CONCEPT OF VIRTUAL ORGFANISATION
Virtual organization is a new form of organization that emerged in 1990. it is also known as network organization, modular organization or digital organization. Simply stated, a virtual organization is a network of corporations made possible by what is stated, known as Information and Communication Technology (ICT) which is flexible and is created to meet the dynamics of the market. In other words, the virtual organization is a social network in which al the horizontal and vertical boundaries are removed. In 5his sense, virtual organization is a boundary less organization. It consists of individuals working out of physically dispersed work places, or even individuals working out of mobile devices and not tied to any particular workplace. In the virtual organization, ICT coordinates the activities and combines the skills of workers and resources in order to achieve the common goal. The network of relationships permits contracting, manufacturing, distribution, marketing and other business functions. A small group of managers oversee directly any activities that are done in-house. They coordinate and control external relations with the help of computer network links. Nike, Reebok, Puma, Dell Computers, Hindustan Lever are some of the companies which are working virtually. Thus, a virtual organization is loose web of individuals, capital and technologies which operate without time and space constraints. It operates without a fixed structure and its boundaries keep on changing.
DISTINCTION BETWEEN TRADITIONAL ORGANISATION AND VIRTUAL ORGANISATION
Every organization requires a team to carry out its activities in an orderly manner. In a virtual organization, the driving force is the virtual team. In a virtual team, members interact primarily through some combination of electronic communication system to tie up with dispersed members who never or rarely come face-to-face. Members communicate on-line using links like e-mal, video conferencing and WAN (Wide Area Network).
The main factors that differentiate virtual teams from face-to-face teams are as follows:
Absence of para verbal and nonverbal cues (e.g., facial expression, eye movement, body language).
Limited social contacts.
Ability to overcome constraints of time and space.
The need for virtual teams is increasing particularly in global organizations. But virtual teams cannot work successfully without personalized trust relationships. Such relationships are normally established through face-to-face interaction and socialization. Information and communication technologies appear to be inadequate or establishing personalized trust relationships due to the absence of face-to-face interaction.
TYPES OF VIRTUAL ORGANISATIONS
According to the degree of virtuality, there are three types of virtual organizations:
1. Telecommuters. In telecommuting companies, employees work from their homes they interact with the workplace via personal computers connected with a modem to the phone lies. Dow chemicals, Xerox, Coherent Technologies Inc. are some examples of companies using some form of telecommuting.
2. Outsourcing Employees. These organizations outsource most or all core competencies. Marketing and sales, human resources, finance, research and development, engineering, manufacturing, information systems, etc. are the areas of outsourcing. Such a virtual organization performs one or two areas of core competence with excellence and other functions are outsourced. For instance, Nike does product design and marketing very well and depends on outsources for information technology as a means for maintaining inter-organisational coordination.
3. Completely Virtual. This type of virtual organization is tightly linked to a large network of suppliers, distributors, retailers and customers as well as to strategic and joint venture partners. IBM’s development effort of the PC and Atlanta Committee for the Olympic Games (ACOG) in 1996 are examples of completely virtual organizations.
TECHNOLOGY OF VIRTUAL ORGANISATION
Employees in a virtual organization will become emasculate and ineffective in the absence of information and knowledge. Therefore, virtual organizations use a seamless web of electronic communication media. The main components of this web are as follows:
1. TECHNOLOGY. The traditional ways of working has been transformed through new technology.
2. E-MAIL INTEGRATION. The whole organization can take advantage of SMS products such as ‘Express Way’ by integrating SMS into the existing e-mail infrastructure.
3. OFFICE SYSTEMS INTEGRATION. SMS technology can greatly enhance the existing or new office systems. For example, phone messages can be sent via SMS rather than returning it in a message book.
4. VOICE MAIL ALERT. Addition of SMS technology to the existing voice mail system builds an effective method of receiving voice mail alerts.
5. MOBILE DATA. This enables a laptop to retrieve information anywhere through the mobile phone network. In the past corporate information has been inaccessible from many places where it is needed. One can keep connected to his/her virtual organization from anywhere by linking laptop to mobile phone. Mobile data communications can revolutionise where and how work is done.
