Organizational learning process in virtual teams

Abstract

Virtual team project management is a theme with great relevance in academia and among practitioners. The objective of this study is understanding the organizational learning process in companies that deliver projects using virtual teams. To achieve such a goal, three concepts will be used as basic theory: the organizational learning model for environments that are affected by strategic renewal, the gatekeeper concept, and the knowledge management model. This research aims to answer the following questions: How does the organizational learning process influence the success of projects that use virtual teams? How does a virtual team internalize their customer knowledge? How does a virtual team transfer their knowledge to their customers? The research method used is a case study, based on a technology consulting company that delivers its projects using virtual teams that are highly virtual. The project analyzed was made by a virtual team with seven components: one in Miami, another in San Francisco, two in Montreal, and four in São Paulo, Brazil. The results found in the case study were confronted against the ground theory so that conclusions could be made.

Introduction

Virtual teams management in projects is one of the relevant themes of the moment for academics and practitioners (Hertel, Geister, & Konradt, 2005). This theme has been studied by academics in several business segments (Marks & Lockyer, 2005), but it finds greatest relevance and interest in the information technology (IT) field. While there is literature available in various research areas, none of them evaluates virtual team management under the organizational learning topics. Therefore, the objective of this paper is evaluating the organizational learning process in service companies that use virtual teams to deliver their projects.

The literature on virtual teams (Horwitz, Bravington, & Silvis, 2006) describes a study that maps which characteristics have strongest influence on a virtual team's project success. However, there are other issues not highlighted and questions not answered. For example: how does organizational learning influence the success of projects that use virtual teams? How do virtual teams internalize knowledge from customers frequently located remotely? How do virtual teams transfer their knowledge to their customers? This research aims to answer these questions.

In order to achieve such a goal, three base concepts are used: the organizational learning model in the strategic innovation context (Crossan, Lane, & White, 1999), the gatekeeper concept (Cohen & Levinthal, 1990), and the knowledge management model (Nonaka & Takeuchi, 1997).

Case study is the research method chosen. Case studies are normally used on occasions where a deep understanding of the phenomena or situation is necessary (Yin, 2005). The research was made at a single IT consulting company. As this is exploratory research intended to gather as much information as possible, the use of a single case is coherent (Yin, 2005). Data collected from the case study is confronted against the presented theory to understand the implications of the study propositions.

Theoretical Background

Virtual Teams: Understanding the Concept

Running a project at different locations and in different time zones is not a new organizational concept. However, the fast growth of information and communication technologies mandated the distributed work to become simpler and easily manageable. “Virtual” is used to describe distributed work using information and electronic communication tools (Hertel, Geister, & Konradt, 2005).

Usually, there are several forms of virtual teams that may be classified according to the number of people involved and the existing interaction degree among them (Hertel, Geister, & Konradt, 2005). The first, called telework, happens totally out of the main work environment, using information and telecommunication services (Bailey & Kurland, 2002). Virtual groups exist when several teleworkers are combined and each member reports to the same manager. A virtual team exists when members of a virtual group interact among themselves to achieve the same objectives (Lipnack & Stamps, 1997). Finally, virtual communities are largely distributed work entities where members participate using the Internet guided by an objective, roles, and common norms. Unlike the others, virtual communities are not initiated inside the organization, but by their own members (Wellman, 1997).

Except for the generic terminologies presented above, there is no common understanding for a definition of virtual teams. However, there is a minimum agreement that virtual teams are composed by two or more people that interact and collaborate to achieve the same objectives, and at least one member of the team works in a location, organization, or time zone different from the others. Also, communication and coordination is based mainly on electronic communication means (Hertel, Geister, & Konradt, 2005). The different location and time zone, as well as the use of electronic means, can be considered the virtuality dimensions that differentiate virtual teams from usual collocated teams (Hertel, Geister, & Konradt, 2005).

