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Technology A doption by
G lobal V irtu a l Teams:
D eveloping a Cohesive
W illiam J. Harris, University o f Maryland University College
International trade and collaboration continue to
expand in the development of products, services, and
interdependent-market activities. Such expansion
has resulted in an increase in global engineering
groups’ interaction across cultures. These groups
exist, in part, because technology now supports
geographically distributed organizations, which
allows them to improve performance and outcome.
However, in many instances, the cultural differences
among group members have become problematic in
their work (Clear, 2010; Nisbett, 2003). Both research
and practice have shown that these groups, and the
technology they use, may form working structures
that are incompatible with many culturally diverse
organizations. This essay explores and uncovers
pertinent issues and provides a conceptual framework
that will allow company managers to adopt technology
that is compatible across global virtual teams (GVT)
and organizations. The aim of this paper is to identify
implications and provide guidance to managers who
may be faced with designing and leading m ulti­
national groups tasked with solving complex problems.
In short, this research will provide guidance to those
managers that will allow them to put theory into
Background and Context o f Global
V irtu a l Teams
Global engineering teams in the public sector are
tasked to provide various capabilities for government
agencies. Contractors that serve various government
agencies and tasked to integrate global technical
capabilities employ many such teams. Often, groups
are formed without a physical presence as enabled
by technology (Brynjolfsson & McAfee, 2014). These
engineering team members, being diverse both
in their fields of expertise and in their geographic
location, are expected to work and perform together,
fully exploiting their abilities and accumulation
of knowledge to design capabilities and/or resolve
unique problems (Pavlak, 2004). Often, these teams
are comprised of a variety of engineers from fields
such as software, hardware, systems, mechanical, and
other disciplines. For these teams, teamwork agility
and decision making are essential (Lowry, Schuetzler,
Giboney, & Gregory, 2015). An engineering team’s
advantage, then – as well as their challenge – is their
collective diversity and tremendous knowledge and
expertise (Harris, 2018).
Team tasking evolves from the first stage of
identifying a problem or requirements to creating
capabilities, introducing new features to existing
products, and then, through to production, technical
services, sustainment, and operations (Defense
Acquisition System, n.d.). The full lifecycle of a project,
whether creating products or providing technical
services, will eventually include the interchange of
ideas, design elements, and solution implementation
for global team members (Harris, 2018).
Many requirements and problems that companies
encounter simply cannot be resolved in-house or at a
single country location; yet, their solutions are critical
SAM Advanced Management Journal – Volume 83 Edition 1
for these companies to launch a product, rectify issues
that arise, or sustain their businesses (Harris, 2018).
Moreover, international trade and collaboration have
continued to evolve, resulting in companies receiving
an increase of revenues from global operations
(Thomas, Beilin, Jules, 8c Lynton, 2014). And along
with these increased global opportunities and
international trade, the development of products and
services has expanded internationally and has become
more globally interdependent. Thus, engineering teams
are tasked to accomplish a variety of critical functions
across geographical boundaries (Thomas et al., 2014).
In as much, global virtual teams form and reform as
their tasking progresses or as a response to events that
unfold over the life cycle of a system or product (Clear,
2010). These engineering teams exist, in part, because
technology now supports geographically distributed
organizations, which allows them to effectively
communicate to improve performance and outcome
(Harris, 2018).
The Challenges of Global Virtual Teams
As a result of this virtual environment, managers
of these teams are faced with efficiently providing
effective resources along with guiding teams through
the entire life-cycle process from determining
requirements through finding and implementing
solutions. These virtual teams rely on technology to
execute engineering processes, collaborate in their
activities, and to validate and share knowledge (Harris,
2018). Furthermore, these teams are often faced with
conflict and disagreement within their ranks yet must
still implement effective solutions (Lowry et al., 2015).
The project manager must be prepared to plan and
to coordinate effective resources to support the GVT.
Thus, the need to manage the adoption and use of
technology that supports the GVT to accomplish their
tasking is critical for successful outcomes (Harris,
Research has found, there are a number of cultural
challenges that these teams face based on their
diversity (Clear, 2010; Mejias, 1995; Thomas et
al., 2014). These challenges include bridging their
languages, cultures, time zones, experience, and so
forth – through effective management. This in itself
is not an easy task, as it requires a level of agility to
orchestrate and bridge those differences (Thomas et
al., 2014, p. 38). These groups are not always wholly
successful in this endeavor, and consequently, their
differences, be they cultural, linguistic, or logistical,
can become problematic (Nisbett, 2003). Because
these cross-cultural issues pose inherent problems in
the interaction of GVTs, they also form an important
component of this research.
Inspite of the fact that these global teams may
be spread out geographically, they are nonetheless
expected to engage in collective behavior to solve
problems quickly, coordinate product design, initiate
start-up activities, brainstorm innovative solutions,
and perform other nonroutine functions. Gains in
technology that support these teams have increased
the expectations of their performance and abilities
to better manage interactions, share knowledge, and
predict outcomes. One such Advanced Information
Technology (AIT) designed to support these teams
is collaboration software (Coleman 8c Levine,
2008). The capabilities contained within this type
if software are available off the shelf, and they are
also configurable. Among these AIT technologies is
SharePoint enterprise software, which uses third-party
applications, such as BPM CRM. However, we must
not lose sight of the fact that people are as complex as
the systems they adopt. As such, adding the variable
of cultural differences among teams may compound
tasking problems for virtual global groups (Clear, 2010;
Mejias, 1995). This study examines the issues faced by
organizations as they prepare to launch global teams
using AIT.
Companies and agencies that do business
internationally may run into unique problems with
political consequences. Harris (2018 p. 14) provided
a poignant example: For nearly 2 decades, both the
U.S. Department of Defense (DOD) and NASA have
used the Russian RD-180 rocket motors for the heavy
lift Atlas V rocket to resupply the International Space
Station and for launching military satellites (Dilanian,
2016). In order to use this Russian rocket motor,
the U.S. military contracts with the United Launch
Alliance (a joint venture between defense contractors
Boeing and Lockheed Martin; Dilanian, 2016). Yet,
this practice is particularly problematic given the
adversarial nature of US/Russian relations (e.g., their
opposing roles in Syria and the Ukraine). Thus, when
a failure occurs, as it did during the 2016 Cygnus
OA-6 International Space Station’s resupply (“By the
Numbers: How Close Atlas V Came to Failure,” 2016),
both countries put together tiger teams to perform
failure analysis to determine the root cause. One can
easily see that a failure of one country’s product may
become exploitive political news overnight, regardless
SAM Advanced M an ag em en t Journal – Volume 83 Edition 1
of sound engineering and business operations.
Regardless of the situation, GVTs come together
with specific tasks, goals, and objectives to achieve
outcomes for unique problems; they accept difficult
challenges and ultimately are able to achieve acceptable
outcomes (Harris, 2018). Not surprisingly, putting
together these teams and then supporting them is a
problem global managers frequently face, especially
when unanticipated critical issues arise that must
be addressed within a short amount of time (Harris,
2018). In other words, the ability of a company
operating globally to successfully operate across
country and cultural boundaries is only viable if the
company’s management is able to solve difficult and
sometimes time-sensitive problems – whilst satisfying
global stakeholders.
Advanced Information Technology’s Role and New
Social Norms
The late 1950s and early 1960s saw the advent
and proliferation of computers, which enhanced
the scientific technology revolution (Harris, 2018).
And as part of this information revolution, both
routine and nonroutine activities were improved
upon by the use of technology by teams (Geels &
Kemp, 2007). Then in the early 1980s, technology
advancements progressed once again, fully developing
the information digital revolution, which continues
today (Brynjolfsson 8c McAfee, 2014). What were
once localized hardware platforms with dependent
software-supporting engineering functions have given
way to ubiquitous applications compatible with a
variety of devices that support global group interaction
(Brynjolfsson 8c McAfee, 2014). These group support
technical capabilities have led to expanded and new
social communication norms. In fact, a new form of
sociology – digital sociology (Lupton, 2015) – has
emerged to address human interaction with both
computer-based group support tools and today’s
social media. Thus, as technology has advanced,
so, too, have methods of communication and team
production (Harris, 2018). These phenomena have
resulted in a shift in social interaction, bringing forth
new concepts in sociology in-step with group support
technologies that impact the way GVT’s communicate
to accomplish their tasking: digital sociology (Lupton,
Research Question
The exploratory research question presented below
is designed to drive this systematic study, as will
permit identification and examination of emerging
themes and relationships, which will ultimately allow
conclusive findings that will inform managers of GVTs.
