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Managing distance by interdependence: Goal setting,

task interdependence, and team-based rewards in virtual
teams

Article  in  European Journal of Work and Organizational Psychology · March 2004

DOI: 10.1080/13594320344000228

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 EUROPEAN JOURNAL OF WORK AND ORGANIZATIONAL PSYCHOLOGY, 2004, 13 (1), 1–28

Managing distance by interdependence: Goal setting,

task interdependence, and team-based rewards in
virtual teams
Guido Hertel, Udo Konradt, and Borris Orlikowski
University of Kiel, Germany

Virtual teams, i.e., work groups in which members collaborate from distant
locations predominantly based on electronic communication media, are
increasingly introduced in organizations due to new opportunities of electronic
communication media and recent trends of globalization and teamwork.
Among the main challenges of virtual teams is the maintenance of high work
motivation due to reduced face-to-face interaction. The current study
examined whether these motivational challenges can be compensated by the
experienced interdependence within virtual teams. Consistent with our
expectations, the result of a field study with 31 virtual teams showed that
management practices related to goal, task, and outcome interdependence
correlated with the effectiveness of the teams. In more effective teams, quality
of goal setting processes and task interdependence were higher compared to
less effective teams. Positive effects of task interdependence were particularly
present during the first year of virtual teamwork. Moreover, the use of team-
based rewards as operationalization of outcome interdependence was also
positively related with team effectiveness. Further analyses revealed that the
positive effects of these management practices were partially mediated by
motivational processes of the team members. Implications for successful
virtual teamwork are discussed.

As a result of both the increasing globalization and recent trends of

establishing teamwork in organizations, team members have to collaborate
more and more from distant locations, using predominantly electronic
communication media to coordinate the work. Such distributed or virtual
teams are no longer a new or exotic work form, but rather established reality
in many companies and non-profit organizations (Bell & Kozlowski, 2002;
Duarte & Snyder, 1999; Hinds & Kiesler, 2002; Konradt & Hertel, 2002;

Correspondence should be addressed to G. Hertel, Psychology Department, University of

Kiel, Olshausenstrasse 40, 24 098 Kiel, Germany. Email: hertel@psychologie.uni-kiel.de

# 2004 Psychology Press Ltd

http://www.tandf.co.uk/journals/pp/1359432X.html DOI: 10.1080/13594320344000228
2 HERTEL, KONRADT, ORLIKOWSKI

Lipnack & Stamps, 1997). However, surprisingly few quantitative field

studies are available yet on existing virtual teams. Therefore, empirically
based recommendations on how to manage these teams are still pending
(Bell & Kozlowski, 2002). The objective of the present study is to explore
effective management of existing virtual teams based on a theoretical model
of motivational processes. The general idea of this approach is that
motivational challenges due to low physical (spatial and temporal)
connectedness can be met by increasing the experienced connectedness and
interdependence within the team. In addition to linking concrete (direct or
structural) management practices to this general principle, our model also
indicates motivational mechanisms as mediating variables between manage-
ment practices and team effectiveness.
While the necessary features that define a ‘‘virtual team’’ are still
discussed controversially (e.g., Duarte & Snyder, 1999; Hinds & Kiesler,
2002; Lipnack & Stamps, 1997; Maznevski & Chudoba, 2000), we suggest a
stepwise definition. First, according to a more basic definition, virtual teams
consist of two or more persons who collaborate to achieve common goals,
while (at least) some of the team members work at different locations (or
times) so that communication and coordination is predominantly based on
electronic communication media (email, fax, phone, video conference, etc.).
In a second step, more specific dimensions are conceptualized on which
virtual teams can be categorized. Examples for such dimensions are the
clarity of team boundaries (inclusion of freelancers and external experts), the
heterogeneity of the team (regarding culture, occupational background,
etc.), time restriction (temporary vs. long-term teams), or the level of
autonomy. Such stepwise taxonomy allows a more accurate differentiation
between specific types of virtual teams that might be suited differently for
different tasks and might require different management strategies (see Bell &
Kozlowski, 2002, for a similar approach). At the same time, basic
characteristics are stressed that might be similar for all types of virtual
teams and are connected with certain advantages as well as challenges.
Advantages of virtual teams combine positive aspects of conventional
teamwork with the growing opportunities of new communication tools. As a
consequence, teamwork can be accomplished with much greater indepen-
dence from time and space constraints, opportunity costs can be reduced,
market demands can be addressed more flexibly, and expert knowledge from
remote locations can be integrated (e.g., Duarte & Snyder, 1999; Lipnack &
Stamps, 1997). These advantages are relevant for teams in various fields,
such as R&D, problem solving task forces, customer services, and even
production.
However, virtual teams also entail a number of challenges. Apart from
coordination and technological problems, there are major motivational
challenges grounded in the reduced level of face-to-face contacts compared
 MANAGING VIRTUAL TEAMS 3

to conventional teams (Lipnack & Stamps, 1997; McGrath & Berdahl, 1998;
Moore, Kurtzberg, Thompson, & Morris, 1999; Valacich, Dennis, &
Nunamaker, 1992). For instance, it is often more difficult to implement and
maintain common goals when persons are spatially and temporally
distributed. Thus, the perceived commitment to team goals might be
reduced in virtual teams. Moreover, lack of face-to-face interaction can lead
to feelings of anonymity and low social control (Kiesler, Siegel, & McGuire,
1984; Spears, Lea, & Lee, 1990; Shepherd, Briggs, Reinig, Yen, &
Nunamaker, 1996; for exceptions, see Lea, Spears, & de Groot, 2001),
which in turn often cause social loafing due to low perceived instrumentality
of own efforts (Karau & Williams, 1993). Persons might feel that their
personal contributions do not really matter for the group or cannot be
evaluated by others, so that expected personal consequences of low
performance are lacking. Furthermore, self-efficacy might be more difficult
to maintain in virtual teams compared to conventional teams because
(positive) feedback is more difficult to receive. And finally, trust might be a
problem particularly in virtual teams (Büssing, 2001; Jarvenpaa & Leidner,
1999; Moore et al., 1999; Wiesenfeld, Raghuram, & Garud, 1999) because
members do not see directly whether the other members are also
contributing to the team task. As a consequence, team members might
reduce their effort in order to prevent being exploited (Kerr, 1983).
Thus, an important theme for current research is to explore (direct and
structural) management practices that particularly address these motiva-
tional issues in virtual teams. In the past, the concept of virtual teams has
been discussed as a new work form in which traditional concepts of
management and team development are no longer valid, assuming that
virtual teams form and dissolve autonomously, manage themselves
independently, and take advantage of their diverse members without much
coordination work. However, how and if such processes might function is
neither thoroughly explained nor empirically demonstrated yet. In contrast,
we believe that virtual collaboration is not completely different from other
forms of teamwork but differs rather gradually in certain aspects. For
instance, motivational problems due to spatial and temporal disconnected-
ness are particularly relevant in virtual teams but can be also found to a
lower degree in conventional teams. As a consequence, it might be possible
to adopt management practices from conventional teamwork to the
management of virtual teams. One objective of the present research is to
explore whether such adoption is fruitful.
In doing so, this study focuses on effective management practices within
existing virtual teams instead of comparing virtual teams with face-to-face
teams. Although the latter is also an important question, the implementa-
tion of virtual teams is often not a matter of free choice but simply inevitable
due to external factors (e.g., a merger with another company, the need to
4 HERTEL, KONRADT, ORLIKOWSKI

include experts from abroad, the need to have representatives at customer

locations). In these cases, guidance is needed how virtual teams can be
managed best (see also Guzzo & Dickson, 1996).

