Virtual Organizations

Virtual organizations are composed of employees spread across different locations who perform different jobs and may also have different cultural identities. These dispersed and diverse employees are joined [Page 870]together by communication technologies such as the telephone, fax, e-mail, Internet, and instant messaging. Some employees of virtual organizations may work alone, functioning essentially as telecommuters. Others, however, may work clustered together in traditional offices. In either case, the virtual organization is spread out over multiple geographic locations.

There are two important characteristics of virtual organizations: (a) They depend on teams, and (b) they have a very fluid structure. Virtual organizations use teams to conduct most of their work. This means that employees must depend on each other to complete their work. Additionally, teams form and disperse frequently and easily. Thus, the organizational structure changes often as teams reorganize to meet the organization's needs.

Although the concept of a virtual organization in which employees never interact face-to-face is intriguing, such purely virtual organizations are very rare. Instead, many organizations have degrees of virtuality, that is, some aspects of the organization are traditional but others are considered virtual. Virtuality can vary along four dimensions:

• 1.
  Space: The physical location of the employees—are they colocated or dispersed in different places?
• 2.
  Time: The time zone in which the employees work—are they working the same business hours or are they dispersed across time zones?
• 3.
  Culture: The employees' culture—are employees from the same culture or country or from different ones?
• 4.
  Boundary: The organizational dispersion of work—do the organizational processes stay with the organization or are they outsourced?

Organizations vary in their virtuality. At one end of the continuum are organizations such as http://Amazon.com: Although http://Amazon.com is a very successful retail organization, there are no http://Amazon.com stores in which customers can buy books. Instead, customers buy books, music, and many other items through the Internet. http://Amazon.com employees rarely interact with the customers. They do, however, interact with each other face-to-face and through technology at several offices around the United States and the world.

At the other end of the continuum are traditional organizations with a worldwide presence. For example, IBM has offices across the world. It also has a significant number of telecommuters and employees located in customers' offices. Employees work together as teams, which may interact completely face-to-face, completely through technology, or through some combination of the two. The teams may be located in the same time zone or spread around the world. Thus, IBM and other large multinational organizations may have components that are very much like traditional organizations and other components that are very much like virtual organizations.