In this paper, we present a theoretical model on the relationships among group atmosphere, shared understanding, and perceived task conflict in virtual teams. We validate the theoretical model by analyzing data that was collected in a laboratory experiment on virtual teams. We find that cultural diversity of virtual team adversely affects group atmosphere and group atmosphere has a positive influence on the development of shared understanding in these teams. We also find that the development of shared understanding weakens perceived task conflict in virtual teams. However, we do not find a strong support for the moderating effect of avoidance conflict management style on the relationship between shared understanding and perceived task conflict
