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Virtual Team Dynamics

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VIRTUAL TEAM DYNAMICS: ISSUES AND RESOLUTIONS

By

MICHAEL SHE

Integrated Studies Project

submitted to Dr. Richard Marsden

in partial fulfillment of the requirements for the degree of

Master of Arts – Integrated Studies

Athabasca, Alberta

April 2010


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Abstract Growing global competition has forced organizations to re-examine their business processes. One of the most radical changes has been the implementation of virtual teams, work groups that consisting of geographically dispersed individuals, collaborating through electronic communications. Virtual teams promise to provide organizations with unparallel level of flexibility in responding to the dynamic impacts of globalization. In spite of the apparent benefits, the virtual environment creates inherent challenges with communications and coordination. Existing literature on the subject is based heavily on theory and often studies virtual teams with lab based experiments. This paper applies a more practical approach and leverages the author’s real-world experiences as a member of a virtual team. Eight major influences (Design, Culture, Training, Technology, Communications, Leadership, Trust, & Cohesion, and Performance) were identified and organized with an Input-Process-Output framework for analysis. The virtual environment creates managerial implications and organizations must take the necessary steps to minimize the idiosyncrasies of the virtual environment. Keywords: Virtual Teams


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A group of card players are huddled closely around a table. The dealer shuffles a deck of cards and deftly doles out a hand to each player. Anticipation amongst the players grows as the dealer plays his first card. Written on the dealer’s card is “… as a user, I would like to change my password”. The players study the words closely and ponder at the ambiguity of the statement. After a short period of contemplation, each player calls their card, with a number representing an estimate on it. The dealer notices that there is an unusually high and low card and asks the players of these cards to explain their decision. After a brief and heated discussion between the two players, the dealer selects the low card and declares a winner. As strange as it sounds, the above is in fact an example of a project estimation exercise used at VoiceTech Communications Inc.* for its virtual teams. As part of the organization’s transition to Agile methodology, VoiceTech has adopted some unique teambuilding and planning techniques to help overcome the difficulties of virtual collaboration. The players of this game are not physically collocated but are virtual team members dispersed across North America. The statement on the dealer’s card represents a project task, condensed to a single idea. The ambiguity of the statement is intentional and symbolizes risk and uncertainty. The player’s card signifies the level of effort required to achieve the task. As a whole, the exercise demonstrates the lengths which organizations are attempting to overcome the limitations of virtual teaming and the integral nature of communications, coordination, and collaboration in such teams. This paper examines the difficulties VoiceTech encountered with developing and managing a virtual team and presents eight important factors influencing the success of these teams.

Virtual Teams The dynamic nature of the global economy is generating a new competitive landscape that is placing considerable challenges on organizations as they expand into international markets. Growing global competition has pressured organizations to shortened development cycles and increasingly become dependent on foreign labor. Organizations are also facing a new work context that spans geographical, cultural, and even organizational barriers. These issues have forced organizations re-examine their existing business practices and seek methods to increase “flexibility, responsiveness, lower costs, and improved resource utilization necessary to meet ever-changing task requirements in highly turbulent and dynamic global business environments” (Jarvenpaa & Leidner, 1999). One of the most dramatic and widely adopted strategies has been the implementation of virtual teams which consist of geographically dispersed individuals with specialized skills, collaborating through information technologies, who are brought together to achieve a task, and to cope with the realities of globalization. Virtual teams promise to provide organizations with unprecedented levels of flexibility and responsiveness (Powell, Piccoli, & Ives, 2004). The virtual nature of these teams imparts permeable interfaces and boundaries, resulting in teams that are highly adaptive and can be quickly assembled and disassembled (Jarvenpaa & Leidner, 1999). Through the use of information technologies, virtual teams can transcend the restrictions of time and space, enabling organizations to assemble individuals with highly specialized skills across

* VoiceTech Communications Inc. is a fictitious name used to protect the anonymity of the organization.


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geographic boundaries. The dispersed nature of virtual teams combined with their extensive use of information technologies, permits these teams to utilize asynchronous workflows and attain concurrency to meet the 24/7 productivity demands of the global economy. In spite of the apparent benefits, as greater numbers of virtual teams are deployed for increasingly complex projects, the limitations of these teams are becoming more apparent. Virtual teams are fraught with several challenges and exhibit a “dark side” (Jarvenpaa & Leidner, 1999) and face a “fundamentally different (and more complex) work environment than their traditional team counterparts” (T. R. Kayworth & Leidner, 2001). The virtual environment combined with the cross-functional nature of these teams exacerbates the challenges with effective team coordination (Suchan & Hayzak, 2001). The virtual team’s reliance on technology impact team dynamics and introduces difficulties with temporal synchronization. As a result, virtual teams face a wide array of issues including communications, socialization, cultural, leadership and coordination, and technical issues. Organizations must come to comprehend the “advantages, disadvantages, social dynamics, problems, and opportunities” (Hiltz & Turoff, 1985) presented by virtual teams and develop relevant strategies to minimize these issues and maximize the opportunities of these teams. Existing research on virtual teams has concentrated on understanding the benefits and challenges associated with virtual teams but there remains a lack of clarity since research on the topic spans multiple fields and does not have an integrated approach (Martins, Gilson, & Maynard, 2004). Previous research has also focused on anecdotal evidence extracted from theoretical lab based academic studies. To find the crucial components necessary to develop and manage a successful virtual team, this paper will apply a more practical approach and examine the dynamics of an actual working virtual team. This paper will use an autoethnography of the author’s experience as a member of VoiceTech’s Outbound Solutions Team to provide the background contextual information necessary to discuss the specific challenges faced by virtual teams.

