Virtual Teams

To thrive in a global economy, businesses must continually seek ways to maintain a competitive advantage by supplying the market with innovative and effective products and services Opens in new window. To do this, barriers of space and time must be overcome, conventional business processes must be enhanced, and customer demand must be promptly supplied by value-based products and services. One way for companies to meet these fast-paced market demands is by utilizing virtual teams.

With virtual teams, companies can expand their talent pool beyond geographical barriers. Furthermore, they can incorporate a follow-the-sun Opens in new window support in their business strategy.

What then are Virtual Teams?

It is difficult to find a singular, unifying definition of virtual teams. This is largely due to the fact virtual teams vary in many ways (Curseu, Schalk, & Wessel, 2008). Some definitions differentiate global virtual teams from local virtual teams.

A local virtual team refers to a team of people that are located in a common geographic area and share the same culture. A local virtual team can also include personnel that work out of home or remote offices. On the other hand, global virtual team members are separated by larger distances and differ in cultural backgrounds between members.

The other area in which there is some debate is on the longevity of the team. In other words, some definitions classify a virtual team with an expectation that the team has a specific end date.

Lastly, there is a difference in how these team members interact with one another. Some definitions indicate that virtual teams have no face-to-face interaction, whereas other definitions state that the face-to-face interaction time is limited.

Despite these differences, there are some common aspects of virtual teams in which there seems to be some consensus. These common aspects include that:

  • virtual teams work remotely,
  • there are multiple members on the team,
  • the members work together on a common project or focused goal, and
  • the communication among team members is through electronic means (Curseu, Schalk, & Wessel, 2008).

Combining these factors, Virtual Teams are defined as groups of employees with unique skills, situated in distant locations, whose members must collaborate using technology across space and time to accomplish important organizational tasks (Lipnack & Stamps, 2000).

Modern virtual teams are assembled with individuals from all areas of the world based on their expertise and fit with the virtual team being assembled. Coupled with their unique talents, they can bring experiences and perspectives to complement other team members. More importantly, when configured and managed appropriately, virtual teams can be more productive than traditional face-to-face teams (Siebdrat, Hoegl & Ernst, 2009).

Factors that Shape the Need for Virtual Teams

Information systems and the growth of high speed Internet across the globe have enabled companies to implement a global virtual team structure (Piccoli, Powell, & Ives, 2004).

In 2011, Deloitte presented a publication on how virtual teams successfully support the implementation of information technology projects. They first examined the impact of cost, time and quality on performance. These three elements are the forces that shape the need for and goals of virtual teams, regardless of the industry or task.

  1. Cost

Cost, for example, can be significantly reduced by limiting travel expenses and hiring lower-cost, high-talent labor that meet specific goals set forth for a project.

  1. Time

Looking at time as the second key element, companies can shorten cycle-time by operating around the clock with team members located in different time zones, a phenomenon often called follow-the-sun.

  1. Quality improvement

Lastly, quality improvement can be gained by assembling a virtual team that represents the highest caliber employees based on value, experience, and specialization.

Thus, the virtual team bypasses geographical barriers in conventional business strategies. Combined, these three elements represent the primary levers of competitive advantage.

Companies implementing virtual teams have seen a reduction in costs, greater utilization, increased access to new market, and a larger pool of resources with a greater variation in skill sets. However, working virtually does come with challenges. In following section, we examine the details of virtual teams, in terms of the challenges they face.

Challenges of Virtual Teams

Compared to traditional face-to-face teams Opens in new window, virtual teams present some unique challenges for companies, team managers, and even the members. When communicating via email, phone, or even video, important intricacies such as facial expressions, vocal modulations, verbal signals, and body gestures can be altered or lost in translation.

As a medium to facilitate communication amongst the virtual team, the very technologies used can also present several challenges. For example, team members may be afraid or lack skills necessary to operate technologies such as video teleconferencing equipment.

Stemming from vast differences in culture and communication, diversity is evident and often the most significant challenge for virtual teams (Pearlson & Saunders, 2010; Staples & Zhao, 2006). Also, the degree of virtualization, say 25% versus 100% dispersion, dictates the severity of challenges that virtual teams face (Schlenkrich & Upfold, 2009).

Furthermore, some virtual team members may have a strong preference for one technology over another, say email versus phone. Lastly, logistical challenges exist for team members spread across multiple time zones. While this enables teams to work around the clock and follow-the-sun Opens in new window, shift overlap may be necessary for day-to-day communication and team meetings (Kayworth & Leidner, 2002).

To overcome these challenges, managers need to be cognizant of the effects of distance and culture to team performance. Building trust and ensuring open communication among the team members should be high priorities. The manager also needs to be a leader to the team; encapsulating the administrator, coach, and advisor functions. In the end, managing virtual teams is more challenging than local teams and requires constant interaction in order to maximize effectiveness.

