Virtual Strategies for 21st Century Organizations

The latest business craze of the 21st century encompasses going global. Yet, these organizations often operate virtually. Communication, however, takes on a brand new meaning when there is no “face-to-face” interaction between team members to facilitate these nontraditional relationships; it is essential to understand how to unify these virtual relationships.

Furthermore, many companies have allowed workers to work from home to achieve huge company savings. Managers assume that an employee, equipped with a computer and fax machine, can stay connected to the organization. This outlook is simply a myth.

James Kouzes and Barry Posner, Authors of The Leadership Challenge, further explain, “…how do leaders create commitment in a virtual organization? Can there be such a thing as virtual commitment?” According to a USA Today poll, nearly half of those interviewed said that corporations can be trusted only a little, or not at all, when it involves looking out for the best interest of employees. Relationships are built on trust. This blog explores the characteristics of effective virtual teams in 21st century organizations.

Virtual organizations are becoming the mascot for globalization. A virtual team (VT) is geographically separated and has very little personal contact; it depends on computers and telecommunication technologies such as the internet and videoconferencing.  VTs provide the benefits of bringing talented people together, providing international perspectives, and saving millions in traveling costs. Yet, going virtual isn’t easy.

 VT organizations are creating a buzz in the academic community. There is a burgeoning literature on virtual teams. As more organizations allow employees to work from remote locations away from their headquarters, there is an increasing problem with office staffing and organizational effectiveness.

 Traditional organizations must shift their viewpoints on virtual organizations. To address human capital issues, an institution must understand the nature of virtual organizations. Effective virtual teams manifest a variety of characteristics including well-defined group sponsorship, goal consensus, effective selection practices, an appropriate skill mix, and specific performance measures linked to goal achievement. Virtual organizations challenge today’s personnel management system by their very existence as a rising number of employees are telecommuting.

 In the old paradigm, managers were required to be technical experts who defined the tasks for the employees. In the new virtual structure, managers are expected to provide technical direction. However, the manager allows employees to participate and listen to their suggestions.

Managers must weigh telecommuting’s benefits against its weaknesses, including reduced employee oversight and accountability, lower productivity, and less direct interpersonal contact thereby decreasing team building opportunities and isolating employees. In fact, VTs require a shift in leadership paradigms. Leaders in virtual organizations must provide an organizational structure for achieving their objectives that is flexible and organic.

 Going virtual will continue to challenge traditional thinking. Establishing trust within a virtual team environment is a prerequisite for an effective team.

 How can organizations build virtual structures that are effective and sustainable?   

 © 2010 by Daryl D. Green

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26 thoughts on “Virtual Strategies for 21st Century Organizations

  1. One of the biggest problems facing managers in virtual organizations is the relationship he or she has with their employees. Employees in these organizations have more freedom in making decisions without the input of their managers. While this practice saves time and cuts cost, it also causes the common goal between the manager and the employee to become distorted. Authors Ray Grenier and George Metes believe this boundary blurring is most prominent in determining when one company ends and another begins. This is because employees in the virtual organization have more face-to-face interaction and communication than their own managers. Because of this, Metes and Grenier argue that the trust and cooperation that should exist between manager and employee is now more prominent between the employee and the companies with which he works. Les Pang believes the solution to this problem is for managers to increase communication with their employees and do not replace face-to-face interaction entirely. Therefore, managers in virtual organizations must find a way to balance the freedom of the employee and the necessary interaction with them.

    Greiner, R., and G. Metes. Going Virtual: Moving Your Organization into the 21st Century. Upper Saddle River, New Jersey: Prentice Hall, Inc., 1995.

    Pang, Les. “Understanding Virtual Organizations.” Information Systems Control Journal 6 (2001): 42–47.

  2. For the most part, virtual teams have been an ignored concept for the business industry. It has only been recently that organizations have started using technology to their advantage. Or, are they wrong? Is a virtual team really an advantage? Dr Rico and his team suggest that the virtual team effectiveness and task independence factors can be linked efficiently by training. Without training, a virtual team is a recipe for disaster (Rico). Dr. Gilbert agrees when he states that virtual teams can be effective, but must require “thoughtful organization, training and new rules for communication.” The concept of virtual teams was applied to the healthcare system in hospital “virtual emergency teams” to other distant hospitals. What lacks is the fact-to-face and hand-on tradition of the ordinary patient encounters. Therefore, as Dr. Rico and Dr. Gilbert agree on, the virtual team can be effective, but must be adopted with care (Gilbert).

    Resources:
    (Rico) “Team learning and effectiveness in virtual project teams: the role of beliefs about interpersonal context.” Ortega A, Sánchez-Manzanares M, Gil F, Rico R, PubMed.gov. May 13, 2010. Accessed June 7th, 2010.
    (Gilbert) “Video conferencing versus telephone calls for team work across hospitals: a qualitative study on simulated emergencies” Bolle SR, Larsen F, Hagen O, Gilbert M. University Hospital of North Norway, Pubmed.gov, Nov 30, 2009. Accessed on June 7th, 2010.