VoiceTech Communications Inc. VoiceTech Communications Inc. is a multi-national high-technology corporation headquartered in Burlington, MA specializing in speech and imaging technology. The company’s large portfolio of products are used in many sectors ranging from text-to-speech products in the automotive sector, optical recognition software for business, medical transcription software for health care practitioners, to mobile applications for smartphones such as the Apple iPhone and RIM Blackberry. With 36 offices around the world and over 6,000 employees, VoiceTech is a culturally diverse and dispersed organization. The company’s geographic dispersion is primarily a consequence of an aggressive growth through acquisitions strategy. Since 2000, VoiceTech has acquired over 30 companies in order to obtain technology and consolidate market share to generate revenue growth. However, the frequent acquisitions have created an amalgamated workforce with a patch work of cultures. Unlike organizations that grow organically and are able to develop an internal unified culture, VoiceTech’s struggles to assimilate the various mores of each newly acquired company. This autoethnography will detail the


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author’s experience as a member of the Outbound Solutions Team during its merger into VoiceTech shortly after being acquired in August 2008. The Outbound Solutions Team is a small development group based out of Toronto, ON, and traces its lineage to M-Tech†, a small systems integration company that was acquired by VoiceTech in August 2008. The team’s primary responsibility is to build and maintain proactive contact applications, software that intelligently communicates with customers based on artificial intelligence. The Outbound Solutions Team has a unique character, although most of its members are located in Toronto, ON, the team has always functioned virtually. Members of the Outbound Solutions Team operate from home offices using electronic communications such as teleconferencing, e-mails, and instant messaging to collaborate. When project requirements deem necessary, the Outbound Solution Team also meets face-to-face. This unique work arrangement was originally born out of M-Tech’s desire to maintain a development team at minimal costs and this strategy eliminated the need to provide real-estate and other resources to members of the team. In August 2008, VoiceTech acquired M-Tech for its proactive communications technology and shortly thereafter placed significant attention on the Outbound Solutions Team. VoiceTech’s executive management, in anticipation of future growth, instituted two directives: new leadership was assigned to manage the team’s integration into VoiceTech’s corporate structure and a significant increase in headcount was authorized for the team. Although members of Outbound Solutions Team were located in Toronto, ON, the new leadership and team members were hired out of VoiceTech’s Canadian headquarters located in Montreal, QC. This resulted in an odd hybrid team structure with virtual team members in Toronto, co-located leadership and team members in Montreal, all collaborating virtually.

† M-Tech is a fictitious name used to protect the anonymity of the organization.


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Toronto

Sunnyvale

Montreal

Developers (5)Architect

Developers (3)

ManagerDirector

CEO

SVP

VP

Dallas

EVP

Burlington

Figure 1. A conceptual structural diagram of the Outbound Solutions Team. This new arrangement proved to be a disruptive factor amongst the Toronto team members who questioned the need for new leadership and experienced anxiety over the new team structure. Especially worrisome was the transfer of management from Toronto to Montreal which raised questions regarding the management’s intentions with the team. The team’s anxiety towards these changes manifested itself as mistrust and hindered integration of the new team members who were viewed with skepticism. To complicate matters, the Toronto team members had long established strong relational bonds from years of working together and the new team members found it difficult to assimilate themselves into the existing social circles. As a result, the new team members being co-located in Montreal found it much easier to develop relationships amongst themselves through daily face-to-face contact than to interact remotely with their Toronto counterparts. With the lack of cohesion apparent and negatively impacting performance, three initiatives were instituted to address the perceived weakness of the team. Firstly, the virtual nature of the team meant that there were few opportunities for team wide touch points. In response, a daily conference call was scheduled in the morning to congregate the entire team which provided a platform to coordinate the team and help foster socialization. Secondly, the Toronto and Montreal team members had difficulties bonding. In an effort to strengthen collaboration, pair programming was instituted in which Toronto team members were assigned a counterpart in Montreal. Although the contact was compulsory, the repetitive daily interaction between the team members helped establish working relationships through shared work experiences and helped to


