Effective leadership for teams that become virtual during crisis times

Virtual teams are becoming increasingly common in today’s business world. They have developed as a response to technological progress and globalization. Globalization also enabled the spread of the COVID-19 pandemic. Due to the introduction of safety measures and lockdown, many employees had to switch from co-located (i.e., physically face-to-face) teams to virtual teams to keep businesses running. The objective of this thesis is to examine whether leaders need to adapt their leadership style in this new environment and to analyse if combining transformational and transactional leadership style is the most effective for teams that become virtual during crisis times. In order to answer the research questions, the study was carried out as an exploratory study that utilizes qualitative data collected via interviews. Nine interviews in total were conducted from which 5 are with subordinates and 4 with team leaders. All interviewees worked previously in co-located teams that became virtual due to the COVID-19 pandemic. The participants work in various industries, companies, and countries and were interviewed on leadership and its impact on their perceived level of team efficiency. The collected data was then analysed through content analysis. The results from the study suggest that leaders should adapt their leadership style in order to tackle the challenges associated with virtual teams such as communication or lack of social interactions. The study also indicates that combining both transformational and transactional leadership style is beneficial for the effectiveness of teams that have to shift to virtual work modes during crisis times. This new virtual environment necessitates guidance and framework skills that transactional leaders excel at, besides team cohesion and coaching, competencies related to transformational leadership style. This study contributes to extending the limited research on leadership style for teams that were suddenly forced to transition to a fully virtual environment. Moreover, it provides practical insights on how managers should adapt their leadership style during these unprecedented times.