Abstract

Cross-cultural management is often regarded as one of the disciplines in international management focusing on cultural encounters between what are perceived as well-defined and homogeneous entities: the organization and the nation-state and offering tools to handle cultural differences seen as sources of conflict or miscommunication. Hence, there is a pressing need to understand the cultural diversity and exercise proper measures to manage it. This paper explores the factors affecting cross-cultural management in R&D projects using Principal Component Analysis (PCA). Using the method of PCA, this paper explores the factors affecting international R&D project management under a combination of Chinese and Western cultures. Eight principal components are extracted and labeled, and the top two include: (1) behavioral characteristics; and (2) social environment. In behavioral characteristics, it is found that Chinese prefer to work in a stable environment and they may find difficulties in adapting to an unfamiliar environment comparing to the West. They would strongly react to losing face events such as being criticized by managers publicly, or being evaluated by an unfamiliar performance evaluation method, etc. Under the social environment, the Chinese government, as an indispensable mediator in the social environment of projects, plays an important role in approving projects, allocating resources, and arranging finance. For multinational corporations in China, the skills of managing corporate-government relations and communications are essential. From the above study, it is hoped that some recommendations can be generated on how people with different cultural and valuing background can create synergy for effective management of R&D projects in multinational firms.

Key words: International project, cross-cultural management, R&D, multinational firm, principal component analysis.