Page 307 - Global Project Management Handbook

15-8 MANAGEMENT OF GLOBAL PROGRAMS AND PROJECTS

It is typical for a project partner to provide a number of services that either are a direct
deliverable to the customer or a supporting element to building the project’s product.
Cultural expectations often bias how services are viewed and delivered.
On a major project in an African nation, the staff was housed and fed by the local
nationals. The housing met acceptable standards, and housekeeping was above the
requirement. However, each day the housekeeping staff would move personal objects
of the project staff to a location nearer to the front door. If the occupant did not notice
the relocation of the object for several days, it was assumed by the housekeeping staff
that the occupant did not want the object because its migration toward the door was
not noticed. Occupants cured the situation by moving objects back to their original
location.
On this same project, the project staff ate their meals in a large dining facility. All
waiters understood and spoke English—understanding American customs may have
been something else. One morning a waiter patiently stood by while one of the staff
reviewed the menu. It was obvious that the staff member was having difficulty in
determining what to order. The young waiter said, “May I suggest something? How about
a mushroom omelet?” The staff member responded, “Yes, bring me a mushroom
omelet.” It came as a surprise to the waiter that the staff member accepted his suggestion,
and he backed away in confusion, saying, “We don’t have. I just suggest.” The waiter
was just trying to help in the custom of his nation.
Reviews are helpful and build confidence in the capability of organizations.
Conducting a review must focus on identifying both strengths and weaknesses—not
just weaknesses to build on the existing capability. Any review should have the goal
of “qualifying an organization as a partner” by overcoming any shortfalls that affect
product quality. The review should not be used to assess business or other technical
areas that are unrelated to the project.

CONTRACTUAL RELATIONSHIP

Contracts are similar in a fundamental way in that there is defined consideration for
all parties. The terms and conditions define the specific requirements to be met for
completing the contract to the mutual satisfaction of the parties. Contracts between

parties in different countries pose special situations that can materially affect the
results.
International contracts need to consider the following:
● Financial matters can have serious repercussions on contracts across international
borders. First, the currency in which remuneration will be paid must be stated.
Currency rate exchanges and inflation can change the profitability of project work.
It is common for currency exchange rates to change as much as 20 percent over
time. The variance in the exchange rates can be significant if, for example, payment
is made in U.S. dollars rather than the currency of the country.
● The location or venue where any dispute resolution will be settled needs to be designated.
If, for example, a contract would specify that all disputes are to be settled in the State of
Delaware, all parties would need to agree to the jurisdiction and submission to the courts
of that state. A Russian organization hired an English company to perform services, and
the contract specified that all disputes were to be resolved in London. When the contract
became very unfavorable to the Russian organization, payments were stopped, and the
Russian organization refused to travel to London. Ultimately, the English company
resolved the dispute by negotiating a new contract with significant differences.