Virtual Team - Origin, Definition and its Scope

In today’s fast pace world, we all lead a virtual life parallel to an actual one. The regular live chats on Skype or status updates on Facebook, which ensure one stays connected with his/her dispersed acquaintances, provide the social platforms for this ‘virtual world’ to exist.

When these groups of individuals come together for a common cause or purpose with a shared vision, they form not just a ‘team’ but what we call today a ‘virtual team’.

Origin of Virtual Teams

According to, the word ‘virtual’ drew its meaning from ‘virtue’ in early 14th century. But by late 1950s, it started taking up a new meaning of ‘temporarily simulated or extended by computer software’.

In recent past, a team constituted of members from more or less one culture, present at one place and time working together to achieve a defined goal. The surging sale of PCs in 1960s followed by the popularity of cellular phones in 1970s, voicemail in 1980s, and internet & World Wide Web in 1990s gradually paved way for the virtual workplace. Keeping with the changes in the human civilization, the organizational structures also evolved.

In pre-historic times, the nomadic era of hunters and gatherers was the first time when man came together in small groups with a shared vision of ‘survival’. Then came the agricultural civilization which led to the growth of hierarchies in organizations. This was followed by the birth of bureaucratic organizations of Industrial era. With the don of Information Age, a new form of organizational structures has emerged, which is known as the network organizations. And, virtual teams are the latest buzzword in the corporate circles of 21st century.

Definition of Virtual Team

Virtual teams are the group of individuals spread across different time zones, cultures, languages or, ethnicities which are united by a common goal.

According to Powell, Piccoli and Ives, virtual team is defined ‘as groups of geographically, organizationally and/or time dispersed workers brought together by information and telecommunication technologies to accomplish one or more organizational tasks’.

Generally virtual teams are formed for temporary period of time to achieve a critical task say, problem solving or new product development. A classic example is that of the virtual team formed by Whirlpool Corporation in late 1990s for its new product development division. The experts from United States, Brazil and Italy were brought together to form a virtual team to develop a chlorofluorocarbon-free refrigerator.

Relevance of Virtual Teams

Owing to the increasing competition in the marketplace, decentralization and globalization of work processes and advances in information and communication technologies, organizations demand flexibility and agility in their delivery of products and services.

Virtual teams play a key role in order to meet these demands. As organizations continue to fight for talent which is fast becoming a scarce resource, virtual team structure allows organizations to leverage the available talent across boundaries.

More and more organizations are adopting virtual team approach to reduce their operating costs, encourage knowledge sharing among their employees to promote organizational learning and expand their business hours to 24/7 by utilizing the different time zones of virtual team members.

For example Sun Microsystems had started an initiative called ‘Open Work Program’ in 1998 which supported its employees to work from anywhere and at anytime (telecommuting). By 2007, it led to huge cost savings for the organization, to the tune of $68 million.

Scope of Virtual Teams

Though virtual teams rely heavily on information and communication technology but it is not just restricted to the IT industry. Today almost all industry sectors ranging from construction, manufacturing, healthcare and automotive to retail and non-profit are benefiting from the virtual teams.

Across the globe, on one hand larger organizations like Hewlett Packard, Whirlpool, Texas Instruments, British Petroleum etc with their huge resources and capabilities draw on the benefits of virtual teams to increase their productivity and services to customer, on the other hand, small and medium enterprises (SMEs) use it to enhance their competitiveness. The success of SMEs depends on two factors, i.e., product quality and productivity.

In order to sustain global competition, small and medium enterprises (SMEs) can draw from the knowledge sharing and collaborative systems of virtual teams to integrate with their vendors, customers and suppliers. Almost all major functions or job roles like R&D, sales, engineering, finance, logistics and HR can be performed in a virtual environment.


According to the social psychologists, human relationships draw their strength from the physical proximity of the individuals. Due to the fact that virtual team members have limited or, no face-to-face interactions, it throws a myriad of challenges.

For the success of virtual teams, it is important to overcome the cultural differences, communication barriers, power struggles and conflict to build trust, collaboration and commitment among the individuals. Though it sounds difficult but can certainly be achieved through effective leadership. With the right strategies, processes and tools in place, organizations can benefit greatly from this new-age trend of virtual teams.

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