Abstract
This paper examines the concept of virtual organizations and the various organizational structures and processes that are involved in their successful management. In particular, the paper focuses on how organizations can effectively structure themselves for maximum global efficiency and economies of scale. The research provides an analysis of the theoretical foundations of virtual organizations, including the philosophies of special purpose organizations, networks, virtual communities, and teleworking. The paper also explores the use of technology in effectively running a virtual organization, including virtual conferencing, e-commerce, and web-based communication channels. Finally, the paper examines some of the current trends of virtual organizations in terms of cloud computing and its effects on the way companies’ operate.
Introduction
In recentyears, the rise of virtual organizations has been one of the most profound changes to hit the business world. Virtual organizations are organizations which do not exist in physical forms, but are instead based on collaboration between individuals and groups through technology. Virtual organizations can be focused around goal-oriented structures, networks, virtual communities, or teleworking. This structure enables employees to access essential resources and information from anywhere. Additionally, virtual organizations are often lead by “agile” virtual teams and decentralized management.
Given their implications, virtual organizations are particularly suited to the global economy. By enabling organizations to operate across a variety of geographic regions and time zones, virtual organizations allow companies to operate on a far larger scale than ever before. Indeed, the promise of virtual organizations is the ability to reach global markets, increase efficiency in management, and take advantage of new technology.
Theoretical Foundations
There are a few different theories behind the concept of virtual organizations. Special Purpose Organizations (SPOs) are defined as “an organization that uses a unique combination of resources to develop or acquire products and services” (Cole, 2009). SPOs are essentially organizations that focus on a single purpose. SPOs typically utilize networks of people and technology to coordinate work and to coordinate transfer of information from one organization to another.
Network organizations are characterized by numerous horizontal and vertical layers of interconnected nodes. The nodes are typically connected through formal agreements, contracts, and collaborations. The nodes in the network often include strategic partners, customers, distributors, suppliers, members and others (Lubit, 2009). Network organizations are characterized by an intense focus on coordination and collaboration across the organization’s nodes.
Virtual communities are organizations built around a common interest or goal. The relationships between members of the community are typically loose and informal, but have been known to become quite powerful, leading to the creation of firms and companies that are part of the virtual community. Teleworking, also known as telecommuting, is a type of workplace arrangement in which employees work from home or other remote locations, typically on a computer or mobile device. Teleworking has been growing in popularity over the past few decades, owing to the increasing availability of communications technologies and the growing desire of employers to cut costs.
Technology
Technology plays an important role in the successful management of virtual organizations. Virtual conferencing technologies provide organizations with the tools necessary to replicate a physical meeting, allowing members from around the world to discuss and collaborate on projects. E-commerce technologies allow for the efficient handling of purchases, sales, and contracts. Finally, web-based communication technologies, such as instant messaging and chat, provide organizations with real-time collaboration opportunities.
Current Trends
One of the most dominant trends in virtual organizations is the rise of cloud-based computing. Cloud-based computing provides organizations with a more reliable, efficient, and flexible computing environment. Companies are increasingly utilizing cloud computing to store and share data, build custom applications, and even to host websites. Furthermore, cloud computing systems are quickly becoming an integral part of many organizations’ IT infrastructure, as they provide organizations with increased control and flexibility over their IT systems.
Conclusion
In conclusion, virtual organizations have become increasingly popular as organizations have begun to recognize the potential benefits they offer. By utilizing their unique organizational structures and technological capabilities, virtual organizations have been able to remain competitive in the global economy. As technology continues to advance, and new trends emerge, virtual organizations will continue to be an integral part of the business landscape.
References
Cole, G. A. (2009). Organizational structuring for virtual organizations and distributed networks. Communications of the ACM, 52(7), 151-157.
Lubit, R. (2009). Network organizations: From structural holes to virtual communities. Academy of Management Annals, 3(1), 91-142.
