Wednesday, 11 October 2006

Virtual team working

I originally wrote this article, “Virtual team working” in June 2003.

Robbins et al (2003, p.4) define an organisation as being "a deliberate arrangement of people to accomplish some specific purpose." If the people working together within the organisation are separated by distance and/or time then the organisation type can be described as being 'virtual’. It is uncommon to find a fully virtual organisation.  Virtual teams however, operating within an organisation, are commonplace and their growth in numbers raises many management issues.


The virtual workplace has the potential to allow team members to be more effective by matching work times to when people are likely to be at their best. Greater efficiency can be realized by removing time wasted commuting to, and from, a traditional workplace.

Mintzberg's interpersonal, informational and decisional management roles within the virtual workplace may be very different to that of a traditional organisation. Anderson and Shane (2002) report that some virtual teams use shared leadership. They also suggest that having only one team leader can slow decision making. Knowledge management, as an informational role, is a key component of management in virtual organisations according to Witzel (2002).

When evaluating the technical, interpersonal and conceptual skills required for a successful virtual team, Adres (2002) quotes various researchers as stating that interpersonal skills are most important. This is because the lack of physical proximity between team members reduces the number of communication channels available and can lead to an increase in 'noise'.

It could be argued that contributions from Peters (1992) could be considered as worthy of being added to the works of recognized general administrative theorists like Henri Fayol and Max Weber in predicting that "information networks will be decisive to relative future competitiveness”.  However, no, universally accepted approach is yet available for the management of the virtual workplace.

Taylor (2001) describes the challenges faced by labour unions in coping with fragmented labour markets in virtual workplaces and introduces the concept of 'e-picketing' by virtual workers as a new form of protest.

Globalisation is seen by Hagen (1999) and many other authors as being a major force in the rise of numbers of virtual workplaces.  Workforce diversity is created by the employment of minorities and mobility-impaired people who may otherwise experience difficulties in being accepted by certain traditional organisations. Additional diversity is provided by the fact that people of different countries, nationalities, religion or culture may be part of the same virtual team.

There are certain dimensions of the successful virtual organisational culture that have common characteristics. High team orientation, low aggressiveness and high innovation and risk taking are important.  Conner (2003) suggests that organisations will no doubt have to foster proactive employee behaviour in terms of selection, socialization and policies that encourage individual initiative.

External and internal environments

The interface between the external environment and a virtual organisation can be quite different from that of a traditional organisation. Many virtual organisations extensively utilize outsourcing, strategic alliances and similar partnerships to realize their goals, according to Fitzpatrick and Burke (2001).  Walters and Buchanan (2001) believe that more cooperation among competitors, suppliers and customers makes it harder to determine where one company ends and another begins.

The proportion of U.S. workers employed in manufacturing has halved in the last thirty years and Konrad and Deckop (2001) attribute this decline to globalization.  Virtual teams are a natural choice for geocentric organisations that break down the barriers of time, distance and national borders to execute projects.

Social responsibility and ethics

The classical view that management's only social responsibility is to maximize profits is exemplified by the virtual organisation, according to Conner (2003), who states that [virtual] "organisations are cutting cost and streamlining operations by reducing or eliminating the need for facilities, levels of management and work sites. This contrasts with the socioeconomic view of Businessline (2002), which argues that virtual organisations offer flexible working practices to mobility-impaired talent, women and minorities.

A consideration of ethics within the virtual workplace raises the issues of collective bargaining, communication, security and trust.   

Williams (2002) claims that outsourcing of workers affects wage bargaining and quotes Young as stating that, 'in outsourced businesses, the most important flexibility is that of employees in accepting lower wages and intensified work.'  However, Taylor (2001) has an interesting notion that the web enables unions to communicate directly with workers in their homes, thus bypassing the employer.

A lack of courtesy may be experienced within the virtual workplace due to the use of e-mail over face-to-face communication.  This may lead to assertive and hostile language as reported by Andres (2002) from research carried out by Siegel.  Although e-mail has the convenience and casualness of conversation, it is a written record and the contents of some messages can be regretted at a later date.

