A look at the future of work: The digital transformation of teams from conventional to virtual

Journal of Business Research 163 (2023) 113912 Available online 16 April 2023 0148-2963/© 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/bync-nd/4.0/). A look at the future of work: The digital transformation of teams from conventional to virtual Davor Vuchkovski a , Maja Zalaznik a , Maciej Mitręga b , Gregor Pfajfar a , * a University of Ljubljana, School of Economics and Business, Kardeljeva pl. 17, 1000 Ljubljana, Slovenia b Department of Marketing and Business, Faculty of Economics, VSB – Technical University of Ostrava, Ostrava, Czech Republic ARTICLE INFO Keywords: Digital transformation Global virtual teams Dynamic capabilities Digital capabilities Knowledge transfer Organizational adaptation ABSTRACT This study addresses the challenges of digitally transforming teams from conventional to virtual environments in response to the unique conditions of a global pandemic lock-down and the need for business survival, rather than as a proactive strategic move initiated and encouraged by senior management. Based on dynamic capabilities theory, we use 18 in-depth interviews to identify the skills and capabilities required for successful transition at the individual and organizational levels. First, at the individual level, communication differences (i.e., informal vs. formal, spontaneous vs. structured, and synchronous vs. sequential) were identified when comparing conventional and virtual teams. Second, at the organizational level, this study identified several challenges related to the digital transformation of teams (e.g., onboarding challenges, barriers in the virtual environment, structural challenges, new team roles such as change manager, chief officer of happiness, etc.). Finally, seven different digital dynamic capabilities are proposed for teams transforming to a virtual environment. 1. Introduction Digital transformation (DT) is defined as the use of new digital technologies to enable significant business improvements (Fitzgerald et al., 2013:2). While Verhoef et al. (2021) argue that DT is mainly driven by external factors, Caputo et al. (2021) point out that digitalization is one of the most common organizational responses to rapid technological and market changes that has received special attention in the strategic management literature. Advances in technology and their implementation by companies have enabled teams to work outside the traditional physical workplace (Dube & Pare, 2001; Rutkowski et al., 2002; St. Amant, 2015) and ensured business continuity (Reuschl et al., 2022) when nationwide closures occurred in many countries between 2019 and 2021, affecting companies across all industries and forcing their employees to work from home. This has led to an accelerated DT and formation of so-called “virtual teams” from the traditional ones. Existing research considers virtual teams as working arrangements in which team members are geographically dispersed with limited face-toface contact working independently using electronic communication media to achieve common goals (Dulebohn & Hoch, 2017), while global virtual teams are defined by three dimensions: no common past or future, cultural diversity and geographic dispersion, and electronic communication (Jarvenpaa & Leidner, 1999). Although virtual teams and global virtual teams share similar characteristics, studies of virtual teams have primarily addressed geographic dispersion and dependence on technology in interaction (Raghuram et al., 2019), whereas studies of global virtual teams have addressed both geographic and cultural dispersion (Klitmøller & Lauring, 2013; Zakaria, 2017), and use of technology in communication (Jarvenpaa & Keating, 2021). The introduction of new technologies in an organization leads to fundamental changes, so radical changes in skills, employment levels, work patterns, work content, and occupational structures (Gill, 1986) can be expected in the course of the digital transformation of teams. However, digital transformation opens new avenues for product, process, and business model innovation and growth (Vial, 2019; Bresciani et al., 2021). While digitalization and DT facilitate the process of knowledge creation and sharing within an organization (Alberti-Alhtaybat, Al-Htaybat, & Hutaibat, 2019; Ferraris, Erhardt, & Bresciani, 2019; Muninger, Hammedi, & Mahr, 2019), it is known that transferring tacit knowledge over medium-lean online communication channels is more difficult (Jimenez et al, 2017), and thus there are additional key issues that require attention as learning and knowledge transfer are * Corresponding author. E-mail addresses: [email protected] (D. Vuchkovski), [email protected] (M. Zalaznik), [email protected] (M. Mitręga), gregor.pfajfar@ ef.uni-lj.si (G. Pfajfar). Contents lists available at ScienceDirect Journal of Business Research journal homepage: www.elsevier.com/locate/jbusres https://doi.org/10.1016/j.jbusres.2023.113912 Received 30 January 2022; Received in revised form 23 March 2023; Accepted 29 March 2023 Journal of Business Research 163 (2023) 113912 2 considered cornerstones of productivity growth (Jovanovic & Nyarko, 1995; Kogut & Zander, 1996; Argote et al, 2003). Dynamic capability theory, also referred to as the Dynamic Capability View (DCV), helps to address and understand these key questions because it assumes that the ability of organisations to sense changes in the environment, seize upcoming opportunities as they arise, and reconfigure, integrate, and adapt existing resources is central to their success in the disruptive digital world (Eisenhardt & Martin, 2000; Teece, 2007). Therefore, we use the DCV to identify and understand the key digital dynamic capabilities for successfully transforming a team from a conventional to a virtual structure. The newly emerged (transitioned) virtual teams or global virtual teams are of great importance, since, first, studies focusing on virtual teams have always been conducted with teams that were virtually initiated, i.e., their team members did not share a common history or a common physical space (Jarvenpaa & Leidner, 1999). In the body of literature on virtual teams or global virtual teams, there is already some research on communication, information and knowledge transfer (Pinjani & Palvia, 2013; Batarseh et al., 2017; McLarnon et al., 2019), however, notwithstanding these contributions, the literature lacks studies that directly address and compare the phenomena of virtual and conventional teams. Second, studies addressing knowledge creation and transfer (Argote, 1996; Reagans et al., 2005; Chen, McQueen & Sun, 2013), and loss (Darr et al., 1995; Li & Rajagopalan, 1998) focus particularly on conventional organizations and teams. In contrast, studies on virtual teams tend to focus on communication problems due to geographical and cultural differences (Klitmøller & Lauring, 2013; Zakaria, 2017) and do not address communication, knowledge transfer, and learning in the context of digital transformation. There is a gap in the literature on information and knowledge transfer in terms of the medium of communication and its comparability to conventional teams, again due to the paucity of research on teams that directly compares virtual and conventional work models. Again, such research would be of particular interest for the practice of digital transformation. Third, knowing that sustainable digital transformation builds on an integrated approach (Vial, 2019), there is a gap in the literature that generally addresses the challenges transforming teams from conventional to virtual and its impact on changing structures, processes, technologies, and culture of organizations. Identifying key dynamic capabilities needed for organizations to become more agile in their process of DT as a response to external (unpredictable) events (i.e. global pandemic) could be beneficial not only to global organizations but also to further development of dynamic capabilities theory. The aim of this study is to address the challenges of digitally transforming teams from conventional to virtual environments in response to the unique conditions of a global pandemic lock-down and the need for business survival, rather than as a proactive strategic move initiated and encouraged by senior management. Due to the pandemic situation(s), teams have been additionally dispersed; therefore, we believe that the role of the individual within the team, the way tasks are accomplished, the knowledge accumulated within a team and its flow, and the role of a team within an organization have changed. Therefore, in this study we answer the following research questions: (1) How have communication, knowledge transfer, and learning changed as a result of the digital transformation of teams? (2) What challenges arise from the lack of capabilities in connection with the digital transformation of teams at the organizational level? (3) What individual and organizational skills are required to successfully manage the shift from a traditional physical workplace to a virtual team? (4) What (new) roles of team members and leaders emerged as a result of the shift from a traditional physical workplace to a virtual team? and (5) How did age, experience, or gender affect the shift from a traditional physical workplace to a virtual team? What other factors (sociodemographic, psychographic, etc.) also influenced this change? Given the exploratory nature of these research questions, we will use an inductive grounded theory approach (Strauss & Corbin, 1998). The research is based on 18 in-depth interviews with information-rich participants (i.e. senior level managers), selected using purposive sampling logic. This allows for interpretive research and grounded theory building to produce original, useful and insightful findings (Corley & Gioia, 2011). We contribute to both practice and theory by addressing the emerging issue of digital transformation of teams triggered by an unprecedented external event (e.g., a global pandemic lockdown). Prior to pandemics, virtual work arrangements were not widespread in organizations. Therefore, this research is not only timely, but also relevant to most organizations today. The results of this study are of particular interest to companies that have not yet faced distractions and the push for virtual teamwork and may choose to do so in the