An investigation of the use of global, virtual, and colocated new product development teams Edward F. McDonough III a, *, Kenneth B. Kahn b , Gloria Barczak a a Northeastern University, Boston, MA 02115, USA b The University of Tennessee, Knoxville, Tennessee, USA accepted 1 November 2000 Abstract This paper presents the results of an investigation of differences between global, virtual and colocated new product development (NPD) teams. Specifically, we examined whether and how these three types of teams differed in terms of usage, challenges, and performance. A survey of PDMA members was undertaken to collect the data. Out of 103 firms participating in the survey, 54 had used or were using global teams for some of their NPD efforts. Overall, we found that the use of global teams in our respondent firms is rapidly increasing. Our respondents indicated that by the year 2001, approximately one out of every five NPD teams in their companies are likely to be global. However, our respondents also expect that their companies will be using multiple types of teams that is, global, virtual, and colocated, to develop their new products. Our findings also suggest that global teams generally face greater behavioral and project management challenges than either colocated or virtual teams. Global team performance is also lower than the performance of virtual or colocated teams. Are these challenges associated with poorer performance? In examining this question, our results suggest that greater project management challenges are associated with lower performance, for all three types of teams. Surprisingly, behavioral challenges were not associated with performance for any team type. Our results suggest that firms face different problems associated with managing each type of NPD team— global, virtual and colocated. To effectively manage each type of team may, in turn, require that companies and their managers employ different solutions to these different problems. Additionally, companies may find that the preparation they provide to their managers and team members to work in these different team environments may also need to be different. Further research is clearly needed to address these managerial implications. © 2001 Elsevier Science Inc. All rights reserved. 1. Introduction Many companies are facing an increased demand to compete on a global scale. But as companies move into multinational markets, the process of developing new prod- ucts and bringing them to market is becoming progressively more complex. Understanding one’s globally distributed customers is no longer a simple matter of identifying the needs of a single, relatively homogeneous group. Instead, it requires an ability to understand the needs of consumers who may be located in different countries, who speak dif- ferent languages, who have different sets of cultural beliefs and who express their preferences in different ways. To handle this increased complexity, more and more firms are relying on NPD teams that are dispersed throughout the world [6]. Companies are also finding that the expertise needed for developing new products can be scattered throughout the world. Global teams can be used to employ globally-dis- tributed NPD expertise that is not available in a single geographic area without having to physically colocate team members. Such teams have the potential to provide compa- nies with a more practical and economical way to develop new products and services. Research suggests, however, that these companies are struggling to deal with the myriad problems arising from the use of such global NPD teams [5,6,36,37]. Much of this struggle seems to stem from the nature of global teams. Global teams are both geographically dispersed and cultur- ally diverse [13,19]. Their members are physically dis- persed across multiple countries, represent different nation- alities, have different cultural backgrounds and speak different languages. * Corresponding author. Tel.: +1-617-373-4726; fax: +1-617-373-2491. E-mail address: e.mcdonoughiii@neu.edu (E.F. McDonough III). The Journal of Product Innovation Management 18 (2001) 110 –120 0737-6782/01/$ – see front matter © 2001 Elsevier Science Inc. All rights reserved. PII: S0737-6782(00)00073-4