MANAGING DISTANCE: MAINTAINING

INTERDEPENDENCE IN VIRTUAL TEAMS
The general idea of the following approach is that motivational challenges
due to low physical connectedness can be addressed or compensated by
maintaining high experienced interdependence among the team members.
Thus, we expect that high interdependence within virtual teams should be
related to high individual motivation of the team members, as well as to high
overall team effectiveness (cf. Figure 1).1
Common approaches distinguish three types of interdependence that are
relevant for teams (Campion, Medsker, & Higgs, 1993; Wageman, 2001). In
accordance with general process models of human action, these types are
related to goals (goal interdependence), task behaviour (task interdepen-
dence), and evaluation of behaviour outcomes (outcome interdependence).
In research with face-to-face teams, all three aspects of interdependence
have been shown to be positively related to motivation of team members
and team effectiveness (Campion et al., 1993; Wageman, 2001). We assume
that these three types of interdependence are also positively related to
motivation and performance in virtual teams. We further assume that these
types of interdependence can be influenced by direct or structural manage-
ment practices, providing concrete means to maintain high motivation and
performance within virtual teams. Next, examples for such management
practices are suggested for each type of interdependence.

Goal interdependence: Quality of goal setting

processes
Goal interdependence is defined by Campion et al. (1993) as the degree to
which teams have clear goals or a clearly defined mission, and the extent to
which members’ goals are linked to these team goals. Realizing goal
interdependence as a management practice can be accomplished by the
managers’ goal setting behaviour, as for instance described as part of

1
A precondition of this assumption is that the outcome of a team must be some kind of an
additive sum of members’ contributions. If the team outcome is already determined by only part
of the members, or if high motivation of some team members even decreases the team outcome,
more complex processes must be assumed (e.g., Koslowski & Klein, 2000). In the present study,
the interviews of the team managers suggested that the outcomes of the teams could be largely
conceived as an additive sum of members’ contributions.
 MANAGING VIRTUAL TEAMS 5

Interdependence as Management Principle

Goal Task Outcome Types of

Interdependence Interdependence Interdependence Interdependence

Goal Task Team-based Operationalization,

Setting Structure Rewards Practices

Motivational
Valence Instrumentality S elf- Trust Processes at
efficacy the Individual
Level

Skills, Individual Motivation Results at the

Knowledge, Individual
(and Performance) Level
etc.

Technology, Team Results at the

Economy, Effectiveness Team Level
etc.

Figure 1. Expected effects of interdependence and related management techniques on team

effectiveness mediated by motivational processes according to the VIST model. Context factors
are depicted in dotted lines. On the individual results level, performance is integrated as a
function of individual motivation but set in parentheses because it is not explicitly measured in
the present study. Moreover, there are a number of feedback loops conceivable between the
steps that are omitted from this schema for reasons of readability.

management by objectives (MBO; e.g., Odiorne, 1986). Particularly in

virtual teams, such a delegative management approach seems to be more
appropriate than direct control techniques (Aiello & Kolb, 1995; Konradt,
Hertel, & Schmook, 2003; Wiesenfeld et al., 1999). Goal setting processes
have been demonstrated to enhance and maintain motivation, performance,
and satisfaction of employees in face-to-face teams (e.g., Rodgers & Hunter,
1991) as well as in telework (Konradt et al., 2003), thus it seems reasonable
6 HERTEL, KONRADT, ORLIKOWSKI

to expect that goal setting also affects motivation and effectiveness within
virtual teams.
Given the popularity of goal setting and MBO in organizations, it is
difficult to find managers who would not claim that they apply goal setting
principles in their work. However, this does not guarantee that these
principles are applied successfully. Team managers might intentionally
neglect important aspects of goal setting principles (e.g., goal agreement), or
they might not be optimally trained to administer them (Gareis & Korte,
2000). Moreover, managers might anticipate difficulties in supervising
remote workers and resent delegative principles because these threaten their
need of control (Wiesenfeld et al., 1999). Thus, instead of relying on
managers’ declaration that goal setting principles are applied, it might be
more appropriate to measure the extent to which goal setting is realized
within a team. Such a procedure allows also a more differentiated scale level
than a simple dichotomic distinction. Assuming that high quality of goal
setting creates high goal interdependence, we expect that the quality of goal
setting is positively related to motivation and overall team effectiveness in
virtual teams.

Task interdependence: Structure of the team tasks

In addition to unclear or conflicting goals, members of virtual teams might
also feel that their personal contribution is not really crucial for the team’s
success. Such low perceived instrumentality of own contribution is generally
one of the major reasons for motivation losses in groups (Karau & Williams,
1993). One structural management practice to overcome low perceived
instrumentality of contributions might be to design the working process of
the team in a way that increases the task-driven interactions among group
members (Shea & Guzzo, 1987). This can be realized by creating a task
structure in which team members work closely with each other, must
coordinate their activities frequently, and within which the way one member
accomplishes her or his task has strong implications on the work process of
other team members. As a consequence, team members should notice the
consequences of their personal efforts for the rest of the team more quickly
and directly, increasing social pressure when efforts are low.
Indeed, recent experimental research with simple weight holding tasks has
shown that persons mobilize additional efforts when they believe that own
poor performance would inhibit other team members in their work (e.g.,
Hertel, Kerr, & Messé, 2000a). These motivation gains were replicated in
laboratory studies even under conditions of anonymity and lack of face-to-
face interaction using a physical task (Hertel, Kerr, Scheffler, Geister, &
Messé, 2000b) or a cognitive computer task (Hertel, Deter, & Konradt,
2003a). We expect similar processes in virtual teams outside the laboratory.
 MANAGING VIRTUAL TEAMS 7

When task interdependence is high and one’s own poor performance would
inhibit the work of other team members, persons should feel that their
personal contribution is highly indispensable for the team’s success. This in
turn should increase the motivation of the team member and lead to higher
effectiveness of the whole team. On the other hand, when task inter-
dependence is low and poor performance of a team member might be
compensated by others, perceived instrumentality and related motivation
should be rather moderate or even trigger social loafing.

