04/28/2014 11:56 am ET Updated Jun 28, 2014

Understanding the Proliferation of Virtual Teams in the Global Economy

As the global economy continues to grow, transnational corporations are expanding their hiring practices by embracing global virtual teams. No longer are corporate headquarters the mainstay for employees; to attract the best employees while tapping into global knowledge, corporations are expanding to allow professionals to work in a virtual environment. While virtual teams can cut costs, they also provide a significantly more varied team base that contributes to the depth and breadth of an organization. As with all teams, virtual teams can be highly functional, or highly dysfunctional. Experienced leaders that understand the dynamics of motivation, leadership, quality and communication across diversified cultural divides are in high-demand.

Creating Leaders For Virtual Teams

Before we explore the how's and why's of why virtual teams are proliferating at an astounding rate across the globe, it is important to look that the leadership skills necessary for managing these teams. Professionals that have vast experience in managing in-house, onsite corporate teams, often lack the base skills necessary for success in the virtual world. One of the strengths of a virtual team is the range of experience and knowledge that stems from a variety of professional backgrounds, and cultural backgrounds. Currently, General Electric boasts that more than 50 percent of their current workforce is based overseas. This gives a competitive advantage that allows them to access local talented professionals that possess expertise as both consumer, and professional.

Benefits Of Global Virtual Teams
It is vital that virtual team leaders understand the natural differences in communication and motivation to ensure each team member performs to their optimal capacity. BP, Nokia and Ogilvy and Mather are all successfully utilizing professional virtual teams across their organization. These organizations and others find that virtual teams boost collaboration, creativity, and efficiency. Before virtual teams were common, if the ideal employee lived across the globe, relocation was required. Today, these individuals can stay in their current location, and telecommute as part of the team. Of corporations surveyed, 52 percent said that virtual teams are used as "top management" and 79 percent are used as "project teams". These numbers are projected to grow in the coming years.

One of the overlooked benefits to functional virtual teams is the "follow the sun" practice. While at first glance some managers may think that they want all team members to work the same hours, regardless of location, however this is not efficient. A virtual team that is comprised of professionals across the globe allows for a 24-hour productivity cycle; as members in one area are wrapping up their day, team members in other time zones are starting their day.

One of the risks that corporations who have highly-concentrated teams onsite at headquarters face, is "group-think" mentality. While a homogenous team may be easier to manage than a virtual team, the experience, perspective, and vision of a multinational team provide much needed insight for tapping into the global markets effectively. Statistically, more than 70 percent of world's purchasing power is concentrated outside of the United States; teams without true global insight, run the risk of limiting their global market share.

The Need For Diversity In Transnational Corporations

According to Nestle, foreign sales of their products total 97.8 percent of their total sales. Missed opportunities for marketing, sales, and management abound when team member diversity is not embraced. Marketing gaffs happen often when teams are centrally located in the United States, and the culture of the customer is not embraced. This is not the fault of the team members; it is the fault of a hiring a homogenous team with little understanding of cultural differences and dynamics. Virtual teams that span the globe help to ensure that marketing communication messages are effective, timely, and not offensive. A company like Nestle, who thrives due to their foreign market share, must tap into the knowledge and expertise of their markets. Virtual teams are the ideal component to bridge cultural gaps and increase profits.

Professionals Now Are Actively Seeking Professional Telecommuting Jobs

Telecommuting once was a function of lower level professionals; this is simply not the case any longer. Professionals from all walks of life, with a wide array of professional backgrounds and education levels, and at nearly every corner of the globe, and seeking the freedom, autonomy, and collaboration that comes with working as part of a virtual team. According to Global Workplace Analytics, 3.1 million workers in the United States telecommuted in 2011, showing a growth of over 70 percent in just six years. After the economic downturn of the last decade, many corporations consolidated their headquarters, leaving many professionals far from a job. This has fueled the desire, and the demand for professional telecommuting jobs. A 2012 survey conducted by the Society for Human Resource Management shows that virtual teams are becoming more and more prevalent. In fact, according to the survey, 28 percent of US based corporations use virtual teams, while 66 percent of multinational corporations embrace virtual teams.

As corporations continue to look for ways to cut expenses while raising productivity and collaboration leading to greater profits, analysts believe that the number of virtual teams will continue to grow. The importance of leaders that have the knowledge and expertise to lead in a global environment is paramount for success. Effective communication with members of global virtual teams, as well as effective marketing communications aimed at a global consumer must be the focus of all organizations seeking greater global profits.