As in other human resource politics, the consequences of virtual teams’ use can be evaluated in individual, organizational, and social terms (Beer, Walton, & Spector, 1985). At the individual level, the advantages include flexibility, time control, responsibility, and motivation. However, there are some challenges, like isolation, low level of human contact, misunderstandings, conflicts, and ambiguous roles. At the organizational level, it is possible to describe some strategic advantages like allocation based on individual knowledge profile, continuous work due to time zone differences, and connection with partners and customers. At this level challenges include, but are not limited to, member supervision. Finally, at the social level, the use of virtual teams can help with regional development by increasing infrastructure investments and employment rates.

Virtual Teams Management: Researches and Guiding Reference

Virtual team research is usually focused on behavior issues and communication problems for decision making, coordination mechanisms, and social controls (Horwitz, Bravington, & Silvis, 2006). The life cycle of virtual team management was used before to evaluate empirical virtual teams’ researches. Such a life cycle has five phases: preparation, launch, performance management, team development, and release. As an example of challenges faced by project managers at each phase, knowledge management is a challenging aspect of the third phase, performance management (Hertel, Geister, & Konradt, 2005).

One of the reasons for knowledge management being a concern is the lack of a common understanding about the virtual team environment (Olson & Olson, 2001). The development of such understanding may be complex, because information sharing and the transitional memory building (who knows what on the team) is much more difficult due to a low level of face-to-face communication and lack of perception about how complex the work is (Axtell, Fleck, & Turner, 2004).

Research in this area seems to be important when shared understanding of tasks becomes much more complex and where synchronous communication is reduced, as with virtual teams (Hertel, Geister, & Konradt, 2005). The life cycle of virtual team management will be used in this paper as a basis to knowledge management organizational learning process, following a similar mechanism used to understand empirical research (Hertel, Geister, & Konradt, 2005).

Likewise, research indentifying key factors for effectiveness and failure in virtual teams will be used. This research describes organizational learning issues faced by project managers during the course of projects that use virtual teams. Issues like team formation, team alignment, and communication, among others, are presented in the literature on virtual teams (Carnel, 2002; Joinson, 2002). Such issues were organized into five groups by Horwitz, Bravington, and Silvis (2006): requirements for a successful start, obstacles to virtual team effectiveness, efforts to overcome obstacles to virtual teams’ success, factors in virtual teams’ dynamics, and overall contributors to team effectiveness. Those groups can be related to the five phases of the virtual team management life cycle. Therefore, the key factors for effectiveness and failure in virtual teams from Horwitz, Bravington, and Silvis (2006), together with other references, will be used in understanding the organizational learning process based on the five phases of the virtual teams’ management life cycle.

Knowledge Management and Organizational Learning: Classic References

Considering the scenario presented above, three classic works seem to be important: the organizational learning model in the strategic innovation context (Crossan, Lane, & White, 1999), the gatekeeper concept (Cohen & Levinthal, 1990), and the knowledge management model (Nonaka & Takeuchi, 1997).

Related to the organizational learning model, there are two important aspects to be considered: inperpretation-integration (forward) and institutionalization-intuition (feedback). The first is about communication of cognitive maps and all the challenges included in this process, like communication skills needed and the use of collective understanding/interpretation. Action has a very important role in the process, because it facilitates collective understanding. The latter is even more complex, as it involves breaking the barriers of a collective point of view and that the organization stop using well established processes and tools. Therefore, the tension between assimilating new knowledge and using what was learned and incorporated before arrives as the institutionalized knowledge avoids the inclusion of new knowledge (Crossan, Lane, & White, 1999).

The gatekeeper concept is the theory that discusses the absorptive capacity of companies and individuals. The ability to explore external knowledge is critical for creating innovation in the companies. On the other hand, the ability to evaluate and use external knowledge is related to the level of knowledge previously acquired. At a basic level, this initial knowledge includes abilities and common language, but it can also contain knowledge about the most advanced scientific methods and technologic tools. Previous knowledge creates the ability to recognize the value of new information, assimilate it, and use it to commercial ends. Such collective abilities constitute what is called absorptive capacity. The actors responsible for this external understanding, mapping new information, and its internalization processes into the organizations can be called gatekeepers. Such actors are particularly important when the knowledge of the organization's internal members is much different from the knowledge of actors outside the organization. Therefore, gatekeepers can promote important new information inside the organization. A very important characteristic of this concept is that the absorptive capacity of an organization is not dependent on the gatekeeper's individual absorptive capacitive. It will depend on the absorptive capacity of the unit to which the gatekeeper is transmitting the information (Cohen & Levinthal, 1990).

