Introduction

Transnational horizontal project teams

The British sociologist Anthony Giddens stated:

‘‘the advent of modernity increasingly tears space

away from place by fostering relations between

‘‘absent’’ others, locationally distant from any given

situation of face-to-face interaction (The Conse-

quences of Modernity, Polity Press, 1991: 18).

This statement is even more true for today’s multi-

national corporations (MNCs) that try to integrate

resources, knowledge and assets spread all over the

world. The ability to achieve this integration can

became a major source of competitive advantage for

contemporary MNC’s.

Sometimes the integration of dispersed resources

through exploitation and optimization ensures that

the current viability of the company is achieved: for

example, by deploying resources across borders to offer

solutions for a global key account. Sometimes MNCs

try to ensure their future through the exploration pro-

cess; for example by forming transnational new product

development teams. In other cases, MNCs attempt to

bridge exploitation and exploration by pursuing more

incremental improvements through identification of a

global center of excellence and transferring its knowl-

edge through geographical units.

Integration through geographical space, but within

organizational space, in order to manage competing

priorities is possible only if MNCs move from partition/

coordination-based structural organizational designs to

human-interaction-based designs. The major challenge

faced by this design process is to foster coordination

and cooperation through task forces, project groups but

also and especially through social networks and human

interactions between geographically distant people.

This challenge raises a number of key questions.

How do human interactions occur through distance

among people with different cultural frameworks and

competencies? How do we mix face-to-face relations

with virtual social interactions to minimize costs of

interactions, while creating common understanding,

trust and relational (social) capital? What are the

mechanisms that lead to the formation and effective

functioning of these teams and networks?

In order to explore the answers to these questions

we organized at the 2002 International Conference of

the European Group on Organization Studies (EGOS)

held in Lyon, France a two-day session addressing

‘‘Transnational Horizontal Project Groups Cutting

Through Intra-Organizational Boundaries.’’ The ses-

sion was created based on the growing awareness that

horizontal integration and coordination have become a

well-known challenge facing multinational corpora-

tions (MNCs). To address this challenge MNCs are

increasingly utilizing new forms of organizations,

such as transnational project teams to bring together

individuals from different countries, functions and/or

divisions of the corporation to solve problems. In some

cases, they are even involving external alliance part-

ners.

Although there is growing awareness on the impor-

tance of transnational project teams, there has been

little theory and research that has explicitly addressed

them. To that end we brought together at the Confer-

ence interested scholars from Europe and the U.S. and

asked them to present their research on this topic. They

were asked to address one or more of the following

questions:

- How are transnational project teams configured in

MNCs? For example, they may take the form of

emergent groups or of formal project structures.

They may be created through top-down or bot-

tom-up processes. Their formation may be the result

of deliberate and explicit macro-organizational pro-

cesses or of subtle and implicit processes. Further,

Journal of World Business 38 (2003) 81–83

1090-9516/03/$ – see front matter # 2003 Elsevier Science Inc. All rights reserved.

doi:10.1016/S1090-9516(03)00002-6

what types of tasks (e.g., development of new

products) do project teams focus on?

- What are dynamics that underlie the functioning of

project teams? What are the factors that foster or

inhibit their effectiveness? What are the factors that

lead to group members’ satisfaction? Work that

focuses on such issues as cultural, functional or

divisional diversity of group members, their

geographical dispersion, political factors (conflicts

of interest between units or set of actors involved in

the process), technical and technological factors,

staffing and leadership issues are also welcome.

- What are the organizational capabilities within the

MNC that allow geographically dispersed people to

collaborate, to link resources spread throughout the

organization, and thus to create project groups?

This capability might be called ‘‘Social Capital’’ or

‘‘Relational Resources.’’ Hence it is important to

explore organizational mechanisms, managerial

process and practices and HR policies that create

and develop this Social Capital or Relational

Resources.

- How can both fluid horizontal structures and more

rigid vertical structures coexist within the MNC?

This leads organizations to create mechanisms that

facilitate conflict resolution. These mechanisms are

of vital importance in reducing tensions that arise

between the two types of structure. Perspectives on

how organizations manage contradictions and

manage paradoxes that stem from this overlap

and new forms of social control mechanisms that

facilitate coordination are welcome.

In this special issue we present six of the papers

presented at the Conference. The papers are quite

diverse and provocative, although they all rely on a

single or multiple case approach. A brief overview of

each paper follows:

The paper by Lagerstrom and Andersson presents a

case study of an international company that attempted

to establish a global business system for its geogra-

phically dispersed business units. The system would

provide a common platform that would link the busi-

ness units and provide scale economies in information

systems. Prior to the effort, each business unit oper-

ated with its own autonomous systems. The project

was led by a corporate information technology group

with the technical knowledge necessary to develop the

system. Unfortunately, the local business knowledge

(e.g., information needs, customer information)

needed in the design of the system resided in each

of the business units. Thus, a transnational project

team composed of corporate and business unit mem-

bers was created to develop the system. The case

specifically focuses on two issues concerning how

transnational project teams create and share knowl-

edge in MNCs. First, is that important knowledge is

created in local business units in cooperation with

local staff. Second, is that there are benefits from

leveraging this local knowledge to the global level.