future. In addition, this study will help companies understand the challenges of virtual teams before they adopt them in the future, as well as the dynamic capabilities required for a successful digital transformation to virtual teams. Nonetheless, such a study would contribute to the literature on digital transformation. While practitioners and global consultancies emphasize the importance of the human component as the soft side of digital transformation processes (Bresciani et al., 2021), we still know very little about the specific individual (e.g., openness to change, change leadership, digital capabilities, etc.) and organizational capabilities (e. g., top management support and understanding, relationship marketing, knowledge management) required to successfully leverage digital transformation, and this paper aims to explore these. Previous research emphasizes that dynamic capabilities are embedded in organizational activities. Some suggest that dynamic capabilities are closely associated with top management, while creative dynamic capabilities for creating organizational knowledge seem to be rooted in team activities (Nonaka, Hirose & Takeda, 2016). Moreover, learning to adapt to the hypercompetitive global landscape is becoming increasingly employee-centric as one of the most important organizational capabilities, especially in the context of global virtual teams (Harvey, Novicevic & Garrison, 2004). Therefore, we contribute to dynamic capability theory by examining the creation of digital dynamic capabilities at different levels (individual, organizational) and proposing different digital dynamic capabilities required for the successful transformation of teams into a virtual form. The remainder of this paper is structured as follows. First, we provide a theoretical background, where we discuss digital transformation, dynamic capabilities theory as a basis for digital transformation, challenges of global virtual teams, learning and knowledge sharing within a team. Next, we discuss our methodology, followed by the in-depth presentation of results. A discussion section, including future research directions and managerial implications conclude the paper. 2. Theoretical background 2.1. Digital transformation The use of new digital technologies is only one piece of the complex puzzle that companies must solve to remain competitive in the digital world. In addition to deploying new technologies, companies must also change their structure, processes, and culture (Vial, 2019; Warner & Wa¨ger, 2019; Małecka et al., 2022; Pfajfar & Małecka, 2022), as well as the roles and skills of their employees and their leadership style (Warner & Wa¨ger, 2019; Małecka, Mitręga & Pfajfar, 2022), to embrace new ways of creating value (Mitrega, Spacil & Pfajfar, 2021; Pfajfar et al., 2022). Excellence in a digital work environment depends on employee skills, available infrastructure and technologies, and work routines, the lack of which can create or widen a digital divide in our society (Reuschl et al., 2022). Kodama (2020) also suggests that organizations should focus not only on the implementation of digital technologies per se, but also on the skills and capabilities required to use new technologies effectively. Matt et al. (2015) suggest that digital transformation D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 3 strategies, regardless of a company’s industry, have common elements that can be grouped into four dimensions: (1) use of technologies (the company’s attitude toward new technologies as well as its ability to use these technologies), (2) changes in value creation (the company’s attitude toward new technologies as well as its ability to use these technologies), (3) structural changes (changes in a company’s organizational setup), and (4) financial aspects (ability to finance a digital transformation). From the perspective of IT-supported digital transformation, an organization can set four strategic roles: to automate (replace human labor), informate-up (provide information to top management), informate-down (provide information to employees across the organization) and transform (redefine the organization’s business model, business processes and relationships) (Vial, 2019). From a transformation perspective, previous research has looked at change initiatives, citing workforce training (Ribeiro-Navarrete et al., 2021), informing employees (van den Heuvel et al., 2015), and creating a digital mindset (Solberg et al., 2020) as key drivers for sustainable digital transformation. In 2019 and 2020, a nationwide lockdown was implemented in many countries, affecting companies in all industries and forcing their employees to work from home (Vione & Kotera, 2021). To sustain their operations and functions, many companies were “forced” to accelerate their digital transformation. Díaz Andrade and Techatassanasoontorn (2021) refer to these digitalization efforts as “digital enforcement”. This digital enforcement has been reflected primarily in the change in working arrangements, as teams have been dispersed from one location to several (remote work) and individuals have been dislocated from the traditional work and team environment, while team communication has shifted to electronic media, transforming teams from traditional to virtual. 2.2. Dynamic capabilities theory In the existing literature, various theories (e.g., resource-based view, institutional view, transaction cost economics, etc.) have been applied to the study of digital transformation, while recently it has become widely accepted that the dynamic capabilities theory provides a particularly important perspective for analyzing the positive outcomes of digital transformation (Li, 2022). Because the dynamic capabilities framework provides a powerful lens for examining strategic change in organizations (Schilke et al., 2018), it can prove very useful when examining a shift from conventional to virtual teams caused by a sudden external event such as a global pandemic. Dynamic capabilities are defined as “the firm’s processes that use resourcesspecifically the processes to integrate, reconfigure, gain and release resourcesto match and even create market changes … and thus the organizational and strategic routines by which firms achieve new resource configurations as markets emerge, collide, split, evolve, and die (Eisenhardt & Martin, 2000). Dynamic capabilities refer to a firm’s ability to ”(a) sense and shape opportunities and threats, (b) seize opportunities, and (c) maintain competitiveness by enhancing, combining, protecting, and, when necessary, reconfiguring the firm’s intangible and tangible assets“ (Teece, 2007: 1319). If sensing and seizing capabilities help create and discover opportunities, transforming capabilities help companies develop an agile mindset and realize the full potential of strategic change (Teece & Linden, 2017) by regularly reshaping aspects of the organization and culture to proactively respond to new threats and opportunities as they arise (Teece, 2018). Transforming capability is therefore critical for organizations to implement a digital strategy (Warner & W¨ ager, 2019). Recent conceptual works provide a framework for the organizational capabilities required for digital transformation. Scholars have identified a broad range of relevant organizational capabilities and categorized them into the following seven themes, which include capabilities related to 1) organizational strategy and ecosystem, 2) organizational innovation emergence with a focus on open innovation and co-creation, 3) data handling, security, and capitalization, 4) organizational structure and process design, 5) new and/or disruptive technologies, 6) organizational management and culture, and 7) ordinary business activities and value creation (Konopik et al., 2022). Similarly, researchers identified six dynamic capability routines that are specifically relevant to digital transformation (Ellstr¨ om et al., 2022): 1) developing a digital strategy; 2) cross-industry digital sensing; 3) determining organizational boundaries; 4) recognizing digital infrastructure from the inside out; 5) creating a unified digital infrastructure; 6) decomposing digital transformation into specific projects. In addition, transformation management capabilities for digital transformation initiatives consist of dynamic capability dimensions (digital opportunities, detection capability, digitalization strategy formulation capability, organizational architecture design capability and people unifying capability, execution assurance capability) and ordinary capability dimensions (transformation resources investment capability, strategic partners assessment capability, continuity assurance capability) (Lukito, Suharnomo & Perdhana, 2022). Alternatives in terms of design thinking dynamic capabilities for digital transformation are also proposed (Magistretti, Pham & Dell’Era, 2021): extending, debating, cropping, interpreting, and recombining capabilities. Companies lacking these dynamic capabilities may be challenged and overtaken by their competitors (Barreto, 2010), while their digital transformation process may be significantly slowed down and competitive advantages may be challenged (Ellstr¨ om et al., 2022; Konopik et al., 2022). In addition, companies may face the challenge of conflicting capabilities required for digital transformation. For example, standardized routines that lead to a data security capability may be in direct conflict with the capability for open innovation and co-creation. Therefore, we believe it is imperative to reassess and prioritize the different dynamic capabilities of organizations at different stages of digital transformation. Contrary to early researchers (e.g., Ellstr¨ om et al., 2022; Konopik et al., 2022) who claim that each of the above capabilities can be used for the three mechanisms of dynamic capabilities (i.e., sensing, seizing and reconfiguring/transforming), the majority of existing research describes different capabilities for different mechanisms of dynamic capabilities and thus different phases of the digital transformation process. For example, sensing can be achieved through digital opportunities detection capability (Lukito, Suharnomo & Perdhana, 2022), which primarily refers to the capability to use digital technologies to improve the collection of relevant market information (Matarazzo et al., 2021). Digital