Virtual Organizations and Their Impact

This report delves into the concept of virtual organizations, highlighting their structure, benefits, and challenges. It discusses how technology facilitates remote work and the importance of effective communication in managing virtual teams. The report also addresses the critical success factors for virtual organizations, including clear objectives, technology availability, and strong team dynamics. Additionally, it examines the potential drawbacks, such as lack of physical presence and communication barriers, while emphasizing the growing relevance of virtual organizations in the modern business environment.

Effective organisations and
consultancy process

TABLE OF CONTENTS
INTRODUCTION .........................................................................................................................................................1
MAIN BODY .................................................................................................................................................................1
CONCLUSION ..............................................................................................................................................................8
REFERENCES................................................................................................................................................................8

INTRODUCTION
Virtual organisation can be termed as the organisation where the members are
geographically apart from each other and work by using information technology for the purpose
of supporting the work and communication. Further, it does not shows attribute of firm but
considered as a kind of different organisation. Present report is based on understanding the
concept organisation which helps the employees to get different opportunism at the time of
working (Bal, Lashari and Nabavieh, 2014). Further, it also covers the various benefits of virtual
organisation which make the job as well as employees more effective as well as efficient in their
work. Moreover, there are different types of challenges are faced in virtual organisation such as
dilemmas of strategic planning, loss of control along with a requirement of appropriate
managerial skills. In this type of organisation there is requirement of appropriate knowledge of
technologies which can be properly utilise at the time of managing different activities of the
business. This report also explained the different strategies which helps in promoting the success
of virtual organisation so that it helps a company to aware people regarding the organisation.
MAIN BODY
Virtual organisation refers to an organisation that involves the separate and circularize
entities with appropriate information technology that helps in the work as well as
communication. It is a connection of cooperation made with the help of information and
communication technology that is flexible for meeting the changes of the market. Furthermore, it
is regarded as a social network which helps in removing the horizontal and vertical boundaries so
that it is considered as boundary less organisations. In this, an individual working out of the
physically dispersed areas or working from mobile devices and not bound with any particular
space of work. Through information and communication technology which helps in coordinates
the activities and combines the workers and their skills for achieving the goals and objectives
which are set by the virtual organisation (Börjesson, Elmquist and Hooge, 2014). All of the
activities are controlled and coordinated through the network lines by the manager of the
company.
However, while considering the different issue of flexibility which provides various
options such as job sharing, home based working. There is one of the most significant issue
which includes to attain the flexibility for responding the changes it can be internal as well as

external which helps in determining the extent of control and the autonomy amount which can be
imposed by the virtual organisation on their members. It is considered as those type of
companies whose employees do work from home and interaction with the workplace can be done
with the help of computers. For example, there are some of the companies which using some
kind of telecommuting are Coherent Technologies, Dow Chemicals etc. These type of
organisation which are characterized by outsourcing of competencies and the different areas of
outsourcing covers the human resources, research and development along with sales and
marketing. For instance, the performance of Nike is very well in marketing as well as product
design so that which is based on the outsources of information technology for maintaining the
inter organisational coordination (Gibbs, Sivunen and Boyraz, 2017). This type of companies can
be described as the organisation which are without walls and highly connected to the huge
network of suppliers, customers and the joint venture partners.
In addition to this, the management of virtual organisation is can be analysed through the human
issues and technical issues. For instance, there are different experience and cultures plays an
important role in the collaboration. Other than this, communication among the partners along
with the planning.
In modern era, virtual organisation are considered as some of the most effective way to
increase the activities of business. This type of organisations are used to describe the network of
independent firms which join together for the purpose of producing goods and services. The
main aim of virtual organisation is to give innovative and high quality products for responding
the demands of customers. This organisation creates new linkages, advanced information
technology it is considered as important element which is the key or success of virtual
organisation.
Virtual organization is an emerging trend across the business sector. It can be look up
from three levels - Individual, organizational and societal as a whole. The biggest advantage of
virtual organization is that cost saving, In this we can save the huge expenses on real estate,
office spaces, utilities bills such as gas, electricity, water etc. Many organizations outsource their
operations through the effective use of technology to cost region. Product cost also reduces with
reduced raw material cost, operational costs and lower wages cost of the employees which
covers the large geographical area because they hire employees from anywhere according to

