Editing Virtual organization

{{Use dmy dates|date=October 2017}}
A '''virtual organization''' is a temporary or permanent collection of geographically dispersed individuals, groups, organizational units, or entire organizations that depend on electronic linking in order to complete the production process ( working definition<ref>[http://home.cc.umanitoba.ca/~btravica/voais.html] Bob Travica, 1997. The Design of the Virtual Organization: A Research Model in Gupta, Jatinder N.D., Association for Information Systems Proceedings of the Americas Conference on Information Systems, August 15–17, 1997, Indianapolis, IN, 1997, pp. 417-19</ref>). Virtual organizations do not represent a firm’s attribute but can be considered as a different organizational form and carries out the objectives of [[cyber diplomacy]].

Unfortunately, it is quite hard to find a precise and fixed definition of fundamental notions such as virtual organization or virtual company.<ref>[https://books.google.com/books?id=bBU3FM95VsEC&pg=PA103], Afsarmanes, H. and Camarinha, M., 2004. Processes and Foundations for virtual organizations. USA: Kluwer Academic Publisher</ref> The term virtual organization ensued from the phrase "virtual reality", whose purpose is to look like reality by using electronic sounds and images.<ref name=economist/> The term virtual organization implies the novel and innovative relationships between organizations and individuals. Technology and  [[globalization]] both support this particular type of organization.<ref name="HRM">[https://books.google.com/books?id=fc7usBl2q1IC], Greenberg, D. and Heneman, R., 2002. Human Resource Management in Virtual Organizations. USA: Information Age Publishing</ref>

Virtual can be defined as "not physically existing as such but made by [[software]] to appear to do so",<ref>[https://web.archive.org/web/20141025143749/http://www.oxforddictionaries.com/definition/english/virtual?q=virtual+] Oxford University Press, 2014. Oxford Dictionary [online]. Accessible at: http://www.oxforddictionaries.com [Accessed 14 October 2014]</ref> in other words "unreal but looking real".<ref name=e-biz /> This definition precisely outlines the leading principle of this unconventional organization, which holds the form of a real (conventional) corporation from the outside but does not actually exist physically and implicates an entirely digital process relying on independents web associates.<ref name="e-biz">[https://books.google.com/books?id=VxFRrcVATEgC] Burn, J., Barnett, M., Marshall, P., 2002. e-Business strategies for Virtual Organizations. Oxford: Taylor & Francis Ltd</ref> Thus, virtual organizations are centred on technology and position physical presence in the background.  Virtual organizations possess limited physical resources as value is added through (mobile) knowledge rather than (immovable) equipment.<ref name=economist>The Economist, 2009. The virtual organisation. [online] Accessible at: <http://www.economist.com/node/14301746> [Accessed 13 October 2014]</ref>

Virtual organizations necessitate associations, federations, relations, agreements and alliance relationships <ref name=HRM /> as they essentially are partnership webs of disseminated organizational entities or self-governing corporations.<ref name= e-biz />

== Apparition and evolution ==

===1980s ===

The emergence of [[outsourcing]] in the 80s unquestionably played a significant role as its aim is to eradicate unproductive internal services and transfers the difficulty outside of the organization.<ref name="VOSP">[https://books.google.com/books?id=r9aURz8Kk0AC&pg=PA196] Afsarmanesh, H., Camarinha-Matos, L. and Ollus, M., 2005. Virtual Organizations: Systems and Practises. Boston: Springer Science + Business Media.</ref> Outsourcing necessarily implies partnerships as companies resort to other establishments. Thus, this method highlighted the necessity of alliances and [[Business networking|networking]] in a business and provoked a great interest for new disciplines. Indeed, this process has dramatically changed the way organizations consider partners and has raised their awareness concerning the benefits smart alliances can offer.<ref name=VOSP/> Though, until the early 1980s, this extremely bureaucratic organization arrangement (involving challenging, complex and slower decision-making) was considered adequate to manage a vast number of employees.<ref name="refbiz">[http://www.referenceforbusiness.com/management/Tr-Z/Virtual-Organizations.html] Thomas, G., n.d. Virtual Organizations [online] Accessible at: <http://www.referenceforbusiness.com/management/Tr-Z/Virtual-Organizations.html> [Accessed 14 October]</ref>

