at various stages to advise on speciﬁc issues. Many of the project team
representatives also lead a sub-team in their own ﬁeld or function, and these sub-teams
also work virtually.
Study aims and methodology
The study had two aims. The ﬁrst was to discover what project leaders perceived as
the main challenges arising from managing international teams working in
geographically distributed locations, and second, how they managed these
challenges. This paper outlines the main themes which emerged from a thematic
analysis of interview data, summarising areas of difﬁculty and how the project
leadership deal with these. The research is qualitative and exploratory, taking the form
of inductive thematic analysis. The themes emerged from the qualitative data collected.
Interviews were conducted at two sites, in Switzerland and the USA, with six
project leaders, six project managers and two ex-project leaders, who are now product
area heads. Background interviews were also conducted with three members of senior
management responsible for strategic planning, innovation management and
executive information systems. Ten interviewees were based in Switzerland and
seven in the USA. The nationalities of the interviewees were as follows: three
Americans, four British, four Swiss, three German, one French, one French- Canadian
and one Japanese. Nine interviewees were male and eight were female.
Interpretation of results
Interviews were coded for key themes and three major themes emerged as most
signiﬁcant, affecting all aspects of the project management task: the leadership
challenge, virtual aspects of communication and developing trust. A further four
sub-themes were identiﬁed, of speciﬁc issues to be managed, namely, managing the
task, managing people, managing language and cultural issues and managing the
matrix. This paper outlines the main points raised in each of these areas, to give a fuller
picture of why these themes were signiﬁcant.
The leadership challenge
This theme emerged as central to the task. Interviewees clearly demonstrated their
expertise again and again as they described the problems they faced on a variety of
levels and how they dealt with these, conﬁrming the assertion by Dalton et al. (2002)
that the deﬁning feature of the work of a global manager can be considered to be its
complexity. A product area head described the hallmark of the leader as “leadership
without authority”. He commented that in order to inﬂuence people over whom they
have no real authority, Project Leaders had to “develop trust and respect, to enable
them to successfully interact with each other and provide each other with what they
need to develop the product”.
Virtual aspects of communication
The second major theme, virtual aspects of communication also had an impact on all
aspects of the project management task. The greatest impact reported was two-fold,
comprising the time difference and the lack of face-to-face contact. Different time zones
meant that teams could use more of the day, for example, working on a document
round the clock. In order to be able to talk to each other team members started work
very early and worked very late, e.g. phoning up to 10 p.m., or organising a three-way
teleconference for 1 a.m., Swiss time.
Lack of face to face contact was more problematic and many missed what they
called the “ofﬁce atmosphere” and the opportunities presented by striking up a
conversation in the cafeteria or hallway. Phoning was “not the same” and the monthly
video conferences were somewhat controversial. Some reported appreciating seeing
people’s faces and body language while others reported that video conferencing
facilities were poor quality and less convenient than dial-in teleconferences held from
Having the project leader and project manager in two different geographical
locations was viewed by some as “ideal”, in particular when there were an equal
number of team members in each country. They talked daily on the phone, or even two
or three times a day, sometimes for an hour. One Swiss-based project manager, who
hated the phone, reported that it was a disadvantage that his American-based project
leader was “almost alone” in the USA, and that an effort had to be made to “keep him in
the loop” with daily phone calls.
All interviewees without exception emphasised the importance of meeting face to
face, preferably when the team was ﬁrst put together. Some managers reported that
their team members all took every opportunity to see fellow team members while
travelling for other reasons, e.g. for conferences or to meet other colleagues from their
line function. Even if the whole team could not get together, the project leadership
would travel more frequently.
Trust, then, is efﬁcient. You save yourself a lot of time and trouble by being able to rely on
someone’s word (Arrow, 1974).
The third topic area, “Developing trust” was also considered a key issue by all
interviewees. Face-to-face contact, mentioned above, was a key to developing trust and
this was initiated by a formal team building sessions with a facilitator to “agree to the
relationship” and deﬁne the rules as to how the team was going to work. Informal
contact was also mentioned, e.g. sitting down over lunch to break barriers. Another
beneﬁt of spending at least two days together included going through the “forming,
storming, norming, performing” dynamic more quickly. It was generally assumed that
members only really knew each other if they could put a face to a name. Knowing each
other was reported to lead to higher efﬁciency. Problems were easier to solve if they
knew that person on the other side of the line.
It was reported that trust was built over time, based on long-term consistent
performance and behaviour that created conﬁdence. Interviewees estimated a range
between three and nine months as the time needed to develop a comfort level and trust
level with new members. Once trust was there, people would report problems to the
project leader before they became ofﬁcial, so the leader could still do something about
them. They were also more likely to communicate if they were unhappy or upset about
something. Some reported that it was also advantageous to trust building if the project
leader and project manager had worked together at the same site for a long time, even
if they were later on different continents.
It took time for newcomers to the company to gain the trust of their colleagues.
