A Critical Evaluation of Virtual Teams - Research Paper Example

A Critical Evaluation of Virtual Teams The increase in global business and competition has forced companies to rethink how they will go about achieving their corporate goals. On the one hand, companies are being forced to co-ordinate work across different continents, cultures and languages while on the other hand they are still have to contend with limited resources. To keep their costs low and manage their key resources better, companies now have to work with virtual teams to accomplish their goals or else risk losing their competitiveness to those that do. This paper seeks to understand what virtual teams are, there characteristics, their merits and demerits and finally how to ensure that one succeeds in using them now and in the future. From literature there is no unified definition of what virtual teams are. However from the numerous definitions the recurring descriptions are that they are teams working across boundaries of space and time – here referring to geographic or temporal dispersion – with coordination of work done predominantly through the use of electronic information and communication technologies (Ebrahim, Ahmed, and Taha 2654; Ganguli and Mostashari 3). That said the most widely accepted definition of virtual teams is that they are “a group of geographically, organizationally and time dispersed workers brought together by information technologies to accomplish one or more objectives of the organization (Powell, Piccoli, and Ives 10).” From these definitions we identify three predominant characteristics of virtual teams. The first is that at least a member of the team has to be located in a different location, time zone or organization. Secondly, communication within the team is done mainly through the use of Internet and electronic media. Lastly, most of the virtual teams are created to do projects. This implies that virtual teams get disbanded on project completion. So if these teams often get disbanded at the end of a project the question is why should an organization choose to go through the trouble of establishing virtual teams? To begin with virtual teams provide organizations with unprecedented levels of flexibility and responsiveness (Powell, Piccoli, and Ives 15). In today’s rapidly changing business environments due to disruptive innovations organizations cannot afford to be laggards. It is quicker to set up a virtual team to strategize on short-term response measures to mitigate the effects of a competitor while the company devises a long-term strategy. This is because with virtual teams the company can draw talent quickly from different functions, locations, and organizations without having to relocate their staff at short notice. Furthermore, if the competences of key or star employees are needed in more than one place, setting up a virtual team implies that there competence can be accessed from different locations and as such it provides the organization with a way to leverage its scarce resources across geographic or other boundaries. Time and cost savings are direct beneficiaries of the company’s increased flexibility and responsiveness. Consider the example of two global companies A and B that manufacture durable goods. Both companies have product-development teams comprising of members around the world. Company A’s team members continually move from site to site for activities such as design meetings, status reviews and prototyping sessions and so on. Company A contends with direct costs it terms of travel and accommodation, indirect costs in terms of human costs of being away from home and the lost work time and productivity (Duarte and Snyder 7). Company B, on the other hand, uses electronic collaboration technologies to form a virtual product-development team which reduces traveling thus lowers travel and facility costs, reduce project schedules, and improve decision-making time. Other time and cost savings that an organization could benefit from when it uses virtual teams include: reduced training expenses, faster learning and reducing time-to-market. Time has an almost 1:1 correlation with cost, so cost will likewise be reduced if the time-to market is quicker (Ebrahim, Ahmed, and Taha 2657). The third major advantage of deploying virtual teams emanates from their typically diverse composition. Virtual teams tend to inherently comprise of greater levels of structural and demographic diversity than traditional teams (Siebdrat, Hoegl, and Ernst 65). Structural diversity refers to arrangement where a team is made up of members from several different locations and/or different business units and having them report to different managers. Demographic diversity in this case refers to having team members come from different nationalities and hence have different cultural influences. This diversity exposes team members to heterogeneous sources of networking opportunities; feedback and work experience and so on which have the potential to enhance the overall problem-solving capacity of the team considering that the will now have more diverse points of view on any particular project (Siebdrat, Hoegl, and Ernst 65). Finally, virtual teams are especially advantageous to organizations that have global presence because they facilitate transnational innovation processes. Virtual teams facilitate these innovations through the following three ways: (1) they provide a vehicle for global collaboration and coordination of research and development related activities; (2) they make it possible for the organization to use its best talent independent of location; and (3) in virtual teams, experts – both internal and external – in highly specialized fields working at great distances from each other can be digitally united (Ebrahim, Ahmed, and