These findings will provide insight for both researchers
and practitioners into the management of global
virtual teams and the adoption of support technology.
To that end, the following research question forms the
context and drives this research:
What specific issues do global problem-solving teams
face when adopting advanced information technology
(AIT) for collaborative support?
Literature Review
Whereas the adoption of technology by groups
within singular cultures has been thoroughly
researched for over 3 decades (Nikas & Poulymenakou,
2008, p. 1; Turban, Liang, & Wu, 2011, pp. 140141), literature on the adoption of technology to
support global teams across cultures is not as prolific.
Drawing from eight sources (see Appendix B), this
literature review addresses major themes and issues
with supportive evidence. The eight sources are
conventionally identified in the reference section with
a preceding *. First, theoretical underpinnings are
considered, covering concepts on group interaction
and structured adaptation of technology for
multinational groups. The eight articles that support
the major topics explored herein, which include both
scholarly and “gray literature,” are then addressed.
Theoretical Underpinnings for Group Interaction
and Technology Adoption
This researcher identified two primary theories
upon which collective group behavior in the adoption
of technology can be understood. These theories are
Hofstede’s theory, which provides a model of cultural
differentiation (Hofstede, 1980; Hofstede, Van Deusen,
Mueller, Sc Charles, 2002), and adaptive structural
theory (AST; DeSanctis & Poole, 1994; DeSanctis et al.,
2008; Gopal, Bostrom, & Chin, 1993).
Hofstede’s theory: Model of cultural
differentiation. Three of the selected studies
(Davidson & fordan, 1998; Mejias, 1995; Paul,
Samarah, Seetharaman, & Mykytyn, 2005) specifically
based their conclusions on Hofstede’s (1980) seminal
research on the cultural differences of global teams. In
the early 1980s, Hofstede researched and identified the
collective characteristics of countries and their cultures
based on data gathering research from 53 countries
SAM Advanced Management Journal – Volume 83 Edition 1
and 116,000 respondents. Hofstede discovered that
there are five dimensions in cultural differentiation:
Power-Distance, Uncertainty-Avoidance,
Individualism-Collectivism, Masculinity-Femininity,
and Time-Orientation. In Mejias’s study (1995), the
author referred to four out of five of the dimensions
described in Hofstede’s cultural differentiation model:
“Cultural differentiation described four dimensions
of national culture along which value systems may
vary…. [H]is Model of Cultural Differentiation
framework may be useful in hypothesizing specific
predictions of cultural tendencies” (pp. 56-69).
Davidson and Jordan (1998) and others have
concurred with Mejias’s assertion that the dimensions
of uncertainty avoidance and power distance have
the greatest influence in relating cultural aspects
of interdependent groups operating across cultural
boundaries. However, these dimensions also represent
the underlying characteristics of individualism
or collectivism, in varying degrees, for each of
Hofstede’s five dimensions (See Figure 1). Notably,
Paul et al. (2005. p. 190) viewed the fifth dimension
of individualism/collectivism as a dominating aspect
across the power distance and uncertainty-avoidance
scheme. Here, Mejias (1995, pp. 59, 61) provides a apt
description of both power distance and uncertaintyavoidance:
Power Distance describes the relationship and
relative distance between a supervisor and a
subordinate … the extent to which a particular
national culture accepts and recognizes the
unequal distribution of power and influence
in institutions and organizations. Countries
that score high on power distance appear to
emphasize autocratic or paternalistic, bossemployee relations. In these countries the
powerful have more privileges over others….
Countries scoring low on Power Distance
favor participative management relations and
prefer the use of “equal rights” and legitimate
power over the use of coercive or referent
power. During group decision making, higher
status individuals are more likely to dominate
the group discussion and influence group
outcomes more than low status individuals.
Uncertainty-avoidance expresses the extent
to which members of a particular national
culture feel uncomfortable or threatened by
uncertain or unknown outcomes (Hofstede,
1980, 1991). Countries that scored high on the
Uncertainty Avoidance dimension tended to
have a low tolerance for uncertainty (expressed
by higher levels of anxiety) and a greater need
for formal rules. Additionally, countries with
F ig u r e 1 . R e la t io n s h ip B e t w e e n U n v e r t a in t y A v o id a n c e a n d P o w e r D is ta n c e
Uncertainty Avoidance
Family Model – clannish
Pyramid Model – fiefdom
Southeast Asia, Singapore,
Hong Kong, India, Philippines
Latin America, Mexico, Brazil, Chile,
Venezuela, Yugoslavia
Market Model – structure
Machine Model – bureaucracy
Anglo/Scandinavia, United States,
Australia, Canada, The Netherlands,
United Kingdom
Germanic, Israel, Austria
SAM Advanced Management Journal – Volume 83 Edition 1
strong (high) Uncertainty Avoidance scores
also had less tolerance for people or groups
with deviant ideas or behavior and were more
likely to resist innovative ideas (Hofstede; 1980,
1991). Countries with weak or low Uncertainty
Avoidance scores were inclined to take more
risks and were more likely to tolerate deviant
behavior and innovative ideas when making
group decisions (Hofstede; 1980, 1991).
Figure 1 depicts the relationships between the
variables of power distance and uncertainty-avoidance
and the countries whose cultures align with each. In
sum, Hofstede’s theory is paramount in anticipating
cultural issues associated with multinational teams
as they come together to work.Figure 1. Hofstede’s
Regional/Countries Matrix of Cultural Differentiation
(Mejias, 1995, p. 66; Davidson & Jordan, 1998, p .41).
Adaptive structuration theory (AST). Giddens’s
(1984) original structuration work unified an approach
to social organization theory, resulting in a holistic
view of people acting together to achieve common
goals. In doing so, Giddens shifted the focus from the
individual to groups of actors who are knowledgeable
about the systems they produce and reproduce (Harris,
2016, p. 3). Adaptive structuration theory (AST)
expands upon Giddens’s theory that by incorporating
AIT as a component of group activities (as proposed
by researchers, including Gopal et al., 1993, and
DeSanctis et al. 1994; 2008, p. 552), a unified AST
would result.
Harris’ (2016, p. 7) earlier research described the
relationships of groups and technology from an AST
perspective, finding: AST posits that the impacts
of AIT “on group and organization processes and
outcomes depend on the structures incorporated in
the technology and on the structures that emerge as
users attempt to adapt the technology to the tasks
at hand” (Poole, 2013, p. 22). DeSanctis and Poole’s
(1994) foundational description of AST first defines a
system as an observable pattern of relationships among
actors as part of a group. Structures are the rules and
resources that members employ in their activities
and interactions that give the system its pattern. As
members develop rules and resources from their tasks,
norms, and AIT, they enact and sustain structures
to make them part of an ongoing organization of a
system. In other words, groups produce and reproduce
rules and resources as they interact to accomplish
their tasking. As a result, AST posits the effects of
AIT on group processes and outcomes depend on the
structures incorporated within technology (structural
potential) and the emergent (adaptive) structures that
form as members interact with the technology and
themselves over time (DeSanctis & Poole, 1994, pp.
DeSanctis and Poole (1994) also describes how
AST works by identifying the two AIT structural
elements: spirit and features. Spirit being the general
intent with regards to values and goals of the specific
rules. Capabilities and usage rules make up structural
features of the technology… The result being a novel
structural ensemble tailored to the group’s needs… and
interactions (DeSanctis & Poole, 1994, pp. 22-23).
Harris (2016) also found that the components of
structural adaptations from the interactions of group
members with regard to appropriated AIT (depicted
in Figure 2) are segregated by input-process-output
functions. These elements (changing rules, resources,
group/technology products, and tasking environment)
dynamically come together during social interaction
(see center of Figure 2), appropriating and applying
ongoing influences of new and emerging structures.
Literature from four of the eight studies reinforces
the applicability of AST for this research. For example,
Watson (1994, pp. 47-48) noted that AST makes an
important distinction between system and structure:
“The system is a social entity such as a group …
structures are the norms of behavior that maintain
the system” (p. 47). Nicolas-Rocca and Coulson
(2014, p. 83) then expanded upon AST with tasktechnology-fit to build a framework that explains the
interrelationships of global virtual teams and their
functional abilities. Finally, Nikas and Poulymenakou
(2008, pp. 4-6) applied AST in their research on
adopting web-based collaboration technology to global
teams. Based on the studies of these researchers, AST
became a foundational theory for this paper.
