Making Organisations Virtual: The Hidden Cost of Distributed Teams

This paper reports an exploratory case study that used boundary theory to investigate the impact of organisational virtualisation on work units. Specifically, the research analysed the transition in a public sector organisation from permanent, co-located teams to temporary virtual teams and its impact on team boundary properties and activities. The study contributes to existing knowledge of virtual teams and virtualisation processes in several ways. The findings suggest that, contrary to existing thinking, rather than removing organisational and institutional boundaries, virtualisation increases the number and complexity of such boundaries at the work unit level. The findings also indicate that the chronic lack of knowledge sharing on virtual teams is, in addition to difficulties of establishing interpersonal trust, due to a lack of trust in the technology as an appropriate medium for sensitive knowledge sharing. The implications of the study for practice are that efficiency gains from organisational virtualisation can easily be offset by the need to invest additional resources and team members’ time into cultivating a greater number of transient relationships at a distance. Organisations also need to invest in opportunities for face-to-face interaction where sensitive knowledge sharing is a critical resource for a virtual team.