===1990s ===

The terms virtual organization, [[virtual enterprise]] or [[virtual corporation]] were first utilized in the early 1990s as demonstrate the work of Jan Hopland, Roger N. Nagel, [[William H. Davidow]] and Malone.<ref>[https://archive.today/20141017023323/http://www.businessweek.com/stories/1993-02-07/the-futurists-who-fathered-the-ideas] BusinessWeek Archives, 1993. The Futurists Who Fathered The Ideas. [online] Available at: <http://www.businessweek.com/stories/1993-02-07/the-futurists-who-fathered-the-ideas> [Accessed 15 October 2014]</ref> The table below allows us to understand more specifically their faintly distinctive theories:

 {| class="wikitable alternance centre"
 |+ Virtual organizations' views
 |-
 |
 ! scope="col" | Jan Hopland
 ! scope="col" | Roger N. Nagel
 ! scope="col" | William H. Davidow and Malone
 |-
 ! scope="row" | Position
 | Digital Equipment Corp. executive
 | Management expert
 | Authors of The Virtual Corporation
 |-
 ! scope="row" | Virtual organization’s depiction
 | A company that knows how to utilise partnerships both inside and outside its boundaries in order to mobilise more assets than it presently has on its own
 | Take advantage of market openings thanks to technology which allow enterprises to form temporary partnerships 
 | A broad and catch-all term comprising numerous management ideas and trendy terms
 |-
 |}

===Today ===

As mentioned before, there is not yet a universal definition of the term virtual organization. Even though this concept started to evolve a long time ago it is still progressing nowadays. We can observe below the innovative virtual organization's model focusing on quickly and efficiently creating first-class products (using each partner core competence).<ref name=refbiz />

== Technology required ==

Virtual organizations are supported by primary technologies such as the [[Internet]] and the [[World Wide Web]], [[Electronic data interchange|EDI]], [[telecommunications]], [[e-mails]], [[groupware]], and [[video conferencing]].<ref name="isaca">[http://www.isaca.org/Journal/Past-Issues/2001/Volume-6/Pages/Understanding-Virtual-Organizations.aspx] Isaca, 2001. Understanding Virtual Organizations. [online] Available at: <http://www.isaca.org/Journal/archives/2001/Volume-6/Pages/Understanding-Virtual-Organizations.aspx> [Accessed 10 October 2014]</ref>

=== Knowledge management technologies ===
[[Knowledge management]] technologies assisting virtual organizations comprise:<ref name=isaca />

* Collaborative technologies
* [[XML|Extensible markup language]] (XML)
* [[Intranets]] and [[extranets]]
* Personal devices
* [[Wireless technologies]]
* [[Virtual reality]] (VR)
* [[Enterprise portal|Portal]]s

=== EDI ===

[[Electronic data interchange|EDI]] can constitute a useful tool for virtual organizations as it transfers [[information]] (in the adequate form which a computer can utilize straightforwardly) from a computer to another and does not necessitate the intervention of any individual. [[Electronic data interchange|EDI]] could be a benefit to virtual organizations in numerous ways as the exchange of information between associates is facilitated and more efficient than with non-electronic transfer: better [[Field inventory management|inventory management]] and [[shipping]] performance, amount of time saved and faults escaped by the fact that data requisite to be entered only once, as well as a rise of the speed and accuracy of processes. However, using [[Electronic data interchange|EDI]] is not the optimal choice to make for assisting communication within a virtual organization, as the flexibility required for quick reactions is lacking in this system.<ref name="EGW">[http://ceit.aut.ac.ir/~sa_hashemi/My%20Teachings/MS-CEIT-Supply%20Chain%20Management/W-Selected%20Papers%20for%20class%20seminars-last/Information%20infrastructure%20for%20electronic%20virtual%20organization%20management.pdf] Lin, F., Shaw, M. and Strader, T.,  1998. Information infrastructure for electronic virtual organization management. [online] Accessible at: <http://ceit.aut.ac.ir/~sa_hashemi/My%20Teachings/MS-CEIT-Supply%20Chain%20Management/W-Selected%20Papers%20for%20class%20seminars-last/Information%20infrastructure%20for%20electronic%20virtual%20organization%20management.pdf> [Accessed 11 October 2014]</ref>