They linked being able to trust people’s expertise primarily with their developing
knowledge of the company as well as knowledge of the task. One Project Manager
commented that newcomers to the company would attend meetings, take notes, take
questions and say “I’ll get back to you”, with the result that the team was at least one
week behind on certain issues.
A main reason that developing trust and a comfort level was “a major challenge”
was the high turnover of project leaders, project managers and members. Many
interviewees were matter-of-fact about this as an unavoidable phenomenon, part of
“career building”, which also occurred in other companies in the same sector, but they
would nevertheless much prefer it to be lower. It was considered more difﬁcult to
integrate people who joined the team after it had ﬁrst gelled. The main way of dealing
with the high turnover was to keep doing team building, as one Project Leader said,
“...to bring everyone back to the same level, and up to speed”.
Managing the task
The ﬁrst sub-theme refers to the steps the project leadership described to manage the
task effectively. Team operating guidelines were deﬁned, e.g. an agreement as to how a
signiﬁcant new piece of team data would be communicated to the line function in the
virtual setting. One project manager reported the need to “set up a process that is
simple and workable and then communicate that within the line”. It was important to
be transparent about the invisible timetable, “giving a bit of detail behind the scenes as
to why you’re asking for information at a certain time”. It was crucial to check that
people were in agreement with written communication sent out, by doing follow-up,
making phone calls or personal contact, as the geographical setting allowed. In general,
keeping everyone on the same level of information was something that had to be
worked at, in particular if things were moving fast in one particular “corner”, e.g.
within a line function or at an upper management level at a particular stage.
There were many comments on this, the second sub-theme, regarding how to manage
people in general, as well as more speciﬁc comments on people who were
“challenging”. General comments included the importance of the team leader having
one-to-one contact with “key players”, for relationship building and maintenance,
“bringing in” people over whom the leader had no authority, and then “making them
stay”. One leader pointed out that they could not “try to impose things” on people.
They had to adopt different leadership styles and apply them as needed. Another
described the importance of creating a pleasant environment with a positive
atmosphere, and talking about good results to make people feel appreciated. Accepting
people’s weaknesses was mentioned as was empathy, e.g. showing understanding of
the other pressures and inﬂuences affecting them, e.g. from their line function. Work
overload was generally assumed.
Most interviewees gave an example of challenging people they had worked with.
Personality descriptions ranged from neutral expressions such as “introverted” or
“extroverted” to more colourful descriptions such as “difﬁcult”, “disruptive”,
“egomaniac”, “prima donna”, “aggressive”, “always right”, and “can’t sit quietly”.
Overall, the two greatest challenges seemed to be the two extreme behaviours of
extroverts who dominated team meetings and did not have “that empathy component”
and the introverts who did not share their knowledge. Many leaders reported similar
ways of dealing with these contrasts. The introverts might not tell them if the process
was working, and would have to be “pulled out of their shells”. If someone always
thought they had the right answer, the team leader could deal with it one-to-one, as one
leader put it, saying in a nice way that they were “over-communicating”. In a meeting
the leader could be directive, interject and speciﬁcally ask the quieter, possibly more
knowledgeable member to contribute, encouraging others to do the same.
In relation to people’s job functions, many reported that marketing people had the
tendency to be dominant while technical people had to be prompted to speak. A
product area head commented that the project leader had a key role in narrowing the
gap of understanding between functions, explaining the needs of each function to the
Managing language and cultural issues
It helps to distinguish front- from back-stage behaviour and get to the heart of social relations
Language and cultural issues were closely connected as a third sub-theme, summed up
by a project leader with the comment that she started to be cautious regarding cultural
differences if people’s English was not good. Another leader reported that it was a
selection criterion within the line functions that people promoted from the line to be
project team representatives were those who could bridge the language and culture gap
between the project team and the line functions.
Use of English was an issue in particular when dealing with sub-teams used to
working in German, as well as Japanese colleagues on all levels. Interviewees reported
paying attention to the pace of speech, slang, and different accents. An example of
overlapping language and cultural attitudes that were difﬁcult to separate was the
“direct, pointed Germanic tone” described by an American leader, who saw it as a
cultural style. A British leader put this directness down to the person’s command of
English, saying that “particularly in writing, it comes over a little too strongly
sometimes”. An American project leader saw the beneﬁt of this directness in terms of
efﬁciency, as he did not have to ﬁgure out the “nugget” of information he needed to
move on the next step in a process.
Cultural differences were reported in two main area dynamics, between the USA
and Europe and between the USA/Europe and Japan. Differences in cultural attitudes
between Europe and the USA were reported in connection with trust. An example
given by an American product area head was the natural distrust he sensed from
inexperienced managers in the Germanic culture to the American culture, of the “good
hearty openness and ‘I’m your friend’ kind of thing”, as well as their “moving ahead
with spirit”. A Swiss informant thought the Swiss-based staff were quite often
perceived as not being enthusiastic, as not really buying in, and that the lack of
enthusiasm was “puzzling for US people”. These perceptions were modiﬁed as people
got used to each other over time.