    • While telecommuting may increase isolation and loneliness in employees without families, it may have the revere effect on employees with families. Some people find social interaction outside of the office considerably more fulfilling than in the workplace. My father transitioned from a traditional employee in a company office to a telecommuter that worked out of our home. He found great content in the flexibility of his schedule which allowed him attendance and participation in family activities that were not feasible in the past due to his work schedule. A substantial amount of time was added to his day that no longer was spent on commuting from the suburbs to the city. I think it is important to realize that the situation and personality of the telecommuter are large players is the likelihood of success. I agree with Duermyer in his statement, “Social interaction is more important to some telecommuters than others, but for those who do not interact well in person, a work at home telecommuting arrangement can be a very positive, productive, possibly even career-enhancing experience.”

      Duermyer, Randy. “Telecommuting on the Rise as More Want to Work from Home: It’s a Great Time to Consider a Telecommuting Arrangement,” About.com: Home Business. http://homebusiness.about.com/od/workingathome/a/telework_gas.htm

  3. “Virtuality” is initiating a change in organizations. It is necessary for companies to be managed flexibly and to respond to the changing needs of the environment. (Aparico-Valverde) We live in a world that is more technologically advanced than any other time in the history of the world, and today’s technology is rapidly made obsolete by newer innovations. In order for organizations to build virtual structures that are effective and sustainable, the virtual technology chosen should be monitored for updates and newer versions. The virtual edge is often expensive and time consuming (when employees must be trained). It is totally within the realm of possibility that the virtual technologies can be utilized and proven as a benefit as long as the virtual structures are a compliment and not a replacement for the individual workers. Interpersonal relationships among employees can often produce a competition or a sense of completeness at the work place, either of which often increases productivity. If personal interaction is complimented by virtual structure then productivity should be maximized under appropriate management.
    Reference:
    APARICIO-VALVERDE, MIRETA, The New Organizational Structure and its Virtual Functioning. Publication: International Advances in Economic Research. May 1 2000

  4. Lurey and Raisinghani found in an empirical study that although VTs are becoming necessary because of organizational globalization, more formal processes are needed to perform work more efficiently. Added connectivity due to distance between employees is also a necessity.

    Some of these potential productivity issues with VTs might be alleviated through web-based videoconferencing. A quick Google search showed many different free services like Skype, as well as premium services designed for businesses. Even if the employee was isolated or remotely located, as long as they were able to access the internet, they would be able to participate. Additionally, because many companies provide specific computers for those who work at locations other than an office, it would be easy to ensure that the computer specifications supported this type of service (i.e. webcams built in, correct software, etc.) From this point, managers could set weekly (or monthly, depending on the company’s individual needs) times where all employees utilize this service to meet, much like they would as if they were face-to-face. This may prove a beneficial solution to the main problems of virtual teams.

    Reference
    1. Lurey, J. and Raisinhgani, M. (2001). “An Empirical Study of Best Practices in Virtual Teams,” Information & Management, Vol. 38, No.8, pp. 523-544.

  5. When an organization implements virtual communication, they can become global and pull the top professionals from around the world. Being able to see colleagues by video conferencing is an important step in making business personal again. It is vital to overcome cultural differences. Social cues and facial recognition help people feel secure in their business transactions. It is important to keep employees from feeling isolated and fearing the loss of a promotion because they do not form relationships with their colleagues. With new technologies such as Cisco calling themselves the Human Network, they have been marketing video conferencing. To be effective with a virtual team, employees must have thorough training in using the virtual medium. A company must have a reliable tech support team to help with any problems that may come up. Making sure the other parties involved are equally comfortable with the communication is also very important. These ideas can help ensure the sustainability and success of virtual structures in most any company.
    Works Cited
    Elmore, B. (2006). It’s A Small World After All. Baylor Business review , 8-9.

  6. I would suggest that to be effective and trusted (in the organizations eyes) in virtual team, the responsibility needs to be earned. The ability to be able to work from remote locations, including home for example, is something that should not just be handed out on the first day, regardless of one’ s expertise or experience. Time invested on the front end by the employ to convince the organizations managers that they are trustworthy, efficient, and effective will ensure that the given employee is truly ready to function on the organizations behalf in the virtual world. Once the ability to work outside the office is awarded, it becomes increasingly important that a manger is effective in its functions. Some would suggest that virtual teams make the need and purpose of a manager obsolete, but it is in fact the ability of the manager to adapt and regulate distant employees that would make these teams successful. In an article by Wayne Cascio, he states, “The need is not for fewer managers, but for better supervisory skills among existing managers.” Because of the practicality, I think properly managed virtual teams can be efficient and effective resources for an organization.

    Reference: Cascio, Wayne. Managing a virtual workplace. Academy of Management Executive. 2000. Vol. 14. No. 3.

