Introduction
Advances in technology have changed the ways teams function. In the late 1990s, organizations began adopting the idea that effective teams could comprise individuals stationed across the country or the globe. These teams, known as virtual teams, were even touted as the “workplace of the future” (Townsend, et al., 1998). Twenty years later, virtual teams are used by nearly half of the global organizations (Minton-Eversole, 2012).

This chapter will explore the characteristics of virtual teams and how they compare to conventional teams, identifying both the strengths of virtual teams and the challenges that they face. Though challenging for all types of teams, virtual teams must approach the issues of goal alignment, motivation, and conflict management differently than their collocated counterparts. Additionally, this chapter will explore the differences between transactional and transformational leadership, the strengths and weaknesses of each style in leading virtual teams, and answer the question, “Is a transactional or transformational leadership style more effective when leading virtual teams?” Finally, the chapter will explore three phases of leading virtual teams and strategies for leading effective virtual teams.

Virtual Teams vs. Conventional Teams
Virtual teams are “groups of geographically and/or organizationally dispersed coworkers assembled using a combination of telecommunications and information technologies to accomplish an organizational task” (Townsend et al., 1998). Bell and Kozlowski (2002) identified two key characteristics that differentiated virtual and conventional teams – spatial distance and information, data, and personal communication.

The distance between virtual team members could be significant or relatively minor. Although distance matters less, Bell and Kozlowski (2002) indicate that how teams interact despite their distance matters most in determining whether a team would be considered “virtual.” A lack of face-to-face interactions due to their spatial distance can be considered a defining characteristic of virtual teams.

Although all teams utilize technology for communication, virtual teams rely more heavily on communication technologies, such as web-based apps for project management, videoconferencing, and schedule management, than conventional teams (Bell and Kozlowski, 2002). Rather than supporting the team’s work, virtual teams rely on communication technologies as a primary means of communication.

Gibson and Gibbs (2006) expanded Bell and Kozlowski’s definition of virtual teams by considering four dimensions: geographic dispersion, electronic dependence, dynamic structure, and national diversity. Although geographic dispersion and electronic dependence are often characteristics of a virtual team, dynamic structure, and national diversity are less often noted.

Dynamic structure relates to the frequently shifting organizational structure of virtual teams. A study of 101 virtual teams found that virtual teams are often grounded in shared team leadership rather than having a solid hierarchal approach (Hoch and Kozlowski, 2014). Virtual teams are often more fluid, relying less on the hierarchy common in conventional teams, and may be limited in the time they exist (Gibson and Gibbs, 2006).

National diversity speaks to virtual teams’ ability to be inclusive of talent from multiple states or countries (Gibson and Gibbs, 2006). Organizations utilizing virtual teams find that the decentralized nature of these teams lends itself to increased diversity. Without the requirement to relocate, organizations broaden their applicant pool to include professionals outside their local area, including crossing national boundaries (Johnson et al., 2001). Additionally, the remote work environment of virtual teams can make positions more accessible for professionals with physical disabilities who may find challenges working in a traditional office environment or locations with limited accommodations (Bergel, 2008; Johnson et al., 2001).

It can be argued that these dimensions of a virtual team make them advantageous to companies. Without the geographic constraints of conventional teams, virtual teams allow organizations to recruit the most qualified employees for positions (Bell & Kozlowski, 2002). Employers do not need to relocate their talent, thereby diversifying their pool of potential employees (Bergel, 2008).

When teammates are not required to gather in a singular workplace, organizations can save money on providing physical workspaces to employees. Less on-site employees translate into smaller office spaces, fewer parking requirements, and less in utilities (Johnson et al., 2001). Employees may find working in a virtual team appealing because of their cost savings. Commuting saves employees on the costs and time associated with car maintenance, gas, or public transportation.

Virtual teams lend themselves to hiring employees who focus on productivity rather than other characteristics, such as social skills (Bergel et al., 2008). The national diversity that virtual teams can bring leads to a more heterogeneous team and discourages discrimination based on race, age, gender, or physical ability (Bergel et al., 2008).

Challenges of Virtual Teams
Although there are significant advantages to virtual teams, they also have disadvantages. Virtual teams rely so heavily on technology to facilitate communication. Therefore, team members’ lack of experience in these applications can be a significant barrier for some (Bergel et al., 2008). This could mean that otherwise, qualified team members may hesitate to take a role that requires them to work on a virtual team. Virtual teams may also not be conducive for every type of organization. Companies focused on manufacturing or requiring tasks to be completed in a specific sequence may not be well suited for virtual teams (Joinson, 2002). Finally, another disadvantage to virtual teams is that not every professional can work in a virtual space. This could be particularly true for extroverted employees who thrive on social interaction, as well as those that struggle to stay motivated without the structures of conventional teams (Joinson, 2002).