Structural Layers of Virtual Teams

To establish effective virtual teams in their organizations, managers must look at it from a complete and comprehensive perspective. Structurally, virtual team success is dependent on the successive construction of three key layers critical for organizations to thrive in a global economy (Piccoli, Powell, & Ives, 2004).

We’ll spend the remainder of this literature delving deeper into each, but for now, here they are in order:

  • the infrastructure,
  • tactical, and
  • strategic layers (Beck, et al., 2011).
  1. Infrastructure Layer

Beginning with the infrastructure layer, it sets the foundation for how the virtual team will operate. This includes various types of hardware, software, remote access applications, networks, standard documents, operating procedures, and clearly defined roles, expectations, and meeting schedules. Unlike traditional face-to-face teams located in the same building or office, virtual teams must ensure that information flows despite the challenges associated with being physically separated, albeit in different in time zones.

  1. Tactical Layer

Once the infrastructure layer is established and team members are deployed, managers must begin to facilitate the communication and collaboration necessary for daily and efficient operations. This can be accomplished by designing a schedule with overlapping shifts and onsite visits, identifying virtual team leaders and scheduling headquarters visits, training members to be technologically proficient and culturally cognizant, and creating an environment that encourages frequent collaboration, as it could be with traditional teams.

  1. Strategic Layer

And then finally, after the infrastructure and tactical layers are set up and working well, managers must now consider ways to optimize the performance of the virtual team by making strategic refinements. This includes monitoring and adjusting the balance of onsite and offsite resources and tasks, fine-tuning the flow of knowledge and information between clients and off/onsite locations, and finding areas for additional cost savings (Beck, et al., 2011).

Developmental Steps of Virtual Teams

Once the virtual team structure is established, it is important for managers to know that virtual teams will go through different steps of development (Orlikowski, 2000; Piccoli, Powell, & Ives, 2004). Furst, Reeves, Benson and Blackburn (2007) summarize these steps using Tuckman’s four steps of team development:

  • forming,
  • storming,
  • norming, and
  • performing.
  1. Forming Step

During the forming step, team members become acquainted with each other by sharing basic information about themselves and their duties. This is when team trust begins to build and where goals and expectations are made clear.

With limited opportunities for virtual team member conversations, other than work related topics, trust builds slowly (Krebs, Hobman, & Bordia, 2006). It is possible that members will incorrectly stereotype each other during this step.

  1. Storming Step

In the storming step, the group will work toward identifying key roles and responsibilities. However, conflicts is likely as the team contends with points of parity and differentiation. The situation can be further complicated by the use of virtual team communication technologies. Consequently, team members may withdraw from the group or increase their dependence on the virtual team leader to resolve their concerns.

  1. Norming Step

Moving to the norming step, team members work through their interpersonal conflicts and begin to focus on efficient information flow and collaboration. Professional bonds develop and their actions become aligned with their distinct roles and the overarching strategy. It is during this time that members are challenged with best practices for communication and collaboration using the technologies provided by leadership.

  1. Performing Step

And then finally, in the performing step, the virtual team begins to work as a cohesive unit, providing support for one another and focusing on completion of project deliverables. Still, it is possible during this step that communication and collaboration will suffer from side conservations and meetings among certain team members (Furst et al., 2004).


Given the inherent nature of the development steps, it is important for managers to guide the team using a variety of well-timed interventions.

During the forming step, virtual team managers can strive to provide clarity for individual and group goals, encourage knowledgeable and experienced virtual members to help mentor other than members, and begin to foster a team culture by establishing common ground.

When conflicts arise during the storming step, managers can organize in-person meetings to alleviate tension from misunderstandings, train employees on how to resolve conflict, and if needed, help team members develop, and agree on alternative solutions to their issues.

In the norming step, virtual team members can spend less time on building relationships and resolving interpersonal conflicts, and focus more on the task at hand. Managers can accelerate this process by refining schedules and task deadlines, improving the use of virtual team communication technologies, and leveraging a team member to perform some of the virtual team management duties.

Lastly, in the performing step, managers and senior leadership can focus on more global issues by further developing a company culture that understands and fully supports virtual teams. For team members with existing on-site responsibilities, support from managers and senior leadership is pivotal to sustaining on-site and off-site work-loads that fluctuate in volume and importance (Furst, et a., 2004).

In sum, virtual teams present a unique opportunity for businesses to respond to market needs. By tapping into the global talent pool and dispersing team members, companies can improve their position to provide quality, cost effective, and valuable products and services in a timely manner.

Key to this process is the successful construction and management of virtual teams. Understanding the difference between traditional and virtual teams is the first step, followed by a deeper understanding of how diversity creates challenges for virtual teams.

With proper structure and planning, mangers can use various tactics to sustain a highly functional level of communication and collaboration among dispersed team members. Accordingly, virtual teams can increase their productivity resulting in greater competitive advantage.

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