Virtual Project Management

A term paper for MSIS 489
By Mike Rolfes

Abstract · Introduction · Definition · System · Obstacles
Trust · Communication · Management · Success· References


The rise of the Internet and development of collaborative software have instilled a new dimension into project management. This paper explores recent literature that evaluates virtual project management and virtual teams to determine the extent new technologies affect projects with members in dispersed locations. It is found that the new channels of communication offer opportunities for participation, but it is still more difficult to manage a virtual team than an on-site team.


Every college graduate preparing for the rash of interviews during senior year reflects on the proper answer to the question “Are you a team player?” The business literature at the end of the 20th century excuses the concept of a Lone Ranger in favor of bringing together employees who can collaborate with others to bring forth synergy greater than individuals working on their own agenda. The resulting boon in research, studies, and articles on team interaction could fill many shelves in a library.

Now factor in global organizations with talent spread among many time zones and dispersed through various nations. Companies send their best and brightest overseas to effectively colonize new worlds, bringing products and services to win over the natives, thereby growing new revenue in expanding markets. However, these locations were often merely islands with little interaction with other locations since interaction was limited to phone, fax, mail, or personal visits.

The final ingredient is the World Wide Web. Enter cost effective email, broadband, along with collaborative technologies and the concept of virtual teams emerges with all the hype associated with other Internet breakthroughs. Some authors point to other factors contributing the emergence of virtual teams. Franklin Becker of Cornell University adds that “people are doing significant parts of their work in different places.” He asserts mobility is transforming the office place, thus making the use of new communication technologies a necessity. [1] UCLA professor Phil Agre asserts that the trend feeds upon itself “people talk to each other, a lot, routinely, across distances, by several media.” [2] However, even with improved communications, virtual project management is an uphill climb.

Definition: Identifying Virtual Teams

Virtual project management is the system by which virtual teams collaborate for a finite period of time towards a specific goal. There are several appealing definitions in the literature.

Peterson & Stohr identify virtual teams (a.k.a. Geographically Dispersed Team) as a “group of individuals who work across time, space and organizational boundaries with links strengthened by webs of communication technology. They have complementary skills and are committed to a common purpose, have interdependent performance goals, and share an approach to work for which they hold themselves mutually accountable.” [3] A brief, but similar definition is proposed by Krill & Juell: “A virtual project is a collaborative effort towards a specific goal or accomplishment which is based on ‘collective yet remote’ performance.” [4]

Perhaps an appropriate approach is to view virtual projects and teams as simply projects and teams with a virtual overlay. This is a perspective taken by Cantu who proposes teams become virtual when any of three components are added to the mix: 1) different geography or locations of team members, 2) team members from different organizations or parts of the organization, or 3) different durations or lengths of time that member work together as a team. She suggests the concept runs across a spectrum as each component is expressed to a greater extent. [5]

Similarly, other authors have established dimensions of virtual teams. Fisher & Fisher propose time, space, and culture. [6] Lipnack & Stamps identify people, links, and purpose as the strongest characteristics that distinguish a virtual team from a traditional team ( Virtual Teams: Reaching across space, time and organizations with technology) [7] . On the other hand Skyrme believes the dimensions of virtuality are time, space and structure. [8] Three dimensions are also popular with Kimble, Li & Barlow who like time, place and organization. [9]

Another approach to the subject is to divide teams into subtypes and distinguish "virtualness" as a characteristic. Guss states that there are four classes of team:

One gets the feeling that everything old is new again with the Internet. Perhaps there is truth in this statement, but recent technology has greatly enhanced the possibility of geographically dispersed employees working together on common projects. This thread of thought is weaved into related areas, such as corporate structure with virtual companies and virtual enterprises. Some concepts are taken from the older topic of telecommuting. Still others from CASE tools that allow collaborative engineering. Most of the concepts from these ideas are shared, as is the literature.

Virtual Teams in an Organizational System

Rather than just a mere curiosity, promoters of virtual teams assert there are many advantages to virtual teams. A few of the drivers leading to interest in virtual teams include attracting the best workers independent of location, no need to relocate existing workers, flexibility, reduction in travel time and expense, environments requiring inter-organizational cooperation, shift towards service work, global workdays (24 hours vs. 8), and changes in workers expectations. Although not the answer to all logistical problems encounter by projects, it does provide a potential solution to numerous personnel and work issues.