Adopting Advanced Information Technology and
Group support systems (GSS) are a form of AIT.
Watson’s (1994) early work informs us: “GSS is a
blend of technical and social facilities … and because
GSS design is often based on the customs of the
particular culture in which it was developed … both
technical and social features may need modification
for successful adoption” (p. 45). Davidson and
Jordan (1998, p. 44) provided research on technology
adoption for GSS as it relates to global teams with a
focus on barriers to adoption in cross-cultural settings.
SAM Advanced Management Journal – Volume 83 Edition 1
Figure 2. Adaptive Structuration Theory Domain and IPO Diagram
In p u ts
P ro c e s s
O u tp u ts

S tructure o f Advanced
In fo rm atio n Technoloev
G r o u p S o c ia l I n t e r a c t i o n
Spirit (in tend ed use)
O utcom es
Tech AD orooriation
GrouD Processes
Q u a lity objective
Task & E nvironm ent
Degree o f Respect
Idea g en eration
P articipation
C o m m itm en t
Task typ e
Decision-M aking
S ituation , expectations
In stru m en tal value
C onflict M g t
A IT A ttitud es
Ease o f use
Process M g t
In tern al Group System
Individual preferences
â– P
Confidence in
Satisfaction w ith
O utcom es and
Norm s, processes,
A IT facilitatio n
Em ergent Sources of
AIT Products & O utputs
Task Products &
Changes in Environm ent
Due to A IT Use
Figure 2. Adaptive Structuration Theory Domain and IPO Diagram (DeSanctis et al., 2008, p. 555;
Gopal et al., 1993, p. 49)
Davidson and Jordan pointed out a number of failures
in adopting technology within these environments that
included mismatching software tools, lack of group
interrelations awareness, and insufficient experience in
facilitating the use of AIT (p. 39). These authors also
relied on Hofstede’s theory of cultural differentiation to
explain technology adoption across teams:
GSS may be used as a source of inspiration, but
its underlying assumptions should be tested
to see if they [technology features] fit with
local assumptions about how groups should
function. Where necessary, the assumptions
should be reconceptualised according to local
A more recent study on adopting technology was
conducted by Nikas and Poulymenakou (2008).
Their study directly linked AST to the adoption and
adaptation of technology by global groups. These
authors also found that faithfully appropriating
technology (Figure 2) depends on task structures as
well as group social systems (e.g., norms, personal
preferences, facilitation).
Group support and collaboration systems have
dominated AIT team based research for the past
30 years (Nicolas-Rocca & Coulson, 2014). At first,
technology emerged as stand-alone proprietary
software designed for specific hardware platforms.
These initial systems, which were predominantly
used for record keeping, data analysis, and reporting,
were feature-limited. More complex systems evolved
that included high performance workstations rich
in features and information management, such as
AutoCAD® in the 1980s for engineering support.
Advancing in AIT for GSS now provide open access
cloud applications and social media, thereby advancing
capabilities in support of decision making and other
important group needs (Turban et al., 2011, p. 141).
Within enterprise support systems, automated
decision technologies include rule-based engines,
statistical or numeric algorithms, workflow
applications, and outcome prediction. Social software
capabilities, described as Collaboration 2.0-3.0, and
products such as SharePoint and SalesForce are
examples of enterprise GSS (Harris, 2016). In fact,
newer AIT features create collaborative platforms
that reflect the way knowledge work is naturally
SAM Advanced Management Journal – Volume 83 Edition 1
accomplished rather than adjusting behaviors around a
system (Harris, 2018; Nicolas-Rocca & Coulson, 2014;
Turban et al., 2011, p. 141).
Global Virtual Team Composition, Structure, and
Use of Technology
Global virtual teams (GVT) have evolved into groups
that assemble using combinations of technology to
accomplish an organizations task (Paul et al., 2005,
p. 188; Tung & Turban, 1998, p. 177). GVTs are more
complex than traditional face-to-face. These teams
may be comprised of individuals with a collection of
differing skills and professions using tools specific to
their areas of expertise. Or, teams of like professions
are brought together to tackle a common issue within
their area. Both research and practice have shown that
both teams and technology structures change based
on ongoing influences (see Figure 2, AST diagram).
New structures emerge with the dynamic nature of
work that create new rules, thereby changing the tasks
and capabilities of both humans and machines. That
is, a multiphase project comprised of both people and
technology transforms as the tasks and environment
change. For example, Paul et al. (2005) linked bipolar
dimensions (see Figure 1) to group composition while
tying performance to Hofstede’s theory.
Team structure – centralization/decentralization.
The literature reviewed in this research concluded that
decentralization is a direct benefit of AIT, especially
as it relates to decision making. The studies reviewed
make a clear distinction between decision making and
control, as facilitated by AIT (Robey, 1977, p. 974).
Halal (2013) argued that it is essential to determine
which technology is best suited strategically for a
particular type of organization. As a result, Harris
(2018) found Halal (2013, p. 1640) established the
concept for understanding the impact of technology
on organization centralization or decentralization.
Robey (1977, p. 974) also concluded that AIT has
supported greater degrees of formal and informal
decentralization. For example, as explained by Harris
(2018): Robey (1977) claimed that AIT supports stable
environments, which are best suited to organizations
with central authority where routine operations are
the main focus. However, under dynamic conditions
(i.e., nonroutine operations), technology reinforces
decentralization (Robey, 1977, p. 974). However,
Harris (2018) also found that Pheffer and Leblebici
(1977) came to a different conclusion, claiming that
technology supports centralization (personal control)
as a substitute for formalization. However, Pheffer and
Leblebici (1977) also found that technology supports
rapid environmental changes, which may result in
increasing and enabling decentralization (pp. 245246). Huber (1990, p. 57) took decision making one
step further, claiming that AIT provides a uniform
approach to decision making, acting as a decentralized
function for centralized organizations and visa versa.
Nault’s (1998, p. 1322) later work provided a more
detailed organizational application of technology,
asserting that it allows both centralized (hierarchy) and
decentralized (local market) decision support within
the same organization.
Team structure – organization complexity.
Organization complexity is also a common theme
in the literature. An early empirical study viewed
knowledge work and technology complexity as
a systems functioning under uncertainty within
organizations (Hickson, Pugh, & Pheysey, 1969,
p. 380). Harris (2018) found in this earlier study,
Hickson et al. characterized technology complexity,
in relationship to organizations, by looking at the
number of exceptional cases encountered, the degree
of logical analysis, and how the information was used
in workflow (p. 380). Robey (1977, p. 974) concluded
that the structure of an organization does not depend
upon any type of technology, “but rather the nature
of the task environment,” inferring complexity. Pfeffer
and Leblebici (1977, p. 248) added to the organization
complexity discussion by submitting that technology is
positively associated with both vertical and horizontal
differentiation within organizations, as this allows “the
manager to control and coordinate more complex,
differentiated organizations” (Pfeffer & Leblebici, 1977,
p. 247).
Harris (2018) also found that Burton and Obel (1998,
p. 236) presented propositions specifically addressing
highly complex environments with nonroutine
technology in large organizations, DeSanctis and
Poole (1994, p. 143) looked at emerging technology,
finding that it is used structurally by groups with
differing attitudes and different goals to support the
organization. Chambers (2004, p. 25) observed that
technology is dynamic, changing every 2-3 years, and
aids in the transformation of organizations that “must
change in synchrony with … technology.” Finally,
Halal’s (2013, p. 1636) ongoing TechCast longitudinal
project, which was designed to predict emerging
technology, underscored that the Internet continues to
transform businesses by redefining goals and changing
SAM Advanced M anagem ent Journal – Volume 83 Edition 1
how organizations support an ever-expanding complex
GVT technology use. Global groups use AIT
for a variety of reasons, including application
of productivity tools, collaboration, processing
and storage of knowledge, and decision support
(Mejias, 1995; Nicolas-Rocca & Coulson, 2014;
Nikas & Poulymenakou, 2008). Collaborative and
decision support systems allow GVTs to engage,
expand their roles and responsibilities, and thereby
improve outcomes. Specific examples include
regulatory compliance, case analysis and outcomes,
yield optimization, and group workflow progress
(Davenport 8c Harris, 2005, p. 85).
