The impact of organisational structure on the performance of virtual teams

Abstract

Globalisation and advances in Information and Communication Technologies (ICT) are contributing to the increased virtualisation of work teams within organisations. Researchers are in agreement that most modern day work teams have some degree of virtualisation (Workman, 2007) and that it is critical for researchers and practitioners alike to understand the impact of virtualisation on the inputs, process and outputs of work teams. Benefits commonly associated with increased team virtualisation such as increased knowledge retention (Dietz-Uhler&Bishop-Clark, 2001), cost savings (Bergiel, Bergiel,&Balsmeier, 2008) and flexibility (Clemons&Kroth, 2011) are proven and well researched. However we know that no benefit can be obtained without incurring some sort of a cost (Colander, 2010) and research showed that virtual teams typically incur additional challenges in the areas of communication, culture, technology and leadership (Kayworth&Leidner, 2000).This research hypothesised that the three levers of organizational structure as defined by Satô (2010) namely the formalization, standardization and centralization of organisational elements can ease the negative effects caused by an increase in team virtualisation. We evaluated the impact that the organisational structure has on the performance of work teams throughout the team virtualisation continuum by conducting a set of interviews, a survey and performing descriptive quantitative analysis on the results. A total of three interviews were conducted which served as confirmation of our research questions and provided guidance to construct the questionnaire. A total of 87 respondents participated in our online survey of which 69 responses were included in the quantitative analysis phase. The responses received were equally distributed between four categories namely: Organic Face-to-face, Mechanistic Face-to-face, Organic Virtual and Mechanistic Virtual.The results revealed that there is no statistically significant relationship between the organisational structure and the performance of virtual teams. We further noticed a higher variance in the performance scores of virtual teams which indicates that the performance of virtual teams are more inconsistent than that of Face-to-face teams. The key finding of the research is that virtual teams perform equally well in both organic and mechanistic organisational structures.