Although there are benefits to the utilization of virtual teams, they present challenges to all team members. The dispersed nature of virtual teams can be a barrier to productivity that relies on the work of others. Having team members in other states, countries, or continents makes scheduling meetings challenging due to time differences (Bergel et al., 2002). Frustrations can mount between team members who start and end their day at different times, particularly when it holds up a team member’s progress (Joinson, 2002). There may be only a few hours of the day when all team colleagues are working concurrently.

Although virtual teams allow for more diversity among team members, this can lead to challenges. Differences in language and culture among team members can lead to miscommunication, and misunderstandings may hinder the development of trust in a team (Bergel et al., 2008). Team members who all agree to speak a common language can still experience challenges if the common language is not native to all team members, as it may be challenging to communicate your needs, challenges, and ideas in a second language.

Challenges are not just limited to the team members but also how virtual teams are led. Leaders of virtual teams may find it challenging to monitor their team member’s performance and provide the coaching and recognition needed to have a highly functional team.

A review of the findings from both surveys and research about the challenges of leading virtual teams by Robert Lavasseur (2012) found the top three challenges for virtual teams to be cultivating trust among team members, overcoming the lack of face-to-face contact, and overcoming communication barriers. Since virtual teams, by definition, lack frequent face-to-face interactions, team members may miss out on nonverbal communication cues such as facial expressions, body language, and eye contact, leading to an increased risk of miscommunication. Johnson, Heimann, and O’Neill (2001) identified three common communication problems for virtual teams: (1) an unclear understanding of the expectations related to their tasks and how those related to the overall project; (2) challenges getting in touch with the team members; (3) difficulty translating the true meaning of a message when it was relayed in a text-based means, such as emails.

Zander, Zettinig, and Makela (2013) found similar challenges to virtual teams in their research. They identified what they referred to as “three critical challenges:” goal alignment, knowledge transfer, and motivation.

Virtual team members may find they prioritize tasks differently than their peers based on their cultural experiences and make assumptions about how the team’s objectives should be met. Leaders of virtual teams will need to find a way to align the goals of their team members so they can work as a cohesive unit. Knowledge transfer is also a challenge, as the lack of face-to-face contact can lead to communication barriers that impede the ability to share necessary information. Finally, motivation can be a challenge for virtual teams. Since leaders of virtual teams do not see their direct reports regularly, it is more challenging to identify and respond to their needs. Additionally, members of virtual teams may have varying degrees of commitment to the team, which can impact performance (Zander, et al., 2013).

In addition, conflict, and the management of it, can be a significant challenge for virtual teams. The lack of face-to-face communication can mean that it is hard to identify if miscommunication is happening and that conflict related to miscommunication can go unnoticed for longer than if occurring in conventional teams (Johnson, Heimann, and O’Neill, 2001). Lavasseur (2012) even referred to the conflict as the “Achilles heel” of virtual teams. Because of this, leaders of virtual teams should be mindful of the detrimental impact conflict can have on team success and take steps to address it proactively.

Leadership Styles and the Virtual Team
Although there are a variety of leadership styles, I focus on transactional leadership and transformational leadership are frequently discussed in the literature as it relates to leading virtual teams.

Transactional Leadership
Transactional leadership consists of three dimensions (Bass, 1997; Northouse, 2015):
• Contingent reward. These leaders clarify expectations and provide rewards and recognition for meeting those expectations. They create mutually beneficial transactions consisting of trading resources and support for efforts made by their team members.
• Active management by exception. Active leaders provide ongoing monitoring that allows them to take action in potentially problematic situations before significant adverse impacts are made on the team and its performance. Active leaders enforce the rules, taking action when guidelines are not followed.
• Passive management by exception. Passive leaders also take action in problematic situations; however, they wait until they are made aware of the problem before intervening.

These dimensions mean that transactional leaders thrive in environments with structure and are likely to integrate structure, procedure, and policy throughout the teams they lead. They tend to focus more on short-term goals and can achieve them quickly (Spahr, 2016). This can be beneficial in virtual teams, as communication and setting clear expectations are necessary for the success of decentralized teams (Levasseur, 2012; Watkins, 2013). Since the contingent reward is a crucial dimension of transactional leadership, leaders employing this style must overcome the barriers related to monitoring performance and delivering rewards and recognition to team members with whom they do not have face-to-face interactions (Bell & Kozlowski, 2002).

