Harnessing the Innovative Potential of Culturally Diverse Global Virtual Teams Through Shared Leadership

Abstract

Global virtual teams (GVTs) are a valuable means to boost cross-geographical collaboration allowing organisations to benefit from worldwide talent pools, combining diverse skill, knowledge and expertise for superior innovation. However, those working in this environment are challenged by the added intricacies of working virtually between nations, cultures and time zones. Despite the increasing prevalence of GVTs, research on the conditions releasing the powerful potential of GVT innovation is a shortcoming in the literature. Thus, the primary aim of this study is to explore how GVTs operating virtually across national bounds can make positive use of their diversity through shared leadership to realise advanced innovation. Then, because the existing innovation literature typifies popular fallacy that innovation will always lead to positive outcomes, this study also seeks to provide empirical evidence of the relationship between GVT innovation and effectiveness. In efforts to undertake exploration of the relationship between diversity and GVT innovation van Knippenberg, De Dreu, and Homan’s (2004) categorisation-elaboration model (CEM) of team diversity is drawn upon. This model facilitates opportunity to adequately account for both the positive and negative effects diversity may have on team performance outcomes. It is hypothesised that shared leadership will mediate the relationship between diversity and GVT innovation, though it is expected that diversity may create relational challenges limiting cohesion and the occurrence of lateral influence among team members, hindering shared leadership and consequently innovation. To understand how the challenges of diversity can be negated, the moderating roles of cultural intelligence (CQ), asynchronous communication and cognitive trust on the mediated cultural diversity-innovation relationship are investigated. Empirical data were collected from a survey of 55 working GVTs, comprised of 438 team members across 50 countries. Additional data were collected from 53 supervisors on GVT effectiveness. As expected, results reveal a negative mediated relationship between cultural diversity and GVT innovation (through shared leadership), despite a strong and positive relationship between shared leadership and GVT innovation. GVT CQ and cognitive trust are both found to moderate the mediated relationship between cultural diversity and GVT innovation (through shared leadership). However, albeit favourable influence from cognitive trust on the diversity-shared leadership path and CQ on the shared leadership-innovation path, the relationship between diversity and shared leadership remains negative, and thus so too does the overall mediated relationship. Additionally, a positive relationship between GVT innovation and effectiveness is found, confirming the appropriateness of innovation as a positive team outcome. The results highlight several contributions to both research and practice. Most broadly, the integrative-moderated mediation model developed and analysed addresses incongruities in diversity research and provides more detailed insights into the complex interaction effects explaining the innovative process in GVTs. This further builds on the analysis of group diversity advanced in the CEM. The findings of this research also offer several future research directions for the continued development of GVT, diversity, shared leadership and team innovation literatures