Memo and PPT

Course Resource: Project 4: Implementing Virtual Teams

Types of Teams

The information in the Resources section below offers a typology of team types and summarizes some of their basic attributes. It is important to recognize that there are hybrid versions of these teams, and in certain situations, it may be wise to recommend a team design that combines the advantages of more than one of the traditional types.

Resources

Teams and Teamwork lists types of teams and characteristics of effective teams.

Working with Groups and Teams covers trust amongst team members, types of team meetings, and the value of a project story.

An Analysis of Virtual Team Characteristics: A Model for Virtual Project Managers  explains a structured model for implementing and managing virtual teams.

Teams and Teamwork

A team is a collection of interdependent individuals organized to accomplish a common purpose. Teams exist within a larger organization and interact with other teams and with the organization. Teams are one way for organizations to gather input from members and to provide organization members with a sense of involvement in the pursuit of organizational goals. Further, teams allow organizations flexibility in assigning members to projects and allow for cross-functional groups to be formed.

Teams and Teamwork

From: Encyclopedia of Management(6th ed.)

Publisher: Gale, a Cengage Company

TYPES OF TEAMS

There are six major types of teams: informal, traditional, problem solving, leadership, self-directed, and virtual. Table 1 describes some of the characteristics of these six types of teams.

Informal Teams. Informal teams are generally formed for social purposes. They can help to facilitate employee pursuits of common concerns, such as improving work conditions. More frequently however, these teams form out of a set of common concerns and interests, which may or may not be the same as those of the organization. Leaders of these teams generally emerge from the membership and are not appointed by anyone in the organization.

Table 1 Six Types of Teams

Traditional Teams. Traditional teams are the organizational groups commonly thought of as departments or functional areas. Leaders or managers of these teams are appointed by the organization and have legitimate power in the team. The team is expected to produce a product, deliver a service, or perform a function that the organization has assigned.

Problem-Solving Teams. Problem-solving teams or task forces are formed when a problem arises that cannot be solved within the standard organizational structure. These teams are generally cross-functional; that is, the membership comes from different areas of the organization and are charged with finding a solution to the problem.

Leadership Teams. Leadership teams are generally composed of management brought together to span the boundaries between different functions in the organization. In order for a product to be delivered to market, the heads of finance, production, and marketing must interact and come up with a common strategy for the product. At top management levels, teams are used in developing goals and a strategic direction for the firm as a whole.

Self-Directed Teams. Self-directed teams are given autonomy over deciding how a job will be done. These teams are provided with a goal by the organization, and then determine how to achieve that goal. Frequently there is no assigned manager or leader and very few, if any, status differences among the team members.

These teams are commonly allowed to choose new team members, decide on work assignments, and may be given responsibility for evaluating team members. They must meet quality standards and interact with both buyers and suppliers, but otherwise have great freedom in determining what the team does. Teams form around a particular project and a leader emerges for that project. The team is responsible for carrying out the project, for recruiting team members, and for evaluating them.

Virtual Teams. Technology is impacting how teams meet and function. Collaborative software and conferencing systems have improved the ability for employees to meet, conduct business, share documents, and make decisions without ever being in the same location. While the basic dynamics of other types of teams may still be relevant, the dynamics and management of virtual teams can be very different. Some have pointed out that building team chemistry and a specific team dynamic can be far more difficult for virtual teams. Issues can arise with a lack of facial or auditory clues; participants must be taken at their word, even when video-conferencing tools are used.

Accountability is impacted by taking a team virtual. Each member is accountable for their tasks and to the team as a whole usually with minimal supervision. Some have pointed out that members' performance in a virtual team needs to be measured by outcome. Key factors in the success of a virtual team are effective formation of the team, trust and collaboration between members, and excellent communication.

In general, managers must be attuned to dynamics that are unique to virtual teams. In Blackwell's handbook on global management, Davison and Ekelund note that conflict can take on a specific character in a virtual environment. While it can explode quickly, it can dissipate just as fast. They stress the importance of being deliberate in writing communications, to avoid information being read out of context.

However, virtual teams can also present specific advantages. For example, they allow managers to assemble the best team members across an entire organization. Judy Zuccon and others advise that virtual teams must take advantage of numerous communications and collaborative tools, such as blogs and wikis.

Global Teams. With the globalization of business, multinational firms can assemble teams comprised of members in different countries throughout the world. To a large degree, information technology has made this possible. However, while some global teams do resemble virtual teams, others may take the form of more traditional

Page 931  |  Top of Article

teams. Some argue that even if a global team will be operating as a virtual team for the most part, initial in-person meetings are crucial to establishing a rapport among team members.

Often times, members of global teams are also members of different teams. Global teams are used to work on both short-term and long-term projects. However, as Julia C. Gluesing and Christina B. Gibson note In Blackwell's handbook on global management, global teams do not necessarily represent the most efficient manner of completing a task. They point out that issues of time and distance mean that some tasks can be accomplished with greater speed by local teams. Additionally, cultural differences can present a challenge to global teams. These differences can be made manifest in different communication styles, languages, and operating styles.

To combat this challenge, Gluesing and Gibson emphasize creating a shared “context” or environment, something akin to a third space where team members can create a shared culture, even if that culture and context survives only as long as the team itself does. The standard ways of creating this context are those that are used to create ritual and symbol in creating a company culture. Another way to ensure the effectiveness in global teams is selecting the team members carefully. Finally, Gluesing and Gibson stress the importance of clear communication. Communicate information as deliberately and specifically as possible to ensure that the message is being conveyed clearly.

Global teams also present unique challenges to managers and team leaders. Many of these have to do with managing cultural differences and perceptions. In Blackwell's handbook on global management, Bradley L. Kirk-man and Deanne N. Den Hartog point out that members of a global team from different nations may have different expectations regarding performance and management. Some team members may want to be recognized for their own performance, while this same measure may be of little to no importance for other team members. In general, those leading global teams must be very involved in how that team functions, paying close attention to maintaining an environment, virtual or otherwise, where all team members are comfortable operating.

CHARACTERISTICS OF EFFECTIVE TEAMS

Some characteristics of effective teams are clear direction and responsibilities, knowledgeable members, reasonable operating procedures, good interpersonal relationships, shared success and failures, and good external relationships.

Clear Direction. Clear direction means that the team is given a clear and distinct goal. The team may be empowered to determine how to achieve that goal, but management, when forming the team, generally sets the goal. A clear direction also means that team outcomes are measurable.

Clear Responsibilities. Clear responsibilities means that each team member understands what is expected of her or him within the team. The roles must be clear and interesting to the team members. Each team member needs to be able to rely on all the other members to carry out their roles so that the team can function effectively. Otherwise, one or two team members come to feel that they are doing all the work. This is one of the reasons so many individuals are initially reluctant to join teams.

Knowledgeable Members. An effective team will be comprised of individuals who have the skills and knowledge necessary to complete the team's task. Cooperation is essential at an early stage in inventorying the skills and knowledge each member brings to the team, and working to determine how to utilize those skills to accomplish the team task.

Reasonable Operating Procedures. All teams need a set of rules by which they operate. Sports teams, for example, operate according to a clearly laid-out set of rules about how the game is played. Similarly, work teams need a set of procedures to guide meetings, decision making, planning, division of tasks, and progress evaluation. Setting, and sticking to, procedures helps team members become comfortable relying on one another.

Interpersonal Relationships. Teams are composed of diverse individuals, each of whom comes to the team with his or her own set of values. Understanding and celebrating this diversity helps to make a stronger, more effective team.

Sharing Success and Failures. Everyone wants to feel appreciated. Within a team, members should be willing to express their appreciation, as well their criticisms, of others' efforts. Similarly, the organization must be willing to reward the team for successful completion of a task and hold all members responsible for failure.

External Relationships. In the process of building a strong team, groups external to the team are frequently ignored. In order for the team to successfully complete its task, it cannot operate in isolation from the rest of the organization. Teams need help from people within the organization who control important resources. Establishing clear lines of communication with these people early on will facilitate the completion of the team's task.

Page 932  |  Top of Article

TEAM BUILDING

The most successful teams go through five stages of development. Table 2 outlines these stages.

Forming. Forming is the stage when team members become acquainted with one another. They also assess the group task and the ground rules that will apply to that task. At this stage everyone is typically very polite and willing to go along with suggestions made by other team members. Team members try to avoid making enemies and are frequently more patient with one another than they might be later in the process.

Storming. As the novelty of being a member of the team wears off, conflict emerges. Members of the team emerge who want to exert greater influence over the process. Leadership struggles begin, as do interpersonal conflicts. Conflicts erupt over the task requirements and the best way to achieve that task. This is the stage at which listening and finding mutually acceptable resolutions to the conflict is most important. The team can either emerge united and ready to take on the assigned task, or divided, with some members taking a passive role.

Norming. In the norming stage team members make an effort to discover what standards of performance are acceptable. What do deadlines really mean? How high a level of quality is necessary? Does every member have to be at every meeting? What about developing sub-teams? If the team can establish harmonious relationships at this stage, they are ready to move on to the performing stage. Some teams, however, disband at this stage.

Table 2 Five Stages of Team Development

Performing. At this stage the team is ready to be productive and work on the task assigned. Team members' roles have been established and clarified. Group interaction should be relatively smooth as the team applies some of the problem-solving skills it learned in earlier stages to the task at hand. If the team has reached this stage without successfully working through the problems and issues of the earlier stages, it may disband or regress and work through those issues.

Adjournment. At some point almost all teams are disbanded, whether their task is completed or a team member leaves. On the one hand this can be a happy stage, with members congratulating one another on a job well done. On the other hand adjournment means the disruption of working arrangements that may have become comfortable and efficient, and possibly the end of friendships.

SELECTING THE TEAM MEMBERS

Forming an effective team is more complex than simply throwing a group of people together, assigning them a task, and hoping for the best. Potential team members need to be interviewed and their skills and knowledge should be assessed. Issues to consider in selecting team members include: the individual's motivation with respect to both the team and the task at hand; the attitudes and goals of potential team members; potential problems with intragroup relationships; and potential problems with relationships with external groups.

The organization needs to first assess what the skills, knowledge, and attitudes of potential team members should be. What are the tasks that need to be accomplished for the team to be successful? Have managers analyzed the jobs and developed an inventory of required skills and knowledge?

Once these steps have been completed, potential team members can be interviewed. Among the issues the interview process should cover are:

· What strengths does the individual bring to the team?

· What is she or he willing to work on improving?

· What problem solving style does the individual employ?

· Can she or he share information in an effective manner?

· Does the individual have good listening skills?

· Can the individual provide constructive feedback?

It is important to remember that effective teams are generally made up of a variety of personalities. The selection process needs to be structured so that it is not biased

Page 933  |  Top of Article

toward one personality type. An effective team needs both the thoughtful, detail-oriented individuals, as well as the outgoing, insightful individuals.

Additional considerations for building an effective team are being identified. There are four important factors to consider when selecting team members:

1. Years of professional work experience

2. Frequency of team participation

3. Type of team training

4. Situational entry to team assignments (volunteered, assigned, requested)

These factors can be effectively utilized by management when selecting team members to increase the opportunity for overall success.

ORGANIZATIONAL BENEFITS OF TEAMS

The major impetus for organizations to embrace the team concept is the effort to improve productivity and quality. Teams are a key component of many total quality management programs. The QS 9000 program, which suppliers to the major automobile manufacturers have embraced, relies on the team approach to ensure quality while maintaining a low-cost approach to manufacturing.

In addition to improved productivity and quality, some of an organization's major benefits from the use of teams are improved quality of work life for employees; reduced absenteeism and turnover; increased innovation; and improved organizational adaptability and flexibility. Effective implementation of teams can also improve office politics by improving the communication and trust between the team members.

Improved Quality of Work Life. Effective teams frequently improve the quality of work life for the employees. An effective team is generally one in which members are empowered to make decisions about how to get work done. Giving team members authority and control over the work processes reduces the amount of external control and increases the sense of ownership and accountability for the work being done. This helps to create a satisfying and rewarding work environment.

Lower Absenteeism and Turnover. A satisfying and rewarding work environment helps to lower absenteeism and turnover. Teams are particularly effective in this area. Membership in a work team gives an employee a sense of belonging, interaction with others on a regular basis, and recognition of achievements. All of these help to eliminate a sense of isolation within the organization. Team members identify with and feel pride in the work they are doing and come to rely on one another being there. At some companies, employees are evaluated based on their contribution to their team's efforts.

Teams are not appropriate for all organizations or in all types of businesses. Behavioral scientists are still working to determine exactly when teams will be most effective, what motivates team members, what types of business can best benefit from the implementation of teams, and so on. The study of the philosophy and psychology of teamwork is still in its infancy. While effective teams can produce extraordinary results, studies have found that an estimated 50 percent of self-directed work teams culminate in failure.

The introduction of effective and stable new technologies has greatly affected teams and teamwork. Collaborative software and other multimedia options are providing businesses with tools to conduct teamwork regardless of location or time. New issues of accountability, team structure, and team selection are arising for management to deal with and coordinate within the businesses' overall goals and objectives.

But as more and more businesses introduce the team concept, the wrinkles in the process are being ironed out and team popularity is growing. An increasing number of organizations are using teams to improve productivity and quality, and to solve a range of managerial problems.

Improved quality of work life and a reduction in absenteeism and turnover all contribute to a positive impact on the bottom line. Involving employees in teams helps the organization remain open to change and new ideas. As long as teams are seen as a means of improving the organization's ability to meet competitive challenges, teams will be part of the business world.

Reference

"Teams and Teamwork." Encyclopedia of Management, 6th ed., Gale, 2009, pp. 929-934. Gale eBooks, link.gale.com/apps/doc/CX3273100295/GVRL?u=umd_umuc&sid=GVRL&xid=51b42a37. Accessed 20 Feb. 2021.

Working with Groups and Teams

A team is a collaboration of people with different personalities that is led by a person with a favored leadership style. Managing the interactions of these personalities and styles as a group is an important aspect of project management.

Trust

Trust is the foundation for all relationships within a project. Without a minimum level of trust, communication breaks down, and eventually the project suffers in the form of costs increasing and schedules slipping. Often, when reviewing a project where the performance problems have captured the attention of upper management, the evidence of problems is the increase in project costs and the slippage in the project schedule. The underlying cause is usually blamed on communication breakdown. With deeper investigation, the communication breakdown is associated with a breakdown in trust.

On projects, trust is the filter through which we screen information that is shared and the filter we use to screen information we receive. The more trust that exists, the easier it is for information to flow through the filters. As trust diminishes, the filters become stronger and information has a harder time getting through, and projects that are highly dependent on an information-rich environment will suffer from information deprivation.

Contracts and Trust Relationships

The project typically begins with a charter or contract. A contract  is a legal agreement that includes penalties for any behavior or results not achieved. Contracts are based on an adversarial paradigm and do not lend themselves to creating an environment of trust. Contracts and charters are necessary to clearly establish the scope of the project, among other things, but they are not conducive to establishing a trusting project culture.

A relationship of mutual trust is less formal but vitally important. When a person or team enters into a relationship of mutual trust, each person’s reputation and self-respect are the drivers in meeting the intent of the relationship. A relationship of mutual trust within the context of a project is a commitment to an open and honest relationship. There is nothing that enforces the commitments in the relationship except the integrity of the people involved. Smaller, less complex projects can operate within the boundaries of a legal contract, but larger, more complex projects must develop a relationship of mutual trust to be successful.

Types of Trust

Svenn Lindskold (1978) describes four kinds of trust:

· Objective credibility—A personal characteristic that reflects the truthfulness of an individual that can be checked against observable facts.

· Attribution of benevolence.—A form of trust that is built on the examination of the person’s motives and the conclusion that they are not hostile.

· Nonmanipulative trust—A form of trust that correlates to a person’s self-interest and the predictability of a person’s behavior in acting consistent in that self-interest.

· High cost of lying—The type of trust that emerges when persons in authority raise the cost of lying so high that people will not lie because the penalty will be too high.

Creating Trust

Building trust on a project begins with the project manager. On complex projects, the assignment of a project manager with a high trust reputation can help establish the trust level needed. The project manager can also establish the cost of lying in a way that communicates an expectation and a value for trust on the project. Project managers can also assure that the official goals (stated goals) and operational goals (goals that are reinforced) are aligned. The project manager can create an atmosphere where informal communication is expected and reinforced.

The informal communication is important to establishing personal trust among team members and with the client. Allotting time during project start-up meetings to allow team members to develop a personal relationship is important to establishing the team trust. The informal discussion allows for a deeper understanding of the whole person and creates an atmosphere where trust can emerge.

High Cost of Lying in a Charleston Project

On a project in Charleston, South Carolina, the client was asking for more and more backup to information from the project. The project manager visited the client to better understand the reporting requirements and discovered the client did not trust the reports coming from the project and wanted validating material for each report. After some candid discussion, the project manager discovered that one of the project team members had provided information to the client that was inaccurate. The team member had made a mistake but had not corrected it with the client, hoping that the information would get lost in the stream of information from the project.The project manager removed the team member from the project for two main reasons. The project manager established that the cost of lying was high. The removal communicated to the project team an expectation of honesty. The project manager also reinforced a covenant with the client that reinforced the trust in the information the project provided. The requests for additional information declined, and the trust relationship between project personnel and the client remained high.

Small events that reduce trust often take place on a project without anyone remembering what happened to create the environment of distrust. Taking fast and decisive action to establish a high cost of lying, communicating the expectation of honesty, and creating an atmosphere of trust are critical steps a project manager can take to ensure the success of complex projects.

Project managers can also establish expectations of team members to respect individual differences and skills, look and react to the positives, recognize each other’s accomplishments, and value people’s self-esteem to increase a sense of the benevolent intent.

Managing Team Meetings

Team meetings are conducted differently depending on the purpose of the meeting, the leadership style that is appropriate for the meeting, and the personality types of the members of the team.

Action Item Meetings

Action item meetings are short meetings to develop a common understanding of what the short-term priorities are for the project, individual roles, and expectations for specific activities. This type of meeting is for sharing, not problem solving. Any problems that emerge from the discussion are assigned to a person, and another meeting is established to address the issue. Action item meetings focus on short-term activities, usually less than a week in duration.

The action item meeting is fact based and information oriented. It is a left-brain-type focus. The action item meeting has very little dialogue except to ask clarification questions. If discussion is needed or disagreement is not easily resolved, another problem-solving meeting is established to deal with that issue. On smaller topics, that meeting might take place immediately after the action item meeting and only include those people with an interest in the outcome of the discussion.

The project manager keeps the successful action item meeting short in duration and focused on only those items of information needed for the short-term project plan. The project manager will restate the common understandings of what activities are priorities and who will be responsible for the activities. Often these meetings can include a review of safety procedures or security procedures when these issues are important to the project. The leadership approach to action item meetings focuses on data, actions, and commitments. Although the project manager may observe stresses between project team members or other issues, they are not addressed in this meeting. These are fact-based meetings. If issues begin to arise between people, the project manager will develop other opportunities to address these issues in another forum. Using the Myers-Briggs descriptions, team members who favor thinking more than feeling and judging more than perceiving are more comfortable with this type of meeting.

Management Meetings

Management meetings are longer in duration and are focused on planning. They are oriented toward developing plans, tracking progress of existing plans, and making adjustments to plans in response to new information.