Cultural Aspects of Global Teams
Cultural dimensions include characteristics such as
customs, values, beliefs, heritage, language, myths, and
social norm s—many of these characteristics may differ
in dispersed teams. One of the most influential cultural
aspects of GVTs is individualism versus collectivism
(Mejias, 1995; Paul et al., 2005; Watson, 1994). As an
example, Asian countries such as Singapore are highly
collectivistic, whereas Western countries such as the
United States are highly individualistic (Hofstede,
1980). In individualistic cultures, openness, directness,
and even conflict in working relationships are
encouraged; not so in many Asian cultures. Hofstede et
al. (2002, p. 786) pointed out that although culturally
distributed groups may be in agreement with regard
to their end goals, their different cultures may have
instilled very different expectations as to how those
common goals are achieved. Further, Davidson and
Jordan contended that Asian countries are likely to
resist the adoption of GSS if it threatens to undermine
leadership (high power distance; 1998, p. 44). Taking
these factors into consideration, one can see that
by forcing interdependent groups together without
adequate training and cultural knowledge, significant
barriers to successful interaction and inter-group
struggles may ensue.
Interaction, Collaboration, and Conflict in Global
Interaction and collaboration were significant
themes in this literature review. All eight of the
reviewed sources (Appendix B) identified both of these
themes as important to the performance of global
groups. Tung and Turban (1998, p. 177) explored
the relevance of synchronous and asynchronous
communication and their effects on GVTs. GSS
capabilities encompass storing and retrieving
information, as well as communicating with and
informing other team members through electronic
media such as e-mail, voice mail, and blogs. With
synchronous GSS, distributed members interact
with each other in real time; this is not the case
with asynchronous interchanges, and problems may
occur in asynchronous interchanges with message
sequencing and participation configuration control (p.
The literature consistently reveals that there is always
the possibility of task-related conflict, especially
when team members come from culturally diverse
backgrounds. However, Paul et al. (2005, p. 189)
found that, in fact, it is unlikely that members of
GVTs will develop major personalized disagreement
or individual disaffection during interactions. At first,
this may not seem intuitive, but the evidence shows
that “group type (homogeneity/heterogeneity) has a
moderating effect on the relationship of collaborative
conflict management style with perceived decision
quality and group agreement” (Paul et al., 2005, p.
209). From a technology-use perspective, collaborative
capabilities bring structure in order “to reveal the
technology-organization relationship and to better
understand how the social structures embedded within
the collaboration technology affect and are getting
affected by work context characteristics” (Nikas &
Poulymenakou, 2008, p. 2). In short, technology is
not deterministic. Rather, it is structured and used in
context, and at times, this may, in fact, reduce group
interaction conflict.
Finally, Nicolas-Rocca and Coulson (2014) discussed
effective collaboration as a major contributing factor
to the success in all GVT environments, stating,
“Therefore, ensuring facilitation and support of
these collaborations should be the starting point
when creating GVTs and deploying information
and communication technologies” (p. 80). However,
significant issues still remain with the implementation
of AIT across cultures, especially when professionals
are unprepared to collaborate effectively with their
culturally diverse team members.
Global Team Performance, Issues, and Outcomes
Fundamentally, humans look to technology as
a means to improve their work environment and
outcomes. Mejias (1995) stated: “Group software as a
specialized computer-based interface for collaborative
SAM Advanced M an ag em en t Journal – Volume 83 Edition 1
T a b le 1 . In t e r r e l a t i o n s h i p s o f P e r f o r m a n c e , Is s u e s , a n d O u tc o m e s
Efficiency rates
Perform ance M easures
W aste in tim e, cost overruns,
Project com pletion tim e,
m eeting specifications
saving money, technical
perform ance
Satisfaction and confidence in
C ollaborative w ork support
D ecision speed
T echnology use
System s satisfaction
Ineffective technology,
Productivity capacity
N um ber o f unique and alternative
Individual dom ination, lim ited
inform ation sharing, diverse
N u m b e r o f v a lu e ad d e d
C u ltu ra l u n d e rs ta n d in g a n d
C h o ic e s sh ift – fro m
a c tiv itie s
a c c o m m o d a tio n –
in d iv id u a l p re fe re n c e to
in d iv id u a lis m /c o lle c tiv is m
g ro u p c h o ic e
C u ltu ra l u n d e rsta n d in g an d
C o lla b o ra tiv e c o n flic t
a c c o m m o d a tio n –
m anagem ent
view s o f success
T im e to re s o lv e c o n flic ts
in d iv id u a lism /c o lle c tiv ism
N u m b e r o f e n g a g e d g ro u p
D iv e rsity , la ck o f p a rtic ip a tio n
su b je c t m a tte r e x p e rts
m e m b e rs
work groups has been shown to improve the quality
of decision-making, improve group performance,
generate significant productivity gains for many major
corporations” (p. 30). However, there is also evidence
that shows failure of adoption, unnecessary conflict,
and unanticipated outcomes are the result of poor GSS
implementation. A literature summary of performance,
related issues, and outcomes is shown in Table 1.
This researcher used a qualitative research approach
with thematic synthesis to generate a conceptual
framework for the adoption of technology by global
teams. In addition, interpretive conceptual analysis
was used to synthesize the heterogeneous nature of the
evidence extracted from eight contextual studies on
this topic. The conceptual framework (see Figure 4)
was first developed by uncovering commonalities in
literature and then by configuring findings (Appendix
B), exploring five thematic areas: (a) task and work
environment, (b) technology features and spirit,
(c) social and technology structures, (d) cultural
collaboration, and (e) technology adoption by global
teams (see Figure 4). Furthermore, two primary
theoretical underpinnings (cultural differentiation
and AST) influenced these five thematic areas. The
researcher then devised a future reality tree cause-andeffect tool to holistically characterize these thematic
S o cia l p re se n c e , a c c e ss to
interrelationships (see Figure 4). A summary claim
emerged from the synthesis and interpretation of
the process. Findings were logically used to test
propositions describing sequencing and actions that
affected the five thematic areas. These findings allowed
the researcher to identify implications and provide
recommendations for practitioners to use in the
management of GVTs.
The unit of analysis for this research is the group,
which is characterized as multidisciplinary, problem­
solving experts. Research of group appropriation of
technology for use has shown that small problem­
solving teams (GVTs) are generally comprised of
between five and 20 people. For example, in their
research on small groups, Gopal et al. (1993, p. 51)
used a group size of nine as a control variable in their
quantitative assessment of applying AST and the
process of group support system use. Harris (2018)
also found that Clear and MacDonell (2011) assessed
small groups of 15 to 20 members across a total of
over 216 participants in their research on methods
of assessing teams of virtual software development
This researcher used a systematic review (Gough,
Oliver, & Thomas, 2012) process to explore technology
adoption and global team interaction from the
best available evidence. The approach used for this
research was first deductive, based on the conceptual
SAM Advanced Management Dournal – Volume 83 Edition 1
F ig u r e 3. S y s t e m a t ic R e v ie w A p p r o a c h
Develop Clear
Describe Study
Assess &
Relevance and
Quality of
Selected Studies
Analyze &
Synthesize in
with a
Interpret and
the Findings
Figure 3. Systematic Review Approach Adapted From: Gough, D., Oliver, S., & Thomas, J. (2012).
framework, with secondary inductive discoveries (see
Appendix B). The six stages of the systematic review
process are shown in Figure 3. Search strategy and
results are included in Appendix A.
Conceptual Fram ew ork for M u ltin a tio n ­
a l Teams’ Technology Adoption
A cohesive framework emerged from this literature
synthesis, which includes cultural diffusion, AST,
and the need for global teams to adopt collaborative
technology. Given the multinational environment
of virtual teams and technology, this conceptual
framework encompasses both the structural
components and the interactions of groups who
collaborate in their work.
Five themes were identified and shown in Figure
4 (blue circles). These themes illustrate collective
activities or functions required to support the entire
concept of adopting technology by global teams. The
state of operation of these themes is described in
the findings. Four propositions were derived from
the synthesized literature, providing interrelated key
injection elements of the model portrayed in this
framework as described below and shown in figure 4.