Outcome interdependence: Team-based rewards

Outcome interdependence is given when team members are not only
rewarded individually but when rewards are also based on the total team
performance. A number of studies with conventional teams have shown that
team-based rewards, when implemented carefully, can support a good team
spirit and foster team members’ perception of responsibility and importance
of their personal contribution for the team’s success (DeMatteo, Eby, &
Sundstrom, 1998; Mohrman, Cohen, & Mohrman, 1995; Snell & Dean,
1994). These effects should be particularly important for virtual teams in
which a strong team spirit and a sense of importance of own contributions
are more difficult to develop due to reduced face-to-face contact. Thus, we
expect that team-based rewards are positively related to members’
motivation and team effectiveness within virtual teams.
In addition to these processes related to different types of inter-
dependence, our model also provides detailed predictions about the
mediating motivational processes at the individual level of each team
member. These analyses are based on a motivational model that is briefly
described next.

MEDIATING MOTIVATIONAL PROCESSES:

THE VIST MODEL
The VIST Model of motivational processes in teams (Hertel, 2002) has been
developed acknowledging the specific situation of virtual teams. It builds on
Expectancy 6 Value concepts that explain motivational processes in
individual work (Atkinson, 1957; Vroom, 1964) as well as in more complex
group settings (Karau & Williams, 2001; Shepperd, 1993). Moreover, the
VIST Model integrates elements from research on social dilemmas
(Komorita & Parks, 1994; Pruitt & Kimmel, 1977) that stress the
importance of trust for the development of cooperation, particularly in
teams with low direct interaction. The label ‘‘VIST’’ is an abbreviation of
the four main model components Valence, Instrumentality, Self-efficacy,
and Trust as predictors of individual performance motivation in groups.
8 HERTEL, KONRADT, ORLIKOWSKI

Valence is defined as the subjective evaluation of the team goals. It is

assumed that the motivation of a team member is directly proportional to
her/his subjective evaluation of these goals. Members of virtual teams (as
well as members of conventional teams) often pursue additional personal
goals and/or goals related to other work units. The more these additional
goals are in conflict with the team goals, the lower the valence component
and related personal motivation to work for the team.
In addition to this valence component, the other three VIST components
contain different expectancy concepts. Instrumentality is defined as the
perceived importance (indispensability) of one’s own contributions for the
group outcome. The higher the perceived instrumentality of own contribu-
tions, the higher should be the motivation to exert effort for the team goals.
On the other hand, if persons believe that their contribution does not matter
or cannot be identified, performance motivation should decrease consider-
ably even when these persons value the team goals highly. We expect that
particularly this component is a mediator of interdependence effects in
virtual teams.
The third component self-efficacy builds on work by Bandura (e.g., 1977)
and includes team members’ perceived capability to show the required
activities for the team tasks. Thus, self-efficacy describes the perceived
contingency that one’s own high effort leads to own high performance.
When group members believe that they are unable to accomplish their part
of the team task, performance motivation should be low even if the team
goals are highly valued and the contribution is perceived as necessary for the
team’s success.2
Finally, trust as the fourth component is defined as the expectancy of
team members that their efforts will be reciprocated and not exploited by
other team members (interpersonal trust), and that the electronic support
system (Groupware, etc.) works reliably (trust in the system). Trust is
particularly relevant in virtual teams in which misunderstandings and fear of
exploitation can escalate more quickly due to reduced face-to-face
interactions (Jarvenpaa & Leidner, 1999).
Together, each of the four components is assumed to contribute positively
to members’ motivation in virtual teams. While related models of motivation
in groups (e.g., Karau & Williams, 2001) assume a multiplicative function of
at least some of these components, the VIST Model refrains from such
specifications because the empirical evidence is yet too shallow. Moreover, a
recent meta-analysis of similar concepts for individual work showed that a
multiplicative combination does not explain more variance than the single

2
Related group level constructs such as collective efficacy (Shamir, 1990) or group potency
(Guzzo, Yost, Campbell, & Shea, 1993) are not considered here in order not to broaden the
research focus too much. At this step we focus on motivational processes at the individual level.
 MANAGING VIRTUAL TEAMS 9

components alone (van Eerde & Thiery, 1996). Instead, the different
components of the VIST Model are assumed to contribute to team members’
motivation similar to predictors in a regression approach.
The VIST Model is used in this study to explain the assumed positive
effects of interdependence on the motivation of team members, and on the
resulting team effectiveness. Of course, the performance of virtual team
members is also determined by nonmotivational factors such as personal
skills or expertise. Moreover, the effectiveness of virtual teams additionally
depend on context factors such as technical equipment or the current
economic situation (cf. Figure 1). Nevertheless, we expect that the effects of
interdependence in virtual teams are strong enough not only to be apparent
in motivational ratings of team members, but also in the effectiveness of the
whole team.
In general, effects of experienced interdependence on team effectiveness
should be particularly mediated by team members’ perceived instrumentality
of own contributions for the team success because the more interconnection
is experienced within a team, the more salient should become the
consequences of personal good or bad performance for the team. However,
such mediating effects of the instrumentality component might be
accompanied by other VIST components. Thus, with varying management
practices different numbers of motivational mediators might be involved.
Goal setting as management practice related to goal interdependence
should affect motivation of team members by the instrumentality
component because high quality goal setting clarifies how and why the
inputs of each group member are important to the group (Karau &
Williams, 2001; Weldon, Jehn, & Pradhan, 1991). However, effects of goal
setting might also be mediated by the valence component because high
quality goal setting clarifies goals and links group goals to personal interests.
In addition, effects of goal setting might be mediated by self-efficacy because
high quality goal setting implies challenging but still realistic goals that are
accompanied by regular feedback (Locke & Latham, 1990). Finally, effects
of goal setting might be mediated by trust because clear goals for each
member and regular feedback can ensure fair working and compensation
processes also under conditions of low face-to-face contact. Based on these
considerations, we can formally specify:

H1: The quality of goal setting is positively related to the effectiveness of virtual
teams. These effects are partially mediated by (1) team members’ perceived valence
of team goals, (2) instrumentality of own contributions, (3) self-efficacy, and (4)
trust within the team.

Creating task interdependence as a structural management practice

related to task design should mainly affect team effectiveness due to team
10 HERTEL, KONRADT, ORLIKOWSKI

members’ perceptions of the instrumentality of own contributions. When

team members have to coordinate their work more often and work closely
with each other, the importance of personal contributions for the overall
team is more apparent compared to low task interdependence. On the other
hand, no direct links between task interdependence and self-efficacy or
valence are expected because both of these motivational components can be
considered high or low under different levels of task interdependence.
Similarly, task interdependence can have both facilitating (e.g., increasing
cohesion) and inhibiting effects (e.g., increasing conflicts) on the develop-
ment of trust. Thus, we state:

H2: Task interdependence is positively related to the effectiveness of virtual teams,

and this effect is partially mediated by team members’ perceived instrumentality of
their own contributions for the team’s success.