Another key issue was the recognition and interpretation of different
communication patterns, e.g. learning to read between the lines in meetings. A
Swiss manager found it important that when Americans talked in meetings about
everything being “easy, perfect, under control”, that he followed up their comments in a
meeting with a personal talk with people individually, to ﬁnd out how things really
were. This involved getting their trust and achieving good communication as well.
In general, cultural differences between the USA and Europe were considered
minimal in comparison to the contrasts experienced by those who had worked with
Japan. An American product area head described how understanding how to interact
with the Japanese was something that took a lot of work and specialised attention. This
was mostly connected with communication patterns. A key challenge was that
Japanese colleagues would say “yes” in a meeting regarding things which turned out to
be impossible. It was often mentioned that the decision-making power of a Japanese
senior manager was greater, “much, much higher” than in Europe, so that in some
situations, no matter how many discussions took place in the team meetings, the ﬁnal
answer would still have to be “no”. One leader managed this challenge by sending a
mail about an issue in advance, to give the Japanese side time to discuss it among
themselves before addressing it with their colleagues from other sites in a video
conference. A project manager went further and commented that there would never be
a new agreement at a meeting with Japanese colleagues. The decision had to be worked
on in advance by both sides and the meeting would be just to conﬁrm it. The product
area head mentioned above reported that after meetings he asked the Japanese side to
summarise in English what was agreed to. This provided a written clariﬁcation of their
position which had not been communicated verbally.
Interviewees also reported ﬁnding it helpful to spend time one-to-one or over meals,
getting to know their Japanese colleagues in order to understand their position better.
One project manager estimated that it could take one to two years to develop a good
relationship. A product area head considered the way Americans and Europeans
reacted if they did not achieve what they wanted to be a problem in the virtual setting.
“We use our own cultural norms to try to inﬂuence behaviour, and these are offensive
to the Japanese. We have no idea how offensive we are”. A French interviewee
commented on how important it was to show respect for the person and never to attack
the person, or show aggression, as harmony was “extremely, extremely important”. It
was also reported that not jumping to conclusions quickly but spending time asking
open questions and ﬁnding out what was the exact problem was helpful to improve
information exchange with Japanese colleagues. A project leader commented “They
have reasons which are not very logical to us and it takes a very long time to
understand them”. Interviewees reported attending three-day intercultural training
courses prior to working with Japan. However, training and assimilation of
understanding were thought by a product area head to be miles apart and a lot of work
still had to be done to understand the cultural inﬂuences and levers in Japan.
Managing the matrix
The matrix structure was the fourth sub-theme, described by interviewees as the
relationship between the project teams and the line functions. In the matrix setting,
there was a tendency for project team representatives to listen more to their line
function management than to the project team leader. It was important that the project
leadership managed the inﬂuence of line functions by networking with higher level line
managers and lobbying as necessary. As an example, a project leader reported going to
the line function head to ask for someone to be allowed to attend a face-to-face meeting
abroad. Keeping in contact was reported as more difﬁcult if the team leader and line
leaders were not co-located.
The project team was also seen as a way of improving understanding from one line
function to another, to give an insight into the “unbelievable amount of work” other
functions were actually doing. It was pointed out that the different line functions did
not report “across” to each other, but rather to the project team and “up their line”.
Temporary multidisciplinary sub-teams were sometimes formed to keep other line
functions informed by a more direct route.
This paper has outlined the main challenges reported by the project leadership of ABC
in managing cross-cultural virtual project teams within in a matrix organisation. Many
lessons can be learned from their perspectives, of relevance to current and future
project leaders working in similar settings. Factors to which particular attention
should be given include the following:
.The importance of selecting creative leaders with a collaborative leadership style
and excellent communication skills. Leaders in a matrix organisation must be
able to lead by inﬂuence rather than authority, managing personality issues as
well as the functional and cultural mindsets of team members. At the same time
they need to keep ﬁnding new ways to communicate across time zones and work
round geographical barriers.
.The need for top management to continue to facilitate face-to-face
communication and relationship building. The trend towards ever-increasing
use of technology can be efﬁcient and clearly saves costs, but has its price. This
study shows the importance of continuing to meet face to face in the
technological age to help promote the development of swift trust (Meyerson et al.,
1996) among team members.
.The value of ongoing investment in language and intercultural communication
training. Training is particularly important for new members of project teams
working on different continents, to help reduce potential distrust, and allow
teams to gel more quickly and work together efﬁciently.
.The issue of high turnover in project teams, which project leaders report to be a
common feature of project teams in many multinational companies. This has
been reported in this study to have a signiﬁcant negative impact on the building
of trust and developing efﬁciency. Future work is required to investigate reasons
for turnover, and whether steps could be taken to promote continuity in project
teams. The viewpoint of line function management would also be valuable in
providing a complementary perspective.
1. The project leader and manager have complementary roles, at least in theory. The project
leader is responsible for the overall project strategy, while the project manager is responsible
for operational management of the project.
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