Whether from necessity or deliberate design, companies are relying on new communicative technology with an impact on organizational structure. Cooper, for instance, takes a loose view of Systems Thinking and uses it as a framework in which to place teamwork. Her emphasis is on change, and the changes relevant to contemporary organizations are reengineering, system integration, process redesign, Total Quality Management, and teamwork. These have been well promoted over the past decade and require a transition away from traditional approaches of management that emphasize the analysis of individual problems and incremental change. Systems thinking is constant change. Teamwork is unique because it overlaps all these radical transformations. It is key to the success of theses changes that each employee see their niche in the total environment. [11]

Network organizations are a popular subject because of their novelty and interplay with new telecommunication technologies. Therefore, it is not uncommon to read about virtual teams in the same context of virtual organizations. Obviously, by definition, any team of a virtual organizational is a virtual team. Typically, virtual organizations are discussed in terms of a network and the network model is imposed on the team structure as well. The appealing line of the network model is that it focuses on links and nodes. Since the links are the distinguishing factor that define virtual teams apart from traditional teams, examining links and nodes on a more microcosmic level may bring forth some enlightenment on the interaction between the individual members (nodes) and the types of links developed by successful virtual teams.

Sandhoff emphasizes real interactive structures in her analysis of organizations. She says, “From the perspective of those involved in it, a network presents itself as a loose, indirect and confusing structure of relations which is nevertheless able to influence social events.” [12] This initial outlay yields the conclusion that successful network organizations are built on trustful relationships. It is the social network that reduces uncertainty and increases performance by providing a sense of predictability and allowing the exchange of resources.

Lipnack and Stamps also approach virtual teams through the portal of network systems. They predict 21st century organizations will be network organizations with virtual team components and each team networked with others. The key change will be the elimination of one-way paths within teams and organizations since teams function best through two-way communication structures (“Virtual Teams: The new way to work”). [13]

However, imposing the network on virtual teams may be limiting since few companies actual subscribe to network structures over traditional structures. Therefore, Peterson and Stohr list seven basic types of virtual teams.

Although not disputed, most of the literature focuses on network teams or project teams either explicitly or implicitly. Research on the remaining areas is undeveloped or relevant characteristics gleaned from general works. The rest of this paper will focus exclusively on virtual project management teams.

Steps of Virtual Projects

There are numerous takes on what are the appropriate steps to project management. Instead of discussing these at length, it would be best to pick a general model and develop the permutations that those writing within the subject of virtual teams choose to emphasize. Gray & Larson support a traditional, linear model of collaboration involving 1) partner selection, 2) project manager team building, 3) stakeholder team building, 4) project implementation, and 5) project completion – celebrating success. [15]

The first step listed is picking the right people. This is not really true since the project needs to be identified, promoted and approved by someone. This is generally not addressed since it is often not a distinguishing factor of virtual teams. Choosing personnel is the first step where traditional and virtual project management diverge.

One of the motivations of instituting a virtual team is that location is no longer a barrier to potential participant. However, one must consider the requirements of team membership and who makes the grade. Here much of the literature borrowers from previous writings on telecommuting. Schilling asserts there are a variety of criteria. First of all, participation must be voluntary--teams are destined to fail if not supported by its members. Furthermore, members must have previously demonstrated satisfactory work responsibilities and habits. Schilling further identifies a number of key social characteristics since work is often performed alone. The employee must be able to perform with limited supervision and feedback, reduced social interaction, have good organizational and time management skills, be self-motivated, demonstrate good performance, and be able to concentrate if away from a worksite. [16]

Putman, an author who also borrows heavily from telecommuting, believes that tasks involving “transmitting clearly defined pieces of information” are the best candidates for independent workers. However, this is typically not the situation in project management, which is oriented towards problem solving. Here she notes that collaborating workers developing new products require intense forms of communication that distinguish telecommuters from virtual team members. [17]

It should be noted that the number of participants should be limited to a few. Lipnack & Stamps suggest five to ten (“Dispersed Teams are the Peopleware for the 21st Century”). [18] This is reasonable considering the network structure previously discussed. With each additional member added to the team, the number of links increases. Even with the best technology communication along those links are slow, making collaboration more difficult than face-to-face teams.