their suitability in order to get maximum profit. Virtual organization acquires talent beyond the
country at the optimum cost. It helps in to bring together experts and specialists from across the
globe to work together on the single project where knowledge sharing and innovation takes place
in order to makes an organizational human capital strong and share across the global market at
cost effective manner as well as best business practices (Grabowski and Roberts, 2016).
Employees of a virtual organization are higher task oriented where virtual organization follows
non-bureaucratic and flatter organization structure where decision are taken faster. Members
don't deal with the unnecessary bureaucracy which slow down the decision making process.
Higher connectivity and strong communication channel provides higher productivity and high
level of profitability in order to maintain sustainability in the market position.
All the members span the time zone, There are different team members working on a
same project 24*7, at a different time slot so everyone participate in the same project work
which helps in to accomplish the task within time period. They all are work in a shifting phase.
One member start the project another one finish the project. this consume shorter time for
product development as well as faster response time to demand in both global and local market.
Virtual organization have created new opportunities for those people who are less mobile and
hesitant to reallocate due to either family problem or may be physical challenges. Leaders are
physically present to boost their confidence while they are supported by the communication
technology for all deserving candidates who want to enhance their knowledge in order to get
maximum opportunities. Organization should buy good electronic equipment's which makes
work easier, accurate and time saving in order to get efficiency so that all the members of an
organization have high skilled with the use of technology and substitute tools (Hsu, Huang and
Chen, 2014). Asynchronous tools are email while synchronous tools are videoconferencing,
instant messaging. Which helps in to provide proper efficiency in work. It is a critical element in
the success of the virtual organization which create world class learning system. These learning
systems helps leaders to create world class competencies and enhancing the innovative
capabilities in the organizational members. An organizational ability to sustain leadership
position in the world economy demand where rapid development and elegant solutions
regarding to customer demand.

Virtual organization is not a real world organization though it works the same as real
world organization .Here individuals are linked through communication and information
technology. Although virtual organization has gained a lot of popularity it also brings in many of
the disadvantages. It covers Physical presence plays an important role for communication in any
industry, virtual organization carries the disadvantage of lack of physical presence. Participants
need to wait unless they are virtually linked. Further, virtual organization requires complete use
of communication and information technology as communication in these kind of organizations
requires different tools such as emails, video conferencing, quick messages etc. (Merkevicius
and et.al., 2015). which in turn increases the cost of installation and adds to the capital
investment. With increasing use of virtual organization there is a need of more and more ICT.
These tools and technology eventually corrupts or degrades with the time and requires timely
maintenance and in case of failure requires repairs be it in hardware or software. Thus cost of
maintenance also increases.Virtual organization works by linking skills, knowledge, activities,
opinions, activities, etc. together on one platform. Thus it becomes difficult to coordinate these
attributes of different individual on one platform.
In a virtual organization different people work together with no physical presence .There
may be more chances of severe conflicts among the participants of the organization and these
conflicts may be difficult to resolve as they are virtually connected. These conflicts can be due to
different cultures and perceptions. For instance for a same work or project there are two
associates with similar activity then it may be possible that one of them may want to complete a
work in a longer perfect method and the other may want to do it in a simpler and a shorter
method at this point conflicts may arise (Nishimura and et.al., 2016). Moreover, Virtual
organization involves no physical presence so it may be possible that individual feel alone and
isolated. In real world organisation you work with many people around you they may be your
friends which creates a friendly and active atmosphere and one remains energetic throughout.
But in virtual organisation there is no such case in turn there may be chances of depression and
loneliness. One needs to be capable of working in an inactive atmosphere so that this isolation
does not affect his or her work. Trust between the employees is very important in order to work
together. Gestures such as eye contact, nodding of head, shrugging of shoulders, facial
expressions, body language holds a significant role in building trust between two people as well
as for better communication. Non availability of these leads to improper communication and also