sensing capabilities often refer to three micro-foundations: digital scenario planning, digital scouting, and digital mindset crafting (Warner & W¨ ager, 2019; Herold et al., 2022). Digital seizing capabilities refer to the development of an actual digital strategy (Herold et al., 2022) and typically consist of a wide range of capabilities: organizational architecture design capability and people unifying capability (Lukito, Suharnomo & Perdhana, 2022), piloting and strategic agility (Herold et al., 2022), and the ability to leverage Big Data analytics, Internet of Things, and artificial intelligence (Mendonça & Andrade, 2018). When considering the incorporation of machine intelligence into the implementation of digital technologies, digital seizing capabilities can be further divided into three sub-capabilities (automation-machine acts, human assists; autonomization-machine acts autonomously; and augmentation-human acts, machine assists), which is often referred to as balancing digital options (Herold et al., 2022). Reconfiguration or transformation often refers to execution assurance capability (Lukito, Suharnomo & Perdhana, 2022), information systems capacity (Osmundsen, Iden & Bygstad, 2018), reinventing core digital platform capabilities to accelerate digitization (Karimi & Walter, 2015), improving digital maturity, redesigning internal structures, and navigating innovation ecosystems (Herold et al., 2022; Warner & W¨ ager, 2019). However, the research listed above all relates to the conceptual level, while the applicability of these organizational dynamic capabilities at the team or individual level remains to be tested. Given the digital transformation from conventional to virtual teams D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 4 in this study, we draw on the existing literature on dynamic capabilities developed by conventional teams. For example, sensing, learning, and integration capabilities of new product development teams have been found to increase the effectiveness of radical innovation projects, while teams with high learning, integration, and coordination capabilities increase project efficiency (Darawong, 2018). The foundation of creative dynamic capabilities for new knowledge creation arises from teamlevel interactions rather than individual-level capabilities (Nonaka, Hirose & Takeda, 2016). This is an important finding considering that a significant amount of knowledge could be lost by moving from conventional to virtual teams, suggesting that the ability to create knowledge could be one of the key capabilities for the success of global virtual teams. Moreover, previous research mainly addressed the challenges of global virtual teams as a given structure within organisations (e.g., the role of brokers and social identities in developing capabilities in global virtual teams (Mattarelli et al., 2017); challenges in staffing global virtual teams (Harvey, Novicevic & Garrison, 2004)) rather than the challenges and capabilities required when moving from conventional to virtual teams. In summary, digital transformation is closely linked to a company’s dynamic capability (Soluk & Kammerlander, 2021; Li, 2022). Digital transformation leads to a reconfiguration of resources by enabling multiple agile responses from companies (e.g., optimizing existing processes and leveraging resources) (Warner & W¨ ager, 2019). However, digital transformation alone cannot create additional revenue (Li, 2022). Digital transformation can only help organizations achieve growth and additional value if it is properly applied to relevant business processes to develop a dynamic capability (Mikalef et al., 2018; Li, 2022). However, understanding how organizations build dynamic capabilities for digital transformation is an important strategic issue that is not yet fully understood (Warner & W¨ ager, 2019). 2.3. Global virtual teams Research on global virtual teams began in the early 1990 s in response to the belief at the time that network organizations could not be built on electronic networks alone, as this would require an entirely new sociology of organization (Jarvenpaa & Leidner, 1999). Increasing globalization, the rapid development of technology and the accelerated creation of global value chains have also increased the number of project teams that can interact mainly virtually via electronic networks. Research in this area has also evolved and peaked in the years 2020–2022 as the majority of teams worldwide have become virtual. Early studies of global virtual teams focused on examining communication patterns and the development of trust between team members separated by location and culture (Jarvenpaa & Leidner, 1999). While trust in global virtual teams can be very fragile and volatile (Jarvenpaa & Leidner, 1999), further studies followed with findings on mechanisms to build trust between members (Sarker et al., 2011; Pinjani & Palvia, 2013; Grossman & Feitosa, 2018; Zakaria & Yusof, 2020). Studies also addressed the role of trust on attitudes and behaviors related to team cohesion (Jarvenpaa et al., 2004), the impact of the use of power in global virtual teams on effective trust development, and overall team performance (Panteli & Tucker, 2009). Apart from distance, trust development in teams has also been discussed in terms of cultural diversity (Kirstein, 2011; Zakaria & Yusof, 2015). Ciesielska and Iskoujina (2012) studied the impact of trust within a virtual team on its innovation. In addition to trust, current literature examines communication as the second important element for the functioning success of virtual teams (see Maznevski & Chudoba, 2000; Sarker et al., 2011; Morgan et al., 2014; McLarnon et al., 2019; Glikson & Erez, 2020). While trust between team members arises from the temporal dimension of a global virtual team (lack of shared history and future), communication issues arise from the other three dimensions, i.e., geographic dispersion, cultural diversity, and electronic medium of communication and work. Moreover, the cultural diversity of a team negatively influences communication within the team, while the use of ICT mitigates this negative influence (Shachaf, 2008). In terms of overcoming geographical distance, mediated interactions, especially those that are text-based and asynchronous, such as email, have been shown to hinder the development of good working and collaborative relationships compared to face-to-face communication, which is a richer information medium (Panteli & Tucker, 2009). The role of culture and language in global virtual teams often caught the attention of scholars, who found that both are important to the effectiveness of knowledge sharing (Klitmøller & Lauring, 2013). When there is a high degree of cultural differences and language diversity, face-to-face (non-virtual) interaction is preferable for knowledge sharing because this type of communication allows team members to use nonverbal signs as well as physically move, touch, and correct objects. Global virtual teams are associated with various factors such as trust, interpersonal relationships, cultural differences, leadership, and impact of technology on communication and project delivery risk (Daim et al., 2012). Existing studies examined different leadership styles and roles (see Montoya-Weiss et al., 2001; Paul et al., 2004; Flammia et al., 2010; Jenster & Steiler, 2011; Carter et al., 2015; Zander, 2020; Castellano et al., 2021) and specific skills of effective team leaders (Kayworth & Leidner, 2001). In particular, virtual team leaders should have the ability to perform multiple leadership roles simultaneously, communicate regularly, in detail, and in a timely manner, as well as act in a mentoring role and demonstrate a high level of understanding (empathy) for other team members (Kayworth & Leidner, 2001; Mysirlaki & Paraskeva, 2020). Recent studies have also examined the role of motivation by a team leader. Specifically, inspirational motivation can compensate for a lack of inclusive group mindset (due to linguistic and cultural heterogeneity) that is typical of global virtual teams (Lauring & Jonasson, 2018). Recent studies of global virtual team have explored the benefits and challenges of diversity among members of global virtual teams (Jimenez et al., 2017; Taras et al., 2019), learning and absorptive capacity of virtual teams (Batarseh et al., 2017; Hung et al., 2021), the role of culture (Stahl & Maznevski, 2021; Tenzer et al., 2021) and cultural intelligence of team’s members work and performance (Presbitero, 2020a; Presbitero, 2020b; Richter et al., 2021). 2.4. Learning and knowledge sharing within a team A model for the transfer of productive knowledge between generations in the organization was proposed by Jovanovic and Nyarko (1995). According to their work, knowledge transfer is the cornerstone of productivity growth and occurs when young agents watch old agents perform a task. Such learning is very limited in virtual environments and cannot be transferred through text-based and asynchronous communication. Knowledge transfer and learning in the workplace occurs both formally (in a setting specifically created for this purpose) and informally (as part of normal work activities). The latter occurs by-doing or through mentoring (Korpi & Tahlin, 2021). With the development of new technologies, the requirements of companies for the qualification of their employees increase, and they should be adapted to more complex technologies. The importance of on-the-job learning and participation in training is therefore increasing (Naval et al., 2020). Learning in an organization occurs at the individual and collective levels and affects productivity and performance. Collective knowledge takes many forms, such as shared social structures, vocabularies, routines, or standard operating procedures; while disruptions to collective knowledge can lead to outcomes that resemble collective forgetting (Anderson & Lewis, 2014). A company’s ability to innovate accumulates over time. Innovativeness lies primarily with the individual and the experience working in teams has a secondary impact on productivity (Jain, 2013). However, when individuals have relevant expertise and experience in team collaboration, they benefit from knowledge D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 5 spillovers within the organization. In their study of learning within a development team, Singh et al. (2011) show that peer learning is the most important source of learning for individuals. In a model where team members can be in three latent learning states (high, medium, and low), developers in the medium learning state benefit most from discussions they initiate, while developers in the low and high states benefit most from participating in discussions initiated by others (Singh et al., 2011). Moreover, following factors influence the rate at which organizations learn (Reagans et al., 2005): the skills of individual employees, the ability of firm members to leverage knowledge accumulated by others, and the ability to engage in coordinated activities within the organization. When implementing change, people learn new procedures, develop new skills, and adopt new organizational routines (Morrison, 2008). However, the learner must accomplish the ongoing work while taking on the challenge of learning a new skill. In this case, time is often a limited resource. Our in-depth study brings together the areas of digital transformation, virtual teams, and knowledge transfer, explores the individual and organizational changes, and the research methods used for the study are outlined in the next section. 