The next step in the Gray & Larson model is to develop the leader. Discussion on this topic is reserved for the section on “Leadership” because virtual teams impose unique demands on the project manager from start to finish.

The team needs to be developed and prepared for the task at hand. One method is the nine step Xerox model described by Fisher & Fisher. The first step is to form the team, but all the remaining steps are to prepare the members for their tasks. Steps two through nine are 2) communicate the vision, 3) develop a mission statement 4) define goals, 5) develop norms, 6) develop roles, 7) develop meeting processes, 8) develop communication processes, and 9) develop work processes. [19] The Xerox model is a sound model, but does not distinguish virtual teams from traditional ones in enumerating steps. This is not incorrect, but the implementation of the steps will require different practices and areas of emphasis for virtual teams.

Cantu identifies organizational design, job design, and team design as important early elements. Within organizational design, business goals are defined in the context members operate; members need to recognize the team values of others; the team needs to develop an infrastructure for involvement; and they need to design the configuration of the team while setting boundaries. Members need to be clearly aware of the team’s expectations of how each will participate. Therefore, up-front job design should consist of defining realistic job previews; designing accountability; giving decision making power to the team; discussing compensation; and providing feedback for employee development and recognition. Finally the team needs to be clearly defined as well. The team should have a clear identity, create a statement of purpose, name goals, and make connections with those outside the team who can provide resources and support. [20]

The fourth step, project implementation, proceeds like most other projects. The steps here are likely to be highly correlated with the subject of the project. For instance, if the project was to create a software package, appropriate development steps should be taken whether the team is virtual or traditional. However, virtual teams face additional challenges, describe in further detail in the section titled “Obstacles”, and require more effort to keep open the lines of communication and develop trust.

The final step in the Gray and Larson Model is project completion. Many sources suggest a form of celebration to mark the completion of the task and recognize the members of the team. For traditional teams this may mean going to dinner as a group. A virtual team may decide to do the same, but there are alternatives as well. A final video conference with corporate tokens of appreciation could be a substitute.

Some authors observe that there are other considerations upon completion of a project. Cantu labels this as re-entry. Members need to transition into new job roles or reallocate time that they previous dedicated to the project. [21] There is also the concern that their effort participating in the project be visible to those around them, particularly their supervisors. A good virtual team manager addresses these issues prior to kickoff.


All project teams face obstacles to success. When one decomposes virtual teams into the summary of its parts, it is evident that virtual teams are especially challenging. Lipnack and Stamps note that “All the pitfalls that can trip up a collocated team are dangers to a virtual team, but even more so… [T]he best summary we’ve seen [are] ‘team killers’. They include: false consensus, unresolved overt conflict, underground conflict, closure avoidance, calcified team meetings, uneven participation, lack of accountability, and forgetting the customer.” These can be a part of every team. However, virtual teams add a new dimension to the problem—“technology adoration”. The authors suggest some people think that virtual team problems can be solved by setting up e-mail list, opening chat rooms, and mounting desktop conferencing. These can certainly help teams, but only when used in conjunction with the overall strategy of the project. (“Dispersed Teams Are the Peopleware for the 21st Century”) [22]

Lipnack and Stamps only cover one aspect of the unique difficulties encountered by virtual teams. There is more than just technology nerds running amuck. Kimble, Li, and Barlow suggest that virtual teams face “barriers” which can be either technological or non-technological. Technological barriers would include such inconveniences as slow network computers, poor architecture, and lack of collaborative software. They also note that most equipment and software has been designed for use in a conventional office, so those working at remote sites may face problems interfacing with their team. Although some technological problems can be inhibiting, the authors considered other barriers to be more serious. Chief among these would be organizational and cultural barriers. Also included in the list are perceived disruption of virtual teams to corporate culture and the loss of employee’s loyalty. [23]

The bulk of the literature does not directly define the “barriers” or “team killers”. Virtual teams face problems encountered by all teams, people working with others in the organization, plus those face by the virtual nature. These can be numerous. In the end it simply boils down to the fact that it is difficult to collaborate on something when the communication process is inhibited. New technologies just provide new mechanism to make distant collaborative teams possible, not necessarily superior to other options. Since virtual teams present stiff challenges to its members, most authors end up heavily emphasizing one of three areas: building trust, enhancing communication, and developing virtual management skills.