Finally, we expect that the use of team-based rewards as management

practice related to outcome interdependence should affect the instrumen-
tality component because such rewards increase the perceived interconnec-
tion of individual contributions to the team’s success, as well as the
perceived accountability and responsibility to other team members
(DeMatteo et al., 1998).3 Moreover, team-based rewards might also affect
the evaluation of team goals because accomplishing these goals is simply
more rewarding under these conditions. On the other hand, effects of team-
based rewards on self-efficacy and trust should depend on whether these
rewards have been achieved or not. Consequently, no direct relations
between team-based rewards and the latter two VIST components are
expected. Thus we state:

H3: Team-based rewards are positively related to the effectiveness of virtual teams,
and these effects are partially mediated by (1) team members’ perceived valence of
team goals and (2) perceived instrumentality of their own contributions for the
team’s success.

In addition to the management practices described, there are many other

techniques that can be also considered to foster the experience of
interdependence within virtual teams (e.g., communication processes, team
building activities). However, in order to avoid too much complexity, we
focused in the present study on the three management practices described
above.

3
Please note that these authors also describe potential drawbacks of team-based rewards on
team effectiveness (see also Wageman, 1995).
 MANAGING VIRTUAL TEAMS 11

THE PRESENT STUDY

A cross-sectional field study was conducted to test the outlined hypotheses.
According to our taxonomy mentioned above, we explored virtual teams
that had (1) a clear management structure, (2) clear team boundaries, and
(3) that were homogenous in their cultural and occupational background.
However, the teams varied according to their time perspective. About half of
the teams were permanent with no time restrictions while the other teams
were temporary and were dissolved after the project goal was accomplished.
Following a ‘‘best practice’’ approach, the focused management practices
related to goal, task, and outcome interdependence were correlated with the
effectiveness of the teams. In addition, we also measured motivational
indicators of the team members to explore the assumed mediation processes
between interdependence and team effectiveness.

Method
Setting and sample
The study was conducted in two large business companies in Germany;
an international software distributor (8 teams) and a computer service
provider of a large insurance company (23 teams). All teams were formal
groups in that employees were assigned, viewed themselves and were seen by
others as teams, and interacted and shared resources to accomplish mutual
tasks and goals (Shea & Guzzo, 1987). At the software distribution
company, the teams were sales teams with members working at the locations
of key customers. At the computer service provider company, teams were
responsible for information and communication technology solutions for
offices of a large insurance company, with team members located at the
different local offices. Apart from differences in the team tasks between the
companies, the teams were similar in their hierarchical structure (one
manager to whom all team members reported), boundaries (no freelancers
or external experts), their cultural and occupational background, and their
general business sector (IT sector). Moreover, team members and team
managers were similar across the teams in many ways (e.g., gender,
education, tenure), and only nonsignificant or trivial correlations occurred
between these demographics and team effectiveness. However, the teams
differed in their time restriction. Fifteen teams had a long-term perspective
with mostly strategic goals, while sixteen teams were temporary (duration
between 6 and 18 months). This factor was included as a possible moderator
in the following analyses. The teams had on average seven members
(SD = 3.3). About 68% of the team members worked remote (i.e., in
another city spread all over Germany) from the team manager. Tenure of
12 HERTEL, KONRADT, ORLIKOWSKI

the teams was about 15 months (SD = 14), and participants were on average
14 months on the teams (SD = 13). Individual measures of gender and age
were not allowed by the companies. However, according to the HR
departments, team members were mostly male (overall average of 77 %) and
on average 38 years old (SD = 4.0). The average frequency of formal face-
to-face team meetings was once every 2 months. According to members’
ratings, about 64% of all communications within the teams were realized via
electronic communication media (SD = 18).

Procedure
The procedure of this study included an internet-based questionnaire
completed by the team members and semi-standardized interviews of the
team managers. At the beginning, the participants were informed via email
about the purpose of the study and that the data would be kept confidential.
Then, the team managers were interviewed. These interviews lasted about 1
hour each and contained questions about the characteristics of the team and
its tasks, detailed ratings of the team’s effectiveness according to its goals,
and questions about management practices (see below).
Then, team members (but not the managers) completed an internet-based
questionnaire that was entered with an individual password. The
questionnaire contained items measuring the perceived quality of goal
setting, ratings of team members’ motivation and trust, and ratings of team
members’ satisfaction with the team. The items of each concept were
presented in blocks with descriptive headings in order to increase their
comprehension. In addition, demographic data were collected at the end of
the questionnaire. After completion of the questionnaire, participants
clicked a ‘‘send’’ button and the results were saved on a server located at
the University of Kiel. One-hundred-and-nine out of two-hundred-and-
seventeen invited team members completed the questionnaire, yielding a
response rate of about 50%. In the following group level analyses, only
teams were included in which at least 20% of the members returned the
questionnaire.4

4
All managers of the 31 teams were interviewed. However, there were four smaller teams in
which only one team member returned the questionnaire in addition to the manager’s response.
We decided to keep these teams in our sample for reasons of statistical power (particularly for
the mediation analyses). The aggregation analyses of the other teams showed no large within
team discrepancies so that one could expect a similar pattern for the teams in which only one
member had returned the questionnaire. Also, the main results were quite similar when only
teams were included in which at least two team members had returned the questionnaire. For
instance, the correlations between management practices as well as VIST components and team
 MANAGING VIRTUAL TEAMS 13

Measurement overview
The development of the design and measures of this study was guided by
general principles of group research (e.g., McGrath, 1986). First, multiple
constructs of predictors and criteria were developed as often as possible and
collected from different sources. However, due to restrains of participants’
time, not all concepts were measured with ratings from both the managers
and the team members. Also, the number of items in each scale was a
compromise between adequate internal consistency and length limitations of
the electronic questionnaire. Experience with other online questionnaires
suggests an optimal length of about 70 items (or 15 minutes completion
time) in order to prevent premature termination of the questionnaire
(Batinic & Bosnjak, 2000).
Objective team effectiveness measures were not available due to the
companies’ policies. However, if they would have been available, a
comparison would have afforded a transfer to subjective ratings anyway
because tasks and context conditions varied between the teams (Pritchard,
Jones, Roth, Stuebing, & Ekeberg, 1988). Common method variance
between the assessment of management behaviours and team effectiveness
ratings was minimized by using different sources (managers vs. team
members). Apart from preparatory scale analyses of some measured
constructs (goal setting, task interdependence, VIST components), all main
analyses were computed at the group level based on aggregated item and
scale scores of the team members.
Although aggregation is a controversial issue (e.g., Campion et al., 1993),
a number of recommendations were fulfilled to allow such an aggregation.
Most items of the questionnaire referred to the group, and the measured
aspects were understood as shared views of the group. Moreover, for those
measures that addressed personal states of the group members (e.g.,
motivational ratings) the ratio of between- to within-group variance was
statistically significant (James, 1982). Furthermore, we assessed the degree
of interrater agreement within the teams using the rwg index as proposed by
James, Demaree, and Wolf (1993) that indicates the homogeneity of team
members’ perceptions on a multi-item scale. For the 5-point Likert scales
used in the present study, rwg can vary between 0 (low agreement) and 1
(high agreement). The observed mean rwg scores for the used scales were all
higher than .78, indicating satisfying agreement within the teams as a

