Virtual Teams: The Impact of Varying Levels of Virtuality on Project Team Performance

Abstract

Although virtual teams have existed for over two decades, in recent years the Covid-19 pandemic led to a wider adoption and transition to virtual teamwork by most organizations. Virtuality is operationalized as the proportion of work done remotely or virtually on a project. This research studies the moderating effects of virtuality in project teams on communication frequency, leadership effectiveness, and project team performance. Using the theoretical frameworks of Adaptive Structuration Theory and Transformational Leadership Theory, a survey was carried out that informed this cross-sectional study. Respondents were project team members and managers who were involved in AEC (Architecture, Engineering and Construction) and Finance/IT projects before and during the Covid-19 pandemic. This study showed that the inverted-u relationship between communication frequency and project performance was preserved in only low virtuality teams, while the shape of the curve was different for high virtuality teams. AEC project performance was also found to be more sensitive to communication frequency, as these projects exhibited inverted-u relationship with performance compared to Finance/IT projects which was more linear. Regardless of the levels of virtuality in project teams, transformational leadership leads to significantly better performance in both types of projects. This study contributes to the body of literature in project management and information systems by measuring one of several dimensions of virtuality in the proposed model and provides insights for project managers in industry to better lead their virtual project teams.