Building Trust

In an ordinary project trust is built through frequent interaction. If the members of the project team are located on the same site, they may already know each other and have the advantage of previous interaction with their colleges. Members can see one another working on the project, discuss issues at the water cooler, and build a relationship with daily interaction. A distance project team may have none of these advantages. For this reason the majority of the “How to” literature encourages deliberate activities that build trust. Typically the major recommendation across these works is to provide a face-to-face kickoff meeting for all members to get to know each other.

Kiser states that “Trust is the grease. Without it, you’re not going anywhere.” Members have to trust that others are doing their work, and doing it at a high quality level while meeting deadlines. Furthermore, language and culture differences can become a factor. Many times emails can be interpreted in different ways, something that might be cleared up in a face-to-face meeting or visual cues regarding the other’s reaction. [24] Xerox, for instance, encourages imbedding pictures of team members into collaborative and communicative technologies in order to “see” the other member (Fisher & Fisher). [25]

In a research study Herzog interviewed 20 participants from IT projects and concluded that the major factors influencing the level of trust were the members’ perceptions of self, of others, and of the process and activities. [26] This expands the notion of trust beyond most authors’ considerations, who only emphasize relationship-building between team members. The implication of Herzog’s research is that activities must take place that also emphasize buy-in to the project’s goals by building the member’s reasonable expectations. Also, the foundation of trust starts off in square one by selecting people with the right personalities and approach to their work. In a similar vein, Fisher and Fisher go one step further and state that corporations encourage trust through their approach to business. Companies that are honest, establish strong business ethics, do what they say, and grant trust provide a healthy environment for trust to flourish. [27]


Communication builds trust. It provides guidance, and the phrase “collaborative teams” infers that communication is taking place. Lack of communication is the one hurdle that really distinguishes the challenges faced by virtual teams. Blaine and Bowen build on Daft and Wiginton proposition that it is not quantity of information that reduces equivocally, but the quality or “richness” of that information. Richness is a property of the medium used to convey information, which includes the mediums’ ability to provide immediate feedback, use multiple cues and channels, and allow personalization and language variety. Communication can be decomposed into its data capacity and richness. A phone, for instance would be high in richness, but low in data capacity, while reports would be high in data capacity, but low in richness. [28] Recent technologies have simply provided additional mechanisms of communication. With each new tool in the toolbox, there is a chance that a more appropriate tool exists for the communication need than existed a decade ago.

The effects of various types of communication mechanisms was the subject of a study by Eggert. He approach the topic through the framework of a dilemma game, also called the prisoners’ dilemma, public good games, or free riding game. The concept is that with collaboration two individuals achieve a better payoff, but must rely on the other person to get that better payoff. There is also an incentive to cheat or free ride where there is gain by one member at the other’s expense. They conducted seven free riding experiments where the difference between each was the type of communication related to business interfaces. These included communication by reference, identification, lecture, talk-show, audio-conference, video-conference, and table conference. Eggert evaluated the cooperation level and the stability of the cooperation for each method. He found reference and identification produced low levels of cooperation and were highly stable. Lecture, talk show and audio-conference produced intermediate levels of cooperation that were unstable. Finally, video and table conferencing produced a high level of cooperation and were highly stable as well. He concludes the business implication is that both auditory and visual communication play key roles for efficient outcomes. [29]

Certainly video and face-to-face conferencing is not always possible with all virtual team communications. Therefore, several authors have provided guidelines for alleviating communication problems. Gould suggests the following practices

Peterson and Stohr also have four tips for effective distance communication:

Other practical suggestions include establishing a communication center with a project web site. This ensures that everyone is working from the same documents and have the latest information on the team’s progress (Barker). [32] Feldman concurs with this idea and adds that putting a project on the Internet can help build an audit trail to record the documents and details. [33]

