Unpacking the Concept of Virtuality: The Effects of Geographic Dispersion, Electronic Dependence, Dynamic Structure, and National Diversity on Team Innovation

Abstract

To understand why the virtual design strategies that organizations create to foster innovation may in fact hinder it, we unpack four characteristics often associated with the term ‘virtuality’ (geographic dispersion, electronic dependence, structural dynamism, and national diversity) and argue that each hinders innovation through unique mechanisms, many of which can be overcome by creating a psychologically safe communication climate. We first tested the plausibility of our arguments using in-depth qualitative analysis of interviews with 177 members of 14 teams in a variety of industries. A second study constituted a more formal test of hypotheses using survey data collected from 266 members of 56 aerospace design teams. Results show that the four characteristics are not highly intercorrelated, that they have independent and differential effects on innovation, and that a psychologically safe communication climate helps mitigate the challenges they pose. We discuss the implications of these findings for theory and research.