The research by Mendez examines how global R&D

activities are managed through the use of project teams.

Particular foci are given to the knowledge creation and

innovation processes. Relying on data collected from

seven MNCs in three industries (pharmaceuticals,

chemicals, computers) she describes how the project

organization was used to coordinate and control geo-

graphically dispersed R&D units; details how coordi-

nation was achieved; identifies the factors that led to the

particular project management design; and discusses

important organizational contextual factors that shape

the project team She also raises some interesting

questions concerning the role of centralization and

formalization in the R&D organizations and the extent

to which transnational organizational designs are being

used in MNCs.

Lunnan and Barth take a slightly different perspec-

tive from the first two papers and focus on what they

call ‘‘bridging teams.’’ Such teams involve the inter-

face between a firm and alliance partners in the pursuit

of a joint project. Similar to the first two papers the

authors are concerned with how geographically dis-

persed and culturally diverse ‘‘bridging teams’’ can

create knowledge and contribute to the knowledge

bases of the firm. Utilizing data collected from four

diverse teams from two firms the authors gained

insights into how the structure of the activities per-

formed by the teams, the structure of the team itself

and the structure of the firm influenced what the teams

learned. The teams worked on projects ranging from

product innovation to co-customer development to

research development.

Schweiger, Atamer and Calori take a micro view

and examine the inner workings of transnational pro-

ject teams within MNCs. Their focus is on teams

engaged in new product development. The authors

82 Introduction

explore the organizational conditions that give rise to

and support teams and the leadership and team pro-

cesses that allow such teams to effectively perform. In

doing so they rely on case examples and interviews

from senior executives, project team leaders and team

members of six companies. The paper presents a

practical set of observations and recommendations

that should help those who design, lead or participate

in transnational project teams.

Chevrier attempts to gain a better understanding of

the dynamics of international project groups by study-

ing the strategies project leaders of three groups used to

cope with cultural diversity. The three projects focused

on organizing engineers from several European coun-

tries. Each group operated in different contexts and

with different goals and structures. The author identi-

fies three kinds of cross-cultural practices that emerged

from her comparative study: (1) drawing upon indivi-

dual tolerance and self-control, (2) entering into a trial-

and-error process coupled with relationship develop-

ment, and (3) capitalizing on transnational corporate or

professional cultures. An alternative method to

enhance the functioning of cross-cultural projects is

also suggested. It consists of the construction of cross-

cultural patterns based upon a structured examination

of the cultural sense-making processes of project mem-

bers. The paper concludes on the necessarily culture

bound approaches of cross-cultural management in

transnational project groups.

The final paper by Goodall and Roberts explores the

core dilemma facing MNCs, how to be both dispersed

and aligned, while achieving necessary levels of coor-

dination and control between sub-units and the center.

The authors introduce the concept ‘‘liability of foreign-

ness’’—a set of costs associated with, among other

things, unfamiliar operating environments, economic,

administrative and cultural differences, and with the

challenges of coordination over geographic distance to

help explore this dilemma. They draw on two case

studies of multinational teams in Beijing and Bogota to

analyze the realities of using locally hired staff vs.

expatriates to help mitigate some of the ‘‘liabilities of

foreignness.’’ They further analyze the role that

‘‘locals’’ play in the knowledge sharing and deci-

sion-making processes within MNCs. They note that

while there is added value to having local knowledge,

its value is often not utilized. They note that this is due

to a highly socialized network of expatriates who are

able to trust and work with each other over long

distances. It is the strength of this network that makes

it difficult for locals to penetrate it. The authors suggest

that the subsequent loss of valuable local knowledge

fails to mitigate the ‘‘liability of foreignness.’’

We hope that the papers presented are of value to

you. From a research perspective, we believe that they

identify numerous issues that should stimulate future

research. This is an area in its infancy that is ripe for

new and exciting theory and research development.

From a practical perspective, we believe there are

many kernels and issues that have been identified that

can help managers understand the value of transna-

tional project teams and of the factors that influence

their effective functioning.

Tugrul Atamer

E.M. Lyon

69132 Ecully Cedex France

David M. Schweiger

Moore School of Business

University of South Carolina

Columbia, SC 29208, USA

Tel.: þ1-803-777-5955

E-mail: DSchweiger@aol.com

Introduction 83