Transformational Leadership
Bernard Bass and colleagues identified four dimensions of transformational leadership (Bass, 1997; Northouse 2015):
• Idealized influence. Also known as charisma, leaders with idealized influence may be seen as role models within the organization due to their ability to build trust, loyalty, and confidence. They have strengths in garnering support for a shared vision and making ethical decisions, even when the right choice is difficult.
• Inspirational motivation. These leaders foster enthusiasm and optimism among their team. They maintain high standards yet provide sufficient encouragement for their team to reach them.
• Intellectual stimulation. For these leaders, emphasis is placed on creativity and innovation. Rather than follow the procedure for the procedure’s sack, team members are encouraged to question traditions and find new solutions that may better meet the team’s needs.
• Individualized consideration. Recognizing that each team member is an individual with unique needs, these leaders excel at listening, coaching, and providing feedback to develop the skills of their team.

Leaders who employ the dimensions of transformational leadership are more likely to engage their team in critical thinking to solve problems versus relying on the status quo. This leadership style is beneficial to virtual teams for several reasons.

1. Leaders of virtual teams must be skilled in garnering support for a shared vision. Zander and colleagues (2013) identified goal alignment as a critical challenge for virtual teams. Transformational leaders can utilize idealized influence and inspirational motivation to build cohesion with the team around its goals.
2. The dimensions of transformational leadership lend themselves well to overcoming the challenge of motivation among virtual teams (Zander et al., 2013). These leaders foster enthusiasm, provide coaching, and develop loyalty within their team members that can encourage motivation. Although transformational leaders excel at building the trust needed for successful virtual teams, they may struggle to build the structure needed for a virtual team to succeed.

Although Avolio and Bass (1990) identify the dimensions associated with transformational leadership to be more effective than transactional leadership, virtual team leaders may benefit from having a combination of these leadership styles. Although trust is paramount to a virtual team (Joshi, A., et al., 2009) and transformational leaders excel at developing trust among team members (Bass, 1997), leaders of virtual teams must communicate expectations and develop policies and procedures to guide a virtual team- both skills in which transactional leaders excel (Bass, 1997). It has also been found that although transactional leadership may lead to increased productivity, transformational leadership may produce higher-quality results, greater team satisfaction with leadership, and group cohesion (Hoyt & Blascovich, 2003).

Phases of Leading Virtual Teams
Zander et al. (2013) identified three phases of leading virtual teams, the welcoming, working, and wrapping up phases. Within each of the phases, Zander and his colleagues identified areas of focus for the leaders of virtual teams. These phases and focus areas address a number of the challenges of virtual teams that have been identified in the literature, including the challenges of goal alignment, knowledge transfer, and motivation.

The Welcoming Phase
The welcoming phase of a virtual team is when the team is initially formed and introduced to the team’s goals and objectives. Zander et al. (2013) encourage a focus on goal alignment, relationship building, and task definition during this phase. During this time, leaders should clearly articulate the project’s goals and how they relate to the organization’s goals. Explicitly defining the tasks and their expected outcomes for each team member is essential during this welcoming phase.

Additionally, efforts should be made to facilitate relationship-building during this initial phase. Developing relationships within a team helps build trust among team members (Zander et al., 2013).

Levausser (2012) also emphasizes the importance of the initial phase of a virtual team. During this team formation stage, leaders legitimize the behaviors that will ultimately lead to an effective team, including those that help develop trust and effective communication.

The Working Phase
The second phase of effective team leadership is the working phase. Zander and his colleagues identified roles and processes, coordination of tools, and operations as the focus areas during this time. As the leader of a virtual team, it is even more critical to understand with whom the knowledge and skills needed to complete tasks reside. Additionally, leaders must be able to facilitate the access of this information to other team members. Coordination of tools refers to the need for a leader to ensure access to the technology needed for the team’s compelling performance. Finally, during the working phase, operations about the leader’s responsibility for regularly communicating progress to the team and attention to potential conflicts (Zander et al., 2013).

The Wrapping-Up Phase
The wrapping-up phase allows teams to self-evaluate their success in meeting their outlined objectives. Zander et al. (2013) recommend focusing on the finalization and de-briefing during this final phase. Finalization allows team leaders to reflect on a team’s success or shortcomings and give all team members time to evaluate their performance and the entire team regarding meeting goals. De-briefing serves as an opportunity for process evaluation for the virtual team, with team members exploring how goals were met, the process that the work was done, and how the team utilized technology or other communication strategies.

Strategies for Leading Effective Virtual Teams
The decentralized nature of virtual teams can present significant challenges to leading them effectively. Research and personal experience have identified several strategies that have shown to be effective in leading productive virtual teams.

Building Trust
The importance of trust in conventional teams is well-documented. Trust among a virtual team is just as important, though it may be more challenging to achieve because virtual teams, by nature, are limited in their face-to-face interactions (Brake, 2006; Bergel et al., 2008).

Although, by definition, virtual teams do the majority of their communication from a distance, bringing a team together for a face-to-face meeting in the welcoming phase of a new team can help foster the trust needed for an effective team. It is easier to facilitate relationship building, including getting to know team members professionally and personally, during in-person meetings (Watkins, 2013).

