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Communications of the ACM

Technical opinion

Counting the Cost of Virtual Teams

With the increasing availability of technology such as email, chat capabilities, videoconferencing, and group support systems, it has become easier to make use of virtual teams. Virtual teams, composed of members who are geographically dispersed, interact primarily via information and telecommunications technologies [3]. Virtual team members are expected to share information, brainstorm and negotiate alternative solutions to problems, make decisions, and produce output that may be in the form of a report or a delivered product.

Managers can save time and travel costs when team members from different locations can meet together electronically and disband quickly, depending upon the organization's need. With energy costs increasing rapidly and air travel becoming more problematic [7], bringing people together without requiring them to travel appears to be a practical and cost-effective alternative. But despite their attractions, virtual teams have drawbacks, some of which may not be immediately obvious.

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Popularity of Virtual Teams

There are many books (over 100 on Amazon) and articles (for example, see [8]) on how to implement virtual teams. This overwhelming acceptance of virtual teams as inevitable and desirable by-products of globalization might convince a manager that the value of virtual teams is settled, and the only thing left is to implement them. The potential benefits of virtual teams are similar to those touted for telecommuting—including overall cost savings, reduced energy consumption, and greater opportunities for the physically challenged to participate. To some extent, replacing some face-to-face work with virtual meetings seems inevitable, as antiterrorism measures make travel more time consuming and problematic [7].

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What's Wrong with Virtual Teams?

Although virtual teams are popular and widely accepted, communications researchers have long known that there is no substitute for face-to-face interaction. The lack of "media richness," or nonverbal cues, such as facial expressions, can lead to a downward spiral of decreased trust and commitment in a group [12]. Without such paralanguage as facial expressions and voice inflections, communication takes longer [10], and group members may be more reluctant to share information [6]. This often leads to misinterpreted messages, which can exacerbate conflict, damage group cohesion, and lower trust.

This loss of trust is fatal to the effectiveness of a virtual team, since individuals cannot be monitored as closely in this setting [5]. Lack of trust, in turn, increases transaction costs because members feel the need to double-check the work performed by others [12]. And this double-checking is not without cause. One of the most visible and serious problems with any workgroup is the free-rider [1]. Free-riding, the situation in which one or more members of the team does not complete their fair share of the work, may be easier in virtual teams where an individual's actions are less visible. In one study comparing face-to-face teams with virtual teams, members of face-to-face or collocated teams contributed more to their group than their virtual team counterparts [2].

Gender may also play a role in virtual team interaction. Males are socialized to communicate in a "one-up, one-down" style in which the goal is to establish dominance. Females, on the other hand, are socialized to communicate in a "rapport-talk" style in which the purpose is to discuss and understand others' perspectives and develop trust [11]. Misunderstandings of the other gender's communication styles may reduce trust in virtual teams where there is a lack of nonverbal cues. Studies have shown that non-free-riders in groups may lower their effort rather than compensate for free-riders [9].

In addition to communication problems and the difficulties in establishing trust in virtual teams, physical distance also has a direct negative effect on group cohesion [4]. All of these factors can increase the time needed to complete a project, leading to reduced project quality and satisfaction.

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Data Collection

To study performance, satisfaction, and group dynamics of virtual and face-to-face teams, 123 male and 78 female upper-division business students were randomly assigned to either a virtual or face-to-face three-person team. The students ranged in age from 19 to 50, with a mean age of 22 years. Team members were required to share information and make a decision about the best geographic location in which to open a new plant. Each team member was given information about demand, capacity, and costs for two of six geographical areas. Members had to combine their individual information to arrive at the best solution. Teams were given one week to complete the task.

Virtual teams used WebCT, an automated instructional tool, that allowed participants to communicate via email or discussion board facilities. All study participants were provided with training for the WebCT tool and assessed to have been competent in its use. Virtual teams did not meet face-to-face at all during the course of the week and by design were unaware of their teammates' identities, including name and gender. This condition allowed us to limit variability that may have arisen from preconceived notions or individual prejudices. The face-to-face teams met in person to complete the project.