The future-reality-tree technique was used to
illustrate cause-and-effect relationships of themes,
showing the inevitable consequences that will ensue
given various combinations or interactions between
propositions (Scheinkopf, 1999, pp. 110-131). In other
words, propositions form or drive interactions that
affect primary areas (themes); this comprises the total
concept of adopting technology by global teams. In
other words, there is a sequence or state of being for
each theme that is dependent upon the presence of
one or more of the other themes and propositions
(injections). Using this technique with the research
synthesized in this study (i.e., the eight sources,
Appendix B), the researcher was able to logically test
the propositions. For example, based on studies to
date, the theme of technology features and spirit will
not be realized until some degree of proposition 4
(P4: clears goals and expectations) is met. Likewise,
social and technology structures, along with cultural
collaboration, will not sufficiently ensue unless a
level of goal setting and expectations have first been
A state of sufficiency was assessed for each theme,
given the impact of the propositions. This logical
AND function (green ovals) was considered for each
theme, which determined that propositions PI, P2,
and P3 are required in order to achieve the final state
of technology adoption by global groups. The four
propositions found to be primary action elements
influencing the conceptual model are as follows:
Proposition #1: Technology is appropriated
based on task form and fit: AIT use by global
SAM Advanced M anagem ent [Journal – Volume 83 Edition 1
work effectively together using advanced technology
in spite of their differences. For one, even selecting
appropriate technology that will be acceptable to
all group members can be a challenge. The research
indicates this process is complex and dynamic. As
such, to maximize success, managers must consider
that the use of AIT, such as group support systems, is
an ongoing process that requires planning, establishing
a suitable work environment, selecting appropriate
technology, technology facilitation, managing social
and technology structures, and attention to cultural
teams is complex with features adapted based
on goals and expectations.
Proposition #2: The successful adoption and
use of technology is influenced by social and
technology structures, which are derived
from team member commitment and social
interaction to accomplish objectives.
Proposition #3: Cultural differences of
individualism, collectivism, and expectations
are reconciled through collaboration.
Proposition #4: The task and work
environment are based on establishing clear
goals with expectations (motivation).
F in d in g s
Based on the critical interpretation and synthesis of
the literature on global groups adopting technology,
this researcher was able to configure a coherent
framework (Figure 4). The following subsections
provide a discussion of the five thematic areas and
their interrelationships using cause-and-effect analysis.
T h e C o m p e ll in g N e e d f o r a C o h e s iv e
M odel
The proliferation and capability of technology
supporting culturally distributed groups has increased
significantly over the past 3 decades. However, the
road to internationalization is fraught on both sides
with failures; that is, a cohesive management model
is needed to guide and ensure that global teams can
F ig u r e 4 . C o n c e p tu a l F r a m e w o r k o f M u l t i n a t i o n a l T e a m s ’ T e c h n o lo g y A d o p tio n
T e c h n o lo g y
A d o p tio n by
G lo b a l
F in a l D e s i r a b l e
E ffe c t
G ro u p s
P 3 – R e c o n c ilia t io n o f
P I , P 2 a n d P 3 M u s t O c c u r fo r
S u ff ic ie n c y
P I – T e c h /T a s k fo r m & F it
in d i v i d u a l i s m &
-C o lle c tiv is m
P 2 – A d a p t i n g R u le s
a n d R e so u rces
S eco nd Level
C auses
T e c h n o lo g y

S o c ia l a n d
F e a tu re s a n d
T e c h n o lo g y
S p ir it
S tru c tu re s
C u ltu r a l
C o lla b o r a tio n
S econd Level
E ffe c ts

_______ ______
P 4 – C le a r G o a ls a n d E x p e c t a t io n s
F ir s t L e v e l
C ause
Task and W o rk
E n v iro n m e n t
SAM Advanced Management Dournal – Volume 83 Edition 1
Task and Work Environments
Work begins with a need to accomplish goals
to provide a product or service. In doing so, work
expectations are formally or informally developed
and communicated to group members. In addition,
one must keep in mind that groups form with a
purpose and/or set of objectives. The combination of
these objectives/purpose and expectations motivate
a team to accomplish their work. Group composition
is determined based on skills, availability, and other
factors. This combination of tasks and resources
comprise the work environment, and especially with
respect to global groups, this work environment
may become complex. Issues may arise such as
time differences, common processes, standards,
performance measures, magnitude of activities, and
tool needs. Success depends on the establishment
of common goals across groups, but with global
groups, they are often confronted with distinct
challenges such as environmental complexities and
multicultural expectations that may profoundly impact
the group (Hofstede et al., 2002, p. 786). Therefore,
proposition #4 (P4), setting dear goals and identifying
expectations, creates the impetuous (cause) to link task
and work environment to the next level needs of the
group (Figure 4).
Technology Features and Spirit
The second thematic area, group support technology
features and spirit (intention), is considered once
P4 has been determined. Social and technology
structures develop concurrently, after which cultural
collaboration begins to progress. An important
prerequisite is form and fit viability (PI; Turban et
al., 2011, p. 147). If this is not attended to—that is,
technology is forced upon or mismatched with the
needs of the groups or task, detrimental outcomes to
performance may result. Consequently, form and fit
should be considered prior to adopting technology.
A broad base of group support technology is
now available to organizations. Primarily, these
collaborative platforms will be feature-configured and
reconfigured to meet the needs of interacting groups.
Human and technology flexibility is also essential in
order to support progressive stages of projects as their
requirements ebb and flow.
As shown in Table 1, technology, coupled with group
performance and outcomes, will be judged across
numerous areas, including efficiencies, decision speed,
usage, conflict resolution, and social engagement.
Therefore, it is imperative to project needs and select
the appropriate features before attempting to adopt
technology for use. Technology adoption ensues
when technology to task form and fit is achieved (PI)
along with progress in social structures and cultural
Social and Technology Structures
Just like face-to-face interchange of information,
collaboration technologies embed social structures
in the form of group and technology relationships
(Nikas & Poulymenakou, 2008). Moving forward,
interaction begins and develops with knowledge
exchanges during collaboration activities, as effected
by P4. Initially, group interaction is centered on the
needs/performance of the group. This establishes a
basis of rules and resources needed for subsequent
idea generation, decisions, work progress, and GVT
products—the essence of AST social structure.
Synchronous real-time communication provides
the most efficient exchange among group members
looking for the optimal methods for working together
over geographical distances, as it allows for immediate
feedback and exchange required for determining
roles, responsibilities, and how the group will operate.
Rules and methods emerge to capture the knowledge,
plans, and processes anticipated to become standard
operating procedures. Generally speaking, information
storage through system access, e-mail, voice-mail, and
so forth, will be asynchronous. The combination and
varying degree of both synchronous and asynchronous
communication is a driver of social structure rules and
technology resources required for disparate teams.
Technology allows for differing preferences and
needs within groups while supporting interaction
among groups. Teams are able to work out their social
and technology structural relationships, as required,
prior to establishing faithful adoption and rhythm of
supporting technology use. As a result, adapting rules
and resources (P2) as a part of social and technology
structural activities is one of three action elements
required for technology adoption (Figure 4).
Cultural Collaboration
Cultural collaboration, the fourth thematic area,
begins once task and work environments have been
established based on clear goals and recognized
expectations (P4). Collaborative support systems
allow global teams to engage, expand their roles and
responsibilities, and improve outcomes. Furthermore,
SAM Advanced M anagem ent Journal – Volume 83 Edition 1
global companies naturally strive to find collaborative
means to support group performance.
The facility or difficulty of collaboration among
global teams differs, by degree, based on similarities
and differences, type of culture, and so forth, among
team members, as shown in Figure 1 and derived from
Hofstede’s map (1980, p. 223). Conflict may arise while
exchanging ideas or making decisions. In fact, cultural
diversity affects many areas of team work, including
collaboration, consensus, satisfaction, confidence, and
conflict resolution, as shown in Table 1. As noted by
Paul et ah, “Group members wiliness and ability to
collaborate with each other is likely to have a bearing
on the overall performance of the group” (2005, p.