Taha 2657). Like in all other things in the world, virtual teams have limitations too. The primary limitation of virtual teams that sticks out as a sore thumb is increased difficulty in collaboration, largely as a result of the distance involved. The distance referred to here is a triad consisting of physical distance, relational distance and cultural distance. All these three factors offer barriers to information flow and knowledge transfer. Virtual teams therefore experience greater difficulties in communication and coordination. This results in an increased inability for the virtual teams to establish a common ground (Siebdrat, Hoegl, and Ernst 64). Let us not forget the additional constraint on team members who have to negotiate multiple time zones in order to synchronise their schedules. The second major limitation of virtual teams is that they decrease management’s level of control. In traditional teams managers find monitoring and coordination of tasks to be straight forward. In contrast, in virtual teams, management need to ensure that tasks are much more highly structured to mitigate for the control that they have ceded. The distance-barrier of virtual teams decreases closeness and affinity since members are unable to have informal interactions such as going out for a beer or lunch. Loss of control becomes more important where the virtual team comprises members from different companies say in a strategic alliance because companies will need to defend against competitive compromise (Hamel, Doz, and Prahalad 134). The third disadvantage of opting for the virtual team approach is that sometimes it requires complex technological applications and staff training on how to effectively communicate and collaborate using electronic technologies (Ebrahim, Ahmed, and Taha 2658). These complex applications could imply more costs for the organization in terms of purchase price, maintenance costs and costs to train staff. In fact, Siebdrat, Hoegl and Ernst (67) argue that social skills should be a key characteristic of that companies need to consider when staffing virtual teams because one’s social skills determine how good one will be in a team. A comprehensive breakdown of the kind of skills needed by virtual team members as suggested by Duarte and Snyder are: “understanding of human dynamics, knowledge of how to manage across functional areas and national cultures, and the ability to use communication technologies as the primary means of communicating and collaborating (7)”. The effectiveness of these teams therefore is susceptible to available technology and the social skills of team members. Having discussed the merits and demerits of working with virtual teams the next logical question is what is the future of this new working environment? Duarte and Snyder (5) categorically state that organizations that do not use virtual teams effectively may be fighting an uphill battle in a global, competitive, and rapidly changing environment. In fact, organizations that will succeed in this millennium have found new ways of working across boundaries through systems, processes, technology, and people. Some of these techniques are: selection of task-related processes for virtual team assignments, selecting team members with good social skills and leadership capabilities in addition to their expertise and maximizing face time. A study conducted by Siebdrat, Hoegl and Ernst (65) found the quality of task-related processes to be an important factor in deciding whether using a virtual team will be an opportunity or a loss. In the same light, Duarte and Snyder (18) argues that there are seven factors that a company needs to address if its virtual teams are to succeed. These factors are: company HR policies, staff training and on-the-job education and development, standard organizational and team processes, use of electronic collaboration and communication technology, organizational culture, leadership support of virtual teams, and team-leader and team-member competencies. From our discussion in this paper we understand that opting out of using virtual teams will soon not be an option for many organizations that seek to compete in the future. It is clear that this new working environment has got numerous benefits such as increasing an organization’s flexibility and responsiveness, time and cost savings, improving decision making, and encouraging transnational innovation. Virtual teams also have limitations whose effects can be mitigated by carefully selecting the processes to be done by these teams, aligning HR policies and organizational culture to this new reality and providing the right kind of leadership. Virtual teams are not made better through technology. Organizations need to understand that technology is only an enabler. Works Cited Duarte, Deborah L, and Nancy Tennant Snyder. Mastering Virtual Teams: Strategies, Tools, and Techniques that Succeed. 3rd ed. San Francisco, CA: John Wiley & Sons, 2006. Print. Ebrahim, Nader Ale, Shamsuddin Ahmed, and Zahari Taha. “Virtual Teams: A Literature Review.” Australian Journal of Basic and Applied Sciences 3.3 (2009): 2653-2669. Print. Ganguli, Anhirban, and Ali Mostashari. Virtual Teams: An Overview of the Literature. 2008. Center for Complex Adaptive Sociotechnological Research (COMPASS) Working Paper Series. Hamel, Gary, Yves L Doz, and C. K Prahalad. “Collaborate with Your Competitors - and Win.” Harvard Business Review 67.1 (1989): 133-139. Print. Powell, A, Gabriele Piccoli, and B Ives. “Virtual teams : a review of current literature and directions for future research.” The Database for Advances in Information Systems 35 (2004): 6-36. Print. Siebdrat, Frank, Martin Hoegl, and Holger Ernst. “How to Manage Virtual Teams.” MIT Sloan Management Review 50.4 (2009): 63-68. Print.  Read More