Examining the effects of cultural diversity on global virtual team performance: A Global Leadership and Organisational Behaviour Effectiveness-based analysis

Abstract

Orientation: The contemporary business landscape reinforces the necessity of global virtual teams (GVTs) as a flexible organisational work format that transcends national boundaries. Cultural diversity of collaborative teams often leads to challenges in communication, collaboration and task execution, which impact their performance. Research purpose: This study investigates the cultural diversity of GVTs and its effects on team performance. Motivation for the study: In global collaboration work contexts where there is limited communication and interaction, national culture presents a critical diversity dimension, which is often underexplored and inadequately understood. Research design, approach and method: The study surveyed 1292 students across 254 multicountry GVTs. Hierarchical multiple regression was employed to analyse the interaction between the key Global Leadership and Organisational Behaviour Effectiveness (GLOBE) variables and team performance. Main findings: Diversity in the teams’ uncertainty avoidance had a significant and positive effect on team performance, while in-group collectivism diversity had a significant but negative effect on team performance. Practical/managerial implications: The positive effect of uncertainty avoidance on team performance demonstrates that variability of teams on this dimension creates a balance on the tendency of individuals to prioritise certainty over uncertain decisions despite potentially higher returns. While diversity improves team performance, managers should have teams that are cohesive through aligning shared goals with clear individual responsibility. Contribution/value-add: The study contributes to the international business and human resource literature by demonstrating how uncertainty avoidance and in-group collectivism shape performance in GVTs using the GLOBE framework which is rarely used in previous research.