The differences in Eastern and Western cultures best
characterized, in this research context, as individualism
versus collectivism often has a significant influence
on collaboration. As such, care must be taken
when U.S. groups (low uncertainty avoidance/
low power distance) interact with Asian groups
(low uncertainty avoidance/high power distance),
as shown in Figure 1. Issues may arise because of
the cultural differences between these groups (i.e.,
collectivistic v. individualistic). For example, U.S.
groups may generate open conflict in meetings with
their Asians counterparts, who may be uncomfortable
with this style of communcation. Another important
characteristic of Asian/collectivistic cultures is that
they tend to look to leadership for decisions while
avoiding taking chances themselves that might affect
the collective organization, even though they are
comfortable working with uncertainties.
Thus, eliciting interactions that would allow groups
from different cultural backgrounds and traditions to
comfortably work within their culture dimensions will
reduce conflict and improve outcomes. This framework
would entail adjusting for and de-conflicting the
characteristics found in individualism and collectivism
(P3). In this way, progress may be facilitated or
ensured towards their common objectives through
adoption of technology.
Technology Adoption by Global Teams
Finally, the fifth thematic area, faithful technology
adoption, is made possible when the following
objectives have been met: identification of technology
features and spirit, development of social and
technology structures, and establishing cultural
collaboration (PI, P2, P3). Group interaction,
rules and resources, and technology capabilities
are all integrated functions that contribute to the
appropriation and adaptation of technology for global
groups. Nikas and Poulymenakou (2008) informed us:
“By adopting a structuration approach, it is assumed
the adoption and use of novel technology are not
deterministic; technologies are structured by users
in their context of use” (p. 2). Using this approach,
teams use technology as a part of their collaborative
processes, which are subsequently refreshed by
outcomes, changes in environment, and new structures
and resources.
The conceptual model presented in Figure 4 has
not been operationalized, as this is beyond the scope
of this paper. Additional research or attempts to
operationalize this conceptual model may provide
greater insight into the conditions under which each of
the propositions impact the thematic states.
Implications for Management
This paper provides the opportunity to put
theory into practice, by exploring implications and
providing recommendations for managers who wish
to internationalize their teams. The use of technology
has been found to influence group structure and
interaction. As a result, managers are encouraged
to adopt technology across global organizations for
collaboration in achieving common purposes. The
following recommendations are based on employing
the conceptual model of multinational teams’
technology adoption:
• Setting goals and understanding differing
expectations. It is essential for goals to be clear
and concise at the onset. It is important to keep
in mind that expectations will most likely differ
according to cultural group practices. Therefore,
an important step prior to engaging teams is to
develop strategies and action plans to address
these differing characteristics and expectations,
based on Hofstede’s cultural differentiation
• Implementation of technology in groups.
Individual and disparate group preferences
are important factors to be considered when
establishing groups’ needs. Successful groups rely
on facilitators to introduce, configure, and attain
SAM Advanced Management Journal – Volume 83 Edition 1
positive outcomes from the use of technology,
which then enables trust and perception of the
value technology among all team members. If
not deemed viable, groups or individuals will
refuse to use or ignore support technology
altogether. Therefore, identifying and employing
a technology champion is important to success.
Supporting social and technical structures.
Identifying and applying rules and resources that
are deemed to be effective in achieving successful
group collaboration is critical. Managing both
synchronous and asynchronous communication
and addressing associated issues is a needed
Understanding and enabling positive cultural
collaboration. It is important to make an
effort to learn about and consider the cultural
aspects of the teams in the development of a
collaborative style, with an aim of achieving team
cohesiveness. This may entail first identifying
country cultural characteristics, such as power
distance and uncertainty avoidance, and then
interjecting structures for individualism and
C o n clu sio n s
The demands of a global marketplace continue
to command ever-increasing efficient operations,
lower costs, and optimization of resources. Moreover,
many of the teams within this global marketplace
are made up of members who reside across national
boundaries and datelines (Coleman & Levine, 2008,
p. 32). AIT provides capabilities for these teams to
cohesively operate together to achieve their objectives.
Thus, the adoption and use of AIT is essential to
advance business trade. Group support technology
enables greater levels of cultural interaction through
collaboration, resulting in enhanced participative
processes and better outcomes.
Both cultural differentiation and adaptive
structuration theories together provide a sound
foundation for understanding the interrelationships of
teams and technology. However, adoption and use of
technology to support interdependent groups is not as
simple as mandating communal tools.
In this paper, this author presented a conceptual
model of technology adoption that provides a
coherent framework for managers to use in developing
approaches to employ global teams. This model
includes faithfully integrating technology features,
developing social and technical structures, and
establishing effective cultural collaboration designed
for the task and work environment. To be successful
in adopting technology for global teams, these
concepts should be carefully considered, planned, and
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*Turban, E., Liang, T., & Wu, S. P. (2011, March). A
framework for adopting collaboration 2.0 tools for
virtual group decision making. Group Decision &
Negotiation, 20(2), 137-154. http://dx.doi.org/10.1007/
si 0726-010-9215-5
*Watson, R. T. (1994, October). Culture: A fourth
dimension of group systems. Communications o f
the ACM, 37(10), 45-55. Retrieved from http://
A p p e n d ix A. S earch S tra te g y a n d R esu lts
This researcher’s inclusion criteria focused on
studies fitting the context of the research question in
the adoption of advanced information technology
(AIT) across global, multicultural teams in nonroutine
work environments. Either adoption or rejection was
a suitable component for assessment. Finally, both
desirable and undesirable outcomes were included.
Exclusion criteria included studies for routine/
repetitive tasks and limited group subfunctions such as
communications or meetings only. Groups that existed
without cultural diversity were also excluded. The
following search terms were used:
1. Statement A (UA): “Team*” AND “technology
adopt*” AND “global”: 20 articles were found.
2. Statement B (UB): “Group Support System*”
AND “global*” AND “adopt*”: four articles were
3. Statement C (UC): “Group Support System*”
AND “global*”: 42 articles were found.
4. Statement B (UD): “Team*” AND “Group
Support System*” AND “Global”: 14 articles were
5. Searches using the Snowball (SB) technique
derived related studies from references resulting
in five articles.
Figure A. Selecting Articles and PRISMA Diagram
Showing Total Search Results (Moher, Liberati,
Tetzlaff, 8c Altman, 2009). Eight final articles were
selected for synthesis, as shown in the PRISMA Figure
A.The PRISMA diagram shows that only eight out of
80 identified sources passed screening and eligibility
criteria. After 66 articles were found to not meet the
criteria for the study, the remaining 14 articles were
fully assessed for eligibility, in accordance with the
conceptual framework defined and discussed below.
The resulting eight articles were carefully selected after
being subjected to quality and relevance appraisal
against a 3-point score (excellent, good, acceptable);
the TAPUPAS descriptive principle quality standards
were used for assessment. These standards included
transparency, accuracy, purposivity, utility, propriety,
accessibility, and specificity (Pawson, Boaz, Grayson,
Long, 8c Barnes, 2003, pp. 9-11). All eight studies were
assessed as good to exceptional. For example, three
articles (Nicolas-Rocca 8c Coulson, 2014; Tung 8c
Turban, 1998; Turban, Liang, 8c Wu, 2011) undergoing
quality assessment received an acceptable score in the
accuracy category; however, based on the transparency
and accuracy standards, these studies required
additional investigation from alternate sources to
SAM Advanced M an ag em en t Journal – Volume 83 Edition 1
determine explicability. Conversely, three other studies
(Mejias, 1995; Nikas & Poulymenakou, 2008; Paul et
al., 2005) received excellent scores in transparency due
to the in-depth explanations of their approaches, and
therefore, these studies did not need to be investigated
Evidence from each of the eight studies (Appendix
B, Table B) showed both code theme breadth (rows)
and study depth (columns). Over 976 extractions were
derived from the eight articles based on 10 deductive
and 14 inductive codes. Codes were then configured
into logical groupings to define the five thematic areas
(task and work environment, technology features
and spirit, social and technology structures, cultural
collaboration, and technology adoption, as shown in
Figure 4) by global teams, which formed the premise
for this researcher’s cause-and-effect concept. The
contribution depth of each article for each thematic
area can be evidenced in these three aforementioned
sources (Mejias, 1995; Nikas & Poulymenakou,
2008; Paul et al., 2005), which provided rich material
across all but one thematic area. The remaining five
studies provided evidence supporting the conceptual
framework. Common themes emerged across these
studies. For instance, cultural aspects and group
interaction and collaboration, with their associated
subthemes, emerged as predominant themes for final
synthesis and interpretation.