creates difficulty in building trust. Inspire of carrying many disadvantages virtual organisation
are growing faster day by day and is getting much popularity with the digitalisation of the world
as many ways are being developed to overcome the drawbacks.
In virtual organisation, there are certain different challenges at the time of working on
different activities. Further, information technology provides an efficient and it is highly
beneficial platform which can not ignore the demand in virtual organisation of an individual's
skills. It is considered as one of the most important factor in virtual organisation which is
responsible for the efficiency along with its survival. In virtual organisation, it shows different
international workers that includes the challenges such as language barriers and time zones.
Collaboration among different associates also get complicated this kind of organisation which
shows only slightly face to face interaction (Priego-Roche and Rieu, 2016). The members of
virtual teams does not get appropriate opportunities for meeting each other so that there is less
understanding among the team members. Thus, it can be observed that there is lack of
approaches to communication in Virtual organisation are entirely based on technology which can
be termed as internet based. It is considered to be essential for an individual to involved in
partnership for possess some technological tools fro their associates. Matter of compatibility
which results from operating system along with computer software which disturb the efficiency
of virtual organisation. For example, due to the occurrence of difficulty in order to integrate
information with the concern of hardware and software which affects the process of virtual
organisation. Furthermore, protection of data and security is also considered as one of the
important challenge as all of the information are transmitted and collected digitally. Thus, it can
be analysed that there is appropriate evaluation and control of the technology which is utilise
should be done by the virtual organisation for preventing the opportunities.
It is essential to have valuable communication along with the cooperation among the
team members for the management of virtual successfully. If perception of the different partners
are quite varied so that it leads to create conflicts regarding the management of virtual
organisation. It is important to build an appropriate range of understanding among the
relationship at workplace which will be beneficial for the management. However, trust is also
considered to be one of the important factor which helps in the shared leadership among the
different team members which assists the loss of control on the functions which are associated
with the employees.

In virtual organisation, there is considerable cost among the equipment cost and
maintenance cost. It consists of a challenge which helps in measuring and evaluate the track of
work which can be done within the various departments of the virtual infrastructure. Thus, there
will be loss of efficiency and profit due to lead the partners along with the necessity of rework.
It is also considered as an important element in virtual organisation as there is requirement which
have to be done more alert as they understood a shared leadership among the team members that
is composed of self-reliant workers over the world. Virtual organisation have ability to find out a
way in order to overcome the cultural differences that includes inappropriate approaches of the
working along with the distinctive philosophies (Rehman and et.al., 2014). Thus, virtual
organisation must have expert for giving respect for the difference in the team. Thus, all of this
are certain challenges which are faced by the virtual organisation for the different types of
activities which are to be performed by the people. It can be critically evaluated that there are
certain positive impact of virtual organisation due to which it can be easily operate their
functions at workplace.
Virtual can be defined as "not physically existing but made by software to appear to do
so. In other words it is "unreal but looking real". The term virtual organization are centred on
Information technology which support their work and communication. Virtual organization
needs less resources than traditional organizations due to their size and virtual in nature. It has
greater flexibility to adopt easily environmental changes. It has unique strength is its low
overhead , low fixed cost, requirement of few full employees.
Critical success factors for the success of virtual organization:
Clear definition of success - The objective is that why virtual organization is formed it should
be clearly defined. It should develop an objective with the end goal and milestones with realistic
timeliness which should be easily understood by all the members. Objective provide sense of
direction to all members and guide them.
Availability of technology - Organization should invest to buy and support good electronic and
collaboration technological tools. All members should have easy assess and skills to work with
these tools. Asynchronous tools are email while synchronous tools are videoconferencing, instant
messaging.

