StudyCorgi Business & Economics

Virtual Project Teams’ Advantages & Disadvantages

Executive Summary

In the present-day business world striving for globalization, organizations do their best to benefit from cost-saving technical expertise in other countries. This creates a specific kind of business environment necessitating ongoing cross-cultural interaction. Team managers have to deal with teams that are scattered across the globe and consist of people with different backgrounds. Traditional meetings are replaced by teleconferencing and emails that allow creating the so-called virtual project office and ensure immediate access to project information for all participants (Larson & Gray, 2011).

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The most complicated issue is using diverse teams to the best advantage. The problem is that interaction can undermine the success of the team’s work posing additional risks because of the different values of the participants and misunderstanding that arises from this discrepancy. The major recommendation for virtual project team managers is to be more flexible in their approach to leadership. The key goal is to foster tolerance, understanding, teamwork, creativity, and cultural exchange (Han, Chae, Macko, Park, Beyerlein, 2017).

Background

Virtual teams are not just a fashionable innovation: On the contrary, they have a strong business implication. Companies rely on them mostly because they are flexible and can be created in a short period without additional resources. This decreases the company’s response time to changes and thereby ensures a higher competitive edge. Moreover, this opportunity enables organizations to leverage expertise scattered across large geographic areas while required less traveling from employees, who can meet team members and broaden their working and cultural experience without having to go on business trips (Larson & Gray, 2011). Still, there is always a risk that people who are forced to work together regardless of time and distance will face changes with resistance, which is likely to undermine the quality of the company’s performance. This unwillingness to cooperate across cultures, working approaches, and conditions is one of the major challenges of virtual project teams (Iorio & Taylor, 2014).

Yet, the trend is rather successful: Globalization aimed to extend boundaries, actually made the world shrink enabling interaction and collaboration that were previously unattainable or too costly for most organizations. The importance of virtual teams is explained by their ability to assemble without additional preparations, address customer problems, develop new products and services, and involve a large number of employees across the company ignoring limitations of distance and time. This allows improving decision-making and lessening the load of the organizational schedule. Furthermore, companies are generally willing to expand their markets abroad and use virtual teams to collaborate with their foreign partners – this allows winning new customers and lower costs of penetrating foreign markets. They also get a bonus of teams that work twenty-four hours a day due to time differences. This makes investments in foreign subsidiaries especially attractive for organizations striving to achieve cost savings and ensure that their products, services, and solutions can quickly enter new markets. These benefits account for the growing popularity of offshore outsourcing that is going to increase by more than 20% annually (Bassanino, Fernando, & Wu, 2014).

Besides the desire of companies to achieve international presence while cutting costs of foreign operations, other factors are making virtual teams attractive to managers include mergers, acquisitions, and downsizing – reasons that will never cease to exist. This implies that managers have to face the necessity of acquiring skills needed to manage distributed teams and turn their complexity to the benefit of the organization. Team management techniques must be adapted to guarantee acceptable working conditions to representatives of all cultural backgrounds. For achieving higher job satisfaction of virtual teams in the future, motivation and training are widely applied (Han et al., 2017).

Managers should bear in mind what teams they have to deal with: At least seven different types of virtual teams can be identified each having its peculiarities and demanding an individual approach (Pangil, & Moi Chan, 2014).

Table 1. Types of Virtual Teams.

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Type of a Virtual Team Description
Project or Product Development Team This type of team is characterized by its fluid membership and clear boundaries of responsibility. They also have well-defined customers with their particular requirements for the product and the desired outcome. Their work is non-routine as they make important decisions daily.
Networking Team The team has not only fluid but also diffused membership: This implies that members of the team may come and go when it is necessary for the project. However, unlike the previous type, it lacks clear boundaries.
Parallel Team This type of team has distinct membership and clearly defined boundaries, which means that team members are involved in a short-term job and are generally tasked with the development of recommendations of particular issues (in most cases, connected with process improvement).
Work or Production Team Like the previous type, this team has clear boundaries and membership: Its members have to perform routine work usually not going beyond a certain organizational area.
Service Team Service teams have distinct membership and are engaged in activities connected with customer satisfaction.
Management Team The team unites managers from different subsidiaries. It has well-defined membership and works regularly to ensure that all corporate activities are properly organized and regulated.
Action Team Their membership may be both fluid and distinct depending on the organization’s policy. These teams are typically responsible for making decisions on the course of actions in emergencies demanding quick and effective solutions.