The Virtual Team Project Manager

Leading a virtual team not only involves the communication complexities, but requires a certain shift in the project leadership approach. Fisher & Fisher assert that the project leader now must manage the boundaries—the environment that surrounds the team. A few of these include introducing members to key external contacts, building systems for data linking, and intermediating with headquarters. The authors assert this is different from traditional project managers who work in the system rather than on the system. They place virtual project management into seven clusters: leader, results catalyst, facilitator, barrier burster, business analyzer, coach, and living example. [34]

Benett examined project management activities and broke down activities into tasks, resources, and tracking. Establishing tasks and acquiring resources are areas project managers already have experience with, although virtual project management adds a new twist. [35] Tracking, on the other hand, requires a new paradigm of managing people and progress of the project. Pearlson suggests project managers venturing into the virtual world for the first time are faced with three paradoxes: 1) an increase on structure and flexibility—flexibility in the sense of the work environment and structure as it relates to the pattern of interaction. 2) Greater individuality and more teamwork—individual effort is needed due to the distance, but there needs to be unity and commitment by the team members on objectives. 3) An increase and decrease in control—control over the worker is reduced, but managers must maintain strong control over the structure of the group. [36]

Davies adds to the discussion by considering appraisal and compensation. First he considers whether appraisals should be based on similar terms as members of traditional teams. The conclusion is no. The activities of a virtual team required for success are disguisable from the traditional approach. Therefore, the skills (communication for instance) shift. Although he does not draw any hard conclusions, he urges examining what is needed for the effective outcomes of the virtual project and back out the appropriate evaluation factors from those. [37]

Software exists that can aid in the evaluation of team members. One avenue is monitoring software, but this erodes the concept of trust. Yogesh Malhotra, the CEO of, cautions against using such software. “One may compare the above description with bringing up a teenager by the parent. One could either use the technology… for continuously monitoring each movement of the child, or one may rely more on the sharing of family values.” He recommends keeping the channels of communication open and promoting a culture characterized by “clan control”. (“Virtual Corporations, Human Issues & Information Technology”) [38]

The new world of virtual project management requires many of the same skills as traditional project management. However, it means letting go of some of the control, which may be difficult. It is impossible to micromanage a virtual project. Coordination skills are primary because of the reduced communication of virtual teams

Conclusion: The Elements for Success

At this point it would be worthwhile to take a moment and reflect on the words “virtual project team”. Taking these in reverse order, team is the most basic concept. A project leader should question, what makes up a good team? Appropriate answers would be qualified individuals; commitment of members; and communication among players. These are simply the foundation of any group activity. Narrowing the focus a little further, what makes a successful project given a good team? Appropriate answers would be clearly defined goals, access to resources, and a supportive environment. Finally, factor in the virtual qualifier. How does this change what is required of the team and the project. The answer here is that it changes none of the requirements. It does, however, make the requirements more difficult to arrive at because of reduced communication channels. The technologies made available in the past five years merely add broadband to once narrow channels. This broadband not only increases the amount of data that can be transferred, but improves the richness of communication.

Manheim & Medina propose that virtual behaviors are influenced by 1) the nature of the work, 2) management of critical supporting work processes, 3) organizational context 4) geographical context, 5) communications support, 6) other environmental contextual factors, and 7) individual characteristics. [39] Lipnack and Stamps more simply state that “[T]he best collocated teams use principles incorporated by the most successful virtual teams: a clear purpose, a focus on people, and concentration on the links that connect them.” (“Dispersed Teams Are the Peopleware for the 21st Century”). [40]

In the end, a successful virtual project team is successful because they emphasized the necessary components of project teams. The introduction of the virtual world may be beneficial because it demands that the leader and players take a step back and ask themselves, “with this new twist on project teams, what is required of my group and me?” It requires an absolute commitment to project management methodologies. Virtual project teams are successful because the leaders and members put forth the extra effort to overcome communication barriers.

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-- “Virtual Corporations, Human Issues & Information Technology”. Interview with Yogesh Malhotra for the American Society for Training and Development, Training & Development, (February 1, 1997). Available at

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