Selection of team members - Individual competencies are necessary to provide contribution in
the organization success. It has unique challenges and risks so that members requires specific
knowledge, skills and abilities to work productively and effectively (Yuriev, 2014).
Principles of engagement - Virtual team members are engaged and committed with shared
goals. Each of the members shares their opinion and views in decision making. They all have
assigned task to work with the best of their ability.
Strong trust and social ties - The knowledge exchange and collaboration are required to
complete a desire task and builds a strong trust and social; ties among the virtual team members.
Where people feel comfortable and confident with each other so that individual behaviour
positively contributes in the success of the organization.
Supporting top management - Top management should support the team by giving the
flexibility and freedom to take decision and without interference in the work. Virtual
organization should follow non-bureaucratic and flatter organization structure where decision are
taken faster.
Encouraging HR policies - HR policies are complex and challenging according to the members
competencies. Fair promotion and reward facility should be to encourage the members towards
the effective work contribution. In these organization included the effective training and
development program, performance appraisal and management of all the activities.
Hand-on and networked leadership style - Leaders have an ability to influence others towards
the shared goal. It also provides the extensive training program to understand its dynamics, It
helps in to managing conflicts and cross cultural issues in keeping high level of enthusiasm. In
the virtual organization there are variety of communication channels to monitors the individual
performance and provides feedback and find out the solutions (Bal, Lashari and Nabavieh,
2014).
Positive internal branding - In this type of organization where less frequent face to face
interactions with supervisors so that lower chances of career promotion. It is important that to
design and strong internal communication channel strategy that helps in proper interactions.

CONCLUSION
From the above carried out research it can be concluded that there is increase in the
potential of virtual organisation which are associated with the some of the virtual office, teams
along with leadership. Furthermore, one of the major goal of virtual organisation is to offer high
quality products or services along with innovative for give response to the customers demands. It
can also be summarized that there are some of the advantages of virtual organisation which
includes the saving of costs, increase in the productivity and earning high level of profits and it
also provides different types of opportunities for performing different activities. Apart from this,
it can be inferred that there are certain challenges which are faced by the virtual organisation and
how they overcome those issues at workplace. Thus, in this report it also discussed some of the
strategies which can promote the success of virtual organisation and it also helps in encouraging
the functioning of workplace.

REFERENCES
Books and journals
Bal, J., Lashari, S. and Nabavieh, S.M., 2014. Making successful virtual clusters.
Börjesson, S., Elmquist, M. and Hooge, S., 2014. The challenges of innovation capability
building: Learning from longitudinal studies of innovation efforts at Renault and Volvo
Cars. Journal of Engineering and Technology Management. 31. pp.120-140.
Gibbs, J.L., Sivunen, A. and Boyraz, M., 2017. Investigating the impacts of team type and design
on virtual team processes. Human Resource Management Review.
Grabowski, M. and Roberts, K.H., 2016. Reliability seeking virtual organizations: Challenges for
high reliability organizations and resilience engineering. Safety Science.
Hsu, Y., Huang, J.J. and Chen, J.S., 2014. Virtual organization manufacturing resource planning:
Flexible multi-objective mathematical programming. E-Commerce, E-Business and E-
Service. 1. p.233.
Merkevicius, J. and et.al., 2015. Virtual organization: specifics of creation of personnel
management system.E+ M Ekonomie a Management. (4). p.200.
Nishimura, T. and et.al., 2016. Virtual Organization Platform Interoperability Provides the Long
Tail an eScience Environment. Journal of Information Processing. 24(4). pp.609-619.
Priego-Roche, L.M. and Rieu, D., 2016. A framework for virtual organization requirements.
Requirements Engineering. 21(4). pp.439-460.
Rehman, A. and et.al., 2014. Virtual machine security challenges: case studies. International
Journal of Machine Learning and Cybernetics. 5(5). pp.729-742.
Yuriev, E., 2014. Challenges and advances in structure-based virtual screening. Future medicinal
chemistry. 6(1). pp.5-7.
Online
Virtual Organizations: An Overview 2015. [Online]. Available through:
<https://pdfs.semanticscholar.org/09c3/6d70786c906a2f9151e4e7cf95875d67a4c9.pdf>.
[Accessed on 20th February 2017].