Virtual organizations have been described as groups of geographically and/or organizationally distributed participants who collaborate towards a shared goal using a combination of information and communication technologies to accomplish a task. They came into being in the early 21st century as a newly devised organizational paradigm hastened by advances in transportation and media technologies and further globalization of the marketplace. In their discussions of virtual organizations, experts in the field of organizational behavior including Stoica and Ghilic-Micu (2009), Mowshowitz (2002), Bjørn and Ngwenyama (2009), Peters and Manz (2008) and Hortensia (2008) identified potential advantages and disadvantages to virtual organizations.
Potential Advantages of Virtual Organizations
Potential advantages identified by the cited experts included:
1. Swifter reaction times to new products emerging in global and local markets;
2. The opportunity for switching suppliers and human resources in accordance with stated objectives;
3. Reduction of expenses involved by the necessity of using working spaces – rent, maintenance, insurances etc.;
4. More efficient usage of office space, in the case when some employees work according to the traditional system, while others prefer a telecommuting system;
5. Diminishing utilities expenses – gas, electricity, water etc.;
6. Reduction of the consumption of consumable materials;
7. Decrease of salary expenses, as the virtual team members are paid for their task and not for their time spent at work;
8. Possibility to have experts located in any part of the globe;
9. Possibility to hire low cost but qualified labor force (recruiting the personnel can be done in geographic areas where the labor force is low cost and well trained);
10. Increase of productivity and performances due to the fact that virtual team members can better focus on the results to be achieved;
11. Reduction of the number of absentees because the virtual team members work at home;
12. Creation of jobs and employment opportunities in rural or disadvantaged areas.
Potential Disadvantages of Virtual Organizations
Besides the potential advantages previously presented, the same experts identified potential disadvantages to virtual organizations and teams. Some potential disadvantages identified by them included:
1. Added complexity due to the participants being distributed to multiple geographical locations and restricted from face-to-face interaction (Bjorn & Ngwenyama);
2. Increased risk of communication breakdowns due to cultural and organizational differences inherent to participants from geographically diverse regions of the world (Bjorn & Ngwenyama);
3. Reduced productivity due to a lack of shared meaning and cohesiveness that shared meaning can produce between members of an organization (Bjorn & Ngwenyama; Peters & Manz, 2008);
4. For those who telecommute i.e. work at home, reduced productivity due to a lack self-discipline and an overabundance of distractions around the home (Hortensia).
Sources:
- Bjørn, P., & Ngwenyama, O. (2009). Virtual team collaboration: building shared meaning, resolving breakdowns and creating translucence. Information Systems Journal, 19(3), 227-253. doi:10.1111/j.1365-2575.2007.00281.x
- Hortensia, G. (2008). VIRTUAL WORKPLACE AND TELECOMMUTING: CHALLENGES THAT REDEFINE THE CONCEPT OF WORK AND WORKPLACE. Annals of the University of Oradea, Economic Science Series, 17(4), 269-274. Retrieved from EBSCOhost.
- Mowshowitz, A. (2002). Virtual Organization. Westport, CT: Quorum Books.
- Peters, L. M. L., & Manz, C. C. (2008). Getting Virtual Teams Right the First Time. In Nemiro, J., Beyerlein, M., Bradley, L., & Beyerlein, S. (2008). The Handbook of High-Performance Virtual Teams. San Francisco, CA: Jossey-Bass; pp. 105-129.
- Stoica, M., & Ghilic-Micu, B. (2009). VIRTUAL ORGANIZATION -- CYBERNETIC ECONOMIC SYSTEM. MODELING PARTNER SELECTION PROCESS. Economic Computation & Economic Cybernetics Studies & Research, 43(2), 1-11. Retrieved from EBSCOhost.
Eric Coggins - Eric Coggins is a doctoral student at Regent University's School of Global Leadership & Entrepreneurship. From 2000 to 2006, he worked as ...
Join the Conversation