Virtual organizations are on the rise, particularly as the internet has become a way of life. Is there a single day that a business person does not visit the internet? It has become part of every human being. People that used to get dressed, get in the car to drive to a bank to make a transaction, not only is a thing of the past, but sometimes, when they get to the bank, all they see is an ATM machine. All transactions are done via the internet. Pretty soon, people could stay in their homes and not see the sun light.
Hedberg, Dahlgren, Hansson, and Olve (1999) consider the virtual organization as not physically existing as such, but enabled by software to exist. Companies such as Amazon.com, Apple computer and Sun Microsystems are good examples of virtual organizations. Matos, Dahlgren, Hansson, and Olve, describe virtual structure type businesses as: “a network of independent firms that join together, often temporarily, to produce a service or product. Virtual organization is often associated with such terms as virtual office, virtual teams, and virtual leadership. The ultimate goal of the virtual organization is to provide innovative, high-quality products or services instantaneously in response to customer demands.”
The goals of a virtual corporation is to reach global markets, to minimize costs of office space, is to use synergy among companies and join organizations via a network of resources in order to provide goods and services to customers around the world. Isn’t that what amazon is all about?
More and more structured organizations are creating virtual teams. The new conference room is called a “live meeting.” Besides companies where manufacturing take place, the reality is that employees no longer need to be in an “office.”
The opinion of some of the challenges of a virtual organization, include, loss of control over some operations, employees, lack of communication, coordination, and trust among the various partners, as well as a new set of managerial skills.
The reality is that, as Les Pang explains: “these organizations are more flexible; bring products and services to market at an increasing rapid pace. Traditional organization forms are no longer capable of sustaining the needs of this relentless pace.”
. Hedberg, B., G. Dahlgren, J. Hansson, and N.-G. Olve (1999). Virtual Organizations and Beyond: Discover Imaginary Systems. Chichester: John Wiley & Sons.
Camarinha-Matos, L., H. Afsarmanesh, and M. Ollus, eds. Virtual Organizations: Systems and Practices. New York, NY: Springer, 2005.
Gail Fann Thomas, Revised by Monica C. Turner. http://www.referenceforbusiness.com/management/Tr-Z/Virtual-Organizations.html