(Footnote 4, continued) effectiveness were about identical; only the correlation between task
interdependence and team effectiveness decreased somewhat, r(n = 27) = .18, n.s. However,
since team effectiveness and task interdependence were both assessed by the team managers it is
safe to rely regarding this correlation on the whole sample of 31 teams.
14 HERTEL, KONRADT, ORLIKOWSKI

precondition for group level aggregation.5 Together, these results support

aggregation to the group level.

Management practices
Quality of goal setting. In both companies it was stated that goal setting
was an important leadership technique. However, as argued above, the
extent to which goal setting principles are realized might vary as a function
of managers’ preferences, training, or personality. Thus, a six-item scale was
developed to assess the quality of goal setting within the teams as perceived
by the team members. The items were based on earlier work on remote work
(Konradt et al., 2003), which in turn built on work by Locke and Latham
(1990). The six items included aspects such as goal clarity (two items, e.g.,
‘‘My current goals in the virtual teams are very clear to me’’), goal conflict
(‘‘Some of the goals for this team are in conflict with each other’’; reverse
coded), participation (‘‘I participate actively in the goal setting for the
virtual team’’), and goal adaptation (two items, e.g., ‘‘My goals are regularly
checked and adapted’’). Items were averaged based on a scale reliability of
.73 (alpha).

Task interdependence. To measure task interdependence within the

teams, the team managers completed a three-item scale during the interview
that was developed by Pearce and Gregersen (1991) and further modified by
Liden, Wayne, and Bradway (1997; ‘‘Group members work closely with
each other in doing their work’’, ‘‘Group members frequently must
coordinate their efforts with each other’’, and ‘‘The way individual members
perform their jobs has a significant impact upon others in the group’’).
Liden and his colleagues reported a reliability score of .74 (alpha). We used
a German translation with a 5-point answer scale ranging between strongly
disagree (1) and strongly agree (5). Reliability of the German scale was .68
(alpha).

Team-based rewards. In both companies, financial compensation at the

team level were not part of the official reward system. However, the team
managers had some flexibility to reward high team effectiveness with

5
Similar results were obtained using standard deviations across raters within groups to
assess interrater agreement (Schmidt & Hunter, 1989). Finally, to determine interrater
reliability, we calculated coefficient alpha by treating the members of each team as items and
calculating an average interrater coefficient alpha for each scale across all teams (Cohen & Lei,
1997). The average interrater coefficient alpha for the used questionnaire scales ranged between
.47 and .73, indicating not perfect but by and large satisfying interrater reliability.
 MANAGING VIRTUAL TEAMS 15

nonfinancial rewards at the team level, such as a mutual dinner, publication

of outstanding team success in the company newsletter, or free theatre
vouchers for all members. Whether the team managers generally used such
rewards as a management practice was inquired during the interviews and
coded as a dichotomous variable.

Motivational measures
The assumed motivational mediators were measured with four separate
scales based on the VIST Model (Hertel, 2002; for first validation data see
Hertel, Niedner, & Herrmann, 2003b). The valence component was
measured with four items (e.g., ‘‘It is important to me that my team reaches
its goals’’). The instrumentality component was measured with four items
(e.g., ‘‘I believe that my contribution to the team’s success is very
important’’). The self-efficacy component was measured with four items
(e.g., ‘‘I feel capable to accomplish my tasks in this team’’).6 Finally, the
trust component was measured with nine items addressing trust in the work-
related attitudes and competencies of other team members (e.g., ‘‘I can trust
that I will have no additional demand due to lack of competence of other
members of my team’’) as well as trust in the technological equipment and
support (‘‘I can trust that the technical equipment of my virtual team always
works’’). The items were answered on 5-point scales ranging from ‘‘disagree
strongly’’ (1) to ‘‘agree strongly’’ (5).
A principal component analysis with Varimax rotation including all
VIST items revealed five factors with an Eigenvalue 4 1, explaining 61.9 %
of variance. These factors were consistent with the assumed structure of the
VIST Model. The first factor was determined by items related to trust in the
other team members (factor loadings between .43 and .83). The second
factor was determined by the items related to the valence component (factor
loadings between .63 and .72). The third factor was determined by the items
related to the instrumentality component (factor loadings between .54 and
.80). The fourth component was determined by items related to the self-
efficacy component (factor loadings between .35 and .84). Finally, the fifth
component was mostly determined by the two items related to trust in the
system (factor loading of .84 and .88). Based on these results, we computed
mean scores for each participant for the valence (alpha = .72), instrumen-
tality (alpha = .75), and self-efficacy scales (alpha = .71). Reliability of the
person-related trust scale was .89 (alpha), and the correlation of the two

6
We decided to use this rather short self-efficacy measure instead of better known but longer
instruments in order to keep the questionnaire short. The current measure has been successfully
validated in earlier research (Hertel et al., 2003b) and could be applied with the same answer
format as the other VIST items.
16 HERTEL, KONRADT, ORLIKOWSKI

technique-related trust items was r = .72, p 5 .001. However, since the mean
scores of both trust scales were highly correlated, r = .68, p 5 .001, we
combined all 11 items to one overall trust scale in the main analyses
(alpha = .89).7

Measures of virtual team effectiveness

As our main dependent variable, the managers’ ratings of team effectiveness
were collected during the interviews referring to a period of the last 12
months. The team mangers rated as a percentage (1) the overall degree how
well the teams had accomplished their goals in general, (2) the quality of the
team results, (3) the quantity of the team results, (4) the initiative of the team
as indicator of innovation, (5) the adherence to deadlines and (6) the
adherence to budget limits. These six ratings were averaged to a mean team
effectiveness score (alpha = .82). Of course, the team managers might be
tempted to present their team in a positive light but such biases should affect
all managers equally (i.e., as a main effect) and thus be irrelevant for
correlational analyses. Moreover, as documented in Table 1, the variability
of the combined team effectiveness measure was substantial.
In order to explore whether team members’ perception of team
effectiveness was similar to the managers’ view, we also included one item
in the online questionnaire measuring members’ perception of the overall
goal accomplishment of the team during the last 12 months as a percentage.
Finally, members satisfaction with the team was assessed with four items that
measured (1) satisfaction with the contribution of the manager, (2)
satisfaction with the contributions of other team members, (3) satisfaction
with the team climate, and (4) the willingness to stay in the team. All four
items were answered on 5-point scales (alpha = .76).

