Adaptation and Integration for Multinational Project-Based Organizations

Abstract

To succeed internationally, multinational, project-based organizations in the architectural, engineering, and construction (AEC) industry need to both adapt to local environments and integrate knowledge and processes across the organizations. However, the temporary nature, uniqueness, and complexity of international projects create many pressures for project managers. On the one hand, the project manager’s primary responsibility is meeting project objectives, focusing on the performance of the project and adaptation to the local environment, which can differ from the organization’s home market. On the other hand, they are employed by a larger organization that has long-term strategic goals and wishes to gain a competitive advantage by having team members integrate their expertise with the rest of the organization. Thus, this research aims to explore the dual challenges of local adaptation and organizational integration responses at the project level and how these responses relate to project performance. To do this, the research employs a mixed-method approach, including interviews and questionnaires assessing projects’ adaptation and integration responses. The authors found that highly adapted projects employed more aggressive methods to adapt to the local environment than projects with low adaptation; and projects with high integration used methods enabling richer information exchange compared to projects with low integration. When the responses were explored in relation to project performance, the researchers found a significant correlation between overall adaptation and cost performance, but no relation between overall integration and project performance. However, despite this finding, project managers are cautioned that there is a need to achieve a balance between local adaptation and organizational integration and that this balance depends on complex project- and organization-specific environmental pressures.