Finally, the knowledge spiral model assumes that the knowledge is created by the interaction between tacit and explicit knowledge, where the conversion can occur in four different ways: (a) from tacit to tacit knowledge, called socialization, (b) from tacit to explicit knowledge, called externalization, (c) from explicit to explicit knowledge, called combination, and (d) from explicit to tacit knowledge, called internalization. Socialization is a process of experience sharing. Externalization is based on the articulation of tacit knowledge into explicit concepts or knowledge building. Combination is a process where concepts are systematized into a knowledge system. Internalization is the incorporation of explicit knowledge into tacit knowledge (Nonaka & Takeuchi, 1997). Considering the scope of this paper, all four types of knowledge seem to be relevant.

Study Propositions

Proposition 1

The organizational learning model shows four basic learning processes in terms of the strategic renovation context. From intuition to institutionalization, it is possible to verify which processes have stronger relevance for the success of virtual teams. In this context, virtual teams with higher intuitive capacity will bring better results than teams that are based only on institutionalized knowledge, or vice-versa.

Proposition 2

The gatekeeper concept is relevant. In a virtual team, the project manager is responsible for executing this role.

Proposition 3

The knowledge spiral model can be used to clarify understanding about the knowledge externalization process, or in other words, from a knowledge that is tacit to the project company to something that is unknown to the customer company. This process follows the knowledge spiral model. Also, the gatekeeper who brings the knowledge from the customer to the virtual team can have the opposite role.

Methodology

In the literature on virtual teams, there are studies that describe the most important characteristics to the success of projects that use virtual teams (Horwitz, Bravington, & Silvis, 2006). However, there are other issues not highlighted and questions like these are not answered: How organizational learning does influence the success of a project that uses virtual teams? How do virtual teams internalize knowledge from their customers, who are usually at remote locations? How do virtual teams transfer their knowledge to their customers? These three questions are the main research questions to be answered at this paper.

To answer these questions, three base concepts were used: the organizational learning model in the strategic innovation context (Crossan, Lane, & White, 1999), the gatekeeper concept (Cohen & Levinthal, 1990), and the knowledge management model (Nonaka & Takeuchi, 1997).

The research method used was case study. Case studies are normally used on occasions where a deep understanding of the phenomena or situation is necessary (Yin, 2005). Because it is a research area (knowledge management in virtual teams) little discussed, this paper has an exploratory approach. The research was made in one single IT consulting company. As the research is intended to explore as much information as possible, the use of a single case is coherent (Yin, 2005).

The company chosen for this research operates with virtual teams that are highly virtual (Hertel, Geister, & Konradt, 2005). The company has project operations all over the world, with people working in distributed locations on different projects. The evaluation of a virtual team on a single project for a large Brazilian telecommunications company was chosen for analysis in this case study.

Structured interviews with senior managers and the project manager were used for data collection. The questions in this data collection tool were built based on adaptations from the ground theory. The data collected from the professionals, together with project (unit of analysis) documentation were confronted against the previously presented theory to understand the implications of the study propositions.

Case Study Description

This case study investigated a technology company operating in both North and South America that develops products and delivers services related to their products. The company has approximately 500 employees distributed around the world for providing services. Most of these employees are located at United States and Canada, where the main offices are in California, New York, and Montreal. In Brazil, the company has five employees working at their home offices. Two of these are in the city of São Paulo and three are in other cities in the state of São Paulo.

The company uses several Internet-based communication tools. In Brazil the team interacts internally and with external members by instant message, e-mail, telephone, and conferencing. Most of the communication is electronic (virtual), with little physical contact between people.