The dispersed team members within the virtual workplace rely upon internet, satellite and telephone networks for communication and this gives rise to potential security problems.  'In the Net economy, organisations are forced to strike a delicate balance between accelerating their transformation to e-Business while still securing their networks and data.  This balance is driving the rapid adoption of security services, a market which analyst firm IDC expects to reach US$21 billion by 2005', according to M2 Presswire (2001).

Staples (2001) has tested four hypotheses dealing with the role of trust in remote work. He suggests that trust between the manager and employee is an important factor for making remote work effective. His research found that four hypotheses
relating to trust were supported, and these were that higher levels of trust between the manager and employee will be associated with:

  • more positive perceptions of self-performance
  • higher levels of job satisfaction
  • more frequent communication
  • lower levels of job stress

Additionally, Anderson and Shane (2002) recognize that trust among the virtual team members is very important and they need to be confident in each other’s competency.

Decision making

Two aspects of the managerial decision making process have prominence within the virtual workplace. They are the availability of information and the empowerment of individual virtual team members.

Koch (2000) describes a decision support environment known as the 'management cockpit', which is an advanced information system. It's a special meeting room with walls covered with screensdisplaying data on internal and external processes. The vision is to control an entire organisation with one hand and this concept is already being used by companies such as ISS Europe, Citibank, Groupe Oburg and La Suisse Assurance. This type of organisational hub is also described by Fitzpatrick and Burke (2001), who state that it performs all the functions needed to maintain their core competitive competencies and coordinate the work process as it flows or is transmitted from one subcontractor to another within the virtual organisation.

The sharing of relevant information from management amongst virtual team members will become increasingly expected. Decentralised, and a higher degree of discretion in, decision-making will be sought by virtual staff members, according to Businessline (2002).


I worked for seven years as a Project Manager for Rolls-Royce plc leading virtual teams from 1996 to 2002 in Asia, Europe and the US on three separate projects.

The first project was a joint venture between the jet engine design bureau of Sukhoi and Rolls-Royce plc. The joint venture was created to utilise the energy systems experience of Rolls-Royce to modify Sukhoi jet engines to be used for generating electricity and to pump gas from Siberia to Europe. It was a two year project from 1996 to 1998.  A virtual team was created with members in Liverpool, Moscow and Ohio. The team consisted of British engineers and drafters, American stress analysts and designers and Russian designers and production engineers.

The time difference was between three and eight hours for team members and English wasn't readily understood by the Russian designers and engineers. Knowledge was difficult to manage as much of the Rolls-Royce information was proprietary and all of the Sukhoi information was military and only available in the Russian language.  Engineering design, equipment and materials were to American, British, Russian, military standards and imperial and metric sizes. I reduced the language barrier by ensuring that all designs, specifications, drawings and daily correspondence was produced in two languages using several interpreters.

The second project was the reconstruction of two, twenty year-old, Rolls-Royce gas turbines for the Oil and Natural Gas Corporation of India. The turbines were past their useful life but the oil rig, where they were located, was a hub and production time could not be lost for the installation of new turbines.  Lasting for two years, the project ran from 1999 to 2001. The oil rig was in the Arabian Sea; parts and manpower came from the UK, US, Singapore and Bombay. I was based at hotels in Bombay and Singapore and visited the oil rig by helicopter. The virtual team consisted of designers, drafters, schedulers, technical authors and shippers in the US and the UK. Oil production engineers and construction workers were based in Bombay.

The time difference was between five and nine hours for team members.  Communication networks are a problem in Bombay.  The infrastructure is not designed for the level of internet traffic and drop-out is frequent during facsimile and e-mail transmissions.  Additionally, the monsoon period from May to September creates periods of several days when communication is not possible, due to waterlogged communication hubs and distribution centres.  Further, for security reasons, communication between the oil rigs and the outside world is severely restricted to public payphones only. Digital communication with ONGC's oil rigs, by third parties, is not allowed.  Whilst onshore in Bombay, I utilised my Nokia 6150 mobile phone for most of the voice calls and was able to transmit and receive e-mails and facsimiles to the UK and the US via the infrared port, using a laptop computer.

