Chapter 10 – International Projects
10.2. Environmental Factors in Projects
Overview of International Projects
International projects are different from domestic projects because of the cultural, regulatory, social, geographical, reporting, and infrastructural diversity. Project Managers need to understand the best practices for international projects. There are critical issues to think about related to communication, legal and political factors. As well, most Project Managers managing international projects have special skills and competencies.
These project managers have a different set of expectations than domestic project managers. They need to leave their homes, leave their families and friends, learn and speak a foreign language, abide by a different culture and laws, and experience extensive travel.
Defining the Countries
- Home Country and Home Country Nationals: Country where the corporate headquarters is located. The project manager and team would leave the home country for an international project. Example: The corporation is in Canada. The project team leaves the Canadian company and country.
- Host Country and Host Country Nationals: Refers to a foreign country where the corporation invests. The project manager and team relocate to the host country (foreign country) to complete the project. Host country nationals are project employees who are native to the country, and work and live in their home country. Example: Project team go to India from Canada to work and live. A host country national would be a project team member who is native to India.
- Third Country National: Project manager and team who are not from the home country or the host country. However, work for the corporation. Example: Saudi Arabian manager working for a New Zealand subsidiary of a Chinese owned corporation.
HR in Focus: International Human Resources Management (IHRM) and Project Management
Human Resources works closely with international projects and the Project Managers. The complexities of international projects include more activities and responsibilities than domestic projects.
Expatriates are the employees who have been hired to work temporarily in a foreign country. They are also called international assignees. The Project Manager and the team members are considered expatriates, sometimes called “expats” for short.
Differences between Domestic and International Human Resources Involvement:
| Domestic Human Resources | International Human Resources |
|---|---|
| HR Planning | HR Planning |
| Recruitment and Selection | Recruitment and Selection |
| Performance Management | Performance Management |
| Training and Development | Training and Development |
| Compensation | Compensation |
| Industrial/Employee Relations | Industrial/Employee Relations |
| A broader perspective of the world | |
| More involvement in the employee’s lives | |
| Risks for the employees | |
| Change in attitude about expatriates (home country workers) and local workers | |
| Taxes at an international level for compensation | |
| International relocation and orientation | |
| Foreign country human relations | |
| Language translation and training | |
| Administration for expatriates | |
| Arranging training (pre, during, post assignment) | |
| Help with immigration and travel |
Human Resources Specialists work with the organization at the strategic level for international projects.. It is important that everyone involved in an international project understand the environmental factors.
Environmental Factors Affecting International Projects
- Legal and Political: Expatriates need to work within the laws and regulations of the host country. The political stableness of the country affects how a project would be carried out.
- Economic: The gross national product (GDP) of a country tells the organization the level of development of a country. Financial stability is important to project success. When there are risks for the project, a strong risk management plan needs to be in place.
- Security: International acts of terror are a reality today. Crime is another issue. Risk management plays an important role here as well when a project is being implemented in a foreign country. Sometimes project managers experience ethical issues related to security. Two most frequent ethical issues are bribery and corruption. Security precautions need to be in place to keep employees safe.
- Geography: The planning of the project in a different country needs to take into consideration the geography of the country. The organization needs to look at the weather (rain, freezing temperatures, very hot temperatures, jungles, deserts). Sleep issues can arise for employees with too much daylight, or not enough day light. Extreme weather can play havoc with equipment as well.
- Culture: All project employees visiting another country must respect the values, customs, traditions, social standards, and beliefs of the people of the foreign country. If these are not observed by the team, there is a likelihood of failure. Language differences can become a problem. If a project manager and team do not speak the foreign language, it is difficult to communicate; and words get lost in translation. Sometimes, project managers will work with people from the foreign country. Language and cultural skills are necessary for success. Culture affects all human resources areas including recruitment and selection, training, and compensation.
- Infrastructure: This pertains to the foreign country’s capacity to supply the services that are necessary for the project. Some of these could include telecommunication, power, technology, transportation systems, and education facilities.
HR in Focus: Human Resources and Environmental Factors
Given the challenges with international projects, it is important to ensure the employees are well prepared for the assignment. Human Resources would be involved at the strategic level along with stakeholders to review the environmental factors before a project was selected. Stakeholders are the people involved in the project and have a stake in the outcome of the project. They have authority and influence over the project. They include Presidents, executive teams, financial personnel, project manager, project team members, customer, resource managers, and human resources. They may provide training for the stakeholders in the environmental factors before the selection is made. When the project team is hired, again, the Human Resources Specialists need to convey (generally through training) the environmental factors that will affect the foreign assignment of the project.