3 . Methods To explore the changes, i.e., challenges and opportunities, resulting from digital transformation and the formation of virtual teams, and to understand the potential impact on communication, knowledge sharing, and work processes, as well as organizational adaptation and the possible emergence of new roles, skills, and capabilities, we used the inductive approach of grounded theory (Moore, 2009; Gioia, Corley & Hamilton, 2012). We opted for a phenomenographic approach with indepth interviews, as used in this study, to delve deeply into respondents’ lived experiences of the phenomenon in question (Freedman, 2000; Shakman et al., 2017). The interviewees (senior level managers) were selected as individuals within the organization who were very knowledgeable about the process of team transformation, and the choice of method lends itself well to answering the important question, “What is going on here?” It allows for the development of a theoretical model through the collection and close examination of relevant data, rather than testing hypotheses developed from existing literature, and provides deep and rich theoretical descriptions of the contexts in which organizational phenomena occur (Gioia, Corley & Hamilton, 2012). We found it particularly useful to learn about managers’ perspectives on the process of digital transformation and team transformation. We conducted a basic preliminary literature review to contextualize the study and examine previous research contributions on the topic without establishing a rigorous theoretical framework prior to the study (Dunne, 2011). 3.1 . Sampling and data collection In collecting data for this study, we used theoretical sampling logic. This method is widely used in qualitative studies because it allows for the selection of participants with rich information and experience with the research topic (Coyne, 1997). We interviewed executive-level participants (the typical position was chief marketing officer), all of whom came from different multinational companies. We used a variety of sources to access respondents, such as the personal contacts of the research team and referrals from academic colleagues. This gave us a unique opportunity to explore the views of managers in different companies, all of which have undergone a digital transformation in the last two years and whose teams work mainly remotely and have transformed into virtual teams. One interview was conducted face-to-face, while the remaining interviews were conducted via the Zoom platform due to geographic distance and pandemic measures and travel restrictions. Data were collected a year and a half after the start of the global pandemic and the introduction of lockdown measures in the fall/winter of 2021, which was sufficient time for companies to adapt to the new circumstances. Interviews lasted a little less than two hours on average and were conducted in English (with the exception of two interviews in Slovenian and one in Macedonian). The semi-structured, open-ended questions were divided into two sections. The first section focused on questions about the role of digital transformation in the flow of information and knowledge, and the second section focused on individual and organizational skills and capabilities related to digital transformation. We followed a semi-structured interview protocol that began with general questions about participant demographic characteristics and organizational characteristics. Not all interviewees consented to be audio recorded. For participants who did not consent, we took notes on the interviews. Theoretical saturation was reached at 18 interviews (corresponding to 18 organizations), which is consistent with the average of previous studies of 20 respondents, after which variation in a phenomenon reaches saturation and no new concepts emerge (Sandberg, 2000). Table 1 provides the descriptive information about the respondents. 3.2 . Data coding and analysis To analyze the data, we used thematic content analysis (Patton, 1990; Ferraris et al., 2019), while we analyzed all transcriptions and notes using the QSR-NVivo 8 software package. Following the grounded theory approach, we coded the emerging patterns and discussed possible coding differences by refining the coding categories. We labeled all transcripts and notes inductively by determining the meaning of the text. In this first-order analysis we made little attempt to extract categories, so we ended-up with a large number of categories, a process called open coding (Strauss & Corbin, 1998). Some of the open codes that emerged during the analysis were: the impact of online communication, quality of communication, lack of informal communication, adaptability to online, knowledge sharing, problem solving, organizational structure, etc. At the next stage we started seeking for similarities and differences between the categories, a process called axial coding (Strauss & Corbin, 1998) that eventually reduced the number of categories. In this second-order analysis we used theoretical sampling to find concepts suggested by emerging first-order themes that might help us describe and explain the virtual teams’ transformation phenomenon (Gioia, Corley & Hamilton, 2012). At this stage, we arrived at different types of communication (i.e., informal, sequential, synchronous) as emerging topics in virtual team communication research; as well as other topics such as virtual team challenges, organizational innovativeness, individual and organizational capabilities and skills. The next step was the so-called theoretical saturation, where we further extracted second-order topics into aggregated theoretical dimensions and arrived at the following three dimensions: direct vs. indirect communication, organizational challenges, individual and organizational capabilities and skills. The final aggregated dimensions form the basis for the conceptual framework and thus reflect the potentially relevant factors mentioned by the interviewers (see Table 2). Representative quotes illustrating the first-order concepts and thus the second-order themes are presented below to build a data structure that shows how we moved from raw data to concepts and themes in conducting the analysis, underscoring the rigor of our research (Gioia, Corley & Hamilton, 2012). 4. Findings The structure of the findings chapter follows the logic of the firstorder themes, second-order themes, and aggregate theoretical dimensions presented in Table 2. The three identified aggregated theoretical dimensions serve as first-level subtitles, while the second-order themes are examined in depth using the second-level subtitles. We conclude the chapter by contrasting the findings with the DCV and proposing a summary design for the digital transformation of teams from conventional to virtual. D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 6 4.1. Communication within and between teams First, we will discuss the findings that emerged regarding the effects of location, distance, and time on communication and knowledge sharing within teams between its members, as well as between teams. In addition to the obvious distinction between direct, face-to-face, and indirect communication between interacting parties based on their location and the medium of communication, several classifications also emerged that were directly or indirectly related to differences in location, distance, and time of the team(s). 4.1.1. Direct communication Face-to-face communication was the norm for team members before the team transformed into a virtual one. As several of our interviewees pointed out, location and communication medium had a significant impact on the transfer of information and knowledge between team members in terms of availability, speed, quantity, and quality. One of our interviewees (R1) stated, “when we are here physically at the workplace,…, having meetings in a room, or everybody’s working at his desk and then if you have a question, you get up,…, just walk over to the next desk, and ask the question. This is not possible anymore”, the team’s transformation, Table 1 Descriptive information about the respondents. Respondent’s code Gender Product sector Respondent’s job title Number of employees No. of foreign markets Location of the respondent R1 Female Transportation and logistics Director of Marketing 7400 35 Austria R2 Female Sport Social Media Manager 60 30 Slovenia R3 Male Marketing, /Advertising Director of Marketing 40 4 N. Macedonia R4 Female Pharmaceutical Head of Content Department 300 18 Slovenia R5 Male FMCG Brand Manager 2800 80 Germany R6 Female Education Director of Marketing 15 1 N. Macedonia R7 Male SaaS Director of Marketing 230 4 UK R8 Male Automotive Chief Executive Officer 250 4 Serbia R9 Female Manufacturing Global Sales Manager 400 20 France R10 Female Advertising Deputy Sales/Marketing Director 60 28 Slovenia R11 Male Manufacturing Chief Executive Officer 600 50 Slovenia R12 Female Advertising Creative Director N/A 8 Slovenia R13 Male Finance Director of Marketing and Communication 6000 6 Slovenia R14 Female Manufacturing Marketing Communication Specialist 280 50 Slovenia R15 Male Food Sales Manager 80 30 Slovenia R16 Female Medical devices Director of Marketing 80 50 Slovenia R17 Male Retail Director of Marketing 700 5 Slovenia R18 Male Pharmaceutical Director of Marketing 5000 N/A Slovenia Table 2 Data coding. D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 7 therefore resulted in less information and knowledge being available when it was needed. In addition, communication through the mediumlean online communication has reduced face-to-face and communication in general, and as one of our respondents (R4) stated, “when we were in the office I knew a lot about everything, and now I don’t know so much because I don’t talk to so many people every day anymore”, consequently the amount of knowledge shared was reduced. 