These meetings include focused discussion on generating a common understanding of the progress of the existing plan. This discussion is based on quantitative information provided on the progress of the schedule and other data, but the discussion is qualitative in evaluating the data to develop a more complete understanding of the data. The experience and opinions of the project leaders are solicited, and disagreement about meaning of the data is even encouraged to develop a deeper understanding of the data. Through this discussion, a common understanding of the status of the project should emerge, and the project manager invites discussion, includes people to offer their thoughts, and assures that disagreements are positive discussions about interpretation of the information and that disagreements do not become personal.

Management meetings also focus on developing midterm goals. For larger, more complex projects, the goals may be monthly or even quarterly. For smaller or less complex projects, weekly goals will provide the focus. The project manager focuses the discussion on the broad priorities for the next period and includes all the functional leaders in the discussion. The goals that emerge from the discussion should represent a common understanding of the priorities of the project for the next term.

For example, during the early phases of a project, the team is focused on developing a conceptual understanding of the project. A major milestone on complex projects is typically the completion of the conceptual plan. The project manager would lead a discussion on what needs to be accomplished to meet the project milestone and asks what potential barriers exist and what key resources are needed. From the discussion, the project team develops a few key goals that integrate the various functions of the project team and focus the team on priorities.

The following are some examples of goals during the conceptual phase:

· Developing a list of the procurement long lead items and defining critical dates

· Developing a human resources plan that identifies critical positions

· Developing and building agreement with the client on the project scope of work

Each of these goals is measurable and time framed. They can be developed as positive motivators and will take the project leaders and most of the project team to accomplish. They develop a general understanding of the priorities and are easy to remember.

Management meetings are a combination of left-brain thinking, which is fact based, and right-brain thinking, which is creative and innovative. Using the Myers-Briggs terminology, team members who prefer feeling over thinking and perceiving over judging can contribute ideas and perspectives on the project that the more fact-oriented members might miss.

The project manager allows and encourages conversation in developing and evaluating the goals but focuses the discussion on the goals and obstacles. Management meetings take on a different focus during the month. Meetings at the beginning of the month spend time addressing the progress and potential barriers to the goals developed the previous month. During the middle of the month, the project manager leads the team to develop next month’s goals as the team also works on the current month’s goals. Toward the end of the month as the goals for the month are accomplished, the meeting focuses more on the next month, enabling the team to remain goal focused during the life of the project.

Management meetings are also an opportunity to discover obstacles to goal achievement. The project team reallocates resources or develops alternative methods for accomplishing the goals. As the project team discusses the progress of project goals, the project manager explores possible obstacles and encourages exposing potential problems in achieving goals. The project manager focuses the team on finding solutions and avoids searching for blame.

The project manager uses a facilitative leadership approach, encouraging the management team to contribute their ideas, and builds consensus on what goals will bring the appropriate focus. The project manager keeps the focus on developing the goals, tracking progress, identifying barriers, and making adjustments to accomplish the management goals. Although there are typically meetings for scheduling and procurement and other meetings where goals are established and problems solved, the management meeting and the goal development process create alignment among the project leadership on the items critical to the project’s success.

Leadership Meetings

Leadership meetings are held less frequently and are longer in length. These meetings are used by the project manager to reflect on the project, to explore the larger issues of the project, and to back away from the day-to-day problem solving. The project manager will create a safe environment for sharing thoughts and evaluations of issues that are less data oriented. This is a right-brained, creative meeting that focuses on the people issues of the project: the relationship with the client, vendors, and project team. Team members who favor feeling, perceiving, and intuition often contribute valuable insights in this type of meeting. The team might also share perceptions by upper management and perceptions of the community in which the project is being executed. Where the time frame for action item meetings is in weeks and management meetings is in months, the time frame for leadership meetings is longer and takes in the entire length and impact of the project.

The project manager’s meeting management skill includes creating the right meeting atmosphere for the team discussion that is needed. For discussions based on data and facts, the project manager creates the action item type meeting. The conversation is focused on sharing information and clarification. The conversation for leadership meetings is the opposite. Discussion is more open ended and focused on creativity and innovation. Because each type of meeting requires a different meeting atmosphere, mixing the purposes of a meeting will make it difficult for the project manager to develop and maintain the appropriate kind of conversation.

Skilled project managers know what type of meeting is needed and how to develop an atmosphere to support the meeting type. Meetings of the action item type are focused on information sharing with little discussion. They require efficient communication of plans, progress, and other information team members need to plan and execute daily work. Management type meetings are focused on developing and progressing goals. Leadership meetings are more reflective and focused on the project mission and culture.

These three types of meetings do not cover all the types of project meetings. Specific problem-solving, vendor evaluation, and scheduling meetings are examples of typical project meetings. Understanding what kinds of meetings are needed on the project and creating the right focus for each meeting type is a critical project management skill.

Developing a Project Story

Every project develops a story. It is the short explanation that project team members give when asked about the project. This is also called the elevator speech, which is the explanation a person would give if he or she were in the elevator with the CEO and the CEO asked him or her to describe the project. Project stories often express important aspects of the project and can create a positive picture of the project or one that is less appealing.

A project story will develop, and creating a positive project story is a project management skill that helps the project. A positive project story is inviting to people and helps with the recruitment of talent to the project. A positive project story also helps when services are needed from functional departments within the company and in developing management support for the project. The project manager actively sets out to create the project story. Creating a positive story entails identifying the unique aspects of the project and building a positive outcome.

Building a Reputation for Project Completion Speed

A project manager in South Carolina always challenged people with speed. He identified the last project with similar characteristics and challenged the team to beat the time by weeks or months. The story became, “If you want a project done on time, this is the project team you need.” The project manager created a spirit of competition and fun. The project manager was a high-energy person, and the idea of finding a way to finish a project early seemed a natural outcome.

Every project manager can find the unique aspect of the project and build a sense of specialness about the project. The project becomes a good place to work, provides the team with a sense of accomplishment, and becomes the story created by the project manager.

 References

Caudron, S. (1995, December). Industry’s unsung heroes. Industry Week,  12–16.

Lindskold, S. (1978). Trust development, the GRIT Proposal, and the effects of conciliatory acts on conflict and corporation. Psychological Bulletin 85, 4, 772–793.

An Analysis of Virtual Team Characteristics: A Model for Virtual Project Managers

Introduction

Virtual teams have emerged as a powerful structure in the contemporary business environment, and are characterized by the use of information and communication technologies (ICTs), radical changes in organizational design, and the deployment of a multicultural workforce (Gilson et al, 2014; Greenberg et al., 2007). A virtual team can deliver large strategic, operational or commercial projects involving various concurrent and sequential activities by team members across various geographical localities (Lee-Kelley and Shanky, 2008). Virtual team formation has also been found useful for enabling organizations to pool the talents of their own employees, and employees of trading partners to meet the demands of today's competitive global environment (Gibson et al, 2014). However, the natural evolution of virtual teams in a dynamic business environment can leave many organizations grappling with a succession of problems, including: the formalization of virtual team work processes and strategies (Carter et al., 2015; Lee, 2009); the role of technology in a virtual team environment (Clear and MacDonell, 2011; Bryant et al., 2009); the issue of virtual team communication (Cramton and Orvis, 2003; Riopelle et al., 2003); the creation of suitable organizational structures for virtual team operations (Bryant et al., 2009; Johnson et al., 2001); and the interaction of personnel that comprise the virtual team and their supporters (Hill et al., 2014; Fan et al., 2011).

To derive the full benefits of the implemented virtual team structure, it is necessary to contend with these factors, and to create a general framework that may usefully incorporate solutions to the problem areas outlined. Although there is a wealth of research on a range of issues associated with virtual teams and collaboration technologies, no such integrated model is available to guide the managers of large organizations in the implementation and management of virtual teams. This paper fills this research gap by examining the use of virtual teams and collaboration technology, using critical success factors derived from the extant literature. The research is also facilitated by a practical empirical investigation that is carried-out in a multinational medical device company. This allows us to examine virtual teams in an actual company environment, as opposed to a highly structured, though artificial, setting in controlled laboratory settings. Potential strategies for the company regarding the use of virtual teams are explored, and the development of a virtual team model, covering major strands of the current research literature, are proposed and discussed.

Understanding Virtual Teams

Defining Virtual Teams

The term 'virtual team' is used to cover a wide range of activities and forms of technology-supported working (Shen et al, 2014; Anderson et al., 2007), with the terms 'distributed' or 'dispersed' teams having also been used interchangeably by some researchers (Lee-Kelley, 2006). A review of the relevant literature shows that arriving at an accepted definition of 'virtual teams' has proven contentious. While several definitions state that virtual teams extend across geographical, temporal and organizational boundaries, this viewpoint is not always taken in the literature (Magnusson, et al., 2014; Munkvold and Zigurs, 2007).Virtual teams, Clear and MacDonell, (2011) suggest, are work groups whose members are spread over geographic and/or organizational boundaries but are linked together via computer and communication technologies. Huang et al. (2010) posit that virtual teams are technology-enabled, and consist of members who can span different organizations, time zones, geographic locations, and cultures. Virtual project teams, according to Purvanova and Bono (2009), are characterized by temporary lifespan and membership, spatial dispersion, and the use of predominantly computer-mediated communication infrastructures.

In contrast, Johnson et al. (2001), state that the term 'virtual team' can just as easily be applied to groups of people who work no more than 50 feet apart. Distributed work across different locations and/or working times is not a phenomenon of the last 15 years only (Hertel et al., 2005). Kirkman and Mathieu (2005) agree that collocated, face-to-face teams can also exhibit high levels of virtuality. An alternative viewpoint suggests that it is more useful to focus upon the extent to which team members use 'virtual tools' to coordinate and execute team processes—gauging the amount of information value provided by such tools, and the synchronicity of team member virtual interactions—than upon arguments over geographic location, and how far apart team members must be to be considered part of a virtual team (Kirkman and Mathieu, 2005).

There has also been much debate around the definition of the term 'virtual'. Hertel et al. (2005) believe that the extent to which team members are dispersed and their reliance on electronic communication media should be considered dimensions, rather than as dichotomized criteria that distinguish virtual teams from conventional "face-to-face" teams; thus, they believe that it would be better to consider the 'virtuality' of a team. Researchers appear to be moving from defining virtual teams as a type of team that contrasts with a 'traditional' or 'conventional' face-to-face team (e.g. Guzzo and Dickson, 1996), to focusing on 'virtualness' as a potential characteristic of all teams (e.g. Griffith et al., 2003; Munkvold and Zigurs, 2007).

Benefits of Virtual Teams

Virtual teaming has been associated with a number of important benefits and advantages over collocated teams. They have been found to facilitate increased participation, as the nature of the communication technology used allows members to contribute based on their own schedules (Shen et al., 20l4).Virtual teams are noted for providing firms with advantages, such as increased utilization of employee-time, round-the-clock workforce availability, and the opportunity to leverage knowledge and expertise around the world (Clear and MacDonell, 2011). At the individual level, potential advantages of high virtuality include higher flexibility and time control together with higher responsibilities, work motivation, and empowerment of team members (Hertel et al., 2005).

Analyses of virtual team functioning have also found that the number of ideas generated increased with group size, when compared to face-to-face teams (Valacich et al, 1994); while Furst et al. (1999) posit that generating ideas and plans and choosing among alternatives can be completed most effectively through virtual teamwork. The creation of virtual teams also enables team leaders to access a greater pool of employees with the required expertise to address a wider range of problems (Zaccaro and Bader, 2003), and allows organizations to pool talent without having to physically relocate individuals (Greenberg et al., 2007). Virtual team leaders and members have access to a wider range of social contacts than would typically be available in more collocated teams (Zaccaro and Bader, 2003), allowing 'access to a potentially greater base of knowledge' (Griffith et al., 2003).

Critical Success Factors

Several authors have identified critical factors that attribute to the success of virtual teams. These are collected and grouped into three main areas below: organizational structure, team processes and virtual environment, and people.

Organizational Structure

Requirements for successfully supporting virtual teams, according to Germain and McGuire, (2014) include: human resource policies to recognize, support, and reward virtual team members and leaders; training—both during the initiation of a virtual team and also on a continuous basis; a receptive organizational culture; and continued management support. Rosen et al., (2007) emphasize the requirement to provide teams with the robust, responsive service they need to do their work efficiently. Shen et al., (2014) focus on collaboration and technology readiness, positing previous experience as a critical factor prior to implementation of the virtual team. They highlight the need for the organization to have some experience in collaboration technology before implementing virtual teams. This includes collaboration readiness, and technology readiness.

Team Processes and the Virtual Environment

Poltrock and Engelbeck (1999) outline the requirements for establishing an environment that can successfully support virtual teaming; including: providing opportunities for interaction that can substitute for those experienced in a traditional team setting; providing visibility for team members on each other's activities, availability and work progress; providing support to different modes of work; and providing an environment that operates as an integrated service, as it supports many people engaged in critical activities. Within this framework of priorities, Rezgui (2007) recommends the inclusion of face-to-face interactions, when possible, during the virtual team lifecycle and in particular during its inception, where the vision, mission, and goals can be communicated and shared. Zigurs (2003) stresses the importance of interspersing face-to-face communication with virtual meetings to help to build relationships and commitment that can enhance team performance. Maznevski and Chudoba (2000) meanwhile recommend that virtual team meetings should follow a 'temporal rhythm' by holding 'regular, intense face-to-face meetings, followed by less intensive, shorter interaction incidents using various media'. Cultural aspects remain important too: while ICTs have been found to mitigate the negative impact of intercultural miscommunication, differences in language, verbal styles, and nonverbal styles were found to influence team effectiveness (Shachaf, 2008).

Rezgui (2007) also offers several recommendations for successful virtual teams: give equal access to information, including project status and progression; develop strong communication and collaboration protocols, including code of conduct, standards for availability and acknowledgement; and establish trust and cohesion among both leaders and team members. Griffith et al. (2003) highlight the need to verbalize rules, terminologies, and descriptions, along with the development of strategies and technologies that support the transfer of knowledge within virtual team settings from individuals, through the group and eventually to organizational-level knowledge. Team empowerment and team-based reward systems are also considered to be crucial (Bryant et al., 2009). Kirkman and Mathieu (2005) highlight team empowerment—defined as an increased task motivation that is due to team members' collective, positive assessments of their organizational tasks (Kirkman and Rosen, 2000)—as an important factor in the performance of virtual teams. Chinowsky and Rojas (2003) believe that teams should be given the power to make independent decisions, with teams receiving the greatest independence functioning as better teams, and reducing the likelihood that geographic separation will affect the project outcome.

People

A consideration of the interaction of personnel that comprise the virtual team and the virtual team's support system is also essential for success. Trust, for example, has been found to be crucial in virtual teams (Schiller et al., 2014; Germain and McGuire, 2014), as many tasks are carried out independently and team members must rely on each other's expertise to carry out these tasks successfully. Estimating the level of trust in a virtual team allows the team leader(s) to assess the trustworthiness of each member and the cooperation situation between members (Fan et al., 2011), while a lack of trust can act as a barrier to knowledge sharing (Rosen et al., 2007).

As members of virtual teams often have different work, discipline, and culture-related cognitive schemata and expectancies of each other's behavior, these tend to act as 'filters' that team members can use when they are operating in a context, trying to achieve a result and perceiving each other's behavior; so that these differences in perception may become a source of misunderstanding and conflict in a virtual team (Rusman et al., 2010). Instilling all members of a virtual team with a sense of cultural awareness is seen as a vital means of creating trust and openness, particularly in a multi-national organization in which team members may be widely dispersed (Germain and McGuire, 2014).

Johnson et al. (2001) outline specific qualities required in good virtual team members, including self-discipline, individual accountability, excellent team participation skills, and trust. Rezgui (2007) suggest that it is important to involve project coordinators experienced in virtual team management; and that virtual project managers should exhibit a number of essential attributes that include being: a leader, a 'results catalyst', a facilitator, a 'barrier-buster', a business-analyzer, a coach, and a living example. Minas et al., (2014) suggest that the personality characteristics and psychological profile of virtual team members should also be considered when establishing virtual teams.

Managing Virtual Teams

Virtuality has its effect upon the type of management structures put in place to deal with virtual teams, as they begin to be deployed. Virtual team leaders perform a variety of functions within the team, with their role being primarily to develop team members into one cohesive unit, and to constantly monitor and manage ongoing team performance (Bell and Kozlowski, 2002). Reinforcing project objectives, while ensuring that team roles are not in conflict with team members' other commitments, is also identified as key (Chinowsky and Rojas, 2003; Hertel et al., 2005). Furthermore, it is seen as imperative to establish clear conflict resolution procedures in order to avoid minor disagreements between team members, as is the need for virtual team managers to visit dispersed team members to deliver evaluations and to maintain contact (Chinowsky and Rojas, 2003). It is also critically important that managers clearly define the virtual team's role within the context of the organization's greater mission, including the limits of the team's scope and responsibility (Carter et al., 2015).

For Lee (2009), project managers are often required to be both managers and leaders, with managers being responsible for: project initiation; project planning and scope management; time, cost, quality and resource management; and project control. Leaders, on the other hand, are responsible for: project initiating processes; risk management; communication; strategy development and goal setting; and motivating project team members. These tasks, she says, must be balanced. Managers must also overcome individual team member issues, such as feelings of isolation and decreased interpersonal contact, increased chances of misunderstandings and conflict escalation, and increased opportunities of role ambiguity and goal conflicts owing to commitments to different work-units (Hertel et al., 2005). Paul et al. (2004) suggest that a collaborative conflict management style is key to improving the performance of virtual teams, in that they found that a higher level of collaborative conflict management style results in active participation in the group decision making process, and a subsequent perception by virtual team members that the decision-making process is thorough and complete, with a consequent positive reflection on their satisfaction with the overall decision-making process.While a certain level of self-management on the part of the individual team member is practical and necessary when managing at a distance, it is still considered prudent to have regular and structured project status and performance reviews (Lee-Kelley, 2006).

Overall, managers must be politicians (Lee, 2009). While this may seem a negative trait, good political tactics can be positive, ethical, and moral; and can be deployed by project managers to obtain support for projects, promote communication, build the reputation of the project and its deliverables, and influence decision makers in favor of project goals.

Technology in Virtual Teams

Technology is a key enabler of the concept under review, and, as such, must be discussed in connection to virtual teams. Given that virtual teams operate differently to face- to-face team work, in that team members can be in widely dispersed geographic regions, it follows that technology has a tendency to enable a much wider team discussion than formerly. For Anderson et al. (2007), the supply chain provides a fascinating environment in which to investigate the impacts of technology-supported working, as it highlights the complexities of the contemporary workplace, comprising networks of social and organizational relationships between individuals and companies. Advances in technology facilitate communication, and the sharing of information among team members; as well as giving organizations access to a larger pool of skills (Shen et al., 2014; Greenberg et al., 2007), which can reduce product development time, increase organizational performance, lateral communication, and employee participation (Clear and MacDonnell, 2011). Lists of technologies actually recommended for virtual team work range from the sophisticated to the standard, and from communication mechanisms that are both synchronous and asynchronous in operation. Their usefulness for supporting virtual teams is generally assessed by means of empirical observation of study groups deploying the technologies in a virtual setting.