My final project with Rolls-Royce plc was remote machinery diagnostics for seven gas turbines owned by bp Indonesia, Conoco and Shell Philippines. These three companies had signed multi-million dollar asset management agreements with Rolls-Royce to manage the maintenance of the machines and to remotely monitor their condition for a period of ten years. The seven turbines were all located offshore in the South China Sea. The virtual team consisted of members in Birmingham, Indianapolis, Jakarta, Manila, Melbourne, Ohio and Singapore. Monthly invoice payments to RolIs-Royce were performance related and penalties were to be applied if machinery efficiency fell below 98.5 percent.

I hired a team of five engineers to be based in the Singapore office of Rolls-Royce and installed several dedicated broadband internet lines for each customer. Using Microsoft SQL and Oracle databases, virtual team members throughout the global company were able to view 300 turbine parameters almost real-time, with only a delay of approximately three seconds. By this method, quality experts in Indianapolis liaised with field technicians from Melbourne and production operators in Jakarta to resolve problems during teleconference calls whilst simultaneously viewing real-time performance data via the internet. Based in Singapore, I was the customer's single point-of-contact for all technical and commercial issues. The global network of Rolls-Royce plc was used, via intranet, to obtain answers to questions beyond my capabilities and a customer response time of same-day or 24 hours was usually achieved. Monthly customer meetings in Jakarta and Manila enhanced the virtual teamwork.

List of references

Anderson, F.F. & Shane,H.M. 2002, 'The impact of netcentricity on virtual teams: The new performance challenge‘, Team Performance Management, 2002.

Andres, H. P. 2002, 'A comparison of face-te-face and virtual software development teams', Team Performance Management, 2002.

Conner, D.S. 2003, 'Social comparison in virtual work environments: An examination of contemporary referent selection', Journal of Occupational and Organizational Psychology, March 2003.

Fitzpatrick, W.M. & Burke, D.R. 2001 ,'Virtual venturing and entry barriers: Redefining the strategic landscape', S.A. M. Advanced Management Journal, Autumn 2001.

Hagen, M.R. 1999, 'Teams expand into cyberspace', Quality Progress, June 1999.

Koch, C. 2000, 'Collective influence on information technology in virtual organisations-emancipatory management of technology?', Technology Analysis & Strategic Management, September 2000.

Konrad, A.M. & Deckop, J. 2001, 'Human resource management trends in the USA Challenges in the midst of prosperity', International Journal of Manpower, 2001.

'NOVELL: Novell delivers iChain web security software - the gatekeeper to network and application resources', M2 Presswire, 18 October 2001.

Peters, T. 2003, Liberation Management, Macmillan, London

Robbins, S.P., Bergman, R., Stagg, I. & Coulter, M. 2003, Management, Prentice
Hall, Australia.

Staples, D.S. 2001, 'A study of remote workers and their differences from non-remote workers', Journal of End User Computing, April-June 2001.

'Surfing the virtual workplace', Businessline, 22 July 2002.

Taylor, R. 2001, 'Workers unite on the internet: TRADE UNIONS: They were as workplace relics quietly fading away. But information technology may offer labour organisations a new lease of life', Financial Times, 11 May 2001 .

'Technology: Substitute or complement?', Businessline, 2 September 2002.

Waiters, D. & Buchanan, J. 2001, 'The new economy, new opportunities and new structures', Management Decision, 2001

Williams, G. 2002, 'Virtual organisations? Union survival in the outsourced workplace', Management Research News, 2002

Witzel, M. 2002, 'lack of tangibles can be an asset MANAGEMENT A-Z: VIRTUAL ORGANISATION:', Financial Times, 29 August 2002.

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