Virtual organization

Virtual organization
See also
E hub Sources of innovation Market connection Network structure Marketing innovation Strategy and information technology Virtual structure Quality of public administration B2B social media marketing

Virtual organization is created on a voluntary basis. It is based on mutual trust between organizations that engage in all sorts of cooperation in order to achieve greater benefits than if they had to work in the traditional way. Possibility of entering into such relationships is provided by global information networks and large databases.

Features

The main features of virtual organizations are:

• technology: necessary to connect and cooperation with other companies and people, ability to communicate through computer networks and telecommunications,
• excellence: each partner brings the best competences,
• seizing the opportunity: main reason for the cooperation (or dissolution) is the desire to use a particular a chance,
• mutual trust: low formalization and lack of "hard" tools of coordination increases the need for trust and sense of common fate,
• lack of boundaries: it is increasingly difficult to determine where one ends and the other begins, this also applies to the process of globalization,
• fuzzy identity: in the world of virtual organization roles are not as clear as in the traditional model, which clearly specifies who is a competitor who is a supplier and who is the customer.

Role of Internet

Often virtual organization it identified with company actively using the Internet in business. The Internet is a global network that allows you to connect to computers and exchange of information. Its main qualities essential for businesses include:

• low-cost communication,
• global reach for products and services offered,
• lower agency costs,
• lower transaction costs,
• interactivity, flexibility and ability to adapt to customer needs,
• easier sharing of knowledge.

See also:

• Virtual structure

Examples of Virtual organization

• Cloud Computing: Cloud computing refers to a virtual organization that allows multiple users to access, store and share data and applications over the Internet. This type of virtual organization allows for collaboration, shared resources, and scalability. Examples of cloud computing technology include Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Salesforce.
• Crowdsourcing: Crowdsourcing involves using a large number of people to complete a task or project in a distributed manner. This type of virtual organization allows for multiple users to complete a task quickly and efficiently. Examples of crowdsourcing include platforms such as Upwork, CrowdFlower, and Topcoder.
• Open Source Development: Open source development is a type of virtual organization where development is done in an open and collaborative manner. This type of virtual organization allows for multiple users to contribute to the development of a project. Examples of open source development include Linux, Apache, and MySQL.

Advantages of Virtual organization

A virtual organization is a collaborative form of organization that enables groups of people to come together without a physical presence. It has many advantages, such as:

• Increased flexibility: Virtual organizations allow for greater flexibility in terms of decision-making, planning, and communication. Organizations can easily adjust to changing conditions, business plans, and strategies.
• Cost savings: Virtual organizations reduce costs by eliminating the need for physical offices, travel expenses, and other overhead costs.
• Quicker response time: In a virtual organization, communication and decision-making is much faster than in traditional organizations. This allows for quicker responses to customer needs, market changes, and other competitive conditions.
• Access to global talent: Virtual organizations are able to attract talented people from all over the world, regardless of physical location. This can lead to a more diverse, experienced, and well-rounded workforce.
• Improved collaboration: Virtual organizations make it easier for employees to collaborate and share ideas. This can lead to more creative solutions and more successful projects.

Limitations of Virtual organization

Virtual organizations present unique challenges. Despite the potential benefits, they are limited by several constraints:

• Complexity - Virtual organizations require complicated organizational structures and processes to manage the various aspects of the relationship. This can include technical, legal, and cultural complexities that may be difficult to manage.
• Reliability - Virtual organizations are dependent on technology and communication networks. Technology can be unreliable, and communication networks can be disrupted due to hardware failures, software glitches, or power outages.
• Trust - Virtual organizations must be built on trust between the parties involved. This can be difficult to establish and maintain in a virtual environment.
• Security - Virtual organizations can be vulnerable to cyber attacks, data breaches, and other security threats. This can put sensitive data and information at risk.
• Cost - Virtual organizations require significant investments in technology, infrastructure, and personnel. This can be cost prohibitive for some organizations.
• Scalability - It can be difficult to scale a virtual organization up or down as needed. This can lead to inefficiencies and a lack of flexibility.

Other approaches related to Virtual organization

A virtual organization is an entity created through the use of information and communication technologies that allows organizations to cooperate across organizational boundaries and reduce the costs of traditional working structures. Here are some of the other approaches related to virtual organization:

• Leveraging technology for collaboration: Utilizing technology to create collaborative work environments and virtual teaming enables organizations to take advantage of the benefits of global communication, while still maintaining a sense of cohesion and consistency.
• Crowdsourcing: This approach consists of leveraging the collective knowledge and expertise of a larger group of people to solve a problem or complete a project.
• Outsourcing: The act of outsourcing tasks or parts of projects to external organizations or individuals in order to increase efficiency and reduce costs.
• Remote working: This approach involves allowing employees to work from outside of the office, either from home or another location.

In summary, virtual organizations use a variety of approaches to improve collaboration, reduce costs, and increase efficiency. By leveraging technology, crowdsourcing, outsourcing, and remote working, they are able to better collaborate across organizational boundaries and create greater value.

References

• Mowshowitz, A. (1997). Virtual organization. Communications of the ACM, 40(9), 30-37.

Author: Krzysztof Wozniak