While Shachaf (2008) has noted that ICTs may go beyond their intended remit of simply overcoming geographical and time zone differences, to providing support for the creation and maintenance of team identity; they may also present a number of new contextual problems not familiar from face-to-face communication. Lee (2009) asks whether, in the emerging world of ethical monitoring of electronic systems, this may not lead to a multitude of ethical questions regarding privacy, trust, and employee rights, with virtual team managers needing to understand the ramifications of monitoring programs on the dynamics of virtual project work. There is the additional expense of training on the technologies to be used (Greenberg et al., 2007), and the alignment of technology used across multiple time zones, when the logistics of virtual team meetings are likely to become extremely complex (Shachaf, 2008).

Research Methodology

The aim of the study was to gather concrete, practical and context-dependent knowledge about virtual teams in a specific environment. Consequently a comprehensive inductive case study was used to collect the data required. According to Yin (2014) case studies allow for a detailed contextual analysis of a limited number of events or conditions and their relationship. They are lauded to be a valuable way of examining complex real-life situations. They are also used to explain a situation and to provide a basis to apply solutions to situations (Huberman and Miles, 2002). In this approach questions, insights, propositions, and pictures emerge from the data collection process. According to (Rowley 2002) case study research employs analytical rather than statistical generalization techniques. Here 'previously developed theory is used as a template with which to compare the empirical results of the case study'.

The unit of analysis in this study in this study comprised employees in the Irish site of a large multinational medical device organization who worked in a virtual team. These spanned many functions including product design, manufacturing, supply chain management and senior management. The goal of the study was to review the systems and technologies provided at an organizational level to facilitate collaboration; examine the teams currently working virtually in the company, separated by either location or time; and determine the success of virtual teaming in the company by canvassing opinions from virtual team members. Utilizing a semi-structured interview format, respondents from selected virtual teams were asked a set of applicable questions, which included information about the frequency of virtual team participation versus face-to-face meeting, technologies deployed, training received, perceived advantages and disadvantages of virtual team work, and management perceptions of the technologies and guidance required to support distributed teamwork. A non-probabilistic sampling method was favored to target respondents as statistical generalization was not one of our research objectives (Merriam, 2014). Purposeful sampling, or selecting a sample from which the maximum can be learned, was deemed be most appropriate for this study. Interviews continued until saturation point i.e. where no new data emerged. Where necessary additional documentation was supplied and explained to clarify any outstanding issues that respondents may have had in answering the questions.

Great care and attention was paid to maintaining scientific rigor in our study. Data collection techniques followed best practice in order to ensure reliability and validity. Interview questions were derived from the literature to steer the interviews. A pre-test combined with 3 pilot tests were conducted in advance to ensure that the correct information was gathered and that there was no ambiguity in the questions posed. Interviews lasted between 45 and 70 minutes. The answers to the questions were recorded by hand. Structured templates were used to ensure that the information was recorded in the same way for each interview. Case notes were written up within 24 hours of the interview. Clarifications and amendments were made where necessary. In order to satisfy Yin's (2009) requirement of linking the data to the proposition the analysis of the findings was based on the theoretical propositions. Furthermore a chain of evidence was maintained.

A TOWS matrix is used to structure the findings (Weihrich 1982). This study presents a three-step adaptation of the TOWS methodology: first, an analysis of the enterprise and its current approach to virtual teaming is given, which includes a survey of virtual team members to understand their experiences; secondly, these results are subsequently adapted to the TOWS matrix structure, and from this, potential strategies are identified and evaluated; and thirdly, using the information gathered in the case study,alongside that from the literature review, a model for the implementation and management of virtual teams is presented and assessed.

Virtual Teams in Practice: A Case Study of a Multinational Medical Device Manufacturer

Enterprise Profile

MedicDev is a world-wide developer, manufacturer and marketer of medical devices with approximately 25,000 employees worldwide. It has several facilities throughout the US, along with sites in Belgium, Costa Rica, Ireland, Japan, Netherlands, and Puerto Rico. MedicDev use a number a corporate-wide systems including HR Connect, and Learning Connect for locating, completing, and tracking training at MedicDev. PDM (Product Data Management), an electronic change control system, enables users to manage all product documentation facilitating the ability to design anywhere/build anywhere. It also uses GLS (Global Labeling System) for product labeling, and SAP (Systems, Applications and Products) incorporating functions such as customer service, distribution, planning, manufacturing and finance. MedicDev acquired a major medical device manufacturer in 2006 and another in 2014. Thus, one of the key drivers of improvements in communications technologies within MedicDev as a whole is the need to integrate former employees of the acquired firms into the MedicDev organization. This has led to improvements in MedicDev's Information Systems (IS) infrastructure. In this paper we focus upon the Irish branch of MedicDev, and examine the linkages across Irish and international operations accordingly. Analysis of the virtual teams was carried out to understand how successful and effective this work structure is in MedicDev. Table 1 gives a brief outline of virtual team work carried out by MedicDev's functions and departments, and summarizes how participants are physically separated (by geography, by time, or by function).

A list of advantages and disadvantages associated with working in a virtual team, as reported by the study's respondents, is given in Table 2.

Table 1. Virtual teamwork in MedicDev
Example of virtual teamwork	Description	Geographically Separated?	Separated by Time?	Separated by Function?
Corporate Risk Assessment Function	Functional group. Director is based in Ireland, with members from two other sites	Yes	Yes	No
Field Action Reporting System (FARS) Business Process Lead (BPL)	FARS administrator for all Irish sites, who works as part of teams investigating potential product issues in the field. May be a member of several investiga- tion teams simultaneously.	Yes	No	Yes
Operations Training	Functional group, supporting a 24 hour/6 day a week shift pattern (with members working 3 x 12 hour shifts), with a supervisor working a five day week on day shift.	No	Yes	No
Project Teams (Product related)	Multi-functional groups, with members from other sites, working towards a specific goal (e.g. product launch).	Yes	Yes	Yes
Project Teams (System related)	Cross-site (Ireland and US) team focused on risk management process.Various multi-site teams working on quality system-related projects.	Yes	Yes	No
Dualsite Documentation & Packaging Graphics Departments	Departments based in two different sites (Ireland and US) who report to one manager/director.	Yes	Yes	No

Analysis ofVirtual Teaming in MedicDev

A TOWS matrix (Weihrich 1982), has been used to analyze the state of virtual teaming in MedicDev (see table 3) and to determine what strategies the organization should follow to maximize the use of collaboration technologies. The matrix pairs the factors identified during a SWOT analysis to suggest new strategies for the organization. There are four types of resultant strategy, usually arranged in a gridlike structure:

· The SO (Strength-Opportunity) Strategy, which aims to maximize both the strengths and opportunities of the organization.

· The ST (Strength-Threat) Strategy, which aims to maximize the strengths and minimize the threats.

· The WO (Weakness-Opportunity) Strategy, which aims to minimize the weaknesses and to take advantage of the opportunities identified. This is a developmental strategy, which means the company takes steps to transform weaknesses into strengths (Weihrich, 1993).

· The WT (Weakness-Threat) Strategy is aimed at minimizing both the weaknesses and threats.

Based on the results, potential future strategies for the company regarding the use of virtual teams are explored. A best-practice model, of practical interest to management, which allows for the implementation of successful virtual teaming in multinational organizations, is also proposed, based upon experiences from the case study.

Proposed Future Strategy for MedicDev

Table 2: Perceived Advantages/Disadvantages of Virtual Teaming in MedicDev
Advantages of Virtual Teamwork	Disadvantages of Virtual Teamwork
· Time differences allow more time for team members to provide feedback · Distributed team members provide different perspec- tives on issues · More flexibility · Reduced office space required Larger pool of knowledge Less travel required · Team size is not a concern · Technology makes it easier to keep in contact E-mail can be kept as records · Time to formulate responses Increased pool of contacts · Fewer face-to-face meetings required Able to play role in corporate teams · Easier to get experienced people involved Can learn from people in other sites · Easier to maintain relationships with colleagues in other locations	· Lack of personal contact – “out of sight, out of mind” – can lead to feelings of isolation · Some information is more easily shared face-to-face Can take longer to get work done – more expla- nation required, more meetings required to gain consensus · Greater opportunities for misinterpretations and · conflict · Difficulties in reaching consensus due to disparity in · culture/systems/processes · Day-to-day activities may cause distractions from team tasks · Often insufficient face-to-face time to promote team building and to build personal relationships Differences in time zones or work patterns make it difficult to implement changes and schedule meetings · Lack of meeting etiquette/guidelines can make com- munications frustrating · Less respect/understanding of status and experience of other team members  · Less camaraderie among team members

The proposed strategies identified after our analysis must be carefully evaluated before a choice is made. An evaluation of the risks involved, the timing associated with the introduction of a new strategy, and the reaction of key stakeholders must be considered.

SO Strategy 1: Encourage and facilitate increased use of virtual teaming. An increased use of collaboration technology to facilitate work practices and teamwork has been noted across all organizations. Therefore, the continued use of these technologies is a logical strategy to pursue. However, a more formal, structured approach is required to ensure that teams using technology to communicate and share information perform as effectively as possible.

Table 3. TOWS Matrix for MedicDev’s Performance with Virtual Teaming
	Internal Strengths	Internal Weaknesses
	Highly skilled workforce Recognition and reward of successful workers Robust infrastructure Centralized HR function People with experience of virtual work at all levels of the organization Several collaboration technologies in use Collaboration is part of the organizations culture	Little training on technologies No formal training on managing virtual teams No training on how to work in a virtual team No formal guidelines on choosing the most suitable technologies Lack of awareness of the importance and value of virtual teaming and associated processes/technologies
External Opportunities	Strength | Opportunity (SO)	Weakness | Opportunity (WO)
Wide range of applicable technologies available Cost reduction through increased use of technology and reduction in travel or relocation expenses Increased use of collaboration technologies would mean less time spent travelling	Encourage increased use of collaboration technologies to form virtual teams in MedicDev Investigate the technologies currently available and provide criteria for assessing  and choosing  the right system	Develop a set of tools | best practices for the management of virtual teams Provide training on the use of collaboration technologies Provide training or guidance on working in a virtual team Provide tools for project managers to source and identify the right teammembers, regardless of location within the organization
External Threats	Strength | Threat (ST)	Weakness | Threat (WT)
Not optimizing resources by failing to maximize the advantages presented by use of collaboration technologies High fuel costs internationally, resulting in elevated travel costs	Encourage increased use of collaboration technologies in MedicDev to offset travel costs	Permanently relocate personnel to primary project location

SO Strategy 2: Investigate the technologies currently available and provide guidelines for choosing the right system from those currently available. This strategy is an extension of the first proposed strategy. A critical part of introducing a structured and integrated approach to virtual teaming is the provision of knowledge and tools to allow team managers to identify the most appropriate tools for the task at hand.

WO Strategy: Develop a structure to adequately support virtual teams, including guidance on best-practices, appropriate technologies, and training. This strategy focuses on the weaknesses identified during the analysis of virtual teams currently working within MedicDev. The opportunities show that the organization is ready for increased usage of virtual teams. However, to do this successfully, huge improvements are needed in the ways that virtual teamwork is currently viewed and supported within the organization.

ST Strategy: Reduce travel costs by encouraging and facilitating virtual teaming. This strategy provides a solution to the increased costing of business travel by encouraging and facilitating increased usage of the virtual team structure and associated technologies.

WT Strategy: Permanently relocate personnel to primary project location. This strategy may be viable where key team members are required to devote 100% of their time to a critical project. However, as a corporate-wide policy, it is not feasible.

The organization should pursue a strategy of formalizing the use of virtual teams, which requires changes at an organizational level.This includes providing adequate guidance and training on creating and managing virtual teams, and on choosing and implementing the most appropriate tools for these teams. Therefore, four of the five strategies identified can be pursued concurrently, as they are inter-related. The analysis of the current status of virtual teaming in MedicDev has shown a level of frustration around virtual teamwork, which indicates that there would be significant support for initiatives to improve its performance. Continuing developments in technology, along with improvements in infrastructure, mean that virtual teams' processes are continuously being improved. Therefore, the timing of the implementation of these strategies is ideal.

A Model for the Implementation and Management of Successful Virtual Teams

Based on the analysis discussed earlier, it is clear that a multinational organization such as MedicDev must pursue a strategy that supports the creation and management of virtual teams in a systematic manner. The most important issues identified during the analysis relate to: the lack of training available for virtual teams; the lack of appropriate tools and technology; of a properly structured approach to virtual team formation; and the absence of a general, coherent understanding of what virtual teams provide to an organization. Other, additional, factors highlighted by the case study relate to the greater difficulty of sharing information virtually, as opposed to face-to-face and of reaching consensus due to disparity in culture/systems/processes. The lack of personal interaction involved in virtual teams was also found to increase incidences of misinterpretation and lead to feelings of isolation and general dissatisfaction among virtual team members. The model proposed here aims to address these issues within a coherent, structured framework for the successful implementation and support of virtual teams.

The model identifies four key areas that must be addressed to facilitate successful technology-enabled collaboration between work teams.These areas are: (a) essential conditions for success; (b) organizational level tasks; (c) introduction of new technologies; and (d) creation and management of virtual teams. The model is conceptualized in Table 4.

Essential Conditions for Success

Table 4. Model for the Implementation of Virtual Teams and Associated Technologies
Essential Conditions for Success	Organizational Level Tasks	Introduction of New Technologies	Creation and Manage- ment of Virtual Teams
Support of senior management Robust IT Infrastructure Technologically Advanced Corporate Culture	Establish ownership for virtual team support Identify collaboration tools already in use Identify virtual teams that currently operate successfully Develop toolkit for virtual teams Develop training materials on tools Develop Guidelines for Identifying and Intro- ducing new technolo- gies Develop HR policies that support virtual teaming Develop structure for creating and managing virtual teams Raise awareness of virtual teaming	Detailed mapping to ensure technology fits Design of new technology should involve future users Where possible new technologies should be aligned with existing ones Local champions should be identified Rewards/benefits of new technologies should be emphasized Adequate support should be provided for new technologies Clear guidelines and training to be provided	Team manager must be trained on specific skills required to manage VTs Chose team members with appropriate skills Provide training on working in virtual teams including technologies Teams reporting structure to be clearly defined Provide opportunities for interaction and trust development Establish rules of en- gagement Establish clear goals and responsibilities Ensure team are aware of how their work sup- ports the overall goals of the organization Manager to visit remote team members as often as possible

An organization must have several fundamental characteristics in order successfully to support the implementation of virtual teaming and associated technologies. Firstly, the support of senior management is essential: not only are they required to advocate the use of virtual teaming; but they must drive the necessary corporate-wide changes to systems and policies that are required, and ensure that resources needed are made available. The organization's IT infrastructure must also be fully up-to-date and common to all team members, in order to ensure that new technologies and increased network traffic can be accommodated, and that geographically-dispersed team members can have equal input and access to information and opportunities. Lastly, the organization must be open and receptive to change, and preferably have a culture or history of knowledge-sharing, or at least a high degree of familiarity and ease with the use of technologies and systems.

Organizational Level Tasks

If the pre-requisites cited above are met, the organization must turn its attention to establishing policies and processes to support the establishment and management of virtual teams. It is essential that a responsible group is identified at an organizational level to provide focus for maintenance activities, to manage feedback, and to support virtual teams at other sites within the organization. Large organizations should have a centralized owner of the virtual team initiative to ensure that a common approach is maintained throughout, and that a common language is used when working with virtual teams. At the outset of a formal virtual teaming initiative, it is important to identify the existing teams within the organization who are already successfully using collaboration technologies, as their methodologies and the collaboration tools they use could underpin a best-practice model for the organization and provide a 'tool-kit' for new teams. It is also vital that corporate-wide training material be developed to ensure that the tools identified are fully utilized in a common way, ensuring that all team members can be fully involved, regardless of language or geographical location. Guidelines should be established at the corporate level to ensure that any risks associated with the introduction of new technologies are assessed consistently, and that lessons learned at one site can be shared appropriately. HR policies relating to the selection of suitable virtual team managers and members should also be established, and training must be provided, which increases awareness of the suitable behaviors associated with communication technology rather than face-to-face encounters, and which establishes criteria for identifying and rewarding successful teams.

Introduction of new technologies

A properly structured approach is particularly critical in relation to the introduction of new technologies. Before a new collaboration technology is implemented, there must be a detailed mapping of the existing tools used within the organization of the experience of intended users, along with the capability of the IT infrastructure, in order to ensure that the proposed technology 'fits' the requirements of the team and the organization. Before this mapping can take place, it is vital that there is a clear understanding of the tasks to be performed by the technology. When a new technology or system needs to be designed (or customized to meet the needs of the organization), it is critical that input is sought from the future users of the new system as well as current users, and that the support of key stakeholders, such as the organization's leadership, is established early in the project.

System experts and champions should be identified to facilitate acceptance and awareness of the rewards and benefits associated with the new technology. Any new technologies should be aligned to work in conjunction with existing technologies, systems, and business processes to maximize their usefulness and effectiveness. Ongoing technical support should be made available for new technologies, and its performance should be monitored before and after implementation to establish criteria to evaluate its success. Finally, formal training material should be developed for all new technologies, in addition to manuals and procedures governing the use of the system, and its implementation should be timed carefully to meet the needs of the organization.

Creation and Management of Virtual Teams

The team manager must have the appropriate characteristics and skills required to manage the virtual team.These include: the ability effectively to manage communication; to develop relationships with team members, recognizing their opinions and suggestions; and to identify and address issues of low motivation and conflict within the team. They should also encourage self-leadership and be able to recognize emergent leaders, promote and maintain team trust and cohesion, and studiously monitor team performance. It is also crucial that they ensure that appropriate tools are available for all aspects of the work to be performed by the virtual team, and that they lead by example as far as the adherence to team processes and the use of collaboration tools are concerned. It is important that the team members selected have the appropriate skills for working on a virtual team:

· self-management and self-discipline, with individual accountability

· openness to technology and technological change

· excellent team-participation skills, with experience of working in teams, particularly in using technology to communicate

· propensity to trust—i.e. to have confidence in other team members to fulfill their tasks and to behave in a consistent and predictable manner

· suitable personality traits that include: patience, perseverance, persistence, tolerance, flexibility, and understanding

It is also critical that team participants should be trained on how to work effectively in a virtual team, and that team members, regardless of location, should receive the same level of training. This should include guidelines on using communications tools such as email, voicemail and audio-and video-conferencing effectively, and cultural awareness for multinational teams. Furthermore, team members must understand where they fit within the team itself, and also where the team lies within the overall organization. It is recommended that virtual teams should meet face-to-face at least at the initial formation of the team, to help in the creation of relationships and trust between members. Teams should be given opportunities to interact outside of formal group meetings; more informal, social interaction has been shown to lead to more productive teams as it helps to establish trust and to create a shared group identity.

Finally, clear rules of engagement should be established during the team's formation:

· the establishment of equal access to information for all members

· promotion of continuous communication between team members

· continuous performance feedback from the team manager

· the establishment of norms around the use of communication technologies, including terminologies to support knowledge transfer

· the establishment of a clear code of conduct, along with standards for availability and acknowledgement, plus the establishment of guidelines for meetings and discussions to ensure that minor disagreements do not escalate

To work effectively, clear goals and responsibilities should be established. Adherence to these should be monitored by the team manager. It is important that the team roles assigned do not conflict with team members' commitments to other work units. The importance of the work carried out by the team in relation to the overall organization should be emphasized. Where team members are in geographically-dispersed locations, it is important for the team manager to visit remote team members to counteract any feelings of isolation that may arise.