7
More detailed results of the factor analysis are available on request. We also measured team
members’ identification with a three-item scale adapted from Doosje, Ellemers, and Spears
(1995) (e.g., ‘‘I identify with my virtual team’’), alpha = .80. However, although identification
processes are sometimes considered as additional motivational determinants of team
effectiveness (e.g., Karau, Markus, & Williams, 2000), we believe that the consequences of
identification processes are very similar to what is covered by the valence component. Indeed,
entering the identification items into the principal component analysis of the VIST items showed
no additional factor; instead, all three identification items loaded most strongly on the valence
component. We dropped these items from further analyses for several reasons. First, combining
the identification items with the valence items would have diminished the conceptual clarity of
the valence measure. Second, the discriminative validity of the identification items was lower
than the VIST items. Finally, it is generally not clear whether team identification should be
considered as a motivational mediator or as an effectiveness criteria.
 TABLE 1
Reliability and correlations scores of management practices, VIST indicators, and team effectiveness

M SD 1 2 3 4 5 6 7 8

1 Quality of goal setting 3.6 0.40 (.73)

2 Task interdependence 4.0 0.77 .18 (.68)
3 Team-based rewards — — .26 .05 na
4 Valence 3.9 0.64 .47** – .06 .25{ (.72)
5 Instrumentality 3.7 0.63 .39* .32* .31* .47** (.75)
6 Self-efficacy 3.8 0.58 .55** .13 .28 .39* .47** (.71)
7 Trust 3.8 0.63 .71** – .07 .04 .30 { .26 .33{ (.89)
8 Team effectiveness 84.8 9.00 .42** .30{ .46** .39* .49* .24 .23 (.82)

The first two columns show means and standard deviations of the different scales. Scale range of quality of goal setting, task interdependence, and the
VIST ratings varied between 1 and 5. The scale scores of team effectiveness are in percentages. Higher scale scores indicate more positive values on the
constructs. Team-based rewards are dummy coded (0 = not applied, 1 = applied; team-based rewards were used in 55% of the teams). The remaining
columns show correlation results. Reliability scores (alpha) are shown in the main diagonal of the last eight columns in brackets; correlation scores
between the constructs are depicted in the lower half. All correlations computed at the team level (n = 31).
*p 5 .05; **p 5 .01; {p 5 .10 (directional tests when hypotheses specified).

17
18 HERTEL, KONRADT, ORLIKOWSKI

RESULTS AND DISCUSSION

Primary analyses
After reliability analyses provided satisfactory results for the explored
constructs, correlation analyses were conducted among the main predictor
and criteria variables, respectively. The team effectiveness ratings of
managers and team members correlated significantly, r(n = 31) = .40, p
5 .03, demonstrating agreement in the estimated success of the teams.
Moreover, effectiveness ratings of team members were highly correlated with
their satisfaction ratings, r(n = 31) = .75, p 5 .001, suggesting compatibility
between satisfying work conditions and effectiveness of the virtual teams.
On the other hand, intercorrelations between the focused management
practices were nonsignificant (cf. Table 1), suggesting that these practices are
rather independent. Also, correlations between the VIST measures were
only moderate (cf. Table 1 for group level data; correlations at individual
level were even lower).
Finally, correlations between team characteristics and the team effective-
ness ratings of the managers were computed in order to explore context
effects. No significant effects occurred for team size (r = – .15), percentage of
remote team members (r = – .07), amount of face-to-face communication
(r = .16), average distance of team members to the manager (r = .08), or
whether teams were permanent or temporary (r = .04). Based on the last
result, we computed the following analyses across permanent and temporary
teams. (Similar results occurred for correlations with team members’ ratings
of satisfaction and team effectiveness.)

Relations between management practices and team

effectiveness
Next, correlation analyses were conducted between the measured manage-
ment practices and team effectiveness (directional tests when hypotheses
were specified). In the following analyses, we focus on the managers’ ratings
as our most detailed and reliable measure of team effectiveness. Consistent
with our expectations, all three management practices were positively
related to team effectiveness. The correlation scores of both the quality of
goal setting and the general use of team-based rewards with team
effectiveness were significant, r = .42, p 5 .01 and r = .46, p 5 .01,
respectively. The correlation between task interdependence and team
effectiveness just missed the conventional significance criteria, r = .30,
p = .052. Separating the teams according to their tenure (median split)
revealed that the positive relation between task interdependence and team
effectiveness was particularly apparent for younger teams (tenure less than 1
year; n = 16), r = .49, p 5 .03. When the teams were rather settled (tenure
 MANAGING VIRTUAL TEAMS 19
TABLE 2
Simultaneous regression analysis for variables predicting team effectiveness (N = 31)

Independent variable B SE B b

Quality of MBO 6.34 3.63 .28*

Task interdependence 2.67 1.83 .23{
Team-based rewards 6.58 2.83 .37*

R2 = .36 (p 5 .01). *p 5 .05; {p 5 .10.

more than 1 year; n = 15), this relation was not significant any more,
r = .15.8 At the same time no other major difference occurred between
temporary and permanent teams. Together, these results are consistent with
our expectations of a positive relationship between management practices
related to goal, task, and outcome interdependence, and team effectiveness.
Further evidence for the independent effects of the three focused
management practices stems from a linear regression analyses with quality
of goal setting, task interdependence, and team-based rewards as predictors,
and team effectiveness ratings as dependent variable (Table 2). This analysis
revealed a significant result, explaining about 36 % of the variance in the
dependent variable. Beta weights were significant for quality of goal setting
and team-based rewards, and marginally significant for task interdepen-
dence (p = .078). These results suggest again that the three management
practices had rather independent effects on team effectiveness.

Relations between management practices,

motivational indicators, and team effectiveness
To test our more specific hypotheses that the focused management practices
affect the effectiveness of virtual teams by motivational processes, we
explored the relation of team members’ VIST ratings both with indicators of
the management practices and with the team effectiveness ratings of the
managers (cf. Table 1). First, the correlations between the focused
management practices and the VIST ratings are consistent with our

8
This result is also apparent in a moderated regression with team effectiveness as the
dependent variable, task interdependence as independent variable, and team tenure as
moderator variable. In this analysis, the main effect of task interdependence was significant,
beta = .37, p 5 .05. Moreover, consistent with the assumed moderation, the interaction term of
team tenure and task interdependence showed a marginal trend in the expected direction,
beta = – .25, p 5 .09 (tested one-sided). Please note that a moderated regression is a rather
conservative test of moderation. McClelland and Judd (1993) recommend acceptance of lower
levels of statistical significance (such as .10) when testing interactions in field research designs.
20 HERTEL, KONRADT, ORLIKOWSKI

hypotheses. Quality of goal setting was significantly related to all four VIST
ratings (H1), task interdependence was significantly related only to the
instrumentality component (H2) but not to the other three VIST
components, and the use of team-based rewards was significantly related
to the instrumentality ratings and marginally significantly to the valence
ratings (H3), but not to the remaining two VIST components. Second, the
correlations between the VIST components and team effectiveness were also
consistent with our assumptions. Particularly, valence and instrumentality
ratings were significantly related to team effectiveness. The remaining two
components were also positively related to team effectiveness but these
scores were not significant.