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strengthen trust. Finally, face-to-face meetings between the Toronto and Montreal teams were scheduled. Toronto team members were sent to Montreal to meet with their counterparts and team management from Montreal arranged regular site visits to Toronto. These face-to-face meetings placed a person to the voice on the phone and helped humanize their fellow team members. These initiatives helped greatly with fostering team cohesion and facilitated with overcoming the anxieties faced by some of the team members. In spite of the positive efforts to address deficiencies at the team level, several issues at the organization level remained unsolved. Market excitement regarding proactive contact technology placed significant strain on the Outbound Solutions Team to meet customer deliverables and resulted in role overload. Strong leadership was also absent due to role ambiguity between the different levels of management located in Sunnyvale, Montreal, Burlington, and Toronto. The integration of the Outbound Solution’s Team into VoiceTech organizational structure remained elusive and the underperformance of the team was highlighted by VoiceTech’s CEO who commented that the acquisition, merger, and integration of the M-Tech had not “gone as smoothly as expected”. In an attempt to rectify the organizational issues surrounding the team, VoiceTech’s executive management endorsed an initiative to implement Agile methodology, a form of self-organizing work teams tailored towards software development. Agile is a relatively new methodology that seeks to reduce organizational overhead through streamlining of work processes, increased self-management, and greater empowerment. In Agile, team members are encouraged to become active participants in the in the development cycle and provide continuous feedback to managers. Unlike traditional software development methodologies which favor pre-planning and long term goal setting, Agile is lightweight, interactive, and adaptive to changing conditions. Agile methodology implements short, iterative, development cycles that encourages frequent software releases which allow teams to compensate for changing project requirements. To help manage the new development cycle, VoiceTech deployed Rally Project Management System, a web based tool, to support Agile and simplify project administration.

Predictive Development Plan

M a rke t C o n d i t i o n s

Time

Agile

A gi l e

Agi l e

Agile

Agi l e

Figure 2. Agile versus traditional predictive development models.


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The implementation of Agile and Rally was a significant departure from the traditional project management tools the team was familiar with. Although in some aspects the new technology was more flexible, several expected limitations were encountered during the initial phase of adoption. In particular, the version of Rally deployed focused on providing users with a task-level view and was unable to provide non-management users a macro-level project view. Although this is in keeping with Rally’s “more coding, less managing” philosophy, it prevented team members from understanding the dependencies of their tasks as well as comprehending the larger picture of their contribution. As of late 2009, the Outbound Solutions team is still in the process of incorporating Agile into existing team processes. The long term impact of Agile and Rally on the Outbound Solutions Team’s performance still remains to be seen. The Outbound Solutions Team provided a unique example of a virtual team. Unlike many teams encountered in academic literature, the team was not newly formed and contained existing members. Nevertheless, the integration difficulties encountered by the Outbound Solutions Team into VoiceTech Communications reiterates some of the common issues virtual teams face including:

• Trust and Team Cohesion Issues • Coordination Issues • Cultural conflict • Technology-Task-Fit • Team Performance Issues

Some of these issues can be partially attributed to the turmoil created by the acquisition and merger into VoiceTech, but many of the issues faced by the team are not unique and are in fact common amongst other virtual teams. To corroborate the experiences of the team, a review of recent empirical studies on virtual teams was conducted. Pertinent studies were identified via electronic searches of leading academic databases using relevant search terms such as Virtual Team Dynamics, Virtual Team Performance, Virtual Team Issues, Virtual Team Empirical Study, etc. The studies identified for analysis reinforces the notion that virtual teams face a myriad of challenges unique to their own circumstances but share an underlying set of common issues relating to communications, coordination, culture, and performance. To understand the diverse set of issues influencing the dynamics of a virtual team, a comprehensive theoretical framework is necessary to help organize the information into a workable model. Although there are a number of theoretical models used to analyze teams, Hackman and Morris’ Input-Process-Outcomes (I-P-O) model is the predominant theoretical framework used in the study of teams (Martins et al., 2004). I-P-O organizes the multiple factors influencing team performance and examines these factors in the context of a team’s lifecycle as it moves through the three stages. Inputs represent the design and compositional characteristics present at the time of a team’s creation (Hackman & Morris, 1975). Processes define the dynamic variables that dictate group interaction (Martins et al., 2004). Outcomes represent the product of the system as a result of the inputs and processes. The simplicity of the I-P-O has led to some criticism


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that the framework is one dimensional and does not account for aspects such as moderating factors, feedback loops and non-linear progression (Ilgen, Hollenbeck, Johnson, & Jundt, 2005). However, for the scope of this paper, I-P-O represents a manageable and usable model for the analysis of virtual teams. Using the recurring themes present in literature, the various issues can be arranged into the three stages of I-P-O (Maznevski & Chudoba, 2000; Powell et al., 2004; Saunders, 2000). Therefore, examination of the issues encountered by the Outbound Solutions Team can be mapped into I-P-O as follows:

• Inputs: Team Design, Culture, Training, and Technology • Processes: Communications, Leadership, Trust, & Cohesion • Outcomes: Performance

The research findings are summarized in the following section.

Inputs Inputs are the variables present at the time of a team’s creation and were found to have a significant influence on the eventual success and performance of the team. Input variables revolve around a team’s formation and composition and focus on three areas: design, culture, and training. Organizations must weigh each of these aspects when assembling a virtual team to ensure the creation of a successful and balanced team.

Design

Team design is an important element influencing team success. Organizations often overlook the importance of an effective team design and focus on the operational aspects of the team. In the case of VoiceTech, the Outbound Solutions Team was expanded into Montreal with little consideration for the consequences it would have on the existing Toronto team members. The virtual team’s reliance on technology places constraints on interaction and task-coordination and creates barriers to effective team communications, culture, and leadership (T. Kayworth & Leidner, 2000). VoiceTech initially neglected to minimize these detrimental effects and failed to structure the team’s interactions and foster the creation of a shared language and understanding between team members (Powell et al., 2004). As a result, this hampered the team’s ability to integrate the new Montreal team members into the existing team/social structure. A shared language would have permitted the team members to interact via common protocols and exchange information in an efficient and condensed manner and also allow technical, semantic, political, intercommunity, and international interoperability (Chinowsky & Rojas, 2003). Team interoperability is vital in ensuring smooth communications and effective knowledge transfers between team members and the greater organization. Structuring interactions and fostering a shared language should be promoted by team leadership during the early phases of a team’s formation as existing research has found that this provided the greatest benefit to team performance. It should be noted that the development of a shared language ought to be an organic process driven by the team members to ensure that the language developed provides a proper fit for the team.