Comparison of virtual team model against current literature For organizational level issues, commentators such as Carter et al, (2015) and Germain and McGuire, (2014) and have highlighted the requirements for human resource policies to recognize, support, and reward virtual team members and leaders, the provision of training, a receptive organizational culture, continued management support, the provision of adequate support organizations, and experience in collaboration technology. These issues are collectively tackled in the 'organizational level' and 'conditions for success' portions of the model, where issues such as ownership, senior management support, collaboration technologies, and training are addressed.

Similarly, the 'creation/management level' provides detailed support for what may be termed 'team processes' and 'virtual environmental' factors. Zakaria and Yusof, (2015) outline the need for favorable interaction opportunities in virtual teaming, virtual team visibility, support for different work modes (including the mixing of face-to-face and virtual team meetings (Maznevski and Chudoba, 2000; Zigurs, 2003; Rezgui, 2007), and the provision of an integrated service environment for the operation of the virtual team, including the avoidance of 'intercultural miscommunication' (Shachaf, 2008). Team empowerment and team-based reward systems (Kirkman et al., 2004; Bryant et al., 2009) are also considered in the model, in the provisions made for each aspect of the team process and the actual operative virtual environment itself.

People are examined too, as it is acknowledged that a consideration of the interaction of personnel that comprise the virtual team and the virtual team's support system is of considerable importance if the virtual team is to be a success. The model widely supports the tenets proposed by Johnson et al. (2001) on this subject: self-discipline of virtual team members, individual accountability for results, a focus on team participation skills, and issues of trust. In particular, virtual team trust (Schiller et al., 2014; Germain and McGuire, 2014; Fan et al., 2011) is tackled in the 'creation/management level' of the model, as too is the issue of instilling all members of a virtual team with a sense of cultural awareness (Zakaria and Yusof, 2015). Managing virtual teams is also not neglected (Lee-Kelley, 2006; Greenberg et al., 2007; Lee, 2009): tools for tackling personality characteristics and psychological profiling of team members, building teams with appropriate skills, and management's role in team creation are addressed in the 'organizational level' segment, and the 'creation/ management level' segment of the virtual team model.

Finally, the critical success factors surrounding the introduction of new technologies (Shen et al., 2014; Clear and MacDonell, 2011; Shachaf, 2008; Bryant et al., 2009), such as: mapping technologies against existing organizational infrastructure to ensure an adequate fit, designing and implementing new technologies, aligning new technologies with existing technologies in the firm, providing incentives for the adoption of new technologies, technology support, and guidelines for usage: these are addressed in the 'technology section' of the virtual team model.

Conclusions

Developments in information and communication technologies, along with a drive towards flatter, leaner organizations, have contributed to the growth of virtual teams. Although there is a wealth of research on a range of issues associated with virtual teams and collaboration technologies, no integrated model is available to guide project managers of large organizations in the implementation and management of virtual teams. The purpose of this paper was to develop a model for the implementation and management of virtual teams using the information gathered from reviews of literature concerning virtual teams and collaboration technologies, along with an analysis of the virtual team experience in a modern multinational organization.

To investigate how virtual teams and collaboration technologies are implemented and managed in an organizational setting, a case study of a multinational medical device manufacturer has been carried out. This study involves an analysis of the current approach to virtual teaming in this organization, including a survey of virtual team members to understand their experiences, and a review of the technologies available to facilitate collaboration. A TOWS matrix is used to structure these findings. From this, potential strategies are identified and evaluated. Finally, using the information gathered in the case study, along with the literature reviews, a model for the implementation and management of virtual teams is presented and assessed.

Provided that the organization is prepared to invest in the necessary updating and maintenance of the relevant IT infrastructure, and in providing systematic training and recruitment, there are a number of key benefits associated with the implementation of the resultant virtual team model. It provides a holistic framework that takes into account the specific skills and abilities that are most appropriate for working in a dispersed team, as well as meeting requirements at the overall organizational level. Furthermore, it emphasizes the importance of the organization's culture and attitude towards change and incorporating new systems and processes, and the need for senior management support to ensure that tools and techniques are disseminated appropriately throughout the business.

Limitations of the virtual team model proposed should also be noted:

· The model has been developed principally from one in-depth case study of a multinational medical device manufacturer, and would benefit from additional studies carried-out in other industries, and from the opinions and experience of managers practice virtual team creation and implementation.

· Full implementation of the model would mean a considerable investment of time and money to ensure that the organization could meet the requirements of the model—this investment, it is acknowledged, may be difficult to secure.

· It may be difficult to garner adequate support at all levels of the organization to ensure that the guidelines outlined in the model are disseminated and integrate—this may be a particular problem in large organizations with employees from many different countries and cultures.

· It is imperative to assign an owner to the model. For the model to work in a dispersed organization, an owner for the support of virtual teaming would have to be identified.

· Choosing team members with the skills outlined in the model may not be possible if teams are already in place, and managers do not always have the opportunity to choose new members.

The literature reviewed relating to virtual teams was mainly concerned with teams formed to complete a particular object or task. From the case study, it is evident that other, more permanent forms, of virtual teams exist. In MedicDev, some departments and functional groups have been reorganized permanently to incorporate members from more than one site. In addition, production demands mean that some teams are permanently separated by shift patterns. Little or no research has been carried out on the specific challenges faced by such teams, but owing to the increased global nature of business—and the benefits presented by further developments in collaboration technologies— this scenario will become more common, particularly in multinational organizations.

The virtual team model presented in this study incorporates the guidelines for successful virtual teams and technology implementation. However, its true value can only be established through its application in organizations.This study demonstrated that MedicDev does not have a structured approach to virtual teaming. This can be explained to some extent by the emergent nature of this form of teamwork and the rapid growth in technologies that can facilitate collaboration in dispersed work groups. As a result, the absence of an appropriate structure for virtual teamwork would be expected in many organizations. Further research is required to determine if this is, in fact, the case.

Team Principles or Guidelines

One excellent source of information when thinking about appropriate guidelines and guiding principles for a virtual team is your own experience as a member of a virtual team. Consider your experiences in team assignments as well as experiences you may have had at work. What elements made those experiences particularly positive or negative? Were you part of a team that decided not to choose a project leader, for example? Did that work well for the team, or did you find that there was a lack of direction, resulting in a final product that you weren't happy with? Did the team communicate frequently and work well together, or was there conflict that created tension and made the project difficult to complete? It can be very difficult to build trust in virtual teams. One possible aid to trust-building is for virtual teams to incorporate social communication into their routines (Pinjani & Palvia, 2013).

Also think about how team size, composition, roles, and leadership factor into effective guidelines.

References

Pinjani, P. & Palvia, P. (2013). Trust and knowledge sharing in diverse global virtual teams. Information & Management, (50)4,144-153. doi:10.1016/j.im.2012.10.002

Follow-the-Sun

Managers of organizations with teams in multiple countries are challenged by how to best organize work when there are significant time zone (temporal) differences across the organization's locations. For some organizations, the primary focus is on finding a fair and equitable way to schedule team meetings. Some companies opt to assign everything associated with a given task, project, or business component to each location, requiring limited communication or coordination among the varried locations. Then there are businesses that want to figure out how to leverage time zone differences for strategic advantage. Rather than viewing time zones as a challenge, these organizations see an opportunity to organize project tasks so the business can, for example, shorten a product's time to market, improve customer service, or expedite billing processes by enabling work to continue around the clock (Verburg, Bosch-Sijtsema, & Vartianen, 2012; Kumnar, R. L, 2011). Some firms have experimented with a follow-the-sun (FTS) strategy (see Utilizing Follow-the-Sun Development Project Strategies in the Resources section) for this purpose, with mixed results. This particular strategy requires careful planning and coordination, along with rich communication among the participating teams and their managers (Anantatmula & Thomas, 2010).

References

Anantatmula, V., & Thomas, M. (2010). Managing global projects: A structured approach for better performance. Project Management Journal, 41(2), 60-72. doi:10.1002/pmj.20168. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=48836961&site=eds-live&scope=site

Kumar, R. L. (2011). Managing globally distributed projects and processes: A dynamic capability enabled by effective global IT management. Journal Of Global Information Technology Management, 14(1), 1-5. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=iih&AN=56663792&site=eds-live&scope=site

Verburg, R. M., Bosch-Sijtsema, P., & Vartianinen, M. (2013, January). Getting it done: Critical success factors for project managers in virtual work settings. International Journal of Project Management, 31(1), 68 - 79. Doi: 10.1016/j.ijproman.2012.04.005. Retrieved from http://www.sciencedirect.com.ezproxy.umgc.edu/science/article/pii/S0263786312000610

Using Follow-the-Sun Development Project Strategies

Follow the sun (FTS) is a project management strategy that takes advantage of time zone differences between teams in widely separated locations. FTS strategies are currently being used successfully in several applications. Many companies operate service and support call centers in different time zones. This allows them to improve responsiveness to customer complaints. Some back-office support functions also utilize the FTS model. For example, a patient’s MRI, taken late in the day at San Diego health clinic, is sent to India to be read and interpreted, forwarded to Paris for diagnosis and determination of possible treatments, and finally returned to the doctor in San Diego, so she can discuss available and appropriate treatment options with her patient the next morning.

The FTS scenarios above are examples of repetitive and well-defined procedures. They don’t take advantage of the primary benefit of FTS, which is continuous development of tasks that require innovation and collaboration to create novel solutions. A global development project (GDP) model uses geographically dispersed teams to complete a project as quickly, efficiently, and cost effectively as possible. An overall project is divided into subtasks that are distributed to teams located in countries that provide specific advantages. As the subtasks are completed, they are submitted to the project management team for integration into an overall solution. FTS is a GDP strategy that allows work on a project to continue 24 hours per day. Instead of stopping work for the day and picking up again the following morning, as the workday ends for one team (in New York, for example), work is handed off to the next team to the west (Honolulu), thus following the sun. In this way, a task is worked on around the clock, instead of sitting idle during non--work hours.

Advantages of FTS Development Project Strategy

Most of the recognized benefits of global development projects accrue to FTS projects, including the following:

· reduced costs by moving activities to low wage countries

· improved quality by accessing a worldwide skilled labor force

· increased innovation and shared best-practices by utilizing diverse skills

· improved relations with, and responsiveness to, customers

Two potential advantages of using a FTS strategy are time-to-market improvements and improved quality of the final product. Because the teams are distributed across different time zones, work on a project can be continuous—potentially 24 hours per day. Compared to a single site working eight hours per day, the time to completion for a three-site project can, in theory, be reduced by 67 percent.

Improvements in project quality are due primarily to frequent reviews and progress summaries. At the end of each work day, the teams must ready their day’s work for handoff to the next team by summarizing progress, identifying problems encountered, providing details of tasks completed, etc. These daily reviews motivate teams to operate efficiently and effectively (Conchúir, Ågerfalk, Olsson, & Fitzgerald, 2009; Kroll, Hess, Audy, & Prikladnicki, 2011).

Limitations of FTS Project Strategy

There are some inherent limitations to the FTS model—specifically involving knowledge-based products and parallel task scheduling. Because work must be continually transferred between work teams, use of the FTS model is limited to services and applications where the work content or data can be transmitted electronically, also called knowledge-based products. Knowledgebased products include such creations as books or plays, building designs, video games, and simulations. This helps to explain why FTS as a development project strategy is most commonly associated with service and software development projects.

FTS also precludes parallel task scheduling. Because each team passes work on to the next team for further development, all of the teams must be focused on the same task until it is completed. They can then move on to another task in sequential fashion. It has been found that only certain portions of the development process can be treated this way, namely testing, troubleshooting, and defect resolution (Carmel, Espinosa, & Dubinsky, 2010).

FTS in Theory and Practice

In theory, FTS appears to be easy to implement and have clear benefits. Ideally, each team focuses on advancing the project and has ownership of the project while working on it. That is, each team works autonomously and has authority to make changes without waiting for approvals from the other teams. At the end of the day, the team documents the changes and progress they have made, identifies any open problems, and passes the work on to the next team. The work loops continuously through the teams until the project is completed.

The goal of the follow the sun support model is to utilize workers in different time zones to increase productivity.

Follow-the-Sun Model

Time zone differences pose several challenges for geographically distributed virtual teams. These include:

· communications—Because FTS requires teams in one time zone to be working while teams in other time zones are off, face-to-face communications are harder to arrange, and most communication must therefore be asynchronous.

· culture—When there are few opportunities for face-to-face meetings, even synchronous virtual meetings, it may be difficult to overcome challenges presented by cultural differences.

· coordination and control—Management structures have to be replicated at each site and the lack of regular, direct contact between sites increases the potential for conflicts in priorities and methods.

Project Handoff

The most critical activity in the FTS model is the transfer of in-progress work between team sites (Carmel, Espinosa, & Dubinsky, 2010; Kroll, Richardson, Audy, & Fernandez, 2014). The process is called handoff. The handoff must be thorough and complete so that the next and subsequent teams can pick up and continue working seamlessly. Any questions that arise that cannot be resolved synchronously could lead to delays. For example, if Team 3 has a question about a change made by Team 1, they may need to wait a full day for an answer. If further clarification is required, further delays ensue.

Additionally, the time to prepare handoffs is taken from direct project effort and the advantages of FTS are reduced by the requirements to make FTS effective. In practice, it has been found that the difficulties inherent in the handoff process are complex to manage (Carmel, Dubinsky, & Espinosa, 2009). So, the 67 percent theoretical time savings are much less. Recent work in FTS has focused on improving the handoff process, and there is hope that these techniques can be successfully applied in real world situations (Kroll, Richardson, Audy, & Fernandez, 2014).

Conclusion

As a project development strategy, FTS offers real opportunities. The key to successfully implementing FTS is understanding that it is not an add-on tool, but must be included and accommodated in the initial planning stages of a project. Necessary resources, such as a central repository for files and common communications software, must be provided and site selection must provide for sequential team efforts as well as access to essential skills. Most critically, the handoff process must be carefully managed to provide the seamless transfer of work in progress without significantly reducing the time devoted to project tasks.

References

Carmel, E., Dubinsky, Y, & Espinosa, A. (2009). Follow the sun software development: New perspectives, conceptual foundation, and exploratory field study. System Sciences, 2009. HICSS'09. 42nd Hawaii International Conference, 19. IEEE.

Carmel, E., Espinosa, J.A., & Dubinsky, Y. (2010). "Follow the sun" workflow in global software development. Journal of Management Information Systems, 27(1), 1738.

Conchúir, E.Ó., Ågerfalk, P.J., Olsson, H.H., & Fitzgerald, B. (2009). Global software development: Where are the benefits?. Communications of the ACM, 52(8), 127131.

Kroll, J., Hess, E.R., Audy, J.L.N, & Prikladnicki, R. (2011). August. Researching into follow-the-sun software development: Challenges and opportunities. Global Software Engineering (ICGSE), 2011 6th IEEE International Conference, 6065. IEEE.

Kroll, J., Richardson, I., Audy, J.L., & Fernandez, J. (2014). Handoffs management in follow-the-sun software projects: A case study. System Sciences (HICSS), 2014 47th Hawaii International Conference, 331339. IEEE.

Team Size

As you can imagine, the question of the optimal team size has benefited from much discussion among both academics and practitioners. We know that more is not necessarily better when it comes to putting together a team. Too many members can increase the likelihood of "free-ridership" or conflict. However, we also know that the tasks we want teams to undertake require a sufficient number of members to ensure the work gets done in a timely manner. Moreover, many projects benefit from multiple and diverse perspectives, which are more likely to be accessed in a large team. Sadly, there is no rule or formula that can be universally applied when deciding on team size.

Thus, your goal should be to discover as much as you can about the benefits and issues associated with team size and its implications for effectiveness, but also to accept that your ability to offer specific recommendations is inevitably limited. The article Smaller Teams—Better Teamwork in the Resources section can help by providing more information on the efficacy of small teams.

Your team may decide it is useful to research team size to ensure you have the depth of understanding required to identify and analyze the consequences for optimal team performance associated with team size. The journal Organizational Behavior and Human Decision Processes may be particularly useful. Adding a search for titles that include the word team should get you to some potentially useful research. Two authors who have an interest in team size and who have published in this journal are Jennifer Mueller from the University of San Diego and Bradley Staats from the University of North Carolina at Chapel Hill.

Resources

Smaller teams–better teamwork: How to keep project teams small

Smaller teams–better teamwork: How to keep project teams small☆

Cite

https://doi.org/10.1016/j.bushor.2004.10.013 Get rights and content

Abstract

Scholars and practitioners have long suggested that smaller teams perform better teamwork, yet it is surprising to find that many organizations are using teams of 10 and more members. This paper explains how large team size affects teamwork. Moreover, it suggests four ways to keep teams small: (1) Create a multiteam project; (2) create a core team and an extended team; (3) outsource tasks and define team-external contributions; and (4) keep members on the team only for specific project phases.

1. The size of teams

Team size matters, with smaller teams demonstrating better teamwork. From early research by Ziller (1957) and Steiner (1966) to more recent models of team effectiveness (e.g., Hackman, 1987), team size has been considered an important structural variable determining team processes (e.g., team collaboration, social loafing, etc.) and, subsequently, team performance (i.e., the effectiveness and efficiency of task completion). Laboratory research suggests that smaller teams provide for more direct and efficient intrateam communication (Bray et al., 1978), greater effort by all team members (i.e., reduced social loafing; Latané et al., 1979), and, hence, a better utilization of all team members' potential.

Despite such evidence, teams in business organizations today are often too large. Project leaders and managers commonly aim for securing a maximally large head count for their project to ‘ensure’ that objectives can be met. In cross-functional projects, such ‘inflated’ teams are often the result of departmental interests. All organizational units that are potentially affected by the team's work want to be represented in the project.

This was the case, for example, in a large-scale product-development project within the European automotive industry. Leaders of the 39 teams involved reported that their teams were, on average, too large by 1.2 members, with team members generally endorsing this assessment, judging their teams too large by 0.8 members. The teams in this project had between 3 and 16 members, with an average of 9.4 members per team. None, however, suffered from a lack of work; to the contrary, all teams were hard pressed to keep up with project deadlines, but both team leaders and members recognized that the sheer size of their teams created trouble. As outlined in this article, their intuitive notions regarding team size affecting their teams' ability to perform are correct and supported by theory, as well as empirical evidence.

In light of prior research that confirms the benefits of smaller teams and the contrasting tendency of organizations to do the opposite by inflating teams, this article has two main objectives. First, it explains how increasing team size negatively affects performance-relevant team processes, such as information sharing. Second, it outlines four ways for managers of team-based organizations to keep teams small.

2. Teams and teamwork

Teams are social systems of two or more people that are embedded in an organization (context), whose members perceive themselves as such and are perceived as members by others (identity), and who collaborate on a common task (teamwork). It is the last part of this definition that differentiates teams from other formal organizational groups or units, such as departments and divisions. Teamwork, or the collaborative work process toward a common task, creates limits regarding the number of members that a team can have while still functioning well as a collaborative work unit.