=== Groupware ===

Virtual organizations can be supported by [[groupware]] systems as it delivers a shared core of [[information]] to partners and a [[Computing platform|platform]] to collaborate regardless of the associates’ physical position. This way, [[groupware]] systems can assist associates track the rate of progress in work being done in a way that they can cooperate on the project without being concerned about geographical barriers. However, in a similar way as [[Electronic data interchange|EDI]], [[groupware]] is not the ideal decision to make for assisting communication within a virtual organization as it would not empower the organization to rapidly form an alliance to respond to a [[market opportunity]], even though it offers more flexibility than [[Electronic data interchange|EDI]].<ref name=EGW />

=== World Wide Web (WWW) ===

Many virtual firms have chosen the internet-based [[WWW]] in order to support organizational communication, as it constitutes a practical alternative to the [[Electronic data interchange|EDI]] and [[groupware]]’s inflexibility. Even though helping virtual organizations’ associates to communicate was not the initial purpose of the [[WWW]], it is still favourably relevant to this category of organizations. The web permits all co-workers (even the isolated ones) to share their thoughts, opinions and every part of any mutual mission as it was shaped to be a sort of [[data]] gathering of individuals’ [[knowledge]].<ref name=EGW />

== Benefits ==

=== To the organization ===

* [[Competitive advantage]]<ref name="workplace">[https://books.google.com/books?id=nK5EgZrQcRAC&pg=PA83] Igbaria, M. and Tan, M., 1998. The Virtual Workplace. USA: Idea Group Publishing</ref>
* As a way of to conduct [[supply chain integration]] or bridge the [[merger and acquisition]] processes between two companies.[online] <ref>Wang William YC, Pauleen D, and Chan HK (2013). Facilitating the Merger of Multinational Companies: A Case Study of the Global Virtual Enterprise, Journal of Global Information Management, 21(1), pp.42 -58 [http://www.igi-global.com/article/facilitating-merger-multinational-companies/73788]</ref>
* A pool of [[Aptitude|abilities]] and [[knowledge]]
* [[Flexibility]], [[dynamism (computing)|dynamism]] and better [[responsiveness]] : virtual organizations, also called "boundaryless organization",<ref>Maccoby, M., 1991. Closing the Motivation Gap. Research-Technology Management.  [https://web.archive.org/web/20141021074920/http://www.questia.com/library/journal/1P3-769135/closing-the-motivation-gap]</ref> do not imply time or geographical obstacles
* Less [[investments]] costs initially
* [[Productivity]]: the [[implementation]] of virtual organization implies a 30 to 50% rise of [[productivity]]<ref name=isaca />
* Less [[costs]], more [[profit (accounting)|profit]]s: virtual organization are saving a huge amount of money as they are no [[real-estate]] investments necessary, the [[labor cost]] is inferior and the number of errors is poorer <ref name= workplace />

=== To the employees ===

* More independence: individuals can work when they need to and decide in which ways <ref name=economist />
* Amount of stress reduced: no workplace pressure and consequently an improved personal and family life
* Less money spent: diminution of gas consumption or money spent on public transports

=== To the society ===

* An [[environment (biophysical)|environment]]al benefit: less [[pollution]]
* Expansion of the [[workplace]] area: possibility to work efficiently in the [[rural areas]]

== Issues and challenges encountered ==

Despite the advantages provided, it can be quite challenging to those familiar to conventional work group to lead as a virtual organization. Thus, large risks are conveyed with the challenge of working virtually as this new organizational structure implies several issues.<ref name=Lee>Lee, M., 2014. Leading Virtual Project Teams: Adapting Leadership Theories and Communications Techniques to 21st Century Organizations. New York: CRC Press Taylor & Francis group</ref>  Some people wrongly think that the challenges only come from the [[technology management]] but we should not forget the importance of humans.  
Clearly [[information technology]] offers an efficient and largely beneficial [[Computing platform|platform]] but we should not neglect the necessity, especially in a virtual organization, of the individuals’ skills and manner to collaborate.<ref>Vakola, M. and Wilson, I., 2004.The challenge of virtual organisation: critical success factors in dealing with constant change. Team Performance Management: An International Journal, Vol. 10 Iss: 5/6, pp.112 - 120</ref>