At the conclusion of the project, participants were asked to report how much work they put in (frequency of group contacts, hours spent, and estimated contribution), how the group worked together (trust, cohesion, process satisfaction, leader emergence), and how the group performed (outcome satisfaction). In addition, productivity was measured by individual grade as a percentage. These grades were based on the following three factors: accuracy and quality of the final report, timeliness of the report, and a confidential evaluation of their contribution by other members of the team. To detect free- riders, we also asked participants to report whether any team member failed to contribute to the task.

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Data reflecting each individual's level of trust, cohesion, and satisfaction was measured with well-established survey instruments.1 The validity and reliability of these instruments for use in this study were confirmed using principle components factor analysis and Chronbach's alpha tests. Table 1 shows the results of individual differences in the virtual and face-to-face teams.

Individuals in virtual teams had lower average performance, less cohesion and satisfaction, more time spent on the task, and more free-riders than face-to-face teams. Face-to-face teams reported less leader emergence than virtual teams. Taken together with the lower productivity, satisfaction, and group cohesion seen in virtual teams, the higher level of leader emergence may be a reaction to a perceived failure of communal decision making. Virtual teams also reported significantly higher individual contribution and more meetings, indicating they perceived they put in significantly more time and effort than their face-to-face counterparts—for lesser results, as measured both by subjective outcome satisfaction and by objective grade.

While means between males and females in each of the technology conditions did not reach statistical significance, there were some interesting gender differences, as indicated in Table 2. Overall, men were more likely than women to be evaluated by their teammates as free-riders. Two male participants in virtual teams openly abandoned their teams altogether and refused to complete the task with them.

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Virtual teams are tempting for any manager hoping to save money, reduce employees' commuting and travel burdens, and increase efficiency. Our results indicate that at least for projects of short duration, virtual teams yield significantly lower performance, lower satisfaction, and a lower results-to-effort ratio. Virtual teams appear to excel only at lowering commitment, morale, and performance—something worth considering when you're setting up your next group project.

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1. Brooks, C.M. and Ammons, J.L. Free riding in group projects and the effects of timing, frequency, and specificity of criteria in peer assessments. Journal of Education for Business 78, 5 (May 2003).

2. Chidambaram, L. and Tung, L.L. Is out of sight, out of mind? An empirical study of social loafing in technology-supported groups. Information Systems Research 16, 2 (Feb. 2005).

3. DeSanctis, G.D. and Poole, M.S. Transitions in teamwork in new organization forms. Advances in Group Processes 14 (1997),

4. Gibson, J.L., Ivancevich, J.M., and Donnelly, J.H.J. Organizations 8th edition. Irwin, Burr Ridge, IL, 1994.

5. Jarvenpaa, S.L., Knoll, K., and Leidner, D.E. Is anybody out there? Antecedents of trust in global virtual teams. Journal of Management Information Systems 14, 4 (Apr. 1998).

6. Kraut, R., Fish, R., and Chalfonte, B. Requirements and media choice in collaborative writing. Human Computer Interaction 7 (1992).

7. McKinney, V.R. and Whiteside, M.M. Maintaining distributed relationships. Commun. ACM 49, 3 (Mar. 2006)

8. Ross, J.A. Trust makes the team go round. Harvard Management Update 11, 6 (June 2006)

9. Ruel, G. and Bastiaans, N. Free-riding and team performance in project education. International Journal of Management Education 3, 1 (Jan. 2003).

10. Straus, S. and McGrath, J. Does the medium matter? The interaction of task type and technology on group performance and member reactions. Journal of Applied Psychology 79 (1994).

11. Tannen, D. You Just Don't Understand: Women and Men in Conversation. William Morrow, New York, 1990.

12. Watson-Manheim, M.B. and Belanger, F. Support for communication-based work processes in virtual work. e-Service Journal (2002).

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Emmeline de Pillis ( is an associate professor in the College of Business and Economics at the University of Hawaii at Hilo.

Kimberly Furumo ( is an assistant professor in the College of Business and Economics at the University of Hawaii at Hilo.

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1Copies of the survey instruments may be obtained from the authors by email at

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T1Table 1. Differences between virtual and face-to-face teams.

T2Table 2. Gender differences.

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©2007 ACM  0001-0782/07/1200  $5.00

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