Figure A. Selecting Articles and PRISMA Diagram Showing Total Search Results
A ppendix B. Extracted Them atic Analysis and Coding Results
To accomplish conceptual framework analysis, each
selected article was loaded into an ATFAS.ti (coding)
software project scheme. This allowed the assessment
and analysis of the selected studies to be categorized
(as shown in Table B) according to initial deductive
themes derived from the topic conceptual framework
(light blue rows), inductive discovery of themes
(light green row), and supporting information (light
orange rows). A multi-iteration approach for each
article was based on code word searching of text and
graphics, which provided discovery, discussion, and/
or reinforcing evidence. Speculative information, such
as hypotheses, was not included as evidence, although
associated findings were. The five themes in Figure 4
were derived based on this analysis and synthesis.
SAM Advanced Management Journal – Volume 83 Edition 1
| Advanced Information Tech (AIT)
AIT Features
| Technology Adoption
I Global Group
Group Composition
Group Environment
Group Use
Performance & Outcomes
Issues & Practice
| Practical Benefits
Contextual Deductive Themes/Codes
Thematic Analysis and Coding Chart


Liang, & Wu
o> T—
50% of the networkcomputing power is controlled
and all previous transactions
are rewritten—which is largely
Blockchain is
100% secure
Blockchain uses immutable
data structures, such as
protected cryptography
Overall blockchain system
security depends on the adjacent
applications—which have been
attacked and breached
Blockchain is a
“truth machine”
Blockchain can verify all
transactions and data entirely
contained on and native to
blockchain (eg, Bitcoin)
Blockchain cannot assess
whether an external input is
accurate or “truthful”—this applies
to all off-chain assets and data
digitally represented on blockchain
Blockchain beyond the hype: What is the strategic business value?
further industry and use-case level analysis, led to
our key insights on the nature and accessibility of
the strategic value of blockchain.
immutability. It allows information to be verified
and value to be exchanged without having to rely
on a third-party authority. Rather than there
being a singular form of blockchain, the technology
can be configured in multiple ways to meet the
objectives and commercial requirements of a
particular use case.
Three core insights about the strategic value
of blockchain
Our analysis revealed some key takeaways about
To bring some clarity to the variety of blockchain
applications, we structured blockchain use cases
into six categories across its two fundamental
functions—record keeping and transacting
(Exhibit 2). Some industries have applications across
multiple categories, while others are concentrated
on only one or two. This framework, along with
Blockchain does not need to be a disintermediator
to generate value
Benefits from reductions in transaction complexity
and cost, as well as improvements in transparency
and fraud controls can be captured by existing
institutions and multiparty transactions using
Exhibit 2
There are six distinct categories of blockchain use cases addressing two major needs.
Record keeping: storage of static information
for storing
Land title
Food safety
and origin
Distributed database
with identity-related
Particular case of
static registry treated
as a separate group
of use cases due
to extensive set of
use cases
Identity fraud
Civil-registry and
identity records
Transactions: registry of tradeable information
Set of conditions
recorded on a
actions when
these predefined
conditions are met
database that
updates as
assets are
on the digital
database that
updates as
cash or
payments are
made among
Use case
of several of
the previous
Cash-equity trading
New-music release
Drug supply
Insurance claim
Initial coin
as a service
Blockchain beyond the hype: What is the strategic business value?
use case
not fitting
any of the
appropriate blockchain architecture. The economic
incentives to capture value opportunities are
driving incumbents to harness blockchain rather
than be overtaken by it. Therefore, the commercial
model that is most likely to succeed in the short
term is permissioned rather than public blockchain.
Public blockchains, like Bitcoin, have no central
authority and are regarded as enablers of total
disruptive disintermediation. Permissioned
blockchains are hosted on private computing
networks, with controlled access and editing rights
(Exhibit 3).
Private, permissioned blockchain allows businesses
both large and small to start extracting commercial
value from blockchain implementations. Dominant
players can maintain their positions as central
authorities or join forces with other industry
players to capture and share value. Participants
can get the value of securely sharing data while
Exhibit 3
automating control of what is shared, with whom,
and when.
For all companies, permissioned blockchains enable
distinctive value propositions to be developed
in commercial confidence, with small-scale
experimentation before being scaled up. Current use
cases include the Australian Securities Exchange,
for which a blockchain system is being deployed for
equities clearing to reduce back-office reconciliation
work for its member brokers.5 IBM and Maersk
Line, the world’s largest shipping company, are
establishing a joint venture to bring to market a
blockchain trade platform. The platform’s aim is
to provide the users and actors involved in global
shipping transactions with a secure, real-time
exchange of supply-chain data and paperwork.6
The potential for blockchain to become a new openstandard protocol for trusted records, identity,
Most commercial blockchain will use private, permissioned architecture
to optimize network openness and scalability.
Blockchainarchitecture options
based on
of the data
Architecure based on read, write, or commit
permissions granted to the participants
Anyone can join, read, write,
and commit
Hosted on public servers
Anonymous, highly resilient
Low scalability
Anyone can join and read
Only authorized and
known participants can
write and commit
Medium scalability
Only authorized
participants can join,
read, and write
Hosted on private servers
High scalability
Only authorized participants can join and read
Only the network operator
can write and commit
Very high scalability
Blockchain beyond the hype: What is the strategic business value?
and transactions cannot be simply dismissed.
Blockchain technology can solve the need for an
entity to be in charge of managing, storing, and
funding a database. True peer-to-peer models can
become commercially viable due to blockchain’s
ability to compensate participants for their
contributions with “tokens” (application-specific
cryptoassets) as well as give them a stake in any
future increases in the value. However, the mentality
shift required and the commercial disruption such a
model would entail are immense.
If industry players have already adapted their
operating models to extract much of the value
from blockchain and, crucially, passed on these
benefits to their consumers, then the aperture for
radical new entrants will be small. The degree to
which incumbents adapt and integrate blockchain
technology will be the determining factor on the
scale of disintermediation in the long term.
In the short term, blockchain’s strategic value is
mainly in cost reduction
Blockchain might have the disruptive potential to
be the basis of new operating models, but its initial
impact will be to drive operational efficiencies. Cost
can be taken out of existing processes by removing
intermediaries or the administrative effort of record
keeping and transaction reconciliation. This can
shift the flow of value by capturing lost revenues
and creating new revenues for blockchain-service
providers. Based on our quantification of the
monetary impact of the more than 90 use cases we
analyzed, we estimate approximately 70 percent
of the value at stake in the short term is in cost
reduction, followed by revenue generation and
capital relief (Exhibit 4).
Certain industries’ fundamental functions are
inherently more suited to blockchain solutions, with
the following sectors capturing the greatest value:
financial services, government, and healthcare.
Financial services’ core functions of verifying and
Blockchain beyond the hype: What is the strategic business value?
transferring financial information and assets very
closely align with blockchain’s core transformative
impact. Major current pain points, particularly
in cross-border payments and trade finance, can
be solved by blockchain-based solutions, which
reduce the number of necessary intermediaries
and are geographically agnostic. Further savings
can be realized in capital markets post-trade
settlement and in regulatory reporting. These
value opportunities are reflected in the fact that
approximately 90 percent of major Australian,
European, and North American banks are already
experimenting or investing in blockchain.
As with banks, governments’ key record-keeping and
verifying functions can be enabled by blockchain
infrastructure to achieve large administrative
savings. Public data is often siloed as well as opaque
among government agencies and across businesses,
citizens, and watchdogs. In dealing with data from
birth certificates to taxes, blockchain-based records
and smart contracts can simplify interactions
with citizens while increasing data security. Many
public-sector applications, such as blockchainbased identity records, would serve as key enabling
solutions and standards for the wider economy.
More than 25 governments are actively running
blockchain pilots supported by start-ups.
Within healthcare, blockchain could be the key to
unlocking the value of data availability and exchange
across providers, patients, insurers, and researchers.
Blockchain-based healthcare records can not
only facilitate increased administrative efficiency,
but also give researchers access to the historical,
non–patient-identifiable data sets crucial for
advancements in medical research. Smart contracts
could give patients more control over their data and
even the ability to commercialize data access. For
example, patients could charge pharmaceutical
companies to access or use their data in drug
research. Blockchain is also being combined with
IoT sensors to ensure the integrity of the cold
Exhibit 4
The value at stake from blockchain varies across industries.