4.1.1.1. Inclusive communication. Our respondents emphasized the significant differences between conventional and virtual teams and considered face-to-face communication to be more comprehensive when it comes to sharing information and knowledge. Direct face-to-face communication in the context of a team, especially because of the many participants, ensures greater inclusiveness (not to be confused with team belonginess or cohesion), as one of our respondents (R4) noted, “I find that sometimes it happens that team members who are partly in the office while others are working remotely can share and discuss something and have a quick chat to decide something, and the person sitting at home is left out a little bit” so the newly formed virtual teams could potentially increase the information gap between team members. This information gap was particularly evident in the loss of an overview of the “big picture”, as the same interviewee (R4) noted, “it used to be easier to see the big picture, and aha, when you do this, you have to think about this and that, and talk to this person and that person”. 4.1.1.2. Spontaneous communication. A significant difference between traditional and virtual teams was also found in the absence of spontaneous communication (the one which takes place during the process, without prior notice or planning) in indirect communication. This was particularly highlighted in relation to the intensity, speed of information and knowledge transfer, as explained by one of our respondents (R2): “we have to schedule more meetings and make more calls to agree on something or to ask something because it’s faster, and when you are in the office you can ask your colleague something and then we discuss it, but virtually you have to schedule it”, as well as in relation to knowledge and information loss, as explained by another of our respondents (R17) stated: “a lot of information is often passed on in these casual discussions that is now lost; a lot of informal information about how a particular thing is going is simply lost because there is much less contact between individuals”. 4.1.1.3. Informal communication. Working in a traditional environment allowed team members to communicate informally, which is no longer the case when the team is transformed into a virtual one. This communication takes place outside of work routines, such as during coffee breaks or random meetings within the company. This informal communication was not only used for discussions outside of tasks and business activities, but often increased the transfer of information and knowledge. As one of our interviewees (R13) said: “someone has a task in front of him/her that is relatively challenging, quite difficult, and he/she meets a colleague at the coffee machine I mentioned earlier and tells him/her that he/she is struggling with a certain thing, and the person there can help him/her a little bit, give him/her some informal advice, tell him/her that he/ she has done something similar, maybe a resource that you might not otherwise think of, and if it’s not there when you are home alone in your own apartment, there’s less of it, and as a result you definitely struggle more”. This informal advice, shared in informal conversations, helped team members with their formal processes and professional engagement. 4.1.2. Indirect communication As teams transformed from conventional to virtual, most face-to-face communication was replaced by indirect communication. This was enabled by the various digital tools that companies adopted. While indirect communication occurred in both forms, sequenced and synchronous, it was always structured (planned). Our findings show that spontaneous and informal communication decreased significantly or disappeared in the case of indirect communication. 4.1.2.1. Sequenced communication. Sequenced communication such as emails and chats allowed team members to transmit information and interact with colleagues when some of them were “away” and timeshifted, and allowed information and knowledge to be stored and shared with many colleagues at the same time. Particularly recorded videos, and videoconferencing, contributed to better dissemination of information and knowledge. As one of our interviewees (R18) stated: “the teams usually gave presentations on a specific topic and held 3 sessions on it. Employees (outside this team) can attend these presentations or view them later, as everything is recorded”. However, knowledge and information acquisition could be compromised as focus could be lost quickly as the amount of information increased rapidly in the case of sequenced communication, as one of our interviewees (R4) said: “Teams [referring to MS Teams software designed for virtual communication] has exploded in the beginning, there was a gazillion of chats, which was quite exhausting”. The lack of direct communication increased the time needed to share information and knowledge and required extra effort, as one of the interviewees (R1) noted, “It took longer, I would say in the beginning, to get things in order. People had to ask again, they wrote emails… so it was definitely a challenge”. Despite technological advances that allow for storage and better organization of data, one of our interviewees (R4) explained: “at some point, I think it was about six months ago, we started to rethink how to streamline meetings, chats, and workflow in general… at some point we just had to find a way to share information in a more appropriate and organized way”, because the use of multiple channels and tools and the increasing amount of information in the transition process could be a source of over-information and disorganization. 4.1.2.2. Synchronous communication. Synchronous communication is indirect communication that occurs at the same time for all participants. Synchronous communication has advantages in terms of cost, as it allows more frequent communication with participants abroad, as one of our interviewees (R17) stated: “But I must say that there is also another good thing, and that is that with these … So far, we have been communicating with the main management HQ of the company, which is in Germany, and another management team, which is in Austria, and before that, the interaction with them was not very regular.” In addition, it allowed greater reach of information and knowledge share as another of our interviewee (R5) stated: “Digital meetings are much cheaper, and many more employees can attend them”. However, synchronous communication is usually structured and can fail in conveying in-depth information and knowledge, as one of our interviewees (R14) noted: “these coordination meetings that we have are much longer than they used to be… we also will not share everything at the coordination meetings because there is not enough time”. And again, overinformation and disorganization can occur, as another interviewee (R8) explained, “People started attending the meetings so as not to miss anything… There were a lot of people present who might not have been at our regular meetings when we were on site. So on the one hand, some people were getting a lot more information than they were used to before, but on the other hand, the time that everything was presented was pretty limited and more people were getting information, but the people who were getting information before were maybe getting it in a smaller amount than they needed.”. 4.1.2.3. Structured (planned) communication. Our respondents emphasized the significant differences between spontaneous and structured communication after their team was transformed into a virtual one. Structured communication is predetermined and planned, which participants often prepare for. As one of our interviewees (R2) stated: “We need to schedule more meetings and make more calls to come to an agreement, and when you’re in the office you can simply ask your colleague, but virtually you have to schedule it”. Structured communication takes more D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 8 time and can prevent information or knowledge transfer when needed. Coordination meetings, introduced as a structured form of communication, have increased the amount of time spent on information and knowledge exchange and, surprisingly, at the same time decreased the amount of information exchanged. One of the reasons for this phenomenon is that the number of participants in the meetings increased and the time spent on information sharing (per person) decreased, as one of our interviewees (R8) explained: “people started attending the meetings for the sake of not missing something…”. This is probably not the rule, because on the other hand, the online meetings without spatial constraints enabled the exchange and use of information even with those who would otherwise not be involved and would not receive this information, as one of our interviewees (R17) stated: “But with all the videoconferencing and video calls, there is a lot more of it than there used to be, and on some level it allows people who would not otherwise be involved in a particular thing to know about it and also to help them with that information”. 4.2. Organizational adaptation to the online virtual environment Compared to virtual teams which were dispersed and digitalized from the start and were also voluntarily formed before global closures, transformed virtual teams had certain disadvantages because the processes were not designed for dispersed and remote work environments. Adapting processes for dispersed and virtual teams was certainly a challenge for companies, as one of our interviewees (R7) explained: “I think startups that were founded before the Covid-19 pandemic and considered remote work even before it became necessary had a big advantage over companies that required their employees to be in a certain place at a certain time”. 