Teams, like any other organizational unit, need adequate staffing in terms of both quality and quantity of personnel. Unlike less collaborative forms of work organization, however, a team's work performance depends on its ability to efficiently and effectively work in a directly interactive mode to achieve a common team output. In less collaborative organizational units, the collective output largely represents the aggregate of individuals' work products. For instance, customer service agents conduct their work of answering customer calls largely independently from other departmental members. While the agents might cross-train and support one another or collectively set work schedules, their primary work is done individually, often supported by a supervisor who may provide assistance on more difficult customer requests. By contrast, team members are mutually dependent on one another in their effort to produce a common team output. For instance, in a software development team, programming engineers, computer hardware engineers, systems network experts, and software application field experts (e.g., accountants, if the software developed was accounting software) need to collaborate to design and develop a coherent software product. Here, the emphasis is not on individual outputs, but on the common output that team members work interactively toward. Hence, teamwork is the essence of a team's work process, while less collaborative work organizations rely chiefly on individuals' work processes.

Conceptual and empirical analyses by Hoegl and Gemuenden (2001) on teamwork quality, and similarly by Sethi and Nicholson (2001) on charged team behavior, acknowledge that performance-relevant team processes include not only task-related elements, such as cooperation and integration, but also social elements such as enthusiasm, drive, and commitment. To capture the complex nature of team members working together, Hoegl and Gemuenden demonstrate that the quality of teamwork can comprehensively be assessed by considering six facets of the collaborative work process: communication, coordination, balance of member contributions, mutual support, effort, and cohesion. The six teamwork quality facets embrace elements of both task-related and social interaction within teams (Cummings, 1978). The underlying proposition is that highly collaborative teams display behaviors related to all six teamwork quality facets. In teams with high teamwork quality, members openly communicate relevant information, coordinate their individual activities, ensure that all team members can contribute their knowledge to their full potential, mutually support each other in team discussion and individual task work, establish and maintain work norms of high effort, and foster an adequate level of team cohesion where team members maintain the group. Teamwork quality has been shown to be directly related to team performance (Easley et al., 2003, Hoegl & Gemuenden, 2001, Hoegl et al., 2004), and this effect becomes stronger as the innovativeness of the team task increases (Hoegl et al., 2003).

3. How team size affects teamwork

The size of a team has profound effects on several aspects of teamwork quality. First, the sharing of technical and coordinative information within the team becomes significantly more difficult as the number of team members increases (Zenger & Lawrence, 1989). As team size grows, the complexity of the communication structure between all members increases dramatically. Fig. 1 illustrates this effect, showing the jump in the complexity of full communication structures in a team of 4 (6 links) versus a team of 10 (45 links). While the communication between all members becomes increasingly difficult, larger team size also creates a stronger need to coordinate the contributions from the various team members. The combination of these two effects highlights how teamwork becomes increasingly resource– and time–consuming as the team adds members. This exponential increase in interaction linkages may well have been a consideration in the assessments of team members and leaders in the aforementioned European automotive industry case. While adding one more member to a team of nine may seem insignificant, it does add substantially to the complexity of the team's communication structure.

1. Download : Download full-size image

Fig. 1. Large teams make it harder to communicate: full communication structure with 4 and 10 members.

Team size is an important determinant of the social loafing phenomenon, whereby individuals decrease their effort as the number of people in the group increases. Classic experiments by German psychologist Ringelmann at the beginning of the 20th century first documented a steep decrease of effort in men engaged in a tug of war (Kravitz & Martin, 1986). Where one man, on average, pulled about 63 kg, groups of three pulled 160 kg, and groups of eight pulled 248 kg. Hence, in groups of eight, the men put in about 49% of the effort they expended when pulling alone. Later experiments demonstrate that this loss in performance is, in fact, due to decreased effort, rather than coordination losses or other possible causes (e.g., Harkins & Petty, 1982).

Similarly, Bray et al. (1978) find that, as the size of problem-solving teams increases, so does the number of ‘nonparticipating’ members. This term refers to individuals that do not actively participate in the team's collaborative work. Bray et al. coin the term ‘functional size’, referring to those individuals that are contributing to the team's work. This illustrates that, as team size increases, it becomes more difficult for team members to contribute their knowledge, skills, and experience to their full potential, thus hindering an essential element of teamwork quality, i.e., the balance of member contributions. This, of course, is particularly critical in cross-functional or multidisciplinary teams, where the full contribution of all team members' diverse skills and knowledge is a key to team performance.

4. There is no ‘optimal’ team size

Research evidence does not provide an absolute optimal team size in terms of a specific number, nor is there any conclusive indication of an absolute optimal range. As scholars have pointed out, the right team size will certainly depend on the work to be performed (Hackman, 1987), with some tasks requiring more team members than others do. By the same token, the above discussion highlights limitations to team size stemming from its effect on the collaborative work processes.

Therefore, team size must be determined with respect to both staffing requirements, deriving from the size of the project task, as well as teamwork requirements, deriving from task complexity and uncertainty (Hoegl et al., 2003). As projects get larger in size, thus may also the need to add personnel. Similarly, as the task is complex and uncertain, team members with diverse skill sets and knowledge bases must be included in the team to address task complexity, and the team must collaborate closely to integrate this knowledge.

Investigating the effects of team size based on data from 58 software development projects, it was found that the top five teams in terms of teamwork quality ranged in size from 3 to 6 members, with an average of 4.4 members. In contrast, the bottom five teams ranged in size from 7 to 9 members, with an average of 7.8 members. Moreover, teams of three members achieved, on average, 63% of the teamwork quality of the best team, while teams of nine members achieved, on average, 28% of the teamwork quality of the best team.

A very similar pattern, although to varying degrees, is present in all six teamwork quality facets (see Fig. 2). As such, these findings support the above-discussed notion that the smaller the team, the better the teamwork, although there was no indication regarding optimal team size; teams of three worked better than teams of six did, which, in turn, worked better than teams of nine did. In addition, given the lower teamwork quality of teams of 9, these results suggest that teams with 10 or more members cannot really be expected to perform high-quality teamwork. Very similar results in other studies involving product-development teams from different industries, such as automotive, medical devices, high-tech machine tools, customized software solutions, and plant construction, have been found, as well.

1. Download : Download full-size image

Fig. 2. Smaller teams–better teamwork: average score for teamwork quality (and its six facets) for three- and nine-person teams as percent of the best team. Note: Teamwork quality is a higher-order construct made up of its six facets: communication, coordination, balance of member contributions, mutual support, effort, and cohesion.

Given this evidence supporting the claims of scholars and the intuitions of practitioners, outlined are four ways to keep teams small while providing the breadth and depth of knowledge, as well as the necessary personnel capacity to successfully complete a given project.

5. Four ways to keep project teams small

(1)

Create a multiteam project. Larger projects should be assigned to several small teams, rather than a single large one. Often, the structure of the project task is such that it can be split up into multiple subprojects assigned to smaller teams. For example, a software development endeavor taking 20 software engineers to complete in a given time should be split up into four teams of 5 each, rather than two teams of 10 or even one team of 20. The four teams would then be assigned modules of the overall software product, with their own quality, schedule, and budget objectives. These teams are the primary work units of such a temporary team-based organization (Mohrman et al., 1995). There may be an overall project leader facilitating the coordination between teams, or the teams themselves coordinate with each other (Hoegl et al., 2004).

(2)

Core team versus extended team. Cross-functional teams often inflate in size unnecessarily because of departmental interests to be involved or the project leader's interest to keep everyone involved. Both of these considerations are valid, as cross-functional teams are designed to integrate different functional expertise on a certain project (e.g., product-development projects with the involvement of R&D, manufacturing, marketing, etc.). Hence, keeping all organizational units that are affected by an innovative process informed and involved is certain to ensure their commitment, particularly in later implementation phases (Olson et al., 2001). However, rather than having representatives from various organizational groups be included as formal team members, it is better to establish a core team of individuals that are absolutely necessary for task completion to work directly and interactively together on the project. The remaining individuals outside of the core team may take roles of consulting or advisory members, who are informed on a regular basis and can provide input as needed. It is important, however, to clearly communicate these roles to ensure that everyone understands that it is the core team members who are responsible for the project's completion and who interactively work toward this common goal. The core team is the primary work unit with its resources, objectives, and commitments. The members of the extended team provide somewhat formalized informational links to other groups.

(3)

Define team-external contributions. To keep teams small and functional, specific tasks and contributions toward project completion can be identified for team-external individuals or groups to provide, rather than including those individuals or groups within the team itself. For example, most every software product utilizes databases. Such databases are often standardized modules, for which technical interfaces to the other parts of the software can be defined. Moreover, the database specialist's expertise is not likely to support other task decisions or processes (important for product functionality, robustness, performance, and so on) beyond the database itself. Hence, this module lends itself to be outsourced to team-external individuals and groups. Rather than increase the software development team by a database specialist, it is better to define this as a team-external contribution that the team coordinates (Ancona & Caldwell, 1992).

(4)

Project phase-specific team members. Often, projects have identifiable phases with different task requirements. Such is commonly the case in product-development projects, where the early concept phase requires creativity and conceptual thinking, while the design phase focuses on the actual development of initial prototypes, and later phases focus on product testing and production preparation (Hoegl et al., 2004). It is beneficial to keep team members on board during the project phases for which they are needed, rather than carrying them on the team throughout the whole project. As such, phase-specific members would join the team and leave it as needed, helping to achieve the project's objectives for a specific project phase.

6. Conclusion

Despite ample research evidence and the intuition of many practitioners that teamwork quality is lost in large teams, most organizations find it difficult to keep teams small. This work attempted to shed light on this widespread issue, explain why large team size hinders teamwork, and suggest four ways to keep teams lean and functional as collaborative work units.

Team Composition

The topic of team composition has benefited from extensive study. Scholars and researchers have attempted to answer whether performance is likely to be stronger when a team is composed of members who are diverse (heterogeneous) or when its members are similar (homogeneous). Three examples of research related to this question are referenced below. The first, by Mello and Ruckes (2006), looks at the likelihood of increased information sources in heterogeneous teams, recognizing that better decisions may be the result. The challenge for such teams and their leaders is that there may be greater differences in opinion. In other words, achieving consensus can be difficult. As a result, tthose members who disagree with a decision may reduce their effort and commitment. This is one reason some leaders may prefer a more homogeneous team.

The second article, by Steffens, Terjensen, and Davidsson (2012), focuses on new venture team composition and venture persistence and performance over time. This study found that while higher levels of team homogeneity had a positive impact on short term outcomes, the positive effect was reduced over time.

The Turel and Yi (2010) study looked at the traits of team members. Their interest was in investigating the potential impact of team heterogeneity in levels of extroversion and conscientiousness on team performance. Perhaps not surprisingly, this work supports the assumption that if there are great differences in conscientiousness among team members, there is likely to be a negative impact on team performance. The authors explore whether increasing the heterogeneity in the extroversion trait helps to mitigate this effect. The authors' research supports the need for managers to pay close attention to member traits and fit for the team and the tasks with which that team is charged.

References

Mello, A., & Ruckes, M. (2006). Team composition. The Journal of Business, 79(3), 1019–1039. 1019. doi:10.1086/500668. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21080239&site=eds-live&scope=site

Steffens, P., Terjensen, S., Davidsson, P. (2012, October). Birds of a feather get lost together: New venture team composition and performance. Small Business Economics, 39(3), 727–743. doi: 10.1007/s11187-011-9358-z. Retrieved from http://www.jstor.org.ezproxy.umgc.edu/stable/41682936?&seq=1#page_scan_tab_contents

Turel, O., & Yi, Z. (2010). Does virtual team composition matter? Trait and problem-solving configuration effects on team performance. Behaviour & Information Technology, 29(4), 363–375. doi:10.1080/01449291003752922. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=51376897&site=eds-live&scope=site

Resources

Does virtual team composition matter? Trait and problem-solving configuration effects on team performance.

Team Composition

Birds of a Feather Get Lost Together: New Venture Team Composition and Performance

Team Roles

When reading about teams you will find lots of discussion about the role of leader but may see very little about other roles that are equally important for success. While this will vary depending upon the project and the team, examples of roles that can be important include the people responsible for such tasks as:

· scheduling and organizing meetings

· creating and maintaining the project plan

· within-team and external communications (perhaps not the same person)

· research and writing

· reviewing and editing

· facilitating meetings and making sure all members are heard

A main point to remember is that high-performing teams are likely to require members to execute and share many different roles.

References

Understanding team design characteristics. (2012). In ORGANIZATIONAL BEHAVIOR (v.1.1). Saylor Academy. Retrieved from https://saylordotorg.github.io/text_organizational-behavior-v1.1/s13-03-understanding-team-design-char.html

Check Your Knowledge

Question 1

When designing a team, what are some of the factors that should be considered when determining the size of the team?

"Understanding Team Design Characteristics" (2012) suggests that teams are usually composed of fewer than 10 people, though anywhere between two and 20 members is a good rule of thumb. Benefits of having a smaller team are that social loafing is less likely; it is easier to agree on a plan of action and avoid serious conflict; it is easier for team members to know what roles and responsibilities the rest of the team members have; and there is greater accountability for each team member to fulfill his/her responsibilities. As noted in this section of the chapter, "The bottom line is that team size should be matched to the goals of the team." Source: "Managing Groups and Teams," 2012, "How large should my team be?"

Question 2

When designing a team, what are some of the benefits associated with having a diverse team makeup, and what are some of the challenges?

Benefits of having a diverse team membership are that one member's blind spots are more likely to be spotted by a team member who doesn't share the same background and biases. Equally, on a diverse team, one team member's weaknesses can be offset by another's strengths. A diverse membership can also help a team arrive at more creative and effective solutions to problems. Interestingly, teams that believe in the value of diversity perform better than teams that do not. A diverse team membership can create some challenges as well, such as the need for team members to be more sensitive to potential cultural differences. Source: "Managing Groups and Teams," 2012, "How diverse should my team be?"

Question 3

By now, you have likely had the experience of working in a virtual team. In your experience, what were some of the benefits? And what were some of the challenges?

You may have had virtual team experience in your workplace, and because you are completing your MBA at least partially online, you have probably been a member of a virtual team. You may have had some very good team experiences: where everyone clicked immediately, the project roles almost seemed to assign themselves, and the final product was one of which you were very proud. You may also have had some challenging virtual team experiences: where some team members were nonparticipative, or where there was a significant amount of conflict. Benefits of working in a virtual team are that you have the opportunity to work with a more diverse group than might be possible if you were in a face-to-face workplace or study situation, and there is generally more time flexibility, because individual team members can work on the project whenever they have the time to do so. Challenges facing virtual teams include establishing trust among team members; finding the best means for communicating (email, teleconferences, discussion group posts, etc.); finding mutually convenient times for team discussions; and determining team roles and responsibilities.

Question 4

The team role diagram lists 10 typical team roles in three categories (task roles, social roles, and boundary roles). When you think back on your previous team experiences, which team roles do you usually tend to fill? How difficult do you think it would be for you to fill some of the other team roles?

As you look at these roles and their descriptions (contractor, creator, contributor, completer, critic, cooperator, communicator, calibrator, consul, and coordinator), you may see several that cause you to think "Ah! That's definitely me." (Or perhaps "Oh, that's definitely NOT me!"). You may discover that you are already quite versatile, or you may find that there are only one or two roles that you currently feel comfortable filling. If the latter, you might want to pick a different role or roles for an upcoming team project to widen your experience. The most important thing to note is that all of these roles have value. Source: "Managing Groups and Teams," 2012, "Team Roles."

Question 5

An important factor in team success is task interdependence, or the extent to which team members need to depend on one another for information, support, or materials. What are the four types of task interdependence? Describe each one briefly.

1. Pooled interdependence: Team members independently work on parts of the task, and then combine these separate parts to create the team's output.

2. Sequential interdependence: Each team member's work is used as the basis for the next team member's work, so that the final product is created in sequence.

3. Reciprocal interdependence: Team members work together at each stage of the project to create a final product that best represents the entire team.

4. Outcome interdependence: The reward that each team member receives depends upon the performance of others on the team. Source: "Managing Groups and Teams," 2012, "Team Tasks."

Resources

Managing Groups and Teams

Team Leadership

Many people have formed views about what it takes to be an effective leader in general and about team leadership in particular. Most will have had some experiences with school, sports, social, or work teams where there have been formal leaders. Most will also have been in situations where informal leaders emerged.

Of course, it will be important to inform these views with insights gleaned from experts who have spent their careers studying and thinking about workplace teams and team leadership. When you conduct a search for helpful work on team leadership, you will find that scholars have explored many questions, in many different contexts, in the interest of discovering the elements and implications of team performance. It is safe to assume that if you have a question, scholars somewhere have either studied and written about it or are in the process of doing so. Before doing any research, however, it is important to identify and agree on the questions you see as being particularly important for your circumstances.

The following topics have been explored in depth in the articles listed below:

· Whether having a team leader matters, and if so, when, and why. See, for example, Heidal & Antonsen, 2014; Hackman & Wageman, 2004; Pearce & Herbik, 2004; Webber & Webber, 2015; Yun, Faraj, Xiao, & Sims, 2003.

· Whether it is good to rely on external team leadership when the ultimate goal is to empower the team to take responsibility for making its own decisions. See, for example, Rapp, Gilson, Mathieu, & Ruddy, 2016; Druskat & Wheeler, 2003.

· How and under what circumstances informal team leaders emerge. See, for example, Zhang, Waldman, & Wang, 2012.

· How team leadership may be developed—see, for example, Sitkin & Hackman, 2011.

· Whether virtual teams require different approaches to team leadership and, if so, how and why. See, for example, Hoch & Kozlowski, 2014; Minkin, 2012; Hoch & Wegge, 2008; Zhang & Fjermestad, 2006.

· Whether sharing team leadership works. See, for example, Hoch, Pearce, & Weizel, 2010.

References

Druskat, V. U., & Wheeler, J. V. (2003). Managing from the boundary: The effective leadership of self-managing work teams. Academy of Management Journal, 46(2003), pp. 435–457. Retrieved from http://dx.doi.org.ezproxy.umgc.edu/10.2307/30040637

Hackman, J. R., & Wageman, R. (2004). When and how team leaders matter. Research in Organizational Behavior, 26, 37–74. doi:10.1016/S0191-3085(04)26002-6

Heldal, F., & Antonsen, S. (2014). Team leadership in a high-risk organization: The role of contextual factors. Small Group Research, 45(4), 376–399. doi:10.1177/1046496414533617

Hoch, J. E., & Kozlowski, S. W. J. (2014). Leading virtual teams: Hierarchical leadership, structural supports, and shared team leadership. Journal of Applied Psychology, 99(3), 390–403. doi:10.1037/a0030264

Hoch, J. E., Pearce, C. L., & Welzel, L. (2010). Is the most effective team leadership shared? The impact of shared leadership, age diversity, and coordination on team performance. Journal of Personnel Psychology, 9(3), 105–116. doi:10.1027/1866-5888/a000020

Hoch, J. E., & Wegge, J. (2008). Shared leadership in virtual teams: The impact of cognitive, affective and behavioural team leadership on team performance. Retrieved from http://www.qucosa.de/fileadmin/data/qucosa/documents/14122/GeNeMe2008_253-265.pdf.