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As research on virtual team evolves, there has been shift in the definition of the virtual team. Early definitions placed an emphasis on highlighting the differences between traditional face-to-face teams and virtual teams. A traditional definition of the virtual team is a group “of coworkers geographically and organizationally linked through telecommunications and information technologies attempting to achieve and organizational task” (Townsend, DeMarie, & Hendrickson, 1998). It remains well established that virtual teams work across multiple boundaries (time, space, and geography) and primarily leverage information technologies to facilitate communication, but real-world implementations have altered the concept that virtual teams exist solely in the virtual domain. As exemplified by the phrase “trust needs touch” (Handy, 1995), empirical studies of virtual teams have shown teams can benefit significantly from some form of face-to-face and physical interaction. The distinction between virtual and traditional teams is becoming increasingly blurred; virtual teams often do not operate exclusively in the virtual domain but also use supplementary face-to-face meetings with deemed necessary. The undefined nature of these teams has led to an increasing debate as to the amount of electronic communications required for a team to be considered virtual (Maznevski & Chudoba, 2000). In order to reconcile the differences between virtual and traditional teams, recent literature has relaxed the definition of virtual teams by incorporating the concept of virtualness (Kirkman, Benson Rosen, Tesluk, & Gibson, 2004). Recent research acknowledges that virtual teams operate over a range of virtuality, some teams are highly virtual while others are only partially virtual. The amount of virtualness is influenced by team design, function, and requirements. Considering the influence of virtualness, a revised definition of the virtual team is “a team whose members use technology to varying degrees in working across location, temporal, and relational boundaries to accomplish an interdependent task” (Martins et al., 2004). Selecting the appropriate level of virtuality for the team has a direct impact on team performance. In the case of the Outbound Solutions Team, it operates with low virtuality, in a semi-hybrid mode, with the Toronto segment being virtual, the Montreal segment being co-located, all collaborating virtually. This level of virtuality suits the team well, as software development is an intrinsically complex task a great deal of inter-dependent interaction. Projects that are intricate and complex often require frequent collaboration, and these teams can benefit from lower levels of virtuality. Conversely, projects that focus on individual tasks can take advantage of an asynchronous workflow provided by higher levels of virtuality. Nevertheless, due the limitations of current collaborative technologies, virtual teams should consider the use of occasional face-to-face meetings, especially during the early stages of team development, to establish social rapport and build trust, understanding, and respect between team members (Saunders, 2000). Virtual teams allow organizations to engineer a team with a diverse set of skills from geographically dispersed employees. Organizations often select candidates for virtual teams based on an individual’s technical knowledge with little considerations for other traits. Unfortunately, not all individuals possess the necessary aptitude to function effectively and cope with the idiosyncrasies of the virtual environment. Personnel selection has a direct impact on team performance. In additional to technical competency, organizations must consider other attributes important to virtual work. Ideal candidates


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must have excellent communication skills – a vital asset to possess considering the difficulties and limitations of electronic communications. Due to the limited support and managerial oversight in a virtual environment, personnel must be creative and flexible, self-motivated, and must be able to cope with “isolation” and limited social interaction. Individuals with good socio-emotional traits such as being agreeable and conscientious tended to be more co-operative and inherently possessed the necessary social skills to effectively work in a group setting (Neuman & Wright, 1999).

Culture

As organizations expand into non-domestic markets, employees are faced with the difficulties associated with greater cultural diversity. Employees are increasingly required to interact, collaborate and in some cases accommodate colleagues of various ethnic, cultural, and social backgrounds. This increased diversity in the work place can lead to misunderstandings and even conflict due to barriers created by cultural differences in communication and coordination (Staples & Zhao, 2006). The virtual environment amplifies cultural barriers: geographic dispersion tends to make virtual teams more culturally diverse and restrictive communications obstructs the ability of virtual teams to resolve minor issues before they escalate into major conflict. As in the case of the Outbound Solutions Team, even minor cultural differences between the Toronto and Montreal team members were enough to obstruct team performance. The transnational nature of virtual teams means that organizations must confront the realities of cultural diversity. Organizations must adopt strategies that proactively mitigate the negative effects of multiculturalism to maintain optimal team performance. In a culturally heterogeneous environment, subgroups can form in response to a person’s innate need to self-categorize; this is because people are inherently drawn to others that are most similar (Staples & Zhao, 2006). If the development of subgroups is allowed to continue unopposed, this can lead to a debilitating segmentation of the team and negatively on team performance. With the Outbound Solutions Team, in an effort to alleviate the negative aspects of cultural diversity, team leadership encouraged the development of a unique team culture, one that was grounded in shared norms and values that could be adopted by all team members. VoiceTech leadership fostered the development of a common cultural through the establishment of routine processes such as the daily conference call and pair programming. These initiatives helped to foster increased socialization amongst team members. Finally, face-to-face interaction helped to solidify the team’s culture by humanizing fellow team members. As explained by Javenpaa and Leidner, through social dialogue, trust can be develop, and in turn, cultural acceptance of others (Jarvenpaa & Leidner, 1999). A shared culture is a potent attribute and enables virtual teams to foster a shared understanding between team members and allow the development of a common vision, bringing trust and cohesion to the team. Teams that developed a strong internal cultural were found generally to be more successful (Wong & Burton, 2000). Social relationships are often easier to build in the presence of face-to-face meetings, but such interactions should be carefully considered. In a homogenous team, face-to-face meetings are often beneficial as team members share a common context and social


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relationships can be formed easily. However, in highly diverse team, members often have no common context and these initial face-to-face meetings may cause team members to innately resort to using surface level traits to categorize and stereotype others (Staples & Zhao, 2006). Stereotyping can lead to poor “first impressions” and cause tensions and misunderstandings and ultimately taint team relationships. In extremely diverse teams, virtual teams can benefit from the reductive nature of the electronic communications. Electronic communications have a limited ability to transmit personalities, power, political, and social conflict, and therefore allows minority team members to interact comfortably without conveying stereotypes (Kirkman, Rosen, Gibson, Tesluk, & McPherson, 2002; Staples & Zhao, 2006). This use of electronic communication to provide greater anonyminity to users and allows minority team members to interact freely without exposing cultural bias. As a result, research has shown that “social discussion, depth, and intimacies were greater in computer-mediated communication groups than in face-to-face groups” (Walther, 1995; Walther, 1997). In such environments, organizations must adopt egalitarian policies to create an environment of inclusiveness and unity in an effort to prevent disenfranchisement of minority workers.

Training

Organizations often neglect virtual team training and underestimate the amount of preparation required to develop proficient virtual employees. The virtual environment is a significant departure from a traditional team environment and the virtual team’s reliance on electronic communications changes the paradigms of inter-personal interaction. Not all employees have the necessary skills to function effectively in a virtual environment and this can result in negative impacts on team performance. In the case of the Outbound Solutions Team, VoiceTech did little to help the new Montreal team members adjust to working in a virtual team environment. The fact these new members were co-located meant they may not have taken into consideration the limitations of their fellow virtual Toronto team members. As a result, initial interactions between the Toronto team members and Montreal team members were awkward and inefficient. In a survey by Rosen, Furst, and Blackburn, over 80% of organizations polled indicated that virtual team training was “not at all” a priority (Rosen, Furst, & Blackburn, 2006). Organizations must come to understand that comprehensive virtual team training provide quantitative competitive benefits. Well trained virtual teams display a statistically significant improvement in team cohesion and trust which results in higher levels of productivity and creativity (Rosen et al., 2006; M. Warkentin & Beranek, 1999). Existing information technologies enable virtual teams to collaborate over vast distances, but they also impose an overhead to the flow of information and therefore restricts coordination. These limitations prevent virtual teams from achieving the communication speed and effectiveness of a traditional co-located team (M. Warkentin & Beranek, 1999). In response, organizations see new technology as a solution to these limitations and constantly implement new systems to reduce the gap between virtual and physical communications. Regrettably, few teams are able to effectively leverage these new technologies since existing training programs provide little context on the use of new technology. When training is provided, it often focuses on the technical use of software (i.e. how to click a button) rather than on the proper application of the software (i.e. how


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it can help me). An example, with VoiceTech’s transition to Agile methodology, a web-based project management tool (Rally) was introduced help simplify administration of then Outbound Solution Team’s daily tasks. However, training on Rally focused primarily on how to use the system and little time was spent on discussing the integration of the tool into the team’s workflow. This created a situation where team members were familiar with the technical aspects of the tool but struggled to apply Rally and understand how the tool would be incorporated into their daily processes and help them with their day to day tasks. Because of the major limitation in communications and coordination, organizations need to adopt an encompassing perspective and design training programs that teach employees how to leverage new technologies to enhance work processes through the facilitation of communications and improved task coordination. The focal point of virtual team training should provide workers with the necessary skills to minimize the limitations of the virtual environment and maximize operational effectiveness. Training needs to be comprehensive and even cover topics such as general etiquette and social skills, but in the context of virtual teaming such as teleconferencing procedures, netiquette, and cultural awareness. In regards to technology, training needs to provide team members with guidance on the proper and effective use of technologies such as when to teleconference versus instant message versus groupware. Although these topics seem to be “common sense”, the virtual environment is so drastically different than a traditional team environment that inexperienced employees can benefit greatly from an introduction to proper virtual work habits. The end result is to develop virtual employees who are good communicators that can effectively collaborate with others to facilitate knowledge transfer and in due course develop stronger relational links between the members (M. Warkentin & Beranek, 1999).

Technology

Considering the central role technology in supporting the operations of a virtual team, selecting the proper types of technology to meet the task-technology-structure needs of the team is a crucial decision for the team and team leadership. However, distinguishing between effective and ineffective technologies is a difficult task especially considering the number of collaborative technologies available in the marketplace. The selection and justification process requires a systematic approach that applies rational criteria to evaluate the tangible and intangible factors (Chan, Chan, & Tang, 2000) presented by a technology. In a virtual environment, an effective technology should meet four characteristics: be accessible and easy to use, provide an appropriate level of richness, supports the necessary task interaction requirements, and is cost effective. Accessibility and ease of use is especially important in a virtual environment. With team members dispersed around the world, complex technologies quickly become impractical or even impossible to support. For example, a team member located in a developing nation may have limited broadband access which prevents that team member from utilizing high bandwidth applications. Training and deployment is also much more difficult in a virtual environment where support staff may have limited access to remote


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machines and networks. As a result, in a virtual environment, simple technologies that meet the requirements of the virtual teams are preferred. A technology must provide an appropriate level of richness for its perceived use. With tasks that are individualized and well defined, a leaner communications medium such as e-mail and fax is sufficient. In situations with more complex and ambiguous tasks, a richer, more synchronous medium such as voice communications is required to support the interdependent team interactions. In addition, technology must meet technology-task-fit needs of the user. For example, the asynchronous nature of e-mail and fax are well suited for distributed large amounts of information. Instant messaging is excellent for ad-hoc transmission of short bits of information between team members. Teleconferences provide a forum for interactive discussions while groupware and screensharing technologies provide a structured approach to collaboration. A proper technology needs to take into account the types of interactions required by the virtual team members and ensure that their needs and requirements are met and not neglected. Especially given the current economic climate, virtual teams are faced with limited technology budgets. Therefore, virtual teams must be sensitive to costs and technology selection becomes a function of cost benefit analysis (Sivunen & Valo, 2006). Virtual teams must seek to find an optimal balance between functionality and cost and therefore a suitable technology needs to provide maximum benefit at minimal costs. Although academic literature often points to the use of videoconferencing as the prototype rich medium, it is rarely used in real-world virtual teams. The lack of videoconferencing implementations can be partially explained by cost benefit analysis; the costs of videoconferencing systems are currently so expensive that the benefits do not justify its use. Team leadership must determine the interaction requirements of the tasks which the team needs to perform and ensure that the technologies being selected can satisfy the needs of the team. Team leadership must also be cognizant of the disruptive effect new technologies can introduce. The effective use of new technology may require changes to existing business processes and team structures (Luftman, Lewis, & Oldach, 1993; Majchrzak, Rice, Malhotra, Nelson King, & Ba, 2000). For example, with the Outbound Solutions Team, the introduction of Rally impacted existing team processes. The team struggled to recalibrate its workflows from a “predictive” style of development to an Agile iterative model. These changes negatively impacted team performance as processes were modified and adjusted to accommodate the new technology. In addition, teams must carefully consider the interoperability consequences of the new technology and verify that the organizational infrastructure and dependent processes can accommodate the change. Again with Rally, the Outbound Solutions Team still needed to interact with external entities that did not have access to the system. To maintain interoperability with these external entities, spreadsheet reports from Rally were generated and distributed on a regular basis. Virtual teams can minimize the disruptive effect of new technologies by setting the proper expectations and ensuring that alignment between perceived benefits and real benefits (Majchrzak et al., 2000). In addition, training and knowledge sharing


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between the various stakeholders can also help to minimize disruptions during the initial adoption phase.

Processes Processes are interactions that occur between team members as they work towards achieving a goal. Major processes that affect virtual teams include communications, trust, cohesion, and coordination.

Communication

Communication is central to the functions of a virtual team and the ability to maintain predictable patterns of communications has been shown to be a vital requirement of successful virtual teams (Jarvenpaa & Leidner, 1999). Consistent communications allow virtual teams form relational links and develop social intimacy. Unfortunately, the virtual environment imposes many limitations including feedback latency, reduced accuracy in comprehension, and technical challenges that impede effective communications. These issues can cumulate to dysfunctional conflict and consequently hinder team performance. Past research has shown that virtual teams consistently under perform in comparison to their traditional team counterparts (De Meyer, 1991). Existing communication theories surmise that electronic communications impose a significant overhead to the efficient exchange of information and this hampers the ability of team members to convey trust and other interpersonal affections (Beranek & Martz, 2005). For example, media-richness theory asserts that different types of media are able to convey varying levels of richness depending on the number of contextual cues they can convey. This raises questions whether or not electronic communications have the necessary richness to convey the social cues necessary to develop meaningful relational links. Virtual teams have ability to communicate synchronously and asynchronously. Synchronous communications such as teleconferencing occurs with all parties are present and allows for the exchange of information to occur in real time. Synchronous communications is a structured process requiring high levels of non-verbal communications to coordinate the process. In a traditional team, synchronous communications is typically conducted via face-to-face meetings which allow for the transmission of visual cues such as body language, gestures, facial expressions, voice tone and inflection. These non-verbal cues provide participants with large amounts contextual information crucial towards facilitating comprehension. Unfortunately, this non-verbal component is missing most forms of electronic communications which can lead to message ambiguity and result in misunderstandings, confusion, and frustration (M. E. Warkentin, Sayeed, & Hightower, 1997). Virtual team members are unable to observe and evaluate the demeanor of others, maintain situational awareness, and impose a physical presence, which results in feedback delays that interrupt the flow of information (Montoya-Weiss, Massey, & Song, 2001). Asynchronous forms of communications such as fax and e-mail do not require all parties to be present and allow team members to engage in multiple concurrent discussion threads (Whittaker & Sidner, 1996). Although asynchronous communications permits concurrency, workers are challenged with maintaining conversational context as they switch between the multiple discussion threads. Participants in asynchronous conversations are also unable to provide


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feedback in real-time, this creates many issues including delays in response, informational overload, or even no response at all. As a result, asynchronous communication is prone to being disjointed, difficult to comprehend, and at times unreliable. In light of the difficulties, there are several initiatives which can be undertaken by organizations to improve the flow of communications. Most importantly, virtual teams must develop a predictable pattern of communications. Inconsistent communication was found to undermine the confidence of team members and hinder trust (Jarvenpaa & Leidner, 1999). Predictable communications can be developed through initiatives as basic as a daily conference call as was instituted by the Outbound Solutions Team. A daily call provided team members with a platform for socialization and a forum to exchange ideas, resolve issues, and generally to communicate. This simple task of socializing daily helped develop a temporal rhythm of interaction and enabled the team members to form relational links and foster a culture of information and knowledge sharing. In addition to merely communicating, the substance of the message is equally as important. Virtual teams need to take care with ensuring communications between team members are substantive and timely. This means taking care in responding to messages with information of value. Successful teams were found to communicate information in a prompt and meaningful manner, providing team mates with the necessary information to complete their tasks (Jarvenpaa & Leidner, 1999). Poor quality messages can lead to information overload due to increased back and forth messages required to clarify details. Not only does the lack of clarity impede communication effectiveness, it can also be perceived as not being forthright and create feeling of frustration and mistrust.

Trust & Cohesion

Trust is a requirement for developing meaningful social relationships and is necessary in creating relational links and promoting cohesiveness. Trust and cohesion are vital components of a successful virtual team, but the virtual environment makes it difficult for teams to cultivate trust and cohesion. In a traditional team, trust and cohesion is nurtured through routine social interactions such as personal meetings with colleagues, informal “water cooler” discussions, and general networking between employees. These seemingly mundane day-to-day interactions allow individuals to develop a shared social context and in turn create trust and strengthen team cohesion. Unfortunately, these interactions are unavailable in a virtual environment which makes developing trust and cohesion a much more difficult task. Virtual teams face several inherent obstacles to building trust: team members share no common past or expectations of the future, team members face geographic and cultural barriers, and existing communication technologies are poorly suited in meeting the socio-emotional needs of team members resulting in limited and shallow interaction (Jarvenpaa & Leidner, 1999). Trust and cohesion has a direct impact on team performance (Carless & De Paola, 2000) and is essential to reducing the ambiguity of the virtual environment. Teams with high levels of trust and cohesion developed similar views and were able to communicate more succinctly through less complex messages (Maznevski & Chudoba, 2000). These simpler messages enabled highly cohesive teams to exchange detailed information more


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effectively than teams with weak trust and cohesion. Conversely, team members in teams lacking that trust and cohesion tended to withhold information and hamper the team’s ability to achieve task goals (Wittenbaum, Hollingshead, & Botero, 2004). Because of the importance of trust and cohesion on team performance, organizations must actively seek methods of fostering trust and cohesion. Trust and cohesion cannot be mandated on the team but instead must be cultivated. In a traditional team environment, trust is cultivated through physical interactions and social relationships, but in the virtual environment, these methods are unavailable. As a result, virtual teams must rely on alternate means of trust development such as building trust through “predictable performance” (Kirkman et al., 2002). By reinforcing consistency in interactions between team members, a sense of dependability will be created and therefore help foster trust between team members and develop team cohesion.

Coordination

Issues with communications, culture, and logistics combine to hinder effective coordination in virtual teams (T. R. Kayworth & Leidner, 2001). As mentioned earlier, electronic communications is inherently leaner than face-to-face communications and this limitation restricts the possible types of social interactions. With restricted communications, virtual teams are less likely to develop the positive synergies required to achieve good group processes (Kirkman et al., 2002). The cultural diversity of virtual teams exacerbates communication challenges, giving rise to misinterpretations, distortions, and variance in the perspectives of the team members. Logistically, virtual teams often work asynchronously, but this introduces temporal challenges to the coordination of group processes and disrupts the flow of information (Montoya-Weiss et al., 2001). Given the obstacles with maintaining coordination in the altered social context of the virtual environment, effective leadership is a vital requirement. In a traditional team, leadership revolves facilitating group activities to achieve a desired outcome (S. Sarker & Grewal, 2002) through personal communication, resource planning, and management (Chinowsky & Rojas, 2003). Social controls such as personal oversight, team meetings, and informal discussions are used to help minimize social dysfunctions and coordinate activities. Unfortunately, many of the social controls are ineffective in a virtual environment since they require high levels of coupling. In the lean virtual environment, managing the dependencies of tightly coupled processes is a difficult and time consuming task. As a result, virtual teams are prone to suffering from dysfunctions such as low individual commitment, role overload, role ambiguity, absenteeism, and social loafing (Jarvenpaa & Leidner, 1999). Fundamentally, the role of leadership in facilitating group activity does not change in a virtual team (Solomon, 1995), but it needs to take on new dimensions to address the challenges of the virtual environment. Team leadership must seek strategies to overcome these problems without resorting to process coupling. One such approach is to apply object-oriented (OO) principles to streamline task coordination. OO design is a common software engineering philosophy that seeks to encapsulate the functional details of a component and expose its attributes and processes through well defined interfaces. OO design enables individual components to be turned into self-


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contained and self-managing entities with reduced interdependencies. When OO design principles are applied to virtual teams, its goal is to decouple team members through the encapsulation of work processes by standardizing inputs, processes, and outputs (Ramesh & Dennis, 2002). Through standardization, processes can implement concrete interfaces which enhance interoperability and accordingly reduce functional ambiguity. Consequently, virtual teams which adopt OO principles can achieve more efficient and effective exchange of information and thereby simplifying task coordination. The Outbound Solutions Team implicitly implemented OO principles through the use of Agile methodology. Agile removes interdependencies between team members by shifting coordination from a project level to a task level. By focusing on smaller deliverables, Agile permits the encapsulation and decoupling of work processes from the larger project scope. As a result, Agile fosters concurrency and streamlines the delivery of individual work items. It should be noted that OO design is a relatively new concept in terms of team design and wide spread usage remains minimal (Ramesh & Dennis, 2002). Many characteristics of this form of coordination are still unknown and remain to be investigated. Furthermore, whether or not this form of coordination is applicable to all types of teams still requires additional research. However, OO team design represents a unique avenue for team leadership to explore, who ultimately must develop a social climate conducive to combating the social dysfunctions of the virtual environment (T. R. Kayworth & Leidner, 2001).

Outputs Outputs are the outcomes of a virtual team’s performance and this is gauged by the effectiveness of team at performing a designated task.

Performance

Organizations are drawn to the flexibility of virtual teams and often neglect to consider the viability of such teams. Virtual teams introduce considerable managerial implications (Stough, Eom, & Buckenmyer, 2000) to the extent that some research questions the long term viability of such teams, especially those functioning in highly virtualized environments (S. Sarker & Sahay, 2003). The challenges of operating in a virtual environment have prompted discussion that virtual teams should only be used in limited circumstances (De Meyer, 1991). The alluring nature of these teams will ensure that they remain an organizational fixture for the foreseeable future. As virtual teams are increasingly being deployed as permanent team structures, new tools are needed to help organizations determine when virtual teaming is an appropriate alternative to traditional team structures. Unfortunately, current methods for assessing virtual team performance are insufficient; virtual teams are often measured against traditional team performance, but with the structural differences between these team structures, existing performance metrics may present an incomplete picture. The dynamic and permeable nature of virtual teams may necessitate the development of new measurements that that account for the dimensions of the virtual environment. For example, highly dispersed teams face obstacles in developing a temporal rhythm which impedes task coordination and team


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performance (Maznevski & Chudoba, 2000). Even the Outbound Solutions Team which operates with low-virtuality faced significant issues with poor team performance and maintaining individual satisfaction. Reconciling these issues will remain a difficult task for organizations and new metrics are needed to assess the crucial aspects of virtual work such as geographical dispersion, temporal limitations and socio-emotional factors to provide meaningful feedback in helping organizations determine when virtual teaming is appropriate and how such teams can achieve maximum performance (Powell et al., 2004).

Conclusion Virtual teams face a complex and diverse set of challenges including communication hurdles, coordination difficulties, cultural issues, and technological limitations. Even with extensive training and competent leadership, many of these issues are inherent to the virtual environment and are difficult to overcome which results in many virtual teams underperforming in comparison to traditional teams (M. E. Warkentin et al., 1997). With the increasing prevalence of virtual teams, organizations must carefully consider the viability of such teams and adopt strategies to minimize the impact of virtual environment. Some of suggestions covered in this paper include:

• Design: Focus on team design, by selecting an appropriate level of virtuality for the project. Fully virtual teams are not practical and occasionally face-to-face meetings were found to be highly beneficial. Not all individuals possess the necessary aptitude to function effectively in a virtual environment.

• Training: Organizations often under appreciate training but is a necessity in developing effective virtual teams. Training must go beyond providing technical skills and teach workers how to effectively function in a virtual environment.

• Culture: Cultivate shared social experiences through team building exercises to strengthen team trust and cohesion to minimize geographic / physical differences.

• Communications: Promote social interactions to develop relational links and facilitate knowledge sharing and information flow.

• Trust & Cohesion: Trust is difficult to maintain in a virtual environment, but through predictable performance, trust can be built.

• Technology: Select an appropriate technology for an intended use. Complex interactions require rich media such as teleconferencing or videoconferencing. More mundane tasks can suffice with lean media such as e-mail.

• Coordination: The weak relational links of the virtual environment require strong leadership. Leaders must address the altered social contexts of the virtual environment and develop strategies foster a conducive social environment for effective collaboration.

• Performance: Carefully consider the situations in which to use virtual teams; the inherent limitations of the virtual environment limit the effectiveness of virtual teams in comparison to traditional teams.


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While virtual teams promise unparalleled flexibility and responsiveness, organizations must be cognizant to the managerial implications of implement such teams. Virtual teams should not be implemented on assumptions that they will perform identical to traditional teams and organizations must take the necessary steps to address the idiosyncrasies of the virtual environment.

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