4.2.1. Virtual team challenges While the above findings suggest that communication is one of the biggest challenges for transformed virtual teams, and the shift from direct to indirect communication causes disruptions in the availability, speed, quantity, and quality of information and knowledge transfer, other issues have also been identified in digital team transformation and off-site work. Employee availability seemed to be a significant challenge to ensuring a continuous workflow. As one of our interviewees (R15) explained, it was indeed possible for employees to be absent from work due to regulatory or family matters: “It was difficult, especially for the production workers. They also have families, young children going to school. Once the kids were online, one parent had to stay home. At some times that was a problem because we didn’t have enough people on the machines”. On the other hand, availability could be questionable from a perception point of view, in which case another interviewee (R5) stated that: “If you aren’t together in a room, you don’t feel whether someone is available or not”, which also led to limitations in performing team tasks. While employees were unavailable, it was an additional challenge to replace them and hire new employees. Presenting work assignments and conducting all training and onboarding process online could be a challenge, as one of the interviewees (R18) explained: “also worth mentioning is the onboarding of a new employee: when a new team member arrives, the presentation of his or her work takes place virtually, as does the training. This is a difference from the past, where we could hand over the work live”. This is a challenge especially for organizations that did not have onboarding processes suitable for virtual environments. In addition, communication issues were even greater with new team members than with existing team members who had been part of the team before the transformation to a virtual team, as another interviewee (R9) explained: “nowadays I would say that communication gets stuck, not so much with people you have been working with for too many years, but the new workers do not trust you enough to ask, so there are doubts that remain unresolved”. Our research findings have shown that the virtual environment contains barriers that are not a result of the transition process, lack of implementation practices, or lack of resources. For example, regardless of the type of communication, which has already been discussed in detail, the virtual environment could not compensate for the loss of emotional and visual communication that goes hand in hand with verbal communication in face-to-face communication, as one of the interviewees (R16) explained: “communication consists of verbal, visual and emotional communication and with virtual communication you lose the emotional part and also a small part of the visual part”. The information shared in the virtual environment tends to be more rigorous and complex, resulting in tacit knowledge being blocked in product development and intangible skills and creative ideas being blocked in various brainstorming processes, as one of our interviewees (R12) stated: “less emotion, there was more strict information given. It was definitely harder for creative work, because when you’re doing creative work, like creative writing or brainstorming, it’s much harder to do that online than in person, because all those emotions, all those micro, nonverbal communications that are done live can also give a part of the project that is lost”. The transition process to the virtual environment has also affected interpersonal relationships within the team. In some cases, responsiveness has decreased, as has the level of collaboration and the sense of belonging to the team or organization. This has challenged the cohesiveness of the team and the organization. Within the team, interpersonal relationships have deteriorated, as noted by one of our interviewees (R13), “I definitely see in my team that when we work more separately, we come to it because we are mostly at home, the whole climate, the competence, the cohesion of the team has definitely decreased ”. On the other hand, at the inter-team level, the main purpose of achieving a single, common goal has also been eroded, as another of our interviewees (R9) explained: “Now each department works for itself, and it is more difficult to achieve the goal. I think we have lost the cooperation and interdependence between departments”. Our findings also point to declining individual and collective motivation in the transformation process, which combined with eroded interpersonal relationships and communication problems, as well as some other challenges already explained, such as employee availability, contributed mainly to slowed processes and operational disruptions, as one of our interviewees (R7) “the only thing I can think of in terms of disruption in our processes would be motivation. The lack of motivation of all of us”. 4.2.2. Organizational innovativeness In addition to the transformational challenges of the team, our findings have revealed other challenges outside the team level mainly related to organizational performance and innovation capabilities. The first of these challenges is employee organization. Communication problems made task sharing and time management difficult for both individuals and teams, as one of our interviewees (R12) noted: “The main difference was in organizing people, talking to people, and maybe, I would say, the biggest problems were with project leaders or project managers”. When combined with location and distance factors, task assignment and employee organization has transcended the team level and even challenged the structure of the organization. In some cases, the organizational structure had to be redesigned, and to maintain control and work capacity, teams were merged, and the team level expanded, as another of our interviewees (R7) explained: “So what was happening in our company at the beginning of the Covid-19, we had a lack of knowledge sharing between marketing and sales teams, so the two were different silos. So we figured out that we had a problem, and we merged (and this was just at the beginning of Covid-19) the two teams. So we said, we are not two separate teams, we do not have two separate bosses, we are one team now. So we merged everything, meetings, catch-up meetings, everything that was separate before that was at the team level”. Moreover, the virtual environment cannot compensate for the damage caused by mobility restrictions. Travel, on-site visits and faceto-face visits are essential for international business and trade, D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 9 especially when information sources and data are not available, as one of our interviewees (R15) explained: “I work as an area development manager, so it is essential for me to travel. When the situation occurred at Covid-19, I had nowhere to go. I was forced to work from home or from the online office with all the clients, and I had to build the business and find new potential markets. This was quite difficult for me, as I take an old-school approach - I have to see the market and the potential buyer and check the situation”. Our findings show that not only have processes slowed down, but so has decision making. Part of the overall slowdown can be attributed to the disruption of information and knowledge sharing at both the team and organizational levels, as one of our interviewees (R9) noted: “When it comes to production, projects move much slower, each change takes so long to be communicated and transmitted. Since communication is quite difficult nowadays, the projects can lose efficiency”. After the general slowdown as a precautionary measure to avoid misunderstandings and to provide additional verification that processes are being executed correctly, which is partly a prudent move in the volatile and unpredictable business environment, decision-making eventually slowed down as well, as our interviewee (R9) explains: “In the virtual environment, misunderstandings or misdirections are more frequent; in the office, everything was much faster and the resolution of doubts within each department was direct. In the new environment, decisions take so much time because they are not solved during work and remain unresolved”. Finally, the challenges facing the company required new roles, as one of our interviewees (R17) explained: “What to do when everything is closed, what to do when there are new restrictions on sales, who will make these materials, who will notify others, how will we get new supplies, when are the opening hours?”, particularly for coordination, which could prove extremely difficult to fill, especially due to the reduced availability of human resources and problems with onboarding of new team members. 4.3. Individual and organizational skills and capabilities In addition to clarifying the functioning of the virtual teams we studied, we identified another, third theme related to skills and capabilities at the individual level, both at the employee and leadership levels, as well as organizational capabilities at the corporate level. 