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Teams are the typical building blocks of an organization: They provide companies with the means to combine the various skills, talents and perspectives of a group of individuals to achieve corporate goals. In the past, managers used to colocate team members because of the high levels of interdependencies that are inherent in group work. Recently, though, more and more companies are beginning to organize projects over distance, with teams increasingly consisting of people who are based in dispersed geographical locations, come from different cultural backgrounds, speak different languages and were raised in different countries with different value systems.
Over the past 10 years, various studies have investigated the differences in performance of colocated and dispersed teams, quietly assuming that members of the latter never meet in person and members of the former work together in the same office throughout a project. But dispersion is not only a matter of degree; it is also a matter of kind. Most teams are dispersed on some level. They can be spatially separated (from “across the hall” to “scattered worldwide”), temporally separated (spanning different time zones), configurationally uneven (for example, five members in one location and two in another) and culturally diverse. And as past research has repeatedly shown, even the smallest degrees of dispersion, such as working on different floors in the same building, can greatly affect the quality of collaboration.1 In our own study, we have investigated the performance of 80 software development teams with varying levels of dispersion, including those with members in different cities, countries or continents. Such geographically distributed teams have commonly been referred to as “virtual” teams,2 but that label is something of a misnomer, because these groups are very real with respect to the work they can accomplish. We found that virtual teams offer tremendous opportunities despite their greater managerial challenges. In fact, with the appropriate processes in place, dispersed teams can significantly outperform their colocated counterparts.
The Bright and Dark Sides of Dispersion
A team’s level of dispersion is neither preordained nor fixed; rather, it is an organizational design parameter that companies can set and adjust. When making such decisions, managers should take into consideration the various pluses and minuses of separation.
Not surprisingly, several studies have found that collaboration across distance is more difficult than in a colocated environment.
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1. See, for example, T.J. Allen, “Managing the Flow of Technology” (Cambridge, Massachusetts: MIT Press, 1977).
2. J. Santos, Y. Doz and P. Williamson, “Is Your Innovation Process Global?” MIT Sloan Management Review, 45 (summer 2004): 31-37.
3. S.D. Eppinger and A.R. Chitkara, “The New Practice of Global Product Development,” MIT Sloan Management Review 47 (summer 2006): 22-30.
4. J.N. Cummings, “Work Groups, Structural Diversity and Knowledge Sharing in a Global Organization,” Management Science 50, issue 3 (2004): 352-364; and D. van Knippenberg and M.C. Schippers, “Work Group Diversity,” Annual Review of Psychology 58 (2007): 515-541.
5. J.N. Cummings, “Work Groups,” Management Science 50, no. 3 (2004): 352-364.
6. D.C. Hambrick, S.C. Davison, S.A. Snell and C.C. Snow, “When Groups Consist of Multiple Nationalities: Towards a New Understanding of the Implications,” Organization Studies 19, no. 2 (1998): 181-205.
7. M. Hoegl and L. Proserpio, “Team Member Proximity and Teamwork in Innovative Projects,” Research Policy 33, no. 8 (2004): 1153-1165.