Minkin, S. J. (2012). Virtual team leadership and implementation in the US Air Force. International Journal of Networking and Virtual Organisations, 10(2), 169–186. DOI: 10.1504/IJNVO.2012.045733

Pearce, C. L., & Herbik, P. A. (2004). Citizenship behavior at the team level of analysis: The effects of team leadership, team commitment, perceived team support, and team size. Journal of Social Psychology, 144(3), 293–310. Retrieved from www.scopus.com

Rapp, T. L., Gilson, L. L., Mathieu, J. E., & Ruddy, T. (2016). Leading empowered teams: An examination of the role of external team leaders and team coaches. Leadership Quarterly, 27(1), 109–123. doi:10.1016/j.leaqua.2015.08.005

Sitkin, S. B., & Hackman, J. R. (2011). Developing team leadership: An interview with coach Mike Krzyzewski. Academy of Management Learning and Education, 10(3), 494–501. doi:10.5465/amle.2011.0005

Webber, S. S., & Webber, D. S. (2015, July - August). Launching and leading intense teams. Business Horizons, 58(4), 449–457. doi:10.1016/j.bushor.2015.03.009

Yun, S., Faraj, S., Xiao, Y., & Sims Jr., H. P. (2003). Team leadership and coordination in trauma resuscitation. In Advances in Interdisciplinary Studies of Work Teams, 9, 189–214. Retrieved from www.scopus.com

Zhang, S., & Fjermestad, J. (2006). Bridging the gap between traditional leadership theories and virtual team leadership. International Journal of Technology, Policy and Management,6(3), 274–291. doi: 10.1504/IJTPM.2006.011253

Zhang, Z., Waldman, D. A., & Wang, Z. (2012). A multilevel investigation of leader- member exchange, informal leader emergence, and individual and team performance. Personnel Psychology, 65(1), 49–78. doi:10.1111/j.1744-6570.2011.01238.x

Check Your Knowledge

Question 1

What is an informal, or emergent, leader? Why are informal leaders important within a team?

An informal leader is someone who does not hold a formal leadership position but who has the characteristics, behaviors, and attitudes that have caused him or her to emerge and be perceived by others as a leader. An informal leader is a person who is recognized by and is able to influence others even though s/he may have little or no formal power or authority. As Zhang, Waldman, and Wang (2012) note, "informal leader emergence in work teams is essential for effective teamwork to occur" (p. 69).

They determined as well that if the team has a shared vision, team members are more likely to step up as informal leaders. In addition, the appearance of emergent leaders within a team is predictive of better performance by individual team members, as well as by the overall team (Zhang et al., 2012).

Question 2

Rapp, Gilson, Mathieu, and Ruddy (2016) studied team empowerment and whether leaders external to the team, or team coaches (also external to the team) were effective in guiding teams toward empowerment.

Briefly, what insights did they uncover? Why does team empowerment matter?

"Teams characterized by higher levels of psychological empowerment are more committed to their team and the success of their team. Indeed, there is evidence that empowered teams are more proactive, engage in more knowledge sharing and process improvement, and exhibit more effective team processes" (Rapp et al., 2016, p. 114). The study by Rapp et al. determined that team coaches were more effective in guiding teams toward empowerment than were external team leaders. They posited that team leaders may have been consciously or unconsciously exhibiting resistance to team empowerment, which they may have viewed as threatening to their own roles and level of control (p. 120).

Question 3

Does traditional hierarchical leadership work as well in a virtual team as it does in a face-to-face team? Are there other approaches that can be used in virtual teams to support and supplement hierarchical leadership?

Hoch and Kozlowski (2012) investigated the leadership in virtual teams and determined that the virtual nature of these teams made it more difficult for hierarchical leaders to influence team performance. Hoch and Kozlowski found that in virtual teams, structural supports such as fair and reliable reward systems and transparent communication and information management were important ways to strengthen leadership. Their other major finding was that shared team leadership, (the involvement of team members themselves), was effective in strengthening leadership of the teams as well as improving their performance. Source: Hoch & Kozlowski, 2012, pp. 398-399.

Question 4

What are some of the key points made by Hackman and Wageman (2005) regarding the importance of team leaders?

The question asked by Hackman and Wageman (2005) is whether "team leaders [are] really a main, or the main, influence on performance?" (p. 38). In response, they argue that in many cases, team leaders are not the main influence on performance (for example, in cases where the environment in which the team operates and the processes used by the team are heavily constrained by outside factors). In situations such as this, the team leader may be unable to exert much influence on the performance of the team. Importantly, Hackman and Wageman (2005) explain that there are times when team conditions are less constrained.

When this is the case, leaders can have more influence on their team's performance. The authors conclude that team effort (e.g., coordination, motivation, and commitment), performance strategy (e.g., being innovative and avoiding reliance on habits that may not be productive), and knowledge and skill (e.g., avoiding automatic acceptance of individuals' ideas and contributions and sharing of expertise) are all areas where a team leader can use coaching to help improve team performance.

Team Dynamics

Teams have become more than a way of life in organizations: they have become a necessity for organizations that need to move quickly. Though teams have been around forever, the reality of the rapidly changing business environment, paired with the complexity of the problems they face, doesn’t allow “business as usual.” Organizations in almost every industry were using some type of teams in the 1970s, but the ever-increasing competition, including global markets, greatly increased the speed with which organizations began using teams as a competitive strategy and tactic.

Why Use Teams?

Believe it or not, before teams became ubiquitous, organizational problems were handled in a primarily linear fashion according to the hierarchical organization chart. A problem would arise, and a department would begin exploring the issue. Members of that department would come to some sort of conclusion, and would forward to another department, and so on. Problems would take forever to resolve because each additional department would advocate for some other solution, and months would go by even to get each department to form an initial position on the problem.

Even when a solution was finally agreed upon, sending out the proposed solution to various departments would result in efforts that were not synchronized. One department would jump forward, another would lag, and the whole effort might end up a mess.

Teamwork brought a range of perspective to the table from the very beginning, allowing for a a synchronized solution in implementation. When teams are successful, they are powerful.

The paradox of teams is that they are hard work. Teams must be led and managed, and participants have to have clear and unambiguous common goals, or work will quickly fall apart. Everyone has worked on teams that were failures. In those cases, it was not the construct called teams that failed; the members of the team failed. Failure in teams can always be avoided through effective leadership.

Definitions

A team is a small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approaches for which they hold themselves mutually accountable (Katzenbach & Smith, 1993). Virtual teams are those that do their work from different locations.

The type of team used, whether virtual or physical, is purely a function of the organization’s dispersion—and getting the right people at the table to perform the work or realize the purpose. Any team requires a strong leader and facilitator to keep work progressing; virtual teams require an even higher degree of facilitation given the geographic dispersion and the challenges of using meeting technology. There are times when the team model is used with people who are in the organization as well as others who are not in the organization—from subsidiaries, vendors, or outside experts. Again, facilitation is key to successful teams.

There are several main purposes for teamwork:

1. The first and overriding purpose is to bring complementary skills together to work on a common problem, project, or to deliver a product or service. Complementary skills provide the opportunity for synergy not otherwise available by individuals working alone, or even in succession.

2. The second purpose, related to the first, is to attain much better process results than any one individual could attain (e.g., decision making and problem solving). There are numerous examples of this in the teams literature.

3. The third purpose is to deliver better performance numbers than individuals could deliver (e.g., productivity, cycle time, quality).

4. The fourth is to develop the team members more rapidly than they might otherwise have been developed. Cross-training of all team members is a frequently used tool, but team members will also benefit from "osmosis training"—in other words, simply by working side by side with team members having different skills and knowledge, an individual will learn and grow.

5. A fifth purpose is to provide social needs in an organization. This is especially important in organizations where the work itself may not be very motivating and fulfilling.

6. A sixth purpose, which surfaced only a few years ago, is to provide organizational leadership as companies "de-layer" their organizations and operate with many fewer middle managers. Teams often take on many heretofore managerial roles.

At the end of the day, the real purpose of teams is shown in the graphic below: bringing synergistic experts together to solve problems can help the organization grow another competitive advantage—deepening organizational capacity and efficiency.

 

 

What Do Teams Do?

There are thousands of types of teams, and their purposes can be placed into three categories, which are discussed below.

Teams That Recommend Things

Resources

Team Development

How many times have you heard managers say , “Let’s put a team together to explore the problem!” The time frame of these teams is usually short, unless it’s a major project. There is a specific problem being explored, so the team will typically work for a finite time span. These teams are called task forces, project teams, continuous improvement (CI) teams, audit teams, safety teams, and lean manufacturing teams, among others. America’s response to Japan’s quality superiority in the 1970s was been to use CI teams for quality, speed, and productivity. The results from these early teams helped managers see the value of teams for numerous other purposes.

Teams That Make or Do Things

These teams are more or less a permanent part of the organization’s structure. The team is usually comprised of front-line workers who design things (e.g., automobiles, software), make a product, or deliver a service. Most teams that make or do things are longer term in nature than those whose goal is a recommendation. For instance, automobile companies often assemble design teams who may be together for two to three years designing a new car. The US auto industry used to take four or five years to design a new car, but the Japanese showed us how it could be done in much less time by using cross-functional teams. 

Teams That Run Things

This type of team is usually at the top of a company (including board members), business unit, facility, or even a function or department. They may be called the Leadership Team, C-Suite Team, CEO’s Team, Top Team, Plant Manager’s Team, etc. Regardless of its name, this team runs the organization over which it is responsible and accountable. While this type of team is seen far less often than other types, the impact of the decisions they are making are quite large.

Making Teams Successful

The rise of virtual teams in the last 15 or 20 years has led to much research on what makes teams successful face to face, so that specific attention could be paid to fostering those traits even when the team is virtual. 

Research has concluded that the most successful teams in the world display the following best practices .

Trust

Like in any human relationship, trust must be present, but it cannot be expected that trust will be present when a team is first formed. Quite often, team members have not had the opportunity to work together, and trust cannot be assumed. Instead, the team leadership must purposefully work to build trust. Trust can be fostered by the establishment of a commonality of purpose. The more the team’s work can be articulated—and the role each person will play in that work clarified—the stronger can be trust. 

Far more important, however, is clarification of the expectations team members have for each other on their work on a team. Many team failures can be traced to an expectation one person had that others didn’t meet. Because expectations weren’t met, the person with the expectation feels betrayed, and trust isn’t present. Expert team leads do everything they can up front to find out what expectations are in people’s head tacitly, and extract those out explicitly so that everyone can see and respond to them. So, best practice is to spend tremendous amounts of time up front on a team establishing common “team rules ”—behavioral expectations—and having every team member agree to them, while also articulating very specifically what the goals of the team are so everyone feels completely informed as to what the team’s work is.

Clear Communications Plan

Not all members of the team will be present for all conversations; in fact, one benefit of having teams is that different specialists will work on different aspects of the problem. But, each team’s work has to be communicated to the rest of the team so that everyone knows where the project is, where bottlenecks may be occurring, and what work must be completed next. When team members aren’t fully informed where the work is, they are more likely to feel like their contribution is not valued, and they will contribute less.

Recognition of Progress and Accomplishments

Leaders that empower teams must make sure the team is set up for success, that expectations are clear and attainable, and that the work of the team will be valued by the organization. A way to do this is to ensure that the team receives specific recognition for their successes, and that they get full credit for their work.

Planning

To make a team effective, once the goals of the team are clearly articulated, the team should take time to develop a plan up front. Spending more time developing a plan that ensures the team will finish its work on time, including building in contingencies, and will make sure that the team’s work doesn’t have to all happen at once. We’ve all been on teams that inevitably had to scramble at the very end to finish on time; that can be avoided as much as possible with careful planning.

Active Facilitation

No meeting should be held without careful statement of the work that needs to be accomplished during that meeting: what decisions must be made, what work is next to be focused on, what work should be reported on. In addition, facilitators must know when to move the team forward, when to stop and address issues that arise (such as team behavior not meeting stated expectations). The facilitator, usually the team leader, makes or breaks the progress of the team.

Enforce Accountability

Team members must keep each other accountable to the work, given team expectations, given the timeline, and given each person’s area of expertise. 

Clear Decision Making Structure

Teams need to be able to make decisions; they must be given the authority and trust to make decisions that the organization will seriously consider and implement. How decisions are made should be clearly articulated. Teams that decide they are going to get consensus for every decision may be dooming themselves for failure. 

Larson and LaFasto (1989) found several characteristics of effective teams, several of which touch upon the importance of a clear decision making structure:

· Establish urgency, performance standards and direction.

· Select members for skill and skill potential, not personality.

· Pay particular attention to first meetings and actions.

· Set some clear rules for behavior.

· Set and seize upon a few immediate performance oriented tasks and goals.

· Challenge the team regularly with fresh facts and information.

· Spend lots of time together.

· Exploit the power of positive feedback, recognition, and reward.

Team Roles

The subject of team roles is important because it addresses required human behaviors for teams to reach the performing stage of team development. In this context, the word roles refers to the behaviors of specific team members. What can be confusing about team roles is that they may be constantly in flux in terms of which team member(s) plays which role(s).

In this learning topic, team roles will be divided into two categories: task roles and team maintenance roles (also called relationship roles). Task roles are the behaviors necessary to guide the team in it use of information and resolving problems. Team maintenance roles are the behaviors that help the team interact with each other. Using primarily the taxonomy of Gatewood, Taylor, and Ferrell (1995), each role is described in the following section. 

The final topic addressed, after task roles and relationship roles, is that of the facilitator. Facilitators specialize in keeping communication flowing and a process progressing. It is an important concept for students to understand because in the context of teamwork, a facilitator is able to identify the roles not being filled and find a way for the team to fill them.

Task Roles

· Initiator—Initiating behavior refers to getting a team started on a project or an individual team work session. Its importance is that the role focuses the team and minimizes off-topic discussions.

· Information Provider—This role represents the act of giving required information to the team. It is a role that would be likely to rotate often among the members, especially in cross-functional teams where you have a variety of experts whose knowledge would be essential at different times during the team project.

· Information Seeker—This role identifies the need for someone to ask team members for information or opinions. People who fill this role tend to be more extroverted.

· Summarizer—People filling this role are adept at providing updates on where the team stands in terms of completing the project. A summarizer may also help close a meeting by summing up the progress for an individual team session or during a lapse in progress for the team.

· Elaborator—An elaborator is able to contribute more information to something supplied by an information provider. Perhaps it is a clarification or something new.

· Consensus Taker—Sometimes teams will hit a point of disagreement on how to deal with a project issue. Consensus takers will try to clarify where each team member stands on the issue in question to assess the degree of disagreement.

A number of different labels have been created for task roles over the years. The roles described here are commonly used, although different terms may be created by different researchers. The point to remember is that a team needs task roles to be filled. The filling of a role does not have to be assigned or fixed on one person; it can rotate among team members as the situation changes.

Team Maintenance Role

Team maintenance roles serve the function of keeping the team’s interactions constructive and satisfying. Once again, the team member who performs a role may rotate as the team progresses on its assigned task. Five team maintenance roles will be described here. Some of the roles overlap or sound very similar, so it is possible to combine some of the roles. In some teams, a single member may play several roles.

· Encourager—The encourager role is to compliment team members on their contributions and to call on the quieter team members and ask for their input. If this role isn’t filled in a team, some team members will mentally disengage from the team .

· Harmonizer—This role requires a person who is good at releasing tension within a team. Harmonizers help the team deal with conflict. It is an especially important role during the storming stage of team development (discussed below).

· Standards Monitor—This role requires a person to hold the team to the rules, processes, and outcomes the team agreed to in the early stages of their task.

· Gatekeeper—This role can overlap with the encourager role, because the gatekeeper tries to ensure all team members have a chance to speak. Many teams will have one or more dominant personalities and the gatekeeper makes sure that the more passive team members get to have input.

· Tension Reliever—This role overlaps with the harmonizer but is focused on suggesting breaks or telling a quick joke to relieve tension.

Team maintenance roles are just as important as the task roles because teams are about people, and effective teams usually like and respect each other with time. If the team maintenance roles are not filled by the team members, the team will likely never make it out of the storming stage of team development.

Facilitators

In the context of teams, a facilitator is a person who keeps the communication open and flowing and assists the team with their processes. A good team facilitator is familiar with all of the task roles and team maintenance roles required in a team. Facilitators who are from within the company can even fill the role of information provider, a role most facilitators do not fill. 

Understanding the various team roles is knowledge that can make a person stand out when they are assigned to a team because that person can influence or shape the way the team functions. The negative side to facilitation is that a person may use it to justify their overly controlling participation in the team, but this problem generally has to be resolved in the storming stage of team development, or the team will fall apart and the task will fail.

Stages of Team Development

No discussion of teams would be complete without the classic stages of team development. Please take a minute to reflect on one of your most recent experiences as a new team was initiated. What went on early in the team? What were the feelings? What was expressed? Not Expressed? What were the apparent stages your team went through? Then, compare these experiences with the model below.

From academic research and verified in (probably) thousands of business applications, there are quite predictable stages of team development. This chart based on the work of Tuckman and Jensen shows the stages with a short explanation of each stage follows.

Five Stages of Team Development

· Forming—The getting -acquainted period. Rules, goal, roles, decision methods, and meeting times are early topics for discussion.

· Storming—Conflicts begin to arise as members find they have differing opinions on a number of team -related topics. Often, struggles for position and dominance occur at this stage.

· Norming—The team begins to settle in on the objectives. The roles and operational procedures are getting clear , allowing the team to begin its real work.

· Performing—Much of the team “stuff ” is out of the way, and the team has begun to improve the working relationships, collect information, make decisions, and possibly have a few small wins. Depending in the reason for the team, the team may be in this stage for a considerable length of time (e. g ., a large project, a product design team, or a service/manufacturing team).

· Adjourning—This stage is an opportunity to wrap up the team’s work and celebrate the results. Management should ensure proper and visible recognition of the team’s achievements.

The team leadership must facilitate the team through these stages: It is easy for a team to get stuck in the dysfunction of the storming phase without ever working through to the further phases. Failure to address conflict, for example, will result in people being disillusioned and quitting the team.

References

DeRosa, D. (2009). Virtual success: The keys to effectiveness in leading from a distance. Leadership in Action, 28(6), 9–11.

Hamel, G. and Breen, B. (2007). The Future of Management. Harvard Business School

Jones, G. R. & George, J. M. (2003). Contemporary Management, (3rd ed.). Boston: McGraw-Hill. 477.

Katzenbach, J. R., and Smith, D. K. (1993, March/April). The Discipline of Teams. Harvard Business Review, 71(2), 111-120.

Larson, C. E. & LaFasto, F. M. J. (1989). TeamWork: What Must Go Right/What Can Go Wrong. Newbury Park, CA: Sage Publications.

Majchrzak, A., Malhotra, A., Stamps, J., & Lipnack, J. (2004, May). Can Absence Make a Team Grow Stronger? Harvard Business Review, 82(5), 131-137.

Miles, S. A. & Watkins, M. D. (2007, April). The Leadership Team. Harvard Business Review, (85) 4, 90-98, 9p, 2 illustrations; (AN 24267394)

Williamson, B. (2009, July). Managing at a Distance. Business Week,(4140), 64.