ADVANTAGES
1. Saves time and travel expenses.
2. Provides excess to outside experts, without down time and travel or logging expenses.
3. Ability to organize in teams even if members are not in reasonable proximity to each other.
4. Firms can expand their potential labour markets. They can hire and retain the best people irrespective of their physical locations.
5. Employees can accommodate both personal and professional lives.
6. Employees can be assigned to multiple concurrent teams.
7. Dynamic team membership allows people to move from one project to another.
8. Team communication and work reports are available on-line to facilitate swift responses to the demands of a global market.
9. Virtual teams are able to work even when they are miles apart. People who never get a chance to meet each other face-to-face can also work in virtual teams.
DISADVANTAGES
1. Lack of physical interactions.
2. Lack of synergies arising from face-to-face interaction.
3. Non-availability of verbal and non-verbal cues such as voice, eye movement, facial expression and body language which make communication more effective.
HUMAN RESOURCE ISSUES IN VIRTUAL ORGANISATION
Recruitment, development and socialization processes are designed to ensure right person for right job. These processes also regulate and control the antecedent condition as of job performance. A virtual organization is staffed by knowledge workers who are brought togeth4r under short-term market relationships. These highly proficient employees are left to do their own things in order to provide world class products and service. Jobs in virtual organizations are knowledge-based. Such jobs are assumed to require greater skills, have greater varie4ty and offer better quality of working life (QWL).
Virtual organiasation has both positive and negative implications for human resources. Positive implications include greater job autonomy and more financial stability due to reduced commuting, lunches and clothing costs. In addition, there are a perceived increase in performance, reduced job stress and better social relationships owing to dissolution of barriers between the home and work interface. Negative implications consist of longer working hours, increased work demands, poor physical working conditions, less social support from work, poor social position skills are required to share and assimilate information easily for quick decision-making.
The need for virtual teams is increasing particularly in global organizations. But virtual teams cannot work successfully without personalized trust relationships. Such relationships are normally established through face-to-face interaction and socialization. Information and communication technologies appear to be inadequate or establishing personalized trust relationships due to the absence of face-to-face interaction.
TYPES OF VIRTUAL ORGANISATIONS
According to the degree of virtuality, there are three types of virtual organizations:
1. Telecommuters. In telecommuting companies, employees work from their homes they interact with the workplace via personal computers connected with a modem to the phone lies. Dow chemicals, Xerox, Coherent Technologies Inc. are some examples of companies using some form of telecommuting.
2. Outsourcing Employees. These organizations outsource most or all core competencies. Marketing and sales, human resources, finance, research and development, engineering, manufacturing, information systems, etc. are the areas of outsourcing. Such a virtual organization performs one or two areas of core competence with excellence and other functions are outsourced. For instance, Nike does product design and marketing very well and depends on outsources for information technology as a means for maintaining inter-organisational coordination.
3. Completely Virtual. This type of virtual organization is tightly linked to a large network of suppliers, distributors, retailers and customers as well as to strategic and joint venture partners. IBM’s development effort of the PC and Atlanta Committee for the Olympic Games (ACOG) in 1996 are examples of completely virtual organizations.
TECHNOLOGY OF VIRTUAL ORGANISATION
Employees in a virtual organization will become emasculate and ineffective in the absence of information and knowledge. Therefore, virtual organizations use a seamless web of electronic communication media. The main components of this web are as follows:
1. TECHNOLOGY. The traditional ways of working has been transformed through new technology.
2. E-MAIL INTEGRATION. The whole organization can take advantage of SMS products such as ‘Express Way’ by integrating SMS into the existing e-mail infrastructure.
3. OFFICE SYSTEMS INTEGRATION. SMS technology can greatly enhance the existing or new office systems. For example, phone messages can be sent via SMS rather than returning it in a message book.
4. VOICE MAIL ALERT. Addition of SMS technology to the existing voice mail system builds an effective method of receiving voice mail alerts.
5. MOBILE DATA. This enables a laptop to retrieve information anywhere through the mobile phone network. In the past corporate information has been inaccessible from many places where it is needed. One can keep connected to his/her virtual organization from anywhere by linking laptop to mobile phone. Mobile data communications can revolutionise where and how work is done.