Setting Clear Expectations
Setting clear expectations is essential for all teams but critical for virtual teams. Team members should understand the expectations related to their roles and objectives and expectations for the group process (Watkins, 2013).

One strategy to ensure that all team members clearly understand the team’s purpose and roles is the development of a team charter. In addition to identifying the mission and objective of the team, a charter should clearly define how the team functions by outlining the group norms and decision-making process it intends to follow (Combs & Peacocke, 2007).

Research indicates virtual teams often struggle with interpersonal issues and group processes (Levasseur, 2012). Another strategy for setting clear expectations is the development of ground rules can be a way to ensure that everyone understands expectations of their behavior and how to handle challenging situations. Ground rules must be established at the onset of a team’s life and tailored to the unique constraints and culture of the team.

Group rules may focus on ways to avoid interpersonal conflict. Setting rules on accepting and embracing the diversity of teammates, exhibiting patience as new team members adjust to technology and any language barriers, and the expectations around communication are just a few examples (Levasseur, 2012). Clear expectations for managing conflict should also be set. Since conflict can take longer to identify in virtual teams, team members must be expected to identify and resolve conflicts as soon as they start (Levasseur, 2012).

In addition to group rules related to managing interpersonal relationships, establishing and following procedures for a team’s work cycle is also essential. For example, creating procedures for running meetings and the appropriate way to engage in these meetings is essential.

Developing meeting agendas and sending them in advance to team members provides an opportunity for community building at the opening of meetings, and wrapping up meetings with a list of actionable items and who they are assigned to can help keep virtual meetings on track (Malhotra et al., 2007). Without these expectations on procedures, team members may find that they implement processes from past teams that may not meet the team’s objectives and can lead to misunderstandings.

Effective Communication
Effective communication is challenging enough in a conventional team setting. Leaders of virtual teams must put great emphasis on clear and timely communication. Ground rules should be identified for what acceptable communication looks like for the team (Combs & Peacocke, 2007). Establishing team communication norms is an essential step in building trust. A 2007 review of research focused on virtual teams by Malhotra, Majchrzak, and Rosen discussed the importance of setting these guidelines that are unique to the team, as without them, team members are likely to revert to using the communication norms of their local teams or past employers, which may not be conducive to the team’s goals. Malhotra et al. recommends virtual team leadership establish the proper procedures for how to handle the following situations:

• Identifying the communication technology that should be used and when to utilize each one
• How to utilize virtual workspaces, including what types of content to post, when to post it, how to comment on postings, and procedures for managing and storing documentation in the virtual workspace• Etiquette for electronic and verbal communication, such as beginning a response with the person’s name to whom it is directed during audioconferencing and developing abbreviations that can be used to see if emails require responses or not quickly

To be most effective, these guidelines must be regularly revisited to ensure they meet the team’s needs (Malhotra et al., 2007). Miscommunication can also occur when teammates do not share a common language. Spending time coming to a consensus about the key phrases and words for the team’s work can help reduce team misunderstandings (Watkins, 2013).

Building Cohesion
Although virtual team members may not be able to congregate in a break room or at the water cooler to build relationships with each other, relationship building is still an essential part of an effective team. Leaders must take extra steps to provide opportunities for team members to get to know each other and develop positive working relationships. In the Harvard Business Review, Michael Watkins encouraged leaders of virtual teams to develop a “virtual water cooler” or opportunities for informal interactions. This can be done by providing a few minutes at the beginning of each meeting to share current personal events or facilitating formal team-building exercises (Watkins, 2013).

Combs and Peacocke encourage leaders to have team members develop personal profiles that include their professional expertise, personal interests, and a photograph (2007). Malhotra et al. (2007) take these personal profiles a step further and recommend using an “expertise directory,” which makes these profiles publicly available among the team. This document should include details about a team member’s expertise, past training and work, organization affiliations, and a photograph of the team member. This document would serve as a virtual team guide, facilitating collaboration among team members.

Provide Recognition
The decentralized nature of virtual teams means that leaders must make a more concerted effort to recognize the achievements of their team members appropriately. Leaders of virtual teams should identify strategies to celebrate both team and individual successes. Having tokens of appreciation delivered to team members, beginning meetings with recognition of accomplishments, and celebrating project completions are all ways to reward a job well done (Malhotra, et al., 2007; Combs and Peacocke, 2007).

Conclusion
The rise of technology over the last few decades has expanded how organizations can build and leverage teams. Virtual teams allow agencies to bring together the most talented individuals while saving costs, but they can also lead to significant barriers in developing the trust needed to be effective. Although leading virtual teams can present more challenges than conventional teams, taking steps to strengthen trust, enhance communication, and build cohesion in virtual teams can be an excellent strategy for effectively and efficiently meeting organizations’ objectives.