Mediation analyses
Finally, to test whether effects of management strategies on team
effectiveness were mediated by the expected motivational processes, we
performed mediation analyses using multiple regression procedures (Kenny,
Kashy, & Bolger, 1998). The objective of a mediation analysis is to explore
whether a mediator variable (e.g., motivation) is a generative mechanism
through which an independent variable (e.g., management practice)
influences a dependent variable (e.g., team effectiveness). To establish
process mediation, the independent variable must be significantly related to
the mediator variable and to the dependent variable, and the mediator
variable must remain significant after controlling for the independent
variable. To provide evidence for partial mediation, the effect of the
independent variable on the dependent variable must be reduced when the
mediator variable is also included as a predictor. The dependent variable in
the following mediation analyses was again managers’ ratings of team
effectiveness.
In the first group of mediation analyses, we tested H1 expecting that
effects of goal setting quality on team effectiveness are mediated by team
members’ valence, instrumentality, self-efficacy, and trust ratings. Although
quality of goal setting was significantly related to all four VIST components,
self-efficacy and trust showed no significant correlation with team
effectiveness, thereby lacking a necessary precondition for mediation. Thus,
mediation analyses were only conducted for valence and instrumentality
ratings.
In order to test a mediation effect of valence, first, quality of goal setting
was used to regress valence as a mediator variable, resulting in a significant
beta = .47 (p 5 .05; see also Table 1, beta coefficients for regressions with
only one predictor are equivalent to correlation coefficients). Second, quality
of goal setting was used to regress the dependent variable team effectiveness,
resulting also in a significant beta = .42 (p 5 .05). Third, goal setting and
 MANAGING VIRTUAL TEAMS 21

valence were simultaneously entered into a regression to predict the

dependent variable team effectiveness. In this regression (R2 = .23), the
effect of goal setting on team effectiveness was reduced but still significant,
beta = .31, p 5 .05, while the effect of valence remained only marginally
significant, beta = .25, p 5 .10. Thus, only weak evidence was found for
valence as mediator between quality of goal setting and team effectiveness.
The Sobel test as a statistical measure of the impact of this mediation (cf.
Kenny et al., 1998) showed no significant result, z = 1.20, n.s.
Next, in order to test a mediation effect of instrumentality, first, quality of
goal setting was used to regress instrumentality as a mediator variable,
resulting in a significant beta = .39 (p5 .05). Second, a regression of team
effectiveness based on quality of goal setting resulted in a significant
beta = .42 (p 5 .05; see above). Third, goal setting and instrumentality were
simultaneously entered into a regression to predict team effectiveness. In this
regression (R2 = .30), the effect of goal setting on team effectiveness was
stronger reduced and not significant any more, beta = .27, p 5 .10, while the
effect of instrumentality remained significant, beta = .38, p 5 .05. More-
over, the Sobel test revealed a significant effect, z = 1.69, p 5 .05. Thus,
evidence was found that effects of goal setting on team effectiveness are
partly mediated by the perceived instrumentality of personal contributions
for the team. (Similar effects are obtained when both valence and
instrumentality are simultaneously entered as mediators between goal
setting and team effectiveness.)
In the second group of mediation analyses, we tested H2 that effects
of task interdependence on team effectiveness are partly mediated by
team members’ instrumentality perceptions. First, task interdependence
was used to regress the mediator variable instrumentality, resulting in a
significant beta = .32 (cf. Table 1). Second, task interdependence was
used to regress the dependent variable team effectiveness, resulting in a
beta = .30 that just missed the significance threshold (p = .052). Given
our rather small sample size, it might be defensible to consider that this
score still fulfils the preconditions of mediation. Third, task interdepen-
dence and instrumentality were simultaneously entered into a regression
to predict team effectiveness. In this regression (R2 = .26), the effect of
task interdependence on team effectiveness was clearly reduced,
beta = .16, n.s., while the effect of instrumentality on team effectiveness
was still significant, beta = .44, p 5 .05. The Sobel test revealed a
marginally significant impact of this mediation effect, z = 1.55, p = .06
(Similar results occurred when only teams younger than 1 year were
included.) These results are consistent with H2 stating that effects of
task interdependence on team effectiveness are partially mediated by
members’ perceived instrumentality of their own contributions for the
team goals.
22 HERTEL, KONRADT, ORLIKOWSKI

In the third group of mediation analysis, we tested H3 that effects of

team-based rewards on team effectiveness are mediated by team members’
valence and instrumentality perceptions. Since the correlation between
valence and team-based rewards was not significant (cf. Table 1), valence did
not qualify as a mediator in this analysis. Testing instrumentality as a
possible (partial) mediator between team-based rewards and team effective-
ness, first, team-based rewards as independent variable was used to regress
the mediator variable instrumentality, beta = .31, p 5 .05. Second, team-
based rewards was used to regress the dependent variable team effectiveness,
beta = .46, p 5 .05. Third, instrumentality and team-based rewards were
simultaneously entered into a regression to predict team effectiveness. In this
regression (R2 = .34), the effect of team-based rewards was reduced
although still significant, beta = .34, p 5 .05, while the effect of instrumen-
tality remained significant, beta = .38, p 5 .05. The Sobel test revealed a
marginally significant impact of this (partial) mediation, z = 1.50, p = .066.
These results partly confirm H3 showing that effects of team-based rewards
on team effectiveness are partly mediated by team members’ perceived
instrumentality of own contributions.

