Continuing developments of information technologies (IT) have led to the creation of new organizational forms that are flexible and responsive (Fulk and DeSanctis, 1995; Jarvenpaa and Ives, 1994). The virtual team represents an important example of these new organizational forms (Jarvenpaa and Ives, 1994). Virtual teams are groups of geographically, temporally, and/or organizationally dispersed knowledge workers brought together across time and space by way of information and communication technologies (DeSanctis and Poole, 1997; Jarvenpaa and Leidner, 1999; Lipnack and Stamps, 1997; Townsend et al., 1998). We limit our investigation to a class of virtual teams that has recently garnered considerable research attention. These are virtual teams that are assembled on an “as needed basis” in response to specific customer needs or to collaborate on unique projects (Iacono and Weisband, 1997; Jarvenpaa et al., 1998; Jarvenpaa and Leidner, 1999). Both practitioners and academic observers have recognized the potential advantages offered by the deployment of virtual teams. Virtual teams overcome the limitations of time, space, and organizational affiliation that traditional teams face. As a consequence, they are expected to enable organizations to better face the continued shift from production to service environments (Townsend et al., 1998), the increasing requirement for cross-organizational strategic cooperation (Jarvenpaa and Ives, 1994; Townsend et al., 1998), the need to overcome geographical, temporal, and organizational boundaries, and the necessity to bring together dispersed talent (Jarvenpaa and Leidner, 1999; Lipnack and Stamps, 1997). Most notably, the class of virtual teams that we consider offers unprecedented levels of flexibility and responsiveness. While virtual teams provide a number of advantages over traditional co-located teams, they also face obstacles that their traditional counterparts do not have to contend with. Technological support for virtual teams and collaboration in distributed environments, once a major obstacle, is now readily accessible (Constant et al., 1996). Instead, social and managerial challenges now represent the major hurdles to successful adoption of this new organizational form. Others have recognized that virtual teams will fail to meet expectations if organizations do not anticipate and address the unique challenges of this new environment (DeSanctis and Poole, 1997; Handy, 1995; Victor and Stephens, 1994). Primarily, organizations must be able to effectively use IT to rapidly mesh the individual skills of strangers, or near strangers, into interdependent work products (Iacono and Weisband, 1997). Given the pros and cons of working in a virtual context, it is essential that we begin to understand the determinants of team effectiveness in this environment. The range of issues studied on virtual teams is broad (Powell et al., 2004) but the empirical research to date has focused on self-directed virtual teams. It appears that extant IS research has been implicitly based on the assumption that virtual teams will be able to optimally organize their work-flow and manage internal processes (Powell et al., 2004). The potential impact of traditional managerial control mechanisms on team effectiveness has not been fully investigated. Our primary goal is to determine the effect that control mechanisms have on outcomes in the virtual team, as well as what effect control mechanisms have on work processes such as coordination and communication effectiveness in the virtual team. In doing this, we also examine whether coordination and communication effectiveness fully mediate the relationship between control mechanisms and outputs of the virtual team. The next section introduces the theoretical frame of reference and develops the research hypotheses. A discussion of the research methodology follows. The analysis and research results are then presented, followed by a summary of...
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