 

Country Cultural Differences

In workplaces, as in communities and nations, people spending time together are likely to share certain values, attitudes, and beliefs. Because of this established culture, people at work may have developed certain preferences or orientations in the following situations:

· interacting and communicating with others

· working in teams

· making decisions

· responding to and evaluating risks and opportunities

· managing or attempting to resolve disagreements and conflicts

· interacting with those at different levels in the organization

· engaging in numerous other workplace activities

Those who have studied and compared societal cultures and their possible implications for the workplace have identified some differences that can be important for success.

Perhaps the leading expert on cultural differences and their potential implications for business is Geert Hofstede, a Dutch scholar who worked for IBM in the late 1960s. Hofstede's early research (1980) examined, compared, and categorized the culturally derived preferences of IBM employees in many countries. He, and other scholars who have followed in his path, created a classification scheme that differentiates country cultures across what were originally four dimensions, though they have since been expanded to include six.

In what is probably his best-known book, Cultures and Organizations: Software of the Mind (published first in 1991 and revised and republished in 2010 with his son Gert Jan and Michael Minkov), Hofstede presents a careful explanation of his work and its implications. Hofstede reminds his readers that "culture is learned, not innate" (p.6), and introduces the analogy of culture as "software of the mind."

Hofstede uses the layers of an onion to help convey the way culture manifests itself. Values are deep at the core or center of the onion and are very slow to change compared with the other manifestations of culture. Examples of common core values in US businesses include integrity, accountability, fairness, and excellence. Other layers of culture include our rituals (e.g., greeting with a firm handshake and direct eye contact), the heroes we honor (examples include Warren Buffett and Steve Jobs), and on the outside of the onion, the symbols that have special meaning for societal members.

Examples of U.S. Business Cultural Manifestations

Created by Christina Hannah

Using an analogy of culture as mental programming, Hofstede explains that we are each conditioned (or programmed) by multiple societal levels: national, regional, ethnic, religious, linguistic, gender-oriented, generational, socioeconomic, and professional. Values associated with these levels may or may not be in harmony. One consequence of these multiple sources of programming is that it can be difficult to predict what will influence a person's response or behavior in particular situations.

Our present interest is not in delving deeply into the causes and consequences of individual differences in values, attitudes, and beliefs, but rather to learn about those shared at a societal level. Hofstede explains that his extensive research, and that of others who have studied culture, make it possible to differentiate between and among national cultures using a set of dimensions. He originally proposed the first four dimensions in the list below, then added a fifth—long-term orientation (Moskowitz, 2009)—and later added indulgence as a result of further research by and insights from collaborators.

Here is a simple explanation of Hofstede's current six dimensions:

· Power distance (PDI)—In countries with a high power distance dimension score, we can expect those in lower level positions to respect or defer to those who outrank them. In other words, power is thought to come with position. In such cultures, employees may expect managers and leaders to make decisions and might be surprised or uncomfortable when asked for input. In countries with a low power distance score, we are likely to find that employees treat those they report to more as colleagues and hold the view that respect must be earned. There may, of course, be exceptions to this model (for example in military and paramilitary organizations). Not surprisingly, the United States's score on this dimension is relatively low at 40. The score for France is is 69. In comparison, the scores for Malaysia, Slovakia, Guatemala, Panama, the Philippines, and Russia are all above 93 (Hofstede, Hofstede, & Minkov, 2010, pp. 57-58). This means that, in general, we can expect employees in the United States to expect a more egalitarian workplace than may be true in other societies.

· Individualism or collectivism (IDV)—In countries with high scores for individualism (like the United States), you are likely to find a shared belief in developing strong individuals who are comfortable working and making decisions on their own. In such workplaces, you will probably find an emphasis on the importance of developing, recognizing, and rewarding individual contributions. In countries that score low on the individualism dimension, you are likely to find an emphasis on the community, team, group, or department (i.e., the collective). People may be embarrassed if they are singled out publicly for praise or recognition, because they strongly believe their success depends upon the support and work of others. For this dimension, the US score is the highest, at 91. The score for France is 71. The country with the lowest score is Guatemala, with a score of 6 (Hofstede, Hofstede, & Minkov, 2010, pp. 95-97).

· Masculinity and femininity (MAS)—The label used for this dimension may not be the best. The basic idea is that some country cultures place a relatively high value on competitiveness, assertiveness, achievement, etc. Such countries are given a high score for masculinity because these preferences and traits were historically associated with men more than women. Other country cultures place greater value on caring for others, cooperation, quality of life, etc. Such countries are given a high score for femininity on this dimension. Despite the problems with these unfortunate gender-based labels, when you step back and compare countries you will probably recognize that there are some where businesses seem to value competition over cooperation, achievement and success over quality of life, and so on. Japan has a masculinity (MAS) score of 95. The US score is moderate at 62. The score for France is 43. Sweden has the lowest score for this dimension, with a 5 (Hofstede, Hofstede, & Minkov, 20110, pp. 141-143).

· Uncertainty avoidance (UAI)—This dimension recognizes that there are differences among countries, which results in differences among the leaders of businesses that operate therein and the extent to which they are willing to take risks. In countries that are low in the uncertainty avoidance dimension, business leaders might be very comfortable exploring new opportunities and see this as the likely path to success. In other countries, this may not be the case. Sometimes those in country cultures that are highly risk averse (with high uncertainty avoidance scores) have a very good reason for their responses. There may be, for example, significant legal penalties for failure, including the possibility of being sent to jail in the event of bankruptcy or reneging on debts. The country with the highest score for uncertainty avoidance (UAI) is Greece at 112. France is relatively high, with a score of 86, and the US score is 46, indicating a tolerance for uncertainty and acceptance of risk-taking to achieve success (Hofstede, Hofstede, & Minkov, 2010, pp. 192-194).

· Long-term versus short-term orientation (LTO)—In countries with a high long-term orientation score, shared work values emphasize learning, accountability, and self-discipline. Patience and waiting to make a profit are acceptable. Creating and nurturing lifelong networks is valued. In contrast, those favoring a shorter-term orientation tend to focus on "the bottom line" and value achievement, freedom, and independent thinking. Quarterly and annual profitability are important. Korea, Japan, and China have high long-term orientation scores (100, 88, and 87, respectively). France has a moderate score of 63. In contrast, the US LTO score is low, at 26 (Hofstede, Hofstede, & Minkov, 2010, pp. 255-257).

· Indulgence versus restraint (IVR)—In countries with high scores on indulgence, you are likely to find people who value having fun and enjoying life. In the United States, for example, it is common to find that employees emphasize the importance of a good work-life balance and quality of life. The IVR score for the United States is relatively high (68) and for France is moderate (48). Pakistan has the lowest score (0) among the countries studied. Territories with the highest indulgence scores are Venezuela (100), Mexico (97), and Puerto Rico (90) (Hofstede, Hofstede, & Minkov, 2010, pp. 282 - 285).

A very important caveat when reading and thinking about Hofstede's work is to remember that the comparisons are at the societal level, rather than the individual level. In other words, in any country you will find individuals who are different from what you see suggested as the norm for the country culture. In fact, for any given dimension you may find yourself thinking "but this isn't what I'm like" or "this doesn't explain what happens in my organization." Those who have studied and compared country cultures ask you to suspend these responses temporarily and to try instead to look at a country as a whole, and then consider how it compares on these dimensions with other countries. When you adjust your imaginary lens to consider cultural differences from a broader perspective, you are able to discover things that may be helpful when explaining what happens when companies do business abroad, when people work together on country teams, and when they work together in multicultural, multinational organizations.

One challenge is that we are often less knowledgeable about our own shared country culture than we are about the cultures of others (Hofstede, 1980). This is because our culturally derived values and preferences are so deeply embedded that we may not be aware of how they influence our decisions and behaviors. Those who have worked or studied in a country other than their own are likely to have developed higher levels of cultural intelligence than those who have not had this experience.

The United States has traditionally tended to place strong emphasis on equality, individualism, risk-taking, assertiveness, achievement, and the opportunity to enjoy life (pursuit of happiness).

This brief introduction to the comparative work on country cultures and their potential consequences for individuals and their organizations, along with the Resources below, should help you understand the possible sources of confusion or conflict that could, if not anticipated and well-managed, result when multinational and multicultural team members work together. These issues may include training, coaching, mentoring, and effective leadership. Remember to consider as well the possible advantages associated with building and using teams with members who bring different country cultural perspectives to their work (Chakrabarti, Gupta-Mukherjee, & Jayaraman, 2009).

Check Your Knowledge

Question 1

Using Hofstede’s onion metaphor, what are the ways in which country culture manifests itself?

At the core of the onion are values. In US business, typical values are integrity, accountability, fairness, and excellence. The other layers of the onion are rituals (e.g., again in the United States—a firm handshake, direct eye contact); the heroes who are honored (e.g., Steve Jobs, Warren Buffett); and symbols (e.g., big corner office).

Question 2

What are the six dimensions of national culture identified by Hofstede? Describe each one briefly.

Power Distance (PDI)—Is a measure of the extent to which those in lower levels are expected to defer to people who outrank them. Individualism/Collectivism (IDV)—This is a measure of how comfortable the culture is with strong individual performance and contributions, versus a preference for achieving goals collectively, or as part of a group. Masculinity/Femininity (MAS)—This is a measure of how highly a culture values traits such as competitiveness, assertiveness, and achievement (historically thought of as masculine traits).

Other cultures may place higher value on traits such as caring for others, cooperation, and quality of life (historically thought of as feminine traits). Uncertainty Avoidance (UAI)—This dimension measures the extent to which a culture is comfortable with risk-taking and the willingness to explore new opportunities. Long-Term vs. Short-Term Orientation (LTO)—A culture that has a long-term orientation is likely to be patient and comfortable with waiting for a deferred profit. The emphasis would be on work values such as learning, accountability, and self-discipline. In a culture with a short-term orientation, you are likely to see a focus on the "bottom line," and work characteristics such as achievement, freedom, and independent thinking. Indulgence vs. Restraint (IVR)—This dimension measures the emphasis within a culture on having fun and enjoying life.

Question 3

Why is the study of Hofstede’s dimensions of national culture important?

Leadership: Depending upon the part of the world (and specifically, the country) in which an organization is operating, "good" leadership may be seen as something very different than good leadership in the United States. Source: Hofstede, 1980. Customer service: Many organizations try to optimize by consolidating customer service in another part of the world. This may or may not be successful, depending upon how well the organization understands the cultures of the countries being served as well as the culture of the country from which the service is being provided. Marketing: When marketing to consumers in a country other than your own, it is essential to understand the "other" culture so that marketing materials are appropriate. Virtual teams: When an organization establishes virtual teams that operate in more than one country, the organization—and especially, the team members—will need a good understanding of the national culture(s) of other team members.

Question 4

What is meant by the term Cultural Intelligence (CQ)?

Cultural Intelligence is an individual’s ability to function effectively in situations characterized by cultural diversity. Source: Dyne, Ang & Nielsen, 2008, para. 1.

Question 5

What are the four key capabilities held by people who have high CQ?

They are able to anticipate what will happen in cross-cultural situations (metacognitive CQ). They have a wide understanding of multicultural situations (cognitive CQ). They are confident of their capabilities and are intrinsically interested in experiencing culturally diverse settings (motivational CQ). They are able to vary their verbal and nonverbal behaviors in response to cultural characteristics of the situation (behavioral CQ). Source: Dyne, Ang & Nielsen, 2008, paras. 10-13)

Question 6

Why is CQ important?

Individuals who have high CQ capabilities are more effective at making decisions about intercultural situations. They are also more likely to feel well-adjusted in situations characterized by cultural diversity. Those who have the capability to make sense of intercultural experiences perform at higher levels in multicultural work settings. And people who have the capability to adapt their verbal and nonverbal behavior to fit specific cultural settings have a flexible repertoire of behavioral responses that enhances their task performance in culturally diverse settings. Those who are interested in experiencing other cultures and feel confident that they can interact with people who have different cultural backgrounds are better adjusted in culturally diverse situations. Source: Dyne, Ang & Nielsen, 2008, paras. 15-16.

References

Chakrabarti, R., Gupta-Mukherjee, S., & Jayaraman, N. (2009). Mars-Venus marriages: Culture and cross-border M&A. Journal Of International Business Studies, 40(2), 216-236 http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=36587323&site=eds-live&scope=site

Hofstede, G., Hofstede, G.J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind (3rd. ed.). New York: McGraw Hill.

Hofstede, G. (1980). Motivation, leadership, and organization: Do American theories apply abroad?. Organizational Dynamics,9(1), 42-63. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=pbh&AN=5143098&site=ehost-live&scope=site

Resources

Hofstede shares some of his insights in An Interview with Geert Hofstede, while Hofstede's Five Dimensions of Culture covers similar points addressed above. You might also want to read Does Culture Matter? Refresher on Hofstede, Trompenaars, and Gesteland.

Although Hofstede is probably the most frequently cited theorist, there are substantial criticisms of his work such as Mirror, mirror on the wall: Culture's consequences in a value test of its own design. Hofstede responds to criticism in Who is the fairest of them all? Galit Ailon's mirror?

There are also alternative models to Hofstede's; the GLOBE project is one such alternative, explained in GLOBE: A twenty year journey into the intriguing world of culture and leadership.

Cultural Intelligence explains a model for understanding how well individuals might perform in cross-cultural settings. Examples of effective methods of success for cross-cultural teams are covered in Teams, Cross-Cultural.

Brainstorming

Brainstorming was developed by Alex F. Osborn in 1939 to enhance the ability of work groups to solve problems creatively. The participants in his early groups called his process “brainstorming” because it seemed to them that they were using their brains “to storm a creative problem and to do so in commando fashion, with each stormer audaciously attacking the same objective.” According to David Whetten and Kim Cameron, there are four cardinal principles that govern effective brainstorming processes:

1. No evaluation of the effectiveness of any given alternative is to be undertaken while the group is generating alternatives. Evaluation of alternatives must come at a later stage in the problem-solving process.

2. The leader of the group must place no parameters upon the group regarding what kinds of alternatives or solutions should be suggested; in fact, the team leader should encourage the group to come up with novel ideas that normally would not receive consideration in the organization.

3. The quantity of ideas should initially take precedence over the quality of ideas; that is, the leader should push the group to produce a large number of ideas irrespective of their quality.Page 43  |  Top of Article

4. Participants should feel free to add to or modify previous ideas proposed by others; it is often the case that marginal ideas that are added upon or altered in some fashion become transformed into powerful solutions. It should be emphasized that ideas do not belong to the individual who presents them, but to the group.

BRAINSTORMING CATEGORIES

In Hossenlopp and Hass's 2007 book Unearthing Business Requirements, several types of brainstorming sessions are listed, separating the different ways innovation is encouraged. When planning a brainstorming session, it is wise to first decide what type of session to have, how many people to invite, and what the parameters of the session will be—the decisions to be made or problems to solve.

The first type of brainstorming is the Individual session. In this structure, the team leader of the session listens to the input of all members as the problem is explored, and creates a single list of ideas based on the conversations. This adds focus to the brainstorming, and it is often helpful to have a person designated to listen to the others and record the suggestions in a cohesive, clear manner.

The second type of brainstorming is the Open meeting. In an open session, participants call out thoughts and suggestions as inclined, and these thoughts are collected into a list of ideas. Many types of brainstorming go through open phases, and though they can often be confusing, such free-for-all sessions work particularly well for skilled, strong-willed individuals. A listener or designated note-taker is usually required for open sessions as well, although they will not generally have as much authority as in an individual meeting.

The last type of brainstorming is the Structured meeting. Structured sessions are planned and carried out carefully, avoiding any confusion. Usually, this means group participants write down their ideas silently, and then meet for a short time to select the best ideas of the pool to examine. Using these ideas, the group then returns to silent cogitation, refining their thoughts into a second series of ideas, which are again taken and improved. By the end of such a session, the goal is to have several ideas already subject to extensive analysis and ready to be accepted or rejected. Although this type of brainstorming has excellent clarity, it can be stifling for the more creative or strong-willed participants.

No matter what type of brainstorming is planned, having some sort of focus for the meeting is highly advised. Hossenlopp and Hass suggest writing down the goals or purpose of the session somewhere where everyone can see it, whether on a PowerPoint or a whiteboard. This gives a visual center for the participants to gather around.

FACILITATING BRAINSTORMING

When generating ideas, it is best to have the members of a group first generate ideas individually and silently rather than shouting out ideas as an entire group. Research indicates that by having people work individually, they generate a greater number of unique ideas than when brainstorming as a group. After individual brainstorming, all ideas can be shared, and further brainstorming as a group can be used.

What topics should be addressed in brainstorming sessions? While theoretically it is possible to brainstorm around any topic, Osborn believed that the problem or topic should be specific rather than general; that is, it should be narrow enough so that the participants can easily comprehend its nature and target their responses to its solution. Also, multiple problems, such as brainstorming about what a new product should be named, how it should be packaged, and how it should be advertised, should not be set before a brainstorming group. The problems should be separated, and brainstormed in separate meetings that are devoted to one of the aforementioned topics.

Osborn believed the ideal size for a brainstorming group was between five and ten people; however, he also contended that with the right kind of leader, large numbers of people of up to one hundred could successfully participate in brainstorming sessions. However, research indicates that larger groups generally do not generate more ideas than small groups.

In order to facilitate success, leaders of brainstorming sessions should do the following:

1. Facilitators should teach the principles and objectives of brainstorming to the group before beginning the brainstorming session. Unless all group members understand these rules, the brainstorming effort will fail.

2. Facilitators must enforce the rules during the brainstorming session. Inevitably, people will begin evaluating suggestions during the “generation” phase of brainstorming or violate one of the other principles. When such violations occur, the leader must re-teach the principle in question that has been violated, and relaunch the brainstorming process in the group.

3. Facilitators must ensure that the ideas are listed so that they can be referred to later when the group analyzes the ideas that it has generated. Idea records are often kept on flip charts, but an individual can record the information and the results can be photocopied and distributed to the participants as well.

4. Facilitators should try to encourage all group members to get involved in the session and contribute ideas. Some group members may be reluctant to share their thoughts, which could lead to one orPage 44  |  Top of Articletwo participants dominating the session. A good facilitator finds ways to draw out ideas from all group members.

5. Facilitators need to keep the group focused and prevent participants from getting discouraged. Typically, participants offer several ideas at the beginning of a session; often these are the more obvious alternative solutions to the problem at hand. After these initial ideas are offered, the session might get bogged down as the quantity of ideas subsides. Facilitators should assist the group to push past this initial stage and continue working to come up with other alternatives, because it is at this point where truly creative solutions to problems may be offered.

6. Facilitators need to be able to restate and distill poorly articulated ideas in a way that clarifies without altering their meaning.

After a large set of ideas has been generated, they must then be evaluated and culled according to their efficacy. At this point, a large number of options are open to the leader in terms of how the ideas should be evaluated. However, generally it is advisable that the group who generated the ideas be accountable for evaluating them as well. During the analysis stage the leader must facilitate an evaluation of the ideas that the group generated. As the listed ideas are subtracted, merged, and refined in group discussion, it is common for a more comprehensive solution to the problem to be produced than what could have been generated individually or in other group problem-solving processes.