  7. In a globalized world that knows no barriers, virtual teams are a trend that needs to balanced with company goals and unified sense of purpose. To achieve this goal, managers of virtual teams have to insure that they emphasize teamwork skills in their hiring process. In their article on how to manage virtual teams, Frank Siebdrat and Al. state that “managers need to consider teamwork skills as a necessary attribute when selecting the members of a virtual team.”-1 This not only insures that the team will work as a whole, but it also facilitates integration of the different units and their combined operation as a whole. Another critical factor is that the managers must set goals that team performance is measured against. This will help address deficiencies and correct them as necessary.
    In addition, adoption of the quantum field theory in the management of organizations helps. Managers need to recognize that intelligence that directs the organization is disseminated. Through this, they can promote self-leadership across teams which will enhance productivity. Moreover, the company can organize occasional face-to-face meetings of its employees which are important in “initiating and maintaining key social processes that will encourage informal communication, team identification and cohesion.”-2
    Cited Sources
    1& 2 Siebdrat, Frank, Hoegl, Martin, Ernst, Holger. “How to Manage Virtual Teams.” The MIT Sloan Management Review. July 1 2009.

  8. The emotional toll that loneliness and isolation can have on a person can be daunting. Most people view this issue as one of the biggest drawbacks to remote employees or virtual teams. However, I think that a critical concept is being overlooked. Allowing people to work from home has just added another option to the way people work. It’s like online shopping instead of visiting the store; employees and businesses simple have another avenue to explore when maximizing efficiency of time and resources. People who prefer to be alone can now still hold a job and not have to leave their house. Those who enjoy the human interaction than a physical office provides, can choose to leave their house each day and go to work. Allowing people to work from home and tying pay to work accomplished allows both the employee and the employer to maximize productivity while reducing use of resources. Loneliness may be a side effect in some working from home, but stress, frustration and interpersonal conflict is a side effect in others who work in offices. As with everything, there are advantages and disadvantages; tools to be utilized in making choices best suited to the individual.

    References:
    http://viralogy.com/blog/viralogy-news/viralogy-a-new-way-to-work-elance-competition-application/
    http://www.businesslink.gov.uk/

  9. I think that designing a set of guidelines for workers to follow is essential for managers of telecommuters. The lack of supervision and personal contact has potential to leave employees less motivated and perhaps even uncertain in the direction of their work. Directives for daily work should be outlined by each telecommuter’s manager prior to leaving the office or commencing as a telecommuter. Clear short-term and long-term goals should be expressed as well as details pertaining to when the telecommuter is expected to return to the company office. Financial allowances for purchasing of equipment and supplies as well as reimbursement policies need to be addressed. Last the document should include “escape clauses for both sides” so that there is a way to revert back to the traditional business structure if either the employee or manager is unhappy with the results of work through telecommunication.

    McCune, Jenny. Managing Employees Who are Home Alone and Working, 2002. http://www.bankrate.com/brm/news/biz/tcb/20020814a.asp

  10. “Effective leadership is the number one factor that influences success in a virtual organization.” The leaders of these virtual organizations need to be flexible, promote trust and empower employees. Managers need to be flexible in embracing new technology that can help their business. Human Resources need to make sure that there is goal definition and coaching about the virtual structures among all employees. HR also needs to lay out plans for activities that are to be done in person versus those that are done remotely and how everyone can be integrated. To cut down on the amount of coaching and training employees need to do, managers can have competency exams for potential employees.

    The right technology chosen to use is vital. “Research shows that to connect human beings, it is essential to thoughtfully select the most appropriate technology.” The company needs to determine when email use is appropriate versus when to use video conferencing for example. An email may be more effective and efficient than video conferencing in certain situations. For employees who many never see each other every day, it is important to have the right technology to establish “trust and rapport” among employees on an ongoing basis.

    “Successfully Transitioning to a Virtual Organization: Challenges, Impact and Technology.” HR Magazine, , Apr2010, Vol. 55, Issue 4 pp 1-9.

  11. Virtual structures in business are becoming more common now days. In an effort for companies to decrease costs and remain competitive, they are becoming more dependent on technological advances which often result counterproductive. Virtual corporations rely heavily on unreliable apparatuses such as the internet and teleconferences to conduct vital corporate operations which can be severely compromised if the wire through which they communicate got cut.
    However, not all is bad for organizations in the virtual world. These corporations can build sustainable and effective structures by thoroughly understanding the needs of their corporations and utilizing technology only as a tool and not a blue print for their operations. According to Drs. Ahuja and Carley “managers need to align the communication structure to the task characteristics.” Some tasks can be effectively completed through virtual and decentralized resources. Still, others require a personal hierarchy where managers must supervise directly. The balance between these two approaches clearly depends upon the nature of the business and the technological tools require to be able to compete.

    Ahuja, Manju K., Carley, Kathleen M. “Network Structure in Virtual Organizations.” jmc.indiana.edu. 10 Jul, 2010.

  12. Virtual structