Humans have been working in teams since the origins of our species. The organisation of this collaboration and the resulting project management are seen as some of the oldest human achievements. Extraordinary projects like the construction of the Great Wall of China were accomplished mainly due to co-located collaboration and project management (Smith 2014), but societies and organizations have been changing tremendously for the past decades and will continue to do so. Therefore, the requirements for a successful project management keep changing in an equally fast-paced manner (Vielmetter and Sell 2014). The most influential trends that can be identified in that matter are globalisation and digitalisation and will be illustrated in the following.
The increasing level of globalisation does not only affect emerging countries like India, Brazil or China which have become economic super powers, but also offers opportunities and holds risks for single organisations. That means organisations do not only have to face challenges on their local marketplaces, but instead have to develop global strategies to compete globally. This development makes it inevitable that even single projects may require cross-country and cross-functional collaboration of culturally heterogeneous teams.
Digitalisation or the “digital revolution” on the other hand describes the trend to change and to incrementally automate working processes with the help of information- and communication technologies. This digital revolution does not only provide efficient digital communication technologies and a ubiquitous presence of virtual worlds, but also promotes new ways of expert networking and collaboration. In the past decade, digitalisation and globalisation were often a guarantee for success but recently it became clear that in the future it will be necessary for organisations to utilize these two trends as tools, in order to cooperate across national boundaries and thereby realize new potentials for growth (Kauffeld and Sauer 2014). At this point virtual teams come into place as one possible manifestation.
The fact that virtual teams are not only an option anymore but have become, to a certain degree, a necessity for many organisations reflects the previously stated required tool utilization (Dewar 2006; Jarman 2005). Nowadays it has become the norm for many project managers to efficiently lead teams whose team members are physically, linguistically and culturally dispersed (B. J. Bergiel, E. B. Bergiel, and Balsmeier 2008). Thus, the question whether virtual and classical teams show major differences, especially in terms of performance levels, is of particular importance and will be illustrated in this paper.
2 Definition and Types of Virtual Teams
Despite the fact that virtual teams have become the norm in the present professional world, no uniform definition or clear delimitation to similar concepts exist (Hertel, Geister, and Konradt 2005). A commonly used definition comes from Yael (2011) who states that “a virtual team – whether across the street or across the world – is a team whose members simultaneously work together to a common purpose, while physically apart”. While this definition covers the core aspects of virtual teams, many authors take further characteristics into consideration when formulating a definition. In addition to the mentioned common purpose, the geographical dispersion and especially the resulting cultural diversity is often carved out in more detail (O’Leary and Cummings 2007; Hoch and Kozlowski 2014). Furthermore, many authors acknowledge the utilization of virtual tools to coordinate and execute team processes as an additional key aspect of virtual teams (Ale Ebrahim, Ahmed, and Taha 2009).
Due to the lack of a uniform definition for virtual teams, different types can be found. The types of virtual teams can for example be derived from the virtual team’s purpose which results in types like project development teams (Duarte and Snyder 2006). A type can also be derived from its team member’s roles and their distribution over time, resulting in virtual team types that acknowledge that virtual teams can be of permanent nature, dealing with operational tasks, or of temporary nature, only meeting for very specific issues (Bell and Kozlowski 2002). Even a hybrid type in which only parts of a team collaborate virtually with remote team members is possible (Workman, Kahnweiler, and Bommer 2003). This simplified enumeration shows that not only the definition but also the exact classification of virtual teams is a challenge itself. This of course has a crucial implication on the main question of this paper whether virtual teams are a viable alternative or not. Different types and implementations of virtual teams lead to type-specific characteristics. The following chapter therefore, will illustrate opportunities and risks of virtual teams that are generally applicable.
3 Literature Review
3.1 Risks of virtual teams
As a short summary of the previous chapters it can be said that the globalisation has lead to the imperative nature of virtual teams and the digitalisation has enabled them on a global scale. But in order to evaluate their viability, the respective opportunities and risks have to be understood.
Studies have shown that the particularity of virtual teams, namely the physical and cultural dispersion of its members and the collaboration, primarily within a rather loose network-structure and enabled by communication technologies, can hamper the teamwork (Picot and Neuburger 2005). While virtual teams often advertise a greater employee autonomy, this also leads to an increased risk of team members virtually eluding themselves from tasks, which ultimately slows down the overall process (Clases, Bachmann, and Wehner 2003). If, in addition, the predominant communication happens asynchronously, the flow of information among the team members can be restricted and thus their motivation depreciates (Anderson et al. 2007; Malhotra, Majchrzak, and Rosen 2007). Even though the mentioned digitalisation allowed a widespread of various synchronous communication channels, studies show that these are still not yet capable of replacing face-to-face communication by all means, which negatively impacts the social dynamic within virtual teams (Kiesler and Cummings 2002; Kirkman et al. 2002). And even the most advanced communication technologies that allow intuitive and real-life like social interactions among the team members, are not free of obstacles. Not only is the inhibiting impact of different time zones on the natural business flow a risk that cannot be solved with technology, but additionally virtual teams often lack the necessary expertise to operate rather sophisticated tools to experience a satisfactory communication (B. J. Bergiel, E. B. Bergiel, and Balsmeier 2008; Powell, Piccoli, and Ives 2004).
One of the most common perceptions is that virtual teams imply a general lack of trust among the members. This does not only negatively impact cooperation processes but even individual performance levels, which ultimately increases costs (Colquitt, Scott, and LePine 2007). Many authors who come to similar conclusions refer to the fact that human communication is only 20-50% verbal and the predominant part, gestures, tonality and mimic is non-verbal (Lewis 2012). Thus, up to 50-80% of the communication can get lost when the chosen communication channel only supports the verbal component. This leads to team members who experience an inability of gaining a sense for their colleague’s intentions (Lepsinger 2010). This can add up to an environment in which members tend to falsely interpret actions, make incorrect assumptions and struggle on an interpersonal level (B. J. Bergiel, E. B. Bergiel, and Balsmeier 2008; Dewar 2006). Because the resulting physically dispersed conflicts are usually harder to discover, they last longer and can have an accumulated negative impact on overall team productivity (Malhotra, Majchrzak, and Rosen 2007).
In summary it can be said that virtual teams have been the object of many studies in which major risks were discovered. These risks were found to be either not relevant to classical co-located teams at all or these risks were found to be amplified within virtual teams. On the other hand, specific opportunities were discovered and ascribed to virtual teams. These will be illustrated in the next chapter.
3.2 Opportunities of virtual teams
One of the most frequently named opportunities in connection with virtual teams is of monetary nature. Virtual teams allow organisations to conduct business in a more cost-effective way, compared to face-to-face based teams because organisations are provided with global access to experts that would otherwise only be accessible at high costs. For most authors the same applies to recruitment, which allows hiring people who were naturally out of the organisation’s reach (Baltes et al. 2002; Cascio 2000; Hill 2000; Malhotra, Majchrzak, and Rosen 2007). Furthermore, well implemented virtual teams utilize the different time zones to their benefit and establish round-the-clock team operations and due to the rather loose structure of virtual teams, the decision-making process within these team operations is often divided among the team members, which supports the autonomy and flexibility of the individuals. This increased flexibility is also a major opportunity from the organisation’s point of view since it allows them to easily reorganise virtual teams or even completely dissolve them (Mowshowitz 1997; Kristof et al. 1995). For Hildebrandt, Jehle, and Meister (2014) the most significant opportunities of virtual teams are based on the cultural diversity that comes along with many virtual teams. If the across-border collaboration is not seen as a thread anymore but as a potential for superior outcomes, creative solutions will open up and allow the team to solve problems in unprecedented ways.