All the enumerated types require different control styles. This makes the task of managing virtual project teams challenging indeed. Organizations that will fail to find effective ways of using virtual teams are unlikely to be able to survive in the present-day business world with its increasing competition and fast-paced environment. Companies will have to devise strategies to successfully introduce virtual teams and work across all types of boundaries that they will have to encounter.

Analysis

From the analysis of the background, the following benefits of virtual teams can be identified (Gilson, Maynard, Jones Young, Vartiainen, & Hakonen, 2015):

  • low office costs due to virtual character of communication;
  • increased availability as one can hire workers from any place;
  • retention of employees explained by the fact that a lot of people want to work from home;
  • lower costs of labor since employees can come from places with lower costs of living;
  • less unproductive meetings;
  • saved travel time;
  • higher productivity due to flexibility of schedule;
  • accessibility of numerous markets;
  • uninterrupted 24-hour working process due to differences in time.

Although some of the above-mentioned benefits are unachievable in traditional teams, it might be a lot more complicated to manage a virtual team. First and foremost, virtual teams require extensive use of technologies since otherwise, communication would be impossible. They are certainly used by traditional teams too; the difference lies in the degree to which virtual project teams depend on technological means to be able to work as a unified body. The problem is that they have no other way to collaborate as face-to-face communication is an impossible option for them. This implies that any technological failure may paralyze processes running in the organization. Secondly, virtual teams have to deal with various discrepancies connected with time, distance, and subsidiary particularities. Managers must have advance communicative skills to ensure successful interaction of team members. This includes overcoming not only organizational and cultural issues but also limitations imposed by distance communication.

Although the efficiency of the team is not determined exclusively by technological tools that it uses, it is still essential to select tools that would satisfy all technological needs and ensure uninterrupted communication. Otherwise, it may bring about increased costs, wasted time, and loss of motivation of team members. Moreover, difficulties may arise even if team members use different tools that cannot be synchronized. For example, if half of the team uses PC while the other half works with Apple, it means that even sharing a text document will take additional time and may even be impossible for some users who are not advanced in technologies. That is why managers should pay attention to standardization and synchronization issues as well as ensure necessary technical support. The key of the effective performance of virtual project teams lies in the removal of obstacles that may hinder the interaction of team members (software and hardware malfunction, absence of certain programs, personal technical problems, unavailability of resources, etc.) Technical issues are important also because they contribute to work motivation and commitment of the team, increasing its efficiency (Afaq et al., 2014).

It is even more challenging for a virtual team to cope with problems connected with personal differences. Any cooperation (even the one that is performed by representatives of only one culture) faces the problem of personal conflicts. Cultural gaps that exist among members of virtual teams add another stress factor and aggravate misunderstanding. Language barriers, time management approach, uncertainty avoidance, and other discrepancies restrict each team member from prescribing him/her a limited set of actions allowed to perform (Morgan, Paucar-Caceres, & Wright, 2014).

Team motivation is a challenging task that makes managers of virtual teams overcome a lot of obstacles. Even members of different departments of the same organization are likely to have different approaches to work, ways of thinking, and styles of communication. This diversity necessitates continuous learning, which impacts the ways team members use technologies, their preferred models of communication, attitude to training, and the overall working environment (Pangil & Moi Chan, 2014).

Motivation and training can be fruitful only in case all team members are willing to bridge the existing cultural gaps and complete the task efficiently. Team managers must bear in mind that criticism for poor performance as well as incentives for good jobs cannot be equal (some cultures are insensitive to verbal influence). Different approaches to values or different views on working goals can be reconciled rather easily through negotiations. On the contrary, reluctance to obtain knowledge about other cultures and subcultures and hostility towards their representatives are much more difficult to deal with (Han et al., 2017).

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Thus, we can conclude that to increase the chances of the successful operation of a virtual team, the following major principles should be followed:

  1. The team should agree upon standards for all aspects of their work that must be respected and strictly followed. This will ensure that team members are aware of when and where they must be available for their co-workers and how soon they can provide feedback in case of delayed communication. Everyone must be sure whether the message was received and properly understood (Peñarroja, Orengo, Zornoza, Sánchez, & Ripoll, 2015).
  2. The context of communication should be of primary importance. The context includes background knowledge of all the participants, their personal and corporate culture, attitudes to work, styles of communication, and a lot of other factors determining the environment in which the team has to operate. Knowing all those issues makes it possible for the interlocutor to understand the essence of the intended message. In case the context is suddenly lost due to technical problems, it must be restored before communication begins again to minimize misunderstanding (Pangil & Moi Chan, 2014).
  3. Managers should be able to set priorities for communication.
  4. Technologies must be closely managed by a support team to avoid all kinds of distortions that may interrupt work.

