Global virtual teams : a capability centric model - degree of virtualness in capabilities and predictors

Abstract

In recent years, globalization has undergone a significant transformation, evolving from the traditional movement of trade and capital to the dynamic exchange of labor and knowledge. This shift has been driven by cost and competitive pressures, leading to the emergence of global value chains (GVCs) where different stages of production are distributed across various countries. These chains span industries from basic consumer goods to complex technological systems, leveraging geographic advantages such as cheap labor and material resources. Simultaneously, rapid advancements in information and communication technology have enabled extensive digitization of business processes. This has allowed organizations to integrate their supply and demand chains more effectively, fostering closer relationships with suppliers, contractors, and customers. The digitized environment has also facilitated the outsourcing of business functions to global service providers, unhindered by geographical constraints. The convergence of globalization, digitization, and technological innovation has given rise to virtual organizations-networks of corporations that collaborate by contributing their core competencies toward a shared business objective. These virtual organizations emphasize flexibility, integration, and strategic specialization, redefining the structure and dynamics of modern global business. Work teams are one of the foundations of modern organizations. The nature of work teams has dramatically changed with growing number of these virtual organizations. The assumption that ali team members are to be co-located is no longer valid. Team members are distributed across the globe and are still working together as teams. This is what makes them unique and fundamentally different from all other forms of teams called as conventional teams. These new forms of work teams are referred to as global virtual teams in popular literature. The major difference between the two teams being, the global virtual teams extensively use information and communication technologies and do not have the luxury of frequent face-to-face meetings. The team members probably would have met face-to-face just once during the life-time of the team. Global virtual teams are ubiquitous in today's global business environment. They are one of the'new innovative team forms that give the ability to organizations to reach out to competencies globally irrespective of geographic and organizational borders. These present an enormous opportunity for organizations to derive a competitive advantage and deliver high performance. At the same time however, arising out of the fundamental difference between virtual teams and conventional teams, is the differences in team dynamics and behaviors. Global virtual team members face diverse challenges to adapt to this new team environment. So what was taken for granted in a conventional team environment is no longer true in the new environment. The environment is characterized by lack of informal communication opportunities, lack of abilities to adapt to new technologies, cultural differences magnified due to distance to name a few. Certainly, conscious efforts have to be directed towards management of these global virtual teams. Two phases are critical in the life-cycle of an organization or a team - creation phase and operational phase. Creation phase of a virtual team is not as trivial as compared to conventional teams. Global virtual teams are associated with far higher financial and organizational risks. Hence these deserve adequate attention from organization designers. Research as well as theoretical developments in the topical area of global virtual teams are at an Infancy. There is a need for systematic work in every single aspect of such teams to be able to develop a better understanding of this phenomenon. There is a limited amount of research even in the combined topical areas of virtual organizations and teams. Examining the virtual team arrangement, it is argued in this research work that a distinction has to be made between the physical configuration of sub-teams that make-up the virtual team, and the newly created virtual space which gives the impression of one single team in spite of dispersion. This virtual space is the logical configuration of the distributed sub-teams linked through technologies. It is this virtual space that makes these teams so unique. The issues concerning the creation of this virtual space, deciding appropriate structures and processes, are best addressed in the creation phase to reduce the risks. The virtual space perspective of virtual teams throws up very diverse issues and hence opens up enormous opportunities for research. The limited amount of research that exists in the topical area of virtual teams has centered around the issues that come up due to the characteristics of the physical space, like establishment of trust, communication and coordination and adapting the throughout process. In other words, the research has focused on the key aspect of distance or dispersion, its consequences and possible tactical solutions to address these consequences. These are the issues that deserve attention in the operational phase. There has been some research in the last two years that has addressed some of the issues concerning design and implementation of virtual organizations. Most of them are prescriptive models on creation and growth of these virtual organizations. These models have introduced a new phenomenon of virtualization and measures for virtualization referred to as degree of virtualness. Creation models have addressed the process of transformation of a non-virtual organization to a virtual organization and growth models have addressed the movement of a virtual organization from lower levels of virtualization to higher levels. The concept of capabilities of the different participating organizations has been one of the key aspects in each of these models. Virtual organizations and virtual teams though share similar conceptual foundations, still are qualitatively different from each other and are two different levels of abstraction. So creation of virtual teams need to be looked at from its own context, and likewise the phenomenon of capabilities in virtual teams too. The existing research in the area of virtual This research investigates the creation and design of global virtual teams (GVTs) in the context of increasing globalization and digitization. It aims to identify the crucial design parameters and influencing factors that shape the structure and implementation of GVTs. An integrated model was developed, focusing on two key capability dimensions: the capabilities portfolio (structural aspect) and the capabilities deployment process (process aspect). The study explores how dispersion enhances team capabilities, the timing and methods for capability expansion, and the processes for structuring and deploying these capabilities. A novel framework introduces six interrelated concepts-Technical Requirements, Business Motivators, Technology, People Characteristics, Team Performance, and Tolerance to Performanceto explain the dynamics of virtual teams. It distinguishes between Tier-I technologies (essential for basic functioning) and Tier-II technologies (enhancing qualitative performance), and introduces the concept of Electronic Personality, which reflects individual adaptability to virtual environments and technologies. Empirical validation was conducted through a survey of GVT members from multinational high-tech organizations in Bangalore, Stuttgart, and Auburn Hills. Data from 175 respondents were analyzed using composite indices, factor analysis, correlation, regression, and cluster analysis. The findings confirmed the conceptual relationships and revealed two distinct clusters of teams with varying degrees of virtualness. The study contributes to the limited body of knowledge on GVT creation, offering a quantifiable approach to assessing virtualness and highlighting new concepts like Tier-II technologies and Electronic Personality. It provides practical insights for organizations aiming to build effective global virtual teams, emphasizing the importance of preparatory training and strategic technology investments.