=== Communication ===

[[Communication]] is a crucial factor in a virtual organization as it is responsible of its [[efficiency]] and even to its survival. Virtual organizations imply various autonomous and international workers, which also involve challenges such as different [[time zones]] and [[language barriers]]. The collaboration between associates might also get quite complicated as this type of organization denotes only a slight amount of [[face-to-face interaction]]. Thus, a lack of multiple [[communication]] approaches can be observed in virtual organizations.<ref name=Lee />

=== Cultural ===

[[Culture]] constitutes an essential element in any organization of any type. Yet, virtual organizations have to be even more vigilant about this notion as they imply a shared [[leadership]] between the team, which is composed of self-reliant workers from all around the world. Virtual organizations must find a way to overcome [[cultural differences]], which involve dissimilar approaches of working (such as time and deadlines) and living (punctuality for instance), in other words, distinctive philosophies. Thus, virtual organization must exegete respect for differences among the team.<ref name=Lee />

=== Interpersonal ===

Managing virtually successfully requires a valuable communication and cooperation among the team. Perceptions between partners might be quite dissimilar and could lead to conflicts concerning the management of the virtual organization. Thus, it is more than necessary that associates build a solid relationship despite the distance obstacle <ref name=Lee/> Trust is also a crucial matter as a shared leadership among co-workers consequently implies the loss of control on certain functions entrusted to other associates.<ref>BusinessWeek Archives, 1993. The Virtual Corporation. [online] Available at: <[https://web.archive.org/web/20130302055916/http://www.businessweek.com/stories/1993-02-07/the-virtual-corporation]> [Accessed 20 October]</ref>

=== Technological ===

Virtual organizations are completely dependent to [[technology]] as they are entirely [[internet-based]]. It is more than necessary for the individuals involved in a partnership to possess similar technological tools from its associates. Compatibility matters resulting from the [[Computer hardware|hardware]] and [[software]] such as the [[operating system]] as well as certain computer’s software might disturb the efficiency of the virtual organization. For instance, the occurrence of incompatibility issues (difficulty in integrating information generated with dissimilar tools) concerning the hardware or software, would dramatically affect virtual organizations’ process and performance as they depend on these tools. Institute, uphold and spread a definite common knowledge between partners is one of the ultimate issue to virtual organizations’ management. [[Security]] and [[Information privacy|data protection]] also constitute a significant challenge as all the information regarding virtual organizations are transmitted and gathered digitally.<ref name=Lee /> A continuous control and evaluation of the technology utilized should be done by virtual organizations in order to prevent being outdated and losing opportunities.<ref>[http://www.muhlenberg.edu/depts/abe/business/miller/virorg.html] Engemann, K. and Miller, H., 1997. The Role of Information Technology in Managing Virtual Organizations. England: University of Oxford</ref>

=== Economical ===

Virtual organization involves considerable costs. Between the setup and equipment costs and the maintenance costs, the bill can become quite steep quickly. It also constitutes a challenge to measure, evaluate and track the work done within the different departments of the virtual infrastructure. This might lead to partners missing deadlines, the necessity to rework and, thus, a loss of efficiency and profit.<ref name=Lee />

== Examples of virtual organizations ==

=== Private sector ===

* Hollywood <ref>[https://books.google.com/books?id=55WMAwAAQBAJ&dq=hollywood+virtual+organization&pg=PA491] Robbins, S., 2001. Organizational behavior. Upper Saddle River, N.J.: Prentice Hall</ref>
* British Telecom
* Reuters Holdings
* Aventis
* [http://www.globalculturz.org Center for Culture & Global Studies]

=== Public sector ===

*  United States Department of Agriculture (USDA) National Plant Data Center
* United States Department of Energy (The Office of Science Integrated Support Center) <ref>[http://science.energy.gov/grants/] U.S Department of Energy, 2014. Grants & Contracts Support  [online] Available at:<http://science.energy.gov/grants/> [Accessed 20 October]</ref>
* Emics and OphSmart <ref>[https://books.google.com/books?id=BJDY5T5p2gYC&dq=case+study+examples+virtual+organization&pg=PA407] Camarinha-Matos, L., 2008. Pervasive Collaborative Networks. Boston, MA: International Federation for Information Processing</ref>

== See also ==
* [[VOICED]] - Virtual Organization for Innovative Conceptual Engineering Design

==References==
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[[Category:Business models]]
[[Category:Types of organization]]