4.3.1. Individual skills and capabilities The first dimension identified relates to the challenges of adopting the new technology and personal characteristics that influenced the transition process from the traditional to the virtual environment. The speed of the transition process had a significant impact, as all the virtual teams studied were formed as a result of policy decisions and constraints in 2020 and 2021. On an individual level, age was identified as an important factor in the acceptance of change. The older the employees were, the more difficult the transition was. Some employees refused to use the new and centralized channels and continued to work and share information and files through the “old” channels (e.g., emails), as one of our interviewees (R1) explained: “it was introduced so quickly… so there are people who still refuse to work with it, they still stick to the old ways of communication, writing emails and sending the documents by email, which is not the right way, because when you work you should use a channel and everyone works with it”. Mixing different channels was a challenge for the whole team, as it did not lead to the use of a unified system. In terms of gender, our interviewees agreed that it might be somewhat more difficult for women due to the traditional or societal role of the mother, who assumes most of the parental responsibilities, but male employees or fathers were not completely excluded from these parental responsibilities either. The following conclusion has less to do with technology acceptance per se and more to do with the location of the employee, which in the case of virtual teams is usually the home office where other family members were also present, as one of our interviewees (R4) explained: “And in terms of gender, I think the fact that there are a lot of women in our company and a lot of mothers has also had an impact on the way they work, because they also took care of the children when they were not in school, and also some fathers did the same”. In terms of individual skills and abilities needed to transition and function in a virtual team, our respondents mentioned several of them. Understanding technologies and systems, communication skills in a virtual environment (which was covered in detail in the first theme), flexibility, adaptability, and acceptance of change and newness were just a few. An additional skill required, besides clear communication, was also communicating and collaborating with new colleagues they had never met in person, as one of our interviewees (R5) explained: “to cope with all the new ways of communicating, especially, I think, you also needed an ability, yes, to share knowledge within digital rules as well, so not just through interpersonal interactions”. An important capability unique to virtual teams defined in our study is the ability to self-manage. As explained earlier, meetings and communication were generally more time-consuming in a virtual environment. At the same time, processes and decision-making were slower, and without a change of micro-location (some respondents did not leave their workplace 24/7), work hours were longer and life-work balance was compromised, as one of our respondents (R1) stated: “what I learned… an individual needs something like… how do you say… selfmanagement… you have to organize your day… what I have experienced with many employees here in Austria, but also from all over the world, who have told me the same thing, is that working in virtual teams makes you work much more than if you were working in person”. Finding motivation was also a challenge and a skill that became unique to the team members, as distance, location, and time had a great impact on their perception and belonging within the group. Multitasking was also one of the skills that increased or was required as physical absence from the office also disrupted task assignment and required increased communication through multiple channels, as one of our respondents (R6) stated: “to stay motivated, to stay focused while working remotely from home independently is a challenge”. As for management skills, our findings show that the skills and abilities of managers leading a traditional team are not sufficient, i.e., they need to be improved for the virtual environment and virtual teams. As for communication, as explained in the first point, it must be very clear and precise, as well as transparent and comprehensive. In order to inspire and motivate employees, a manager of a virtual team must create a positive atmosphere and be very understanding towards the individual members, as they may find very different and difficult working conditions at home. A good manager of a virtual team must find a way to involve his or her colleagues, otherwise they will feel isolated and lose the sense of belonging to the team or not have enough information and knowledge and lose the “big picture” of the processes and common goals of the team and the organization, as stated by two of our interviewees: “the first thing I realized that is really necessary to work successfully in a virtual team is that you need clear and effective communication. So you have to say exactly what the goals are, what the targets are, so that everybody knows what direction it’s going in, because otherwise you cannot do that” (R1) and “in virtual teams you have to add a little bit more, …, a team leader must always inspire his/her team to reach the target” (R4). Managing a virtual team requires managers to have specialized training in managing remote teams. For managers with years of experience leading conventional teams, this was a particular challenge. They had to maintain the motivation and satisfaction of team members they had not seen in person for more than a year, and maintain team cohesion, as one of our interviewees (R13) explained: “A more interesting challenge arose organizationally because we managers were not trained in managing remote workers. I have been a manager myself for 15 +years, but I was never taught how to lead a team. I have 25 employees in Slovenia and another 30 to 40 in ex-Yugoslavia, and no one has ever taught me how to maintain the motivation, competence, and satisfaction of people you have not seen in person for a whole year, but only through a screen”. In the transition to a virtual team, managers also had to have good change management skills, especially since the internal changes were accompanied by many D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 16 Morgan, L., Paucar-Caceres, A., & Wright, G. (2014). Leading effective global virtual teams: The consequences of methods of communication. Systemic Practice and Action Research, 27(6), 607–624. https://doi.org/10.1007/s11213-014-9315-2 Morris, M. G., & Venkatesh, V. (2000). Age differences in technology adoption decisions: Implications for a changing work force. Personnel Psychology, 53(2), 375–403. https://doi.org/10.1111/j.1744-6570.2000.tb00206.x Morrison, J. B. (2008). Putting the learning curve in context. Journal of Business Research, 61(11), 1182–1190. https://doi.org/10.1016/j.jbusres.2007.11.009 Muninger, M.-I., Hammedi, W., & Mahr, D. (2019). The value of social media for innovation: A capability perspective. Journal of Business Research, 95, 116–127. https://doi.org/10.1016/j.jbusres.2018.10.012 Mysirlaki, S., & Paraskeva, F. (2020). Emotional intelligence and transformational leadership in virtual teams: Lessons from MMOGs. Leadership & Organization Development Journal, 41(4), 551–566. https://doi.org/10.1108/LODJ-01-2019-0035 Nadkarni, S., & Prügl, R. (2021). Digital transformation: A review, synthesis and opportunities for future research. Management Review Quarterly, 71(2), 233–341. https://doi.org/10.1007/s11301-020-00185-7 Naval, J., Silva, J. I., & Vazquez-Grenno, J. (2020). Employment effects of on-the-job human capital acquisition. Labour Economics, 67, Article 101937. https://doi.org/ 10.1016/j.labeco.2020.101937 Newman, S. A., & Ford, R. C. (2021). Five steps to leading your team in the virtual COVID-19 workplace. Organizational Dynamics, 50(1), 1–11. https://doi.org/ 10.1016/j.orgdyn.2020.100802 Nonaka, I., Hirose, A., & Takeda, Y. (2016). ‘Meso’-foundations of dynamic capabilities: Team-level synthesis and distributed leadership as the source of dynamic creativity. Global Strategy Journal, 6(3), 168–182. https://doi.org/10.1002/gsj.1125 Osmundsen, K., Iden, J., & Bygstad, B. (2018). Digital Transformation: Drivers, Success Factors, and Implications. In Mediterranean Conference on Information Systems (MCIS) Proceedings (pp. 1–16). Panteli, N., & Tucker, R. (2009). Power and trust in global virtual teams. Communications of the ACM, 52(12), 113–115. Patton, M. (1990). Qualitative evaluation and research methods ((2nd ed.).). Sage Publications. Paul, S., Seetharaman, P., Samarah, I., & Mykytyn, P. P. (2004). Impact of heterogeneity and collaborative conflict management style on the performance of synchronous global virtual teams. Information & Management, 41(3), 303–321. https://doi.org/ 10.1016/S0378-7206(03)00076-4 Pellegrini, M. M., Ciampi, F., Marzi, G., & Orlando, B. (2020). The relationship between knowledge management and leadership: Mapping the field and providing future research avenues. Journal of Knowledge Management, 24(6), 1445–1492. https://doi. org/10.1108/JKM-01-2020-0034 Pfajfar, G., & Małecka, A. (2022). Evaluating the role of Confucian virtues in Chinese negotiation strategies using a Yin Yang cultural perspective. European Journal of International Management, 17(2–3), 290–323. https://doi.org/10.1504/ EJIM.2022.120699 Pfajfar, G., Shoham, A., Małecka, A., & Zalaznik, M. (2022). Value of corporate social responsibility for multiple stakeholders and social impact–Relationship marketing perspective. Journal of Business Research, 143, 46–61. https://doi.org/10.1016/j. jbusres.2022.01.051 Pinjani, P., & Palvia, P. (2013). Trust and knowledge sharing in diverse global virtual teams. Information & Management, 50(4), 144–153. https://doi.org/10.1016/j. im.2012.10.002 Presbitero, A. (2020a). Foreign language skill, anxiety, cultural intelligence and individual task performance in global virtual teams: A cognitive perspective. Journal of International Management, 26(2), Article 100729. https://doi.org/10.1016/j. intman.2019.100729 Presbitero, A. (2020b). Task performance in global virtual team Examining the roles of perceived cultural dissimilarity and cultural intelligence of member and leader. Personnel Review, 49(5), 1091–1105. https://doi.org/10.1108/PR-10-2018-0415 Raghuram, S., Hill, N. S., Gibbs, J. L., & Maruping, L. M. (2019). Virtual work: Bridging research clusters. Academy of Management Annals, 13(1), 308–341. https://doi.org/ 10.5465/annals.2017.0020 Reagans, R., Argote, L., & Brooks, D. (2005). Individual experience and experience working together: Predicting learning rates from knowing who knows what and knowing how to work together. Management Science, 51(6), 869–881. https://doi. org/10.1287/mnsc.1050.0366 Reuschl, A. J., Deist, M. K., & Maalaoui, A. (2022). Digital transformation during a pandemic: Stretching the organizational elasticity. Journal of Business Research, 144, 1320–1332. https://doi.org/10.1016/j.jbusres.2022.01.088 Reyes, D. L., Luna, M., & Salas, E. (2021). Challenges for team leaders transitioning from face-to-face to virtual teams. Organizational Dynamics, 50(2), Article 100785. https://doi.org/10.1016/j.orgdyn.2020.100785 