When a project begins, usually several members from different offices are allocated. In the company's project management methodology there are several roles. The project manager is the main contact point between the company, the customer, and partners. The designer understands the business requirements of the customer and tries to create a system according to the information provided by the customer. The architect understands all components of the solution and integrates them according to the customer's needs and the equipment provided by the partner. The technical scientist is responsible for creating the advanced technical module, implementing part of the application design. Finally, the coder is responsible for deploying the application designed.

The project analyzed for this research was developed by a team composed by seven professionals: one in Miami, another in San Francisco, two in Montreal and three in São Paulo. The project took nine months to be deployed and, besides the customer (located in São Paulo), there was a partner located in the city of Campinas (São Paulo state). There were two types of weekly meetings for this project. An on-site status meeting, with the participation of the customer, partner, and project manager from the studied company. The other, remote and internal to the studied company, was used by the project manager to align information about the happenings and needs of the project. The contact between the internal team members was mainly by instant messaging and e-mail. There were also a few other meetings: two at the beginning, with the designer's participation, and another at the end of the project, with all members of the team.

At the studied company, knowledge about the project's management and implementation methodology is internalized and explicit. Because of this, there was a need to transfer all this information to the customer and partner during the project. Inside this methodology, several technical parts had a well-structured knowledge. From the most to least well-structured parts, there was: project management, design, technical science, and coding. Several interactions between technical members were needed to discuss the knowledge that was tacit to the most experienced members. On the other hand, mainly in design, there were well-structured knowledge modules, although there was some tacit knowledge from the customer's business requirements feeding the design.

Research Results and Discussion

Related to proposition 1, by evaluating the company's project implementation methodology it was possible to find areas, or professionals, that work on different sides of organization. In fact, each of these functions has characteristics based on intuition with part of institutionalized knowledge, and vice-versa. Specifically, there is no function based only on institutionalized knowledge or intuitive knowledge. There are degrees of institutionalized and intuitive knowledge at all levels of the studied company. Therefore, using the continuous institutionalized versus intuitive knowledge, the project manager, designer, and architect are the most intuitive functions, in that order. The technical scientist and the coder are the functions that use most part of the institutionalized knowledge.

As for the project's success, it can be noted that both types of knowledge are fundamental for the project deployment. That said, it would be impracticable to use only institutionalized knowledge during all phases of the project, as the creative process used by the designer is fundamental to develop an application that meets the business requirements of the customer. This behaviour can be seen for verticals where the company already has applications running, or in other words, if the company has applications running at the telecommunication vertical, a new application for a new company can be very different from already implemented ones. The creative and innovative process from the design cannot be totally institutionalized. The same happens with the project manager, because, while he uses a project management methodology widespread and institutionalized in the company people in this function, he also uses characteristics inherent to human beings, like relationship management skills. These characteristics could be found by looking at the project hours spent by these professionals in the course of the project. The project manager, working during the whole project, and the designer, working at specific stages, used more than 60% of project hours.

On the other hand, technical functions like the ones of the technical scientist and the coder cannot be based only on intuitive knowledge. At the studied company there is solid institutionalized knowledge in these two areas. While these professionals can use intuitive knowledge, the majority of the basic knowledge is institutionalized and came from other similar projects and similar developed products. It is important to notice that these functions are more time- and effort-efficient than the others, working only at implementation and testing phases. These two resources worked for only 25% of the project, which proves their efficiency. Therefore, proposition 1 could not be totally validated due to the dynamic behaviour of the functions.

As for proposition 2, related to gatekeepers, the company studied showed the importance of two actors in that role. First, there was the project manager as a means to transfer information concerning the customer's expectations management. This actor informed his company about the importance of the project to the customer, the time available to deliver the project, the competitive scenario in which the customer works, internal changes inside the customer's organization, and others. All these factors can contribute to the team development process. The project manager clearly communicated these objectives to team members; however, the project manager used the same language with the solutions architect. At the end, the solutions architect was the one responsible to translate all the information about the customer's business to the technical team.