CONCLUSIONS AND FUTURE RESEARCH

To date, there are only few quantitative studies available that investigate
virtual teams in business organizations (Bell & Kozlowski, 2002; Hinds &
Kiesler, 2002); most of them focus on communication processes and media
use (e.g., Hofner-Saphiere, 1996; Jarvenpaa & Leidner, 1999; Maznevski &
Chudoba, 2000). The present study is the first quantitative study that
explicitly investigates management practices within virtual teams. Based on
a theoretically developed model, we explored whether different aspects of
interdependence might be appropriate means to address motivational
challenges due to the lower physical connectedness in virtual teams.
Consistent with our assumptions, the presented results revealed positive
correlations between team effectiveness and management practices related to
goal, task, and outcome interdependence. Since these management practices
were not correlated with each other, these results suggest that high quality of
goal setting, high task interdependence, and the use of team-based rewards
might be independent ways to enhance the effectiveness of virtual teams.
The presented results were similar for both permanent and temporary
virtual teams. However, while quality of goal setting and team-based
rewards seem to be important during the full period of collaboration, task
interdependence was more strongly related to team effectiveness in the first
year of collaboration, suggesting that positive effects of such structural
management are particularly relevant at the beginning of virtual teamwork.
Once the team processes are established, high task interdependence seemed
 MANAGING VIRTUAL TEAMS 23

to be less crucial. This is relevant because task interdependence can increase

opportunity costs due to co-ordination requirements. In order to keep such
costs low, it might be efficient to have highly interdependent task structures
only in the beginning of virtual teamwork, and decrease task interdepen-
dence once team processes are settled.
Apart from the correlations between management practices and team
effectiveness, the present study also explored motivational processes within
virtual teams. First, the scale analyses of team members’ motivational
ratings validated the developed measures of the VIST components,
demonstrating that the components could be sufficiently discriminated and
were only moderately correlated (see also Hertel et al., 2003). Second, the
results confirmed our assumptions about the relations between management
practices and the VIST components; particularly the connection between
interdependence aspects and the instrumentality component. These results
extend our understanding of management effects in virtual teams, and
provide a helpful instrument for team diagnosis to address motivation
problems and intervention programs. Third, the results are also consistent
with the expected relations between the VIST components and team
effectiveness. These correlations were positive for all VIST components and
significant at least for valence and instrumentality. Finally, the mediation
analyses provided first tentative evidence for the role of motivational
processes as (partial) mediator between management practices related to
interdependence and team effectiveness. Here, the clearest effects were
obtained for the instrumentality component, revealing a significant
mediation effect for quality of goal setting and marginal significant
mediation effects for task interdependence and team-based rewards. The
dominant role of instrumentality compared to the other VIST components
in the current study is consistent with our theoretical assumption that the
experience of interdependence within a team should particularly affect the
perceived importance/indispensability of own contributions (see also Figure
1). However, future studies with larger sample size might also reveal
mediation effects of the less central VIST components.
It should be noted that the present study was correlational and cross-
sectional, with all data collected at one point in time. Hence, the inferences
about the causal mechanisms must be viewed with caution. Apart from
possible effects of the measured management practices on team effectiveness,
it is also conceivable that quality of goal setting, task interdependence, and
team-based rewards are a function of team effectiveness, or that both
management strategies and team effectiveness are determined by third
variables. However, there are at least some plausible arguments that the
relations between management, motivation, and overall team effectiveness
are indeed as proposed in our model. Effects of goal setting on motivation
are in line with the goal setting theory (Locke & Latham, 1990) and have
24 HERTEL, KONRADT, ORLIKOWSKI

been well documented in face-to-face groups (e.g., Rodgers & Hunter, 1991).
In a similar way, recent research has demonstrated effects of task
interdependence on motivation and performance in experimental research
with laboratory groups (e.g., Hertel et al., 2000a, 2000b, 2003a) as well as in
field studies with conventional teams (Wageman, 1995; Wageman & Baker,
1997). The causal direction between team-based rewards and team
effectiveness is rather unclear because the results from previous studies are
mixed (DeMatteo et al., 1998). Future research should particularly address
this question using longitudinal or experimental designs.
The practical implications of our results for the management of virtual
teams are clear and straightforward. To overcome motivational challenges
due to lower spatial and temporal connectedness in virtual teams, managers
should maintain the psychological connectedness or interdependence by (1)
assuring high quality of goal setting processes, (2) creating high task
interdependence in the beginning of the virtual teamwork, and (3) using
team-based rewards to maintain high perceived outcome interdependence
within the teams. There are probably even more strategies to maintain the
experienced interdependence within virtual teams that might be explored in
future studies, and we would expect similar effects on the motivation of team
members and on the teams’ effectiveness. The VIST Model might serve as a
heuristic for the exploration of such strategies, as well as for the diagnosis of
motivational problems within virtual teams (Hertel, 2002; Konradt &
Hertel, 2002). Moreover, the components of the VIST Model can be used
for online feedback tools that provide team managers and members with
timely information about the team, facilitating monitoring or self-manage-
ment processes (Geister, Konradt, & Hertel, 2003).
There are several limitations of this study that should be mentioned.
Although the sample size in the present study is higher than in most of the
other studies that are available on virtual teams today, an even larger sample
would be desirable for reasons of statistical power. As reported above, some
of the obtained results are only marginally significant, particularly in the
rather complex mediation analyses. These results have to be interpreted with
caution and have to be replicated in follow-up research with larger samples.
Nevertheless, given that team effectiveness is not only a function of the
motivation of its members (cf. Figure 1), the obtained effects are still
remarkable.
Larger samples would also enable a number of additional analyses
exploring possible moderator variables such as the degree of ‘‘virtuality’’ of
the team, defined either by the number of remote working members, the
average spatial distance between the team members, or by the frequency of
face-to-face meetings. Integrating such a moderator would provide more
information about changes in the team processes when teams rely more and
more on electronic communication media. However, as argued in the
 MANAGING VIRTUAL TEAMS 25

beginning, we believe that ‘‘virtualization’’ of teams cause gradual changes

of team processes rather than qualitative changes, and many of these
gradual changes can be addressed with management practices adopted from
conventional groups. Evidence for this assumption has been provided in the
present study.
Another limitation is that we only explored two types of virtual teams so
that the generalizability of our results to other types of virtual teams is an
open question. Further research is desirable to explore virtual teams that are
more autonomous, have more flexible boundaries (e.g., including free-
lancers), and/or are more heterogeneous (different cultures, occupations,
etc.). However, regarding the temporal restriction of the teamwork, we
found no moderation effects suggesting that our results hold for both
temporary and permanent teams.
A final limitation of this study is a general limitation of best practice
approaches. The results of such a paradigm are always a function of the
prevalence of certain management strategies and the variation within the
measured variables. For instance, if the quality of goal setting had been
equal in all teams of this study, no significant correlation with team
effectiveness would have occurred. Thus, in addition to correlational field
research that portrays the current status quo, experimental research is
necessary in order to detect new and innovative strategies to improve team
effectiveness and explain their underlying mechanisms (e.g., Hertel et al.,
2003a; Wageman & Baker, 1997).
The general result of this study, suggesting that low spatial and temporal
connectedness can be compensated by high experienced interdependence,
might be helpful both for further theoretical exploration of virtual
teamwork and for practical issues on how to manage virtual teams
successfully. Together, we hope that these results provide a useful step
towards the development of a management information system for virtual
teams.

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Manuscript received February 2003

Revised manuscript received July 2003

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