Virtual Organizations

CONCEPT OF VIRTUAL ORGANISATION

Virtual organization is a 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 known as information and communication technology (ICT) which is flexible and is created to meet the dynamics of the market. In others word, the virtual organization is a social network in which all the horizontal and vertical boundaries are removed. In this 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.

TYPES OF VIRTUAL ORGANISATION

According to the degree of virtuality, there are three types of virtual organizations:

1. TELECOMMUTERS: In telecommuting companies, employers work from their homes. They interact with workspace via personal computers connected with modem to the phone lines. 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 outsource for information technology as a means for maintaining inter- organizations coordination.

3. COMPLETELY VIRTUAL: This type of virtual organizations 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 Olympics Games (ACOG) in 1996 are examples of completely virtual organizations.

TECHNOLOGY OF VIRTUAL ORGANISATIONS

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:

I. TECHNOLOGY- The traditional ways of working has been transformed through new technology. Combination of computing and technology is opening up new possibilities. Computer Telephony Integration (CTI) will create a new revolution to the desktop. The CTI has traditionally been used in call centre applications.

II. 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.

III. 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.

IV. VOICE MAIL ALERT- Addition of SMS technology to the existing voice mail systems builds an effective method of receiving voice mail alerts.

V. 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 phones. Mobile data communications can revolutionise where and how work is done.