Impact of blockchain by industry
Arts and recreation
Financial services
Public sector
Technology, media,
and telecommunications
Transport and logistics
Blockchain beyond the hype: What is the strategic business value?
chain (logistics of storage and distribution at low
temperatures) for drugs, blood, and organs.
Over time, the value of blockchain will shift from
driving cost reduction to enabling entirely new
business models and revenue streams. One of the
most promising and transformative use cases is the
creation of a distributed, secure digital identity—for
both consumer identity and the commercial knowyour-customer process—and the services associated
with it. However, the new business models this
would create are a longer-term possibility due to
current feasibility constraints.
Feasibility at scale is likely to be three to five
years away
The strategic value of blockchain will only be
realized if commercially viable solutions can be
deployed at scale. Our analysis evaluated each of the
more than 90 potential use cases against the four
key factors that determine a use case’s feasibility
in a given industry: standards and regulations,
technology, asset, and ecosystem (Exhibit 5).
While many companies are already experimenting,
meaningful scale remains three to five years away
for several key reasons.
Common standards are essential
The lack of common standards and clear regulations
is a major limitation on blockchain applications’
ability to scale. However, where there is strong
demand and commitment, work is already under way
to resolve this issue. Standards can be established
with relative ease if there is a single dominant player
or a government agency that can mandate the legal
standing. For example, governments could make
blockchain land registries legal records.
When cooperation between multiple players is
necessary, establishing such standards becomes more
complex but also more essential. Strong headway has
already been made by industry consortiums, as seen
with the R3 consortium of more than 70 global banks
Blockchain beyond the hype: What is the strategic business value?
that collaborated to develop the financial-grade opensource Corda blockchain platform. Such platforms
could establish the common standards needed for
blockchain systems.
Globally, regulators have taken varying positions,
but most are engaged rather than opposed.
For example, the US Securities and Exchange
Commission’s recognition of ICOs as securities
brought ICOs under the agency’s regulation and
into the mainstream.7 In 2017, Standards Australia
took a leadership position in developing a road
map of priorities on behalf on the International
Organization for Standardization and helping
establish common terminology as a key first
step.8 So far, many governments are following a
technologically neutral regulatory approach—
not promoting or banning specific technologies
like blockchain.
Technology must advance
The relative immaturity of blockchain technology is a
limitation to its current viability. The misconception
that blockchain is not viable at scale due to its energy
consumption and transaction speed is a conflation
of Bitcoin with blockchain. In reality, the technical
configurations are a series of design choices in which
the levers on speed (size of block), security (consensus
protocol), and storage (number of notaries) can
be selected to make most use cases commercially
viable. As an example, health records in Estonia are
still in databases “off chain” (meaning not stored
on blockchain), but blockchain is used to identify,
connect, and monitor these health records as well as
who can access and alter them. These trade-offs mean
blockchain performance might be suboptimal to
traditional databases at this stage, but the constraints
are diminishing as the technology rapidly develops.
The immaturity of blockchain technology
also increases the switching costs, which are
considerable given all the other system components.
Organizations need a trusted enterprise solution,
Exhibit 5
Blockchain feasibility in each industry will depend on the type of asset,
technology maturity, standards and regulation, and the ecosystem.
Feasibility of blockchain
by industry
Standards and
Standards and
Arts and recreation
Financial services
Public sector
Technology, media,
and telecommunications
Transport and logistics
Blockchain beyond the hype: What is the strategic business value?
particularly because most cost benefits will not
be realized until old systems are decommissioned.
Currently, few start-ups have sufficient credibility
and technology stability for government or industry
deployment at scale. Major technology players
are strongly positioning themselves to address
this gap with their own blockchain as a service
(BaaS) offerings in a model similar to cloudbased storage.
Assets must be able to be digitized
Asset type determines the feasibility of improving
record keeping or transacting via blockchain
and whether end-to-end solutions require the
integration of other technologies. The key factor
here is the digitization potential of the asset; assets
like equities, which are digitally recorded and
transacted, can be simply managed end to end on
a blockchain system or integrated through
application programming interfaces (APIs) with
existing systems.
However, connecting and securing physical goods
to a blockchain requires enabling technologies
like IoT and biometrics. This connection can be
a vulnerability in the security of a blockchain
ledger because while the blockchain record might
be immutable, the physical item or IoT sensor can
still be tampered with. For example, certifying the
chain of custody of commodities like grain or milk
would require a tagging system like radio-frequency
identification that would increase the assurance
being provided but not deliver absolute provenance.
The coopetition paradox must be resolved
The nature of the ecosystem is the fourth key factor
because it defines the critical mass required for a
use case to be feasible. Blockchain’s major advantage
is the network effect, but while the potential
benefits increase with the size of the network, so
does the coordination complexity. For example, a
blockchain solution for digital media, licenses, and
royalty payments would require a massive amount
Blockchain beyond the hype: What is the strategic business value?
of coordination across the various producers and
consumers of digital content.
Natural competitors need to cooperate, and it is
resolving this coopetition paradox that is proving
the hardest element to solve in the path to adoption
at scale. The issue is not identifying the network—
or even getting initial buy-in—but agreeing on
the governance decisions around how the system,
data, and investment will be led and managed.
Overcoming this issue often requires a sponsor,
such as a regulator or industry body, to take the
lead. Furthermore, it is essential that the strategic
incentives of the players are aligned, a task that
can be particularly difficult in highly fragmented
markets. Critical mass is much lower in some
industries and applications than in others, while in
some cases, networks need to be established across
industries to achieve material benefits.
What strategic approach should
companies take?
Our research and emerging insights suggests
following a structured approach to answer the
classic questions of blockchain business strategy.
Where to compete: Focus on specific, promising
use cases
There is a plethora of use cases for blockchain;
companies face a difficult task when deciding which
opportunities to pursue. However, they can narrow
their options by taking a structured approach
through a lens of pragmatic skepticism. The first
step involves determining whether there is sufficient
accessible value at stake for a given use case.
Companies can only avoid the trap of developing
a solution without a problem by rigorously
investigating true pain points—the frictions for
customers that blockchain could eliminate.
Identification of specific pain points enables granular
analysis of the potential commercial value within
the constraints of the overall feasibility of the
blockchain solution. Overall industry characteristics
as well as a company’s expertise and capabilities will
further influence this decision, as companies need to
understand the nuances of all these components to
decide which use case will generate a solid return on
investment. If a use case does not meet a minimum
level of feasibility and potential return, then
companies do not even have to consider the second
step of which blockchain strategy to adopt.
will fundamentally be defined by the following two
market factors, which are those they can least affect:
ƒƒ market dominance—the ability of a player to
influence the key parties of a use case
ƒƒ standardization and regulatory barriers—the
requirement for regulatory approvals or
coordination on standards
These two factors are critical in determining a
company’s optimal strategic approach because they
are integral to achieving the coordination required
(Exhibit 6). Blockchain’s value comes from its
network effects and interoperability, and all parties
need to agree on a common standard to realize this
value—multiple siloed blockchains provide little
advantage over multiple siloed databases. As the
technology develops, a market standard will emerge,
and investments into the nondominant standard
will be wasted.
How to compete: Optimize blockchain strategy
based on market position
Once companies have identified promising use
cases, they must develop their strategies based on
consideration of their market positions relative to
their target use cases. Many of the feasibility factors
already discussed are within a business’s sphere of
influence; even technology and asset constraints can
be managed through trade-offs and a series of design
choices to shape a viable solution. Therefore, a
company’s optimal strategic approach to blockchain
Exhibit 6
Optimal blockchain strategy for each use case is dependent on market
position and ability to influence standards and regulatory barriers.
Standards and regulatory barriers
Blockchain strategies
Act now to establish the
industry standard
Focus on use cases with
highest potential value and
network effects
Focus on disruptive
use cases
Blockchain beyond the hype: What is the strategic business value?
Build alliances to shape
blockchain solutions
Focus on high-impact use
cases that require broadly
shared standards
Prepare to move fast to
adopt emerging standards
Focus testing on use
cases that enable internal
This consideration of a company’s market position
will inform which of four distinct strategic
approaches to blockchain should be deployed and, in
fact, further refine which type of use cases to focus
on first.
Leaders should act now to maintain their market
positions and take advantage of the opportunity
to set industry standards. As dominant players
pursuing use cases with fewer requirements for
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