Summary

Although virtual project teams may bring a lot of benefits to the organization, they are also connected with several problems. The issue of team management is particularly important and challenging as managers are required to have professional communicative skills and broad, innovative thinking to ensure the overall success of the team’s work thereby enhancing the competitiveness of businesses.

The major recommendations for successful operation include setting standards, providing context, prioritizing, and managing technologies. Moreover, sensitive management requires both the knowledge of the accepted theories of communication and the ability to use personal skills to successfully implement these theories in practice (Verburg, Bosch-Sijtsema, & Vartiainen, 2013). That is why future research of the topic should develop recommendations for managers on how to ensure effective transfer of theoretical implications into practice.

References

Afaq, S., Qadri, S., Ahmad, S., Siddique, A. B., Baloch, M. P., & Ayoub, A. (2014). Software risk management in virtual team environment. International Journal of Technology Enhancements and Emerging Engineering Research, 3(12), 270-274.

Bassanino, M., Fernando, T., & Wu, K. C. (2014). Can virtual workspaces enhance team communication and collaboration in design review meetings? Architectural Engineering and Design Management, 10(3-4), 200-217.

Gilson, L. L., Maynard, M. T., Jones Young, N. C., Vartiainen, M., & Hakonen, M. (2015). Virtual teams research: 10 years, 10 themes, and 10 opportunities. Journal of Management, 41(5), 1313-1337.

Han, S. J., Chae, C., Macko, P., Park, W., Beyerlein, M. (2017). How virtual team leaders cope with creativity challenges. European Journal of Training and Development, 41(3), 261-276.

Iorio, J., & Taylor, J. E. (2014). Boundary object efficacy: The mediating role of boundary objects on task conflict in global virtual project networks. International Journal of Project Management, 32(1), 7-17.

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Larson, E. W., & Gray, C. F. (2011). Project management: The managerial process (6th ed.). New York, NY: McGraw-Hill Hills Companies.

Morgan, L., Paucar-Caceres, A., & Wright, G. (2014). Leading effective global virtual teams: The consequences of methods of communication. Systemic Practice and Action Research, 27(6), 607-624.

Pangil, F., & Moi Chan, J. (2014). The mediating effect of knowledge sharing on the relationship between trust and virtual team effectiveness. Journal of Knowledge Management, 18(1), 92-106.

Peñarroja, V., Orengo, V., Zornoza, A., Sánchez, J., & Ripoll, P. (2015). How team feedback and team trust influence information processing and learning in virtual teams: A moderated mediation model. Computers in Human Behavior, 48, 9-16.

Verburg, R. M., Bosch-Sijtsema, P., & Vartiainen, M. (2013). Getting it done: Critical success factors for project managers in virtual work settings. International Journal of Project Management, 31(1), 68-79.

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StudyCorgi. (2020, December 10). Virtual Project Teams' Advantages & Disadvantages. Retrieved from https://studycorgi.com/virtual-project-teams-advantages-and-amp-disadvantages/

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"Virtual Project Teams' Advantages & Disadvantages." StudyCorgi, 10 Dec. 2020, studycorgi.com/virtual-project-teams-advantages-and-amp-disadvantages/.

1. StudyCorgi. "Virtual Project Teams' Advantages & Disadvantages." December 10, 2020. https://studycorgi.com/virtual-project-teams-advantages-and-amp-disadvantages/.


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StudyCorgi. "Virtual Project Teams' Advantages & Disadvantages." December 10, 2020. https://studycorgi.com/virtual-project-teams-advantages-and-amp-disadvantages/.

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StudyCorgi. 2020. "Virtual Project Teams' Advantages & Disadvantages." December 10, 2020. https://studycorgi.com/virtual-project-teams-advantages-and-amp-disadvantages/.

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StudyCorgi. (2020) 'Virtual Project Teams' Advantages & Disadvantages'. 10 December.

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