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The adoption of a team approach in new product design, particularly in recent years, has shaped the nature and context of design activities. Concepts of teaming and team building have been around for many decades and are seen as the means for enhancing organizational and individual performance. It is assumed that through teaming, that is, more social interactions, shared focus and physical proximity, the design process and its outcome will be improved. Virtual teaming, a relatively recent phenomenon, is becoming increasingly attractive to organizations due to developments in communication technologies. The implications of a remote distributed working environment, though, are not illustrated or experienced extensively. This paper explores the evolution of virtual co‐location of product design teams within the context of concurrent engineering. It, thus, attempts to highlight paradoxes and dilemmas in setting up physically and virtually co‐located teams. These issues are illustrated in case studies from ongoing pan‐European projects that depict product design and development activities in certain manufacturing organizations. A survey of some manufacturing firms highlights these dilemmas as perceived by participating firms. The paper closes by examining the extent that teaming, as a performance enhancer, can be diffused to other activities than design, and thus the extent that experiences can be shared within the organization.

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