ADVANTAGES
1. Saves time and travel expenses.
2. Provides excess to outside experts, without down time and travel or logging expenses.
3. Ability to organize in teams even if members are not in reasonable proximity to each other.
4. Firms can expand their potential labour markets. They can hire and retain the best people irrespective of their physical locations.
5. Employees can accommodate both personal and professional lives.
6. Employees can be assigned to multiple concurrent teams.
7. Dynamic team membership allows people to move from one project to another.
8. Team communication and work reports are available on-line to facilitate swift responses to the demands of a global market.
9. Virtual teams are able to work even when they are miles apart. People who never get a chance to meet each other face-to-face can also work in virtual teams.
DISADVANTAGES
1. Lack of physical interactions.
2. Lack of synergies arising from face-to-face interaction.
3. Non-availability of verbal and non-verbal cues such as voice, eye movement, facial expression and body language which make communication more effective.
HUMAN RESOURCE ISSUES IN VIRTUAL ORGANISATION
Recruitment, development and socialization processes are designed to ensure right person for right job. These processes also regulate and control the antecedent condition as of job performance. A virtual organization is staffed by knowledge workers who are brought togeth4r under short-term market relationships. These highly proficient employees are left to do their own things in order to provide world class products and service. Jobs in virtual organizations are knowledge-based. Such jobs are assumed to require greater skills, have greater varie4ty and offer better quality of working life (QWL).
Virtual organiasation has both positive and negative implications for human resources. Positive implications include greater job autonomy and more financial stability due to reduced commuting, lunches and clothing costs. In addition, there are a perceived increase in performance, reduced job stress and better social relationships owing to dissolution of barriers between the home and work interface. Negative implications consist of longer working hours, increased work demands, poor physical working conditions, less social support from work, poor social position skills are required to share and assimilate information easily for quick decision-making.
The main human resource issues in a virtual organiasation are as follows:
1. Recruitment is conducted under time pressure and requires high performance expectations.
2. Both human capital (knowing one’s job) and social capital (knowing each other) become extricably linked.
3. Social relationships do not require much stability.
4. Workplace is variable because there is high need for readiness to be mobilized at any moment.
5. Value of idleness is shown in terms of learning by watching what others do.
6. Master apprentice relationships and craft based learning become significant.
7. Job status and project feedback is short-term. Therefore, virtual organizations require a heavy investment to create systems and staffing structure.
Employee selection and performance management are the two critical human resource problems in virtual organization. People who are to work in a virtual organization require the following traits:
Self guided and self motivated.
Familiarity and comfortability with the job.
Effective communication skills- both oral and written.
Adaptability.
Technical self sufficiency.
Result orientation
Performance management is the most difficult problem in virtual organizations. It requires daily attention on three principles due to physical separations of workers and managers:
i. Define performance goal of each member or team clearly.
ii. Facilitate performance by eliminating all obstacles and providing necessary resources.
iii. Encourage performance by providing rewards.
To conclude, human resource management in virtual organizations requires shift from person-job fit to person-role fit.
2. Both human capital (knowing one’s job) and social capital (knowing each other) become extricably linked.
3. Social relationships do not require much stability.
4. Workplace is variable because there is high need for readiness to be mobilized at any moment.
5. Value of idleness is shown in terms of learning by watching what others do.
6. Master apprentice relationships and craft based learning become significant.
7. Job status and project feedback is short-term. Therefore, virtual organizations require a heavy investment to create systems and staffing structure.
Employee selection and performance management are the two critical human resource problems in virtual organization. People who are to work in a virtual organization require the following traits:
Self guided and self motivated.
Familiarity and comfortability with the job.
Effective communication skills- both oral and written.
Adaptability.
Technical self sufficiency.
Result orientation
Performance management is the most difficult problem in virtual organizations. It requires daily attention on three principles due to physical separations of workers and managers:
i. Define performance goal of each member or team clearly.
ii. Facilitate performance by eliminating all obstacles and providing necessary resources.
iii. Encourage performance by providing rewards.
To conclude, human resource management in virtual organizations requires shift from person-job fit to person-role fit.