AVOIDING GROUPTHINK

Certain problems plague group synergy when people gather to make decisions. Irving Janis coined the term “groupthink” in the 1970s to describe these pitfalls, and today organizations should be wary of groupthink, especially when creating new ideas or seeking inspiration. Most groups are not aware of the mistakes they make under groupthink, and so require some kind of outside check or review of their decisions. Daniel Levi, in his 2007 book Group Dynamics for Teams, gives eight commonly recognized signs of groupthink—“symptoms” that can show up in meetings and lead to poor decisions. These signs should be known and watched for by the members of the brainstorming session:

1. Illusion of invulnerability. The group believes its decisions are without fault, and that they will work no matter what.

2. Collective rationalization. Ideas are supported throughout the group, so that poor ideas are often encouraged on the basis of the group's high opinion of each other.

3. Belief in the group's morality. The group considers itself to be always in the right and is never ethically questionable or capable of doing wrong.

4. Pressure on dissenters. Those who disagree with the majority of the group are immediately silenced or belittled, pressured into joining the majority or leaving the group.

5. Stereotypes of outside groups. The group believes it is superior to other tools and organizational structures, exaggerating its own importance and forgetting the necessity of other groups or processes.

6. Self-censorship. Group members who disagree keep their opinions to themselves. They are afraid to question the others and are convinced it is easier to just agree with everyone rather than bring up negative aspects to ideas.

7. Illusion of unanimity. The group believes that all its members agree with all decisions.

8. Self-appointed mind guards. The group has members who downplay all negative results and block criticism from reaching the group.

POTENTIAL PROBLEMS

Certain studies have shown that brainstorming may have some inherent flaws when trying to produce new ideas and processes. According to Levi, brainstorming may not be an improvement over the talented efforts of individuals. A study by Mullen, Johnson, and Salas conducted in 1991 showed that the total of individual work—people creating solutions on their own—usually equaled the number of useful ideas produced in brainstorming sessions. Levi also points out that during brainstorming, a great deal of time is wasted in the speaking queue that develops. People who are participating listen to the speaker while waiting to speak their own ideas, and while waiting do not contribute any thought-value to the group. This often creates a series of mental log jams in which people are waiting to say ideas without coming up with any more themselves.

If groupthink and negative employee impressions take over, the brainstorming session can degenerate to a “blamestorming” session. The change occurs when participants begin to blame their managers, restrictions, and organization for personal grievances. At this point, little creativity is possible, and unhealthy grumbling is more likely. Despite some of these faults, organizations believe that brainstorming fosters creativity and encourages its members, and the track record of success for brainstorming has sustained its popularity.

Face-to-face brainstorming sessions may not always generate a large number of creative ideas for a variety of reasons. One problem with face-to-face sessions is called production blocking, which is basically anything that

Page 45  |  Top of Article

prevents a group member from verbalizing his or her ideas as they occur. Common production blocks are forgetting and distractions. Another problem with face-to-face sessions is evaluation apprehension, which simply means that individuals are afraid to vocalize their ideas. Evaluation apprehension might be caused because individuals are reluctant to share novel, but incompletely developed, ideas. Group members might also be afraid of how others will react if they suggest unpopular or politically sensitive alternatives. Another potential problem with face-to-face brainstorming is social loafing, which occurs when individuals put forth less effort on a group project than they do working alone.

Electronic brainstorming sessions may reduce some of these problems. In online or network settings, participants can simultaneously contribute ideas, and can usually do so anonymously. Anonymity may make it more likely that individuals will contribute a larger number of creative alternatives. In fact, empirical research suggests that electronic sessions are generally more effective than face-to-face sessions in terms of the number of alternative ideas generated.

Although the anonymity offered by electronic brainstorming sessions may reduce the negative impact of some of the problems associated with face-to-face sessions, other research suggests that social loafing might still be a problem. One study published in the Journal of Management Information Systems found that allowing participants in electronic sessions to view and compare their participation rates against those of others in the group (e.g., a tally of how many ideas were suggested by each person) increased individuals' contributions of ideas, as everyone could readily see who was not participating much. In this study, electronic idea forums that allowed social comparison were the most productive, followed by anonymous electronic forums. Face-to-face sessions were the least productive in terms of the quantity of alternative solutions generated.

BRAINSTORMING AS CREATIVE DECISION MAKING

Because of its emphasis on group participation and creativity, brainstorming may also be seen as a tool for creative decision making. Creative decision making is a group decision-making technique in which group members attempt to generate as many alternative solutions as possible for a given problem. It is one of a number of decision-making tools that are used to ensure consideration of a diverse set of alternative solutions. Other common decision-making techniques include the nominal group technique and the Delphi technique.

Businesses can approach brainstorming in a variety of ways. The online options are useful for a company that wishes to bring together far-flung departments, or talents that cannot easily meet face to face. In Andrew Griffiths' 2007 book 101 Ways to Market Your Business, the author suggests having scheduled meetings for brainstorming. One possible schedule is a monthly meeting, giving all the members of the group time to plan or travel if needed. Griffiths also encourages making the sessions casual. Inviting a smaller group to lunch each month is one possibility—a small expenditure to put the group at ease and allow ideas to flow more easily.

Training for Virtual Teams

When planning to form and use teams—virtual teams in particular—it is important to do what you can to ensure the team and its members are prepared for their work together. More often than not, teams are created quickly, with the primary focus (or only focus) being on ensuring members have the technical knowledge and skills to complete the assigned work. The underlying assumption is that members will figure out how to work together or, in some cases, that they come well-equipped with team knowledge and skills. Little or no attention is paid to whether there should be support or training to help the team with communication, conflict resolution, management, decision making, handling weak or noncontributing members (social loafers or free riders), external relationship management, project planning, and so on.

When the decision is made to create and use geographically distributed multicultural virtual teams, even more potential challenges surface. Virtual teams are increasingly prevalent, especially in large companies (Germain, 2011; Rosen, Furst, & Blackburn, 2006). One challenge lies in figuring out how to manage times for synchronous meetings so those in one time zone are not always at a disadvantage. Then there are the various problems that can arise because of differences in language (Klitmøller & Lauring, 2013), cultural values (Goodman, 2012), appreciation of diversity and commitment to inclusion (Derven, 2016), standard business practices, and individual preferences. Furthermore, it can be easier for a tem member or members who are not happy with the direction of the overall team to stop participating, even when in a synchronous meeting. The absence of nonverbal cues can increase the potential for misunderstandings, conflict, and misperceptions (Germain, 2011).

Trust is likely to be a major issue for virtual teams.. An implicit assumption is that trust is possible in onsite teams because nonverbal communication cues are more readily available. The ability to see and hear members using web meeting software may be sufficient to alleviate this concern (Germain, 2011). Of course, we should also question the assumption that face-to-face interactions increase trust between individuals.

Training may not be the best way to help virtual teams address the problems they will encounter, but It should at least be considered (Martinez-Moreno, Zornoza, Orengo, & Thompson, 2014; Rosen, Furst, & Blackburn, 2006; Salas, DiazGranados, Klein, Burke, Stagl, Goodwin, & Halpin, 2008). Sometimes training combined with coaching—or even coaching alone—is a preferable solution. Just trusting that the team will figure out how to work together is usually not advisable, especially when the stakes are high and the consequences of failure are grave.

Both the cost and benefits of training and coaching certainly need to be considered. For example, travel and accommodation costs for an onsite meeting may be prohibitive. You may read in some research on this topic that it is important for virtual teams to be able to spend some preliminary onsite time together. Typically these articles were written years before geographically distributed multicultural and multiorganizational teams were commonplace and before the development of WebEx and other technologies that support real-time audio, video, and text-based communication. Quite often, a review of the experts’ backgrounds reveal little or no personal experience working in a virtual team. Thus, it is important to approach all prescriptions critically. Those members who have worked in virtual teams may bring the more important insights to this topic.

References

Derven, M. (2016). Four drivers to enhance global virtual teams. Industrial and Commercial Training ,48(1), 1–8. Retrieved from http://www.emeraldinsight.com/action/showCitFormats?doi=10.1108%2FICT-08-2015-0056

Germain, M. (2011). Developing trust in virtual teams. Performance Improvement Quarterly, 24(3), 29–54. doi:10.1002/piq.20119. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=ehh&AN=66793697&site=ehost-live&scope=site

Goodman, N. (2012). Training for cultural competence. Industrial and Commercial Training, 44(1), 47–50.  Retrieved from http://www.emeraldinsight.com.ezproxy.umgc.edu/action/showCitFormats?doi=10.1108%2F00197851211193426

Klitmøller, A., & Lauring, J. ( 2013 ). When global virtual teams share knowledge: Media richness, cultural distance and language commonality. Journal of World Business, 48(3), 398–406 .

Martínez-Moreno, E., Zornoza, A., Orengo, V., & Thompson, L. F. (2015). The effects of team self-guided training on conflict management in virtual teams. Group Decision and Negotiation, 24(5), 905–923. doi:10.1007/s10726-014-9421-7

Rosen, B., Furst, S., & Blackburn, R. (2006). Training for Virtual Teams: An investigation of current practices and future needs. Human Resource Management, 45(2), 229–247.

Salas, E., DiazGranados, D., Klein, C., Burke, C. S., Stagl, K. C., Goodwin, G. F., & Halpin, S. M. (2008). Does team training improve team performance? A meta-analysis. Human Factors, 50(6), 903–933. doi:10.1518/001872008X375009

Cost-Benefit Analysis

What Is Cost-Benefit Analysis?

Cost-benefit analysis (CBA) is an appraisal method that provides analysis of social gains and losses that could arise from a project.

The origins of CBA arguably date back a work by the French economist Jules Dupuit in the 1840s. Subsequent developments in cost-benefit analysis techniques were introduced in the United States by the US Army Corp of Engineers, and consistent framework was developed through the US Rivers and Harbor Act of 1902 (Hammond, 1966).

The aim of CBA is to put a monetary value on the benefits expected from the project and compare these to the costs that are expected to be incurred. If the benefit exceeds the cost, there is economic justification for the project to go ahead. This simple decision rule is based on the Kaldor-Hicks criterion developed through the work of Nicholas Kaldor and John R. Hicks. Kaldor argued that policies that resulted in an increase in aggregate real income were always desirable because the potential existed to make every individual better off. Kaldor also noted that whether actual compensation should take place or not "is a political question on which the economist…could hardly pronounce an opinion." Hicks, one of the most prominent economists at this time, accepted Kaldor's approach, which subsequently came to be known as the Kaldor-Hicks criterion. The Kaldor-Hicks criterion provides the foundation for the net benefits criterion commonly associated with CBA: adopt only policies that have positive net benefits (Boardman, Greenberg, Vining, & Weimer, 2006, 31).

Often, an appraisal of "doing nothing" is performed, an estimation of the costs and benefits that will continue to arise if the project is not carried out.

CBA also importantly requires that all benefits and costs can be given values on a common scale or denominator (e.g. monetary values). This practice allows for direct comparison.

One important consideration is the cost of actually performing the CBA. CBAs can be costly to undertake, requiring an investment of time, skills, and money. Past estimates have suggested the costs of large-scale CBAs can be considerable. For example, it was reported that the average cost of performing a CBA for the US Environmental Protection Agency (EPA) in the 1980s was around $700,000 (Boardman et al, 2006, 6).

Ex Ante and Ex Post CBA

Ex ante CBA refers to the more common use of the term CBA, to describe a project that is currently under consideration, but has not begun. Ex ante is used to assist the decision making and appraise the costs and benefits of a project.

Ex post CBA refers to a CBA carried out after a project has been completed. At this stage all of the costs are sunk, meaning they have already been invested in the project. This type of project is therefore used primarily focused on gathering information that can be used in assessing future projects.

A third type of CBA also exists: in medias res. This term refers to CBAs that are carried out during a project (i.e., after the project is already under way). This has the dual use of influencing the current project, as with ex ante CBA, while also gathering information to inform future projects, as with ex post CBA.

A final type of CBA is a comparison of ex ante and ex post CBAs, which is used to assess the efficacy of CBA as an appraisal method.

Creating CBA Options and Alternatives

The initial stage of performing a CBA involves preparing a list of options and alternatives that could be undertaken to achieve identified project objectives. The list will often include a “do nothing” option or a “do minimum” option (HM Treasury, 2013, 17). The range of options depends on the nature of the objectives. For a major program, a wide range should be considered before shortlisting for detailed appraisal. New and current policies, programs, and projects should be considered. Where projects are linked (costs or benefits are mutually dependent), the proposal should be appraised as a whole. But contribution of the component parts must be considered. Examples of project options which could be considered include the following:

· varying time or scale

· rent, build, or purchase

· refurbishment, leasing, or buy new

· different locations or sites

· outsourcing or provision of services

· varying quality target

· action at regional, national, or international level

· fixed period or permanent projects

Please see the resources section below for a few short examples of cost-benefit analysis.

References

Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, L. D. L. (2006). Cost-benefit analysis: Concepts and Practice. New Jersey: Prentice Hall.

Hammond, R. J. (1966). Convention and Limitation in benefit-cost analysis. Natural Resources Journal, 195(6).

HM Treasury. (2013). The green book: Appraisal and evaluation in central government. London: TSO.

Cost-Benefit Analysis

From: Encyclopedia of Business and Finance(Vol. 1. 2nd ed.)

Publisher: Gale

Authors: Mary Michel and Mary Ellen Oliverio

Editor: Burton S. Kaliski

Date: 2007

COST-BENEFIT ANALYSIS

Cost-benefit analysis is used for determining which alternative is likely to provide the greatest return for a proposed investment. Sometimes referred to as cost-effectiveness analysis, it is relevant to businesses as well as to not-for-profit entities and governmental units.

A business might find it helpful to use cost-benefit analysis to determine if additional funds should be invested in a facility in the home country or in another country. A community not-for-profit organization that provides a variety of programs for children might use cost-benefit analysis to assist management in determining which activities will provide the most services for the costs specified. A federal governmental agency might use cost-benefit analysis to determine which of several projects planned for the national parks is likely to be most used by interested citizens, given the costs.

Because resources such as money and time are limited, an organization usually cannot undertake every project proposed. To decide whether to undertake a project, decision makers weigh the benefits from the project against the cost of the resources it requires, normally approving a project when its benefits exceed its costs. Cost-benefit analysis provides the structure and support for making such decisions.

Benefits increase the welfare of the organization. Some benefits are monetary benefits, such as the dollar amount of cash inflows from additional sales of a product or the saving in cash outflows that a project enables. Other benefits are important but harder to quantify. For example, a project may increase customer satisfaction; increased customer satisfaction may increase future sales, but the exact relationship between sales and satisfaction is often hard to specify.

Costs are the outlays or expenditures made in order to obtain a benefit. Many costs are measured monetarily, such as the cost of buying a new machine or of hiring an additional employee.

COST-BENEFIT ANALYSIS IN BUSINESS

A cost-benefit analysis is straightforward when all costs and benefits are measurable in monetary terms. Assume that Company A must decide whether to rent an ice cream machine for the summer for $900. The ice cream machine will produce additional cash inflows of $1,000 during the summer. The benefit of additional cash inflows ($1,000) exceeds the additional cost ($900), so the project should be undertaken. Not all cost-benefit analyses are this simple, however. If the benefits and costs occur in different time periods, it may be necessary to discount the future cash flows to their current equivalent worth.

In another example, cost savings is a benefit. Assume that Company B makes about 100,000 photocopies a year. Company B does not have its own copy machine and currently pays 4 cents per copy, or $4,000 a year, to Copy-cat Copiers. Company B can lease a copy machine for $2,500 a year. It must also pay 2 cents per page for paper for the leased machine, or $2,000. In this example, the cost of leasing the machine and buying paper ($2,500+$2,000=$4,500) exceeds the benefit of saving the $4,000 normally paid to Copycat Copiers. Company B should continue to use Copycat Copiers for its photo-copies. However, Company B must have a pretty good estimate of the number of copies it needs to be comfortable with its decision. If Company B needs 150,000 copies this year instead of 100,000, the cost of the leasing the machine and buying paper ($2,500+$3,000=$5,500) is cheaper than the $6,000 (150,000×$0.04) savings in fees to Copycat Copiers.

A third example involves a project with benefits that are difficult to quantify. Assume that Company C is deciding whether to give a picnic costing $50,000 for its employees. Company C would receive the benefit of increased employee morale from the picnic. Better employee morale might cause employees to work harder, increasing profits. However, the link between increased morale and increased monetary profits is tenuous. The decision maker must use his or her judgment to compare the nonmonetary benefit to the monetary cost, possibly deciding that increased employee morale is worth the $50,000 cost but would not be worth a $100,000 cost.

In the preceding examples, cost-benefit analysis provided a framework for decision making. The range of objectivity related to measurement of the factors is typical. Techniques used in business as a basis for determining costs and benefits, such as return on investment, are generallyPage 168  |  Top of Articlequantifiable and thus appear to be objective. However, it is not uncommon for qualitative factors to enter into the decision-making process. For example, providing a product that individuals with limited incomes will be able to purchase may not provide the highest monetary return on investment in the short run, but might prove to be a successful long-term investment. Careful decision makers attempt to deal with a difficult-to-quantify factor in as objective a manner as possible. However, cost-benefit analysis in most situations continues to introduce measurement problems.

COST-BENEFIT ANALYSIS IN NONBUSINESS ENTITIES

Cost-benefit analyses are also common in nonbusiness entities. Boards of not-for-profit organizations establish priorities for their programs, and such priorities often specify desired program outputs. For example, assume a not-for-profit organization is interested in reducing the level of illiteracy among the citizens of a rural community in a state that has one of the lowest per-capita incomes in the United States. As alternative programs for those who need to learn to read are considered, there will be cost-benefit analyses that focus on a number of factors, including the extent to which a particular program can attract those who are illiterate. A program in the downtown area of a small town might be considered because a facility is available there at low cost, and that low cost is appealing. Focus on cost is not sufficient, however. When benefits are considered, it might become clear that those who are eager for such a program do not have cars and that there is no public transportation from where they reside to the center of the small town. Further consideration of relevant factors and of alternatives, undertaken in good faith, should result in cost-benefit analyses that provide valuable information as the agency makes decisions.

At all levels of government in the United States, cost-benefit analyses are used as a basis for allocating resources for the public good to those programs, projects, and services that will meet the expectations of citizens. For example, decision makers at the federal level who have policy responsibility for environmental standards, air-quality rules, or services to the elderly often find information from cost-benefit analyses to be critical to the decisionmaking task.

CONTINUING EFFORTS TO QUANTIFY COST-BENEFIT FACTORS

As possibilities for the use of funds increase, there is motivation for better measurement of both costs and benefits as well as for speedier ways of accomplishing analyses for alternatives that are appealing. All types of entities, including businesses, not-for-profit organizations, and governmental units, strive to improve the measurements used in cost-benefit analyses. The capabilities of electronic equipment provide promising assistance in accumulating data relevant for analyses. Wise use of resources is an important goal in every organization; cost-benefit analyses make a key contribution to this goal. Therefore, attention is given to improving both the effectiveness and efficiency of such analyses.

BIBLIOGRAPHY

Boardman, Anthony, E. (2006). Cost-Benefit Analysis: Concepts and Practice. Upper Saddle River, NJ: Pearson/Prentice-Hall.

Nas, Tevik F. (1996). Cost-Benefit Analysis: Theory and Application. Thousand Oaks, CA: Sage Publications.