Ribeiro-Navarrete, S., Botella-Carrubi, D., Palacios-Marqu´ es, D., & Orero-Blat, M. (2021). The effect of digitalization on business performance: An applied study of KIBS. Journal of Business Research, 126, 319–326. https://doi.org/10.1016/j. jbusres.2020.12.065 Richter, N. F., Martin, J., Hansen, S., Taras, V., & Alon, I. (2021). Motivational configurations of cultural intelligence, social integration, and performance in global virtual teams. Journal of Business Research, 129, 351–367. https://doi.org/10.1016/j. jbusres.2021.03.012 Rutkowski, A. F., Vogel, D. R., Van Genuchten, M., Bemelmans, T. M. A., & Favier, M. (2002). E-collaboration: The reality of virtuality. Ieee Transactions on Professional Communication, 45(4), 219–230. https://doi.org/10.1109/TPC.2002.805147 Sandberg, J. (2000). Understanding human competence at work: An interpretative approach. Academy of Management Journal, 43(1), 9–25. https://doi.org/10.2307/ 1556383 Sarker, S., Ahuja, M., Sarker, S., & Kirkeby, S. (2011). The role of communication and trust in global virtual teams: A social network perspective. Journal of Management Information Systems, 28(1), 273–309. https://doi.org/10.2753/MIS07421222280109 Schilke, O., Hu, S., & Helfat, C. E. (2018). Quo vadis, dynamic capabilities? A contentanalytic review of the current state of knowledge and recommendations for future research. Academy of Management Annals, 12(1), 390–439. https://doi.org/10.5465/ annals.2016.0014 Shachaf, P. (2008). Cultural diversity and information and communication technology impacts on global virtual teams: An exploratory study. Information & Management, 45 (2), 131–142. https://doi.org/10.1016/j.im.2007.12.003 Shakman, K., Goodyear, L., DeLisi, J., Schiavo, N., Mansori, S., Rodriguez, S., … Irwin, C. (2017). Qualitative research & evaluation methods: Integrating theory and practice. American Journal Of Evaluation, 38, 603–605. https://doi.org/10.1177/ 1098214016689486 Singh, P. V., Tan, Y., & Youn, N. (2011). A hidden Markov model of developer learning dynamics in open source software projects. Information Systems Research, 22(4), 790–807. https://doi.org/10.1287/isre.1100.0308 Solberg, E., Traavik, L. E. M., & Wong, S. I. (2020). Digital mindsets: Recognizing and leveraging individual beliefs for digital transformation. California Management Review, 62(4), 105–124. https://doi.org/10.1177/0008125620931839 Soluk, J., & Kammerlander, N. (2021). Digital transformation in family-owned Mittelstand firms: A dynamic capabilities perspective. European Journal of Information Systems, 30(6), 676–711. https://doi.org/10.1080/ 0960085X.2020.1857666 Stahl, G. K., & Maznevski, M. L. (2021). Unraveling the effects of cultural diversity in teams: A retrospective of research on multicultural work groups and an agenda for future research. Journal of International Business Studies, 52(1), 4–22. https://doi.org/ 10.1057/s41267-020-00389-9 St. Amant, K. (2015). Establishing successful global virtual teams. In International Virtual Teams: Engineering Global Success (pp. 137–157). John Wiley & Sons Inc. https://doi. org/10.1002/9781118886465.ch7. Strauss, A., & Corbin, J. (1998). Basics of qualitative research: Procedures and techniques for developing grounded theory (2nd Ed.). Thousand Oaks, CA: Sage. Taras, V., Baack, D., Caprar, D., Dow, D., Froese, F., Jimenez, A., & Magnusson, P. (2019). Diverse effects of diversity: Disaggregating effects of diversity in global virtual teams. Journal of International Management, 25(4), Article 100689. https:// doi.org/10.1016/j.intman.2019.100689 Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640 Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Planning, 51 (1), 40–49. https://doi.org/10.1016/j.lrp.2017.06.007 Teece, D. J., & Linden, G. (2017). Business models, value capture, and the digital enterprise. Journal of Organization Design, 6(1), 1–14. https://doi.org/10.1186/ s41469-017-0018-x Teece, D. J., Pisano, G. P., & Shuen, A. (1992). Dynamic capabilities and strategic management. Berkeley: Center for Research in Management, University of California. Tenzer, H., Pudelko, M., & Zellmer-Bruhn, M. (2021). The impact of language barriers on knowledge processing in multinational teams. Journal of World Business, 56(2), Article 101184. https://doi.org/10.1016/j.jwb.2020.101184 van den Heuvel, S., Schalk, R., & van Assen, M. A. L. M. (2015). Does a well-informed employee have a more positive attitude toward change? The mediating role of psychological contract fulfillment, trust, and perceived need for change. The Journal of Applied Behavioral Science, 51(3), 401–422. https://doi.org/10.1177/ 0021886315569507 Varadarajan, R., Welden, R. B., Arunachalam, S., Haenlein, M., & Gupta, S. (2022). Digital product innovations for the greater good and digital marketing innovations in communications and channels: Evolution, emerging issues, and future research directions. International Journal of Research in Marketing, 39(2), 482–501. https:// doi.org/10.1016/j.ijresmar.2021.09.002 Verhoef, P. C., Broekhuizen, T., Bart, Y., Bhattacharya, A., Qi Dong, J., Fabian, N., & Haenlein, M. (2021). Digital transformation: A multidisciplinary reflection and research agenda. Journal of Business Research, 122, 889–901. https://doi.org/ 10.1016/j.jbusres.2019.09.022 Vial, G. (2019). Understanding digital transformation: A review and a research agenda. Journal of Strategic Information Systems, 28(2, SI), 118–144. https://doi.org/ 10.1016/j.jsis.2019.01.003 Vione, K. C., & Kotera, Y. (2021). Mindfulness-based approaches for COVID-19 mental health in working from home. International Journal of Mental Health and Addiction. https://doi.org/10.1007/s11469-021-00647-3 Warner, K. S. R., & W¨ ager, M. (2019). Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning, 52(3), 326–349. https://doi.org/10.1016/j.lrp.2018.12.001 Zakaria, N. (2017). Emergent patterns of switching behaviors and intercultural communication styles of global virtual teams during distributed decision making. Journal of International Management, 23(4), 350–366. https://doi.org/10.1016/j. intman.2016.09.002 D. Vuchkovski et al. Journal of Business Research 163 (2023) 113912 17 Zakaria, N., & Yusof, S. A. M. (2015). Can we count on you at a distance? The impact of culture on formation of swift trust within global virtual teams. Leading global teams. Translating multidisciplinary science to practice, 253–268. Zakaria, N., & Yusof, S. A. M. (2020). Crossing cultural boundaries using the internet: Toward building a model of swift trust formation in global virtual teams. Journal of International Management, 26(1), Article 100654. https://doi.org/10.1016/j. intman.2018.10.004 Zander, L. (2020). Interpersonal leadership across cultures: A historical expose and a research agenda. International Studies of Management & Organization, 50(4), 357–380. https://doi.org/10.1080/00208825.2020.1850980 Davor Vuchkovski is a PhD candidate and lecturer in international business and international marketing at the University of Ljubljana, School of economics and business. His fields of research and publications include cross-cultural marketing and communication and international business in emerging countries. His research has appeared in European Journal of International Management and Journal of East European Management Studies. Maja Zalaznik Prior to taking up the position of the Minister of Education, Science and Sport (May 2015-September 2018), Dr. Maja Zalaznik (ex Makovec Brenˇ ciˇ c) was full professor of international business and Vice-Rector for the area of knowledge transfer at the University of Ljubljana. She had been employed by the School of Economics and Business, University of Ljubljana, since 1993. Dr Zalaznik (ex Makovec Brenˇ ciˇ c) bibliography comprises over 500 scientific and professional titles. Her scientific research was focused on company internationalisation, relationship marketing, international marketing and connections between marketing, sales and human resources. In June 2013, she was appointed President of the European Marketing Academy (EMAC), the largest European academic organisation in the field of marketing. In 2011, she chaired the EMAC Annual Conference. She was President of the Druˇ stvo za marketing Slovenije (Marketing Society of Slovenia) from 2008 to 2014. Dr Zalaznik (ex Makovec Brenˇ ciˇ c) imparts her knowledge to internationally active Slovenian companies in various ways (projects, mentoring, expert commissions). She has considerable experience in the field of development and qualityassurance in higher education, internationalisation, and the integration of education and enterprise sector and wider social environment. Maciej Mitręga Chair Professor of the Management Science Board at the University of Economics in Katowice and Professor at VSB - Technical University of Ostrava. Scholar with over 20 years of diverse research and teaching experience. Devoted to high-quality management science research: papers published in IF journals, including four (IJOPM, TRE: E) and three ABS rank publications (IMM, IMR, JBR, LRP, PP&C). Supervising multinational research teams and teaching academic writing, marketing research, and relationship marketing. Editorial board member or guest editor for periodicals such as IMM, JBR, IMR, and JBiM. Gregor Pfajfar Associate professor in the field of international business at School of Economics and Business, University of Ljubljana. His main area of research focuses on distribution channel conflicts and relationships in B2B markets, international marketing strategies, export performance and collaborative consumption. As a visiting professor he gave lectures at internationally high-ranked universities in England, Canada, Russia, Poland, Lithuania, Estonia and Croatia. He is a member of Marketing Association of Slovenia (DMS), Academy of International Business (AIB), Academy of Marketing Science (AMS), and European Marketing Academy (EMAC). He was a project leader for several applied projects in field of international business for selected international companies like P&G, IBM, BMW, Henkel, Gorenje, Elan, etc. His work was published in Journal of Business Research, Industrial Marketing Management, International Marketing Review, Journal of Services Marketing, Journal of Business and Industrial Marketing, European Journal of International Management, Journal of East European Management Studies among others. D. Vuchkovski et al.