Another important actor in this external-world relationship with the customer was the designer. He was the one responsible for understanding the business requirements of the customer and translating that into the design of the system to be delivered. While also dealing with issues similar to the ones of the project manager, the designer is more concerned with technical details around the application in development, influenced by the customer's scenario. These are operational issues from the customer that must be translated into the system. Internally, the designer also interacts with the solutions architect and other technical actors. However, the solutions architect was the one responsible for the final solution to be implemented. That said, the organization's absorptive capacity was more concentrated in the solution architect than in the gatekeepers. In the case where additional information is required, the solutions architect will require new data for the project manager and the designer. Therefore, proposition 2 is also partially validated.

Finally, regarding proposition 3, the company studied showed that projects of this kind have concepts and characteristics strongly related to the technology being implemented. This creates a need to externalize to the customer knowledge that is tacit to the virtual team. Besides, the customer's business is somehow changed by the implementation of the new technology. This also creates the need to present the customer new knowledge about how their internal process will run after the end of the project. The externalization process from the knowledge spiral can explain this knowledge transfer mechanism. However, the studied case showed that the externalization process repeats several times from the moment that the knowledge is initially internalized by the customer company. The process begins with the development of a single and unique language between the parts until there is a complete understanding.

Usually, the actor responsible for this knowledge transfer is the project manager. In other words, the same gatekeeper that brings the information from the external environment carries the information from inside to the customer. Eventually, the designer participates, mainly when internal operational process changes are needed on the customer side. In situations where the level of customer discomfort is too high regarding the new information, the solutions architect is called on to use his communication abilities at all levels. Such discomfort is created by the language difference and by the knowledge obtained in the areas in discussion. The solutions architect can alleviate this situation by approximating the knowledge from the customer and the company by using examples from projects realized in similar companies. Therefore, proposition 3 can also be partially validated.

Conclusions

This paper aimed to evaluate the organizational process, or knowledge management, in companies that deliver project services using virtual teams. Based on the need for additional research in areas concerning knowledge management in virtual teams (Hertel, Geister, & Konradt, 2005), the paper uses as base concepts the organizational learning model in strategic innovation context (Crossan, Lane, & White, 1999), the gatekeeper concept (Cohen & Levinthal, 1990), and the knowledge management model (Nonaka & Takeuchi, 1997) to present research propositions confronted against a case study from a company that uses highly virtual teams to deliver technology projects.

Regarding the organizational learning model, it is not possible to verify which of the four basic learning processes from intuition to institutionalization has higher influence for a virtual team's project success. In that context, virtual teams need areas or professionals with high intuitive capacity, and also professionals who use institutionalized knowledge to create efficient results. Therefore, the composition of those two types of knowledge can bring success from the innovation and efficiency point of view.

As a second conclusion, the gatekeeper concept is relevant because the virtual team project manager is responsible for bringing information regarding the customer's competitive situation to the company. Solution designers can also act as gatekeepers when there is the need to bring from the customer to the company information related to business requirements that the technology to be implemented will automate. Finally, the solution architects are the actor where the company's absorptive capacity should be measured. They are responsible for establishing a common language between all parts and by the knowledge interchange between the company and the external world.

Finally, the knowledge spiral model can be used to improve understanding about the knowledge externalization process, a knowledge that is tacit to the project company but is unknown to the customer. The externalization process can explain why it is necessary to repeat such knowledge until it is fully transferred. The gatekeeper who brings the information from the customer to the company can also have the opposite role (carrying the information from the company to the customer). However, in some cases, the team needs to have a different organization to properly externalize the knowledge to the customer. This reorganization occurs through the solutions architect.

The conclusions of this work can be used as a basis for future research. To test the conclusions in different case scenarios (different companies with different business contexts) seems needed for more concrete understanding. Also, the use of quantitative research methods can be used to test and increase the validation of the presented results. Anyway, new research is needed to help understand the knowledge management process in virtual teams.

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2009, André Machado Dias Ferreira
Originally published as a part of 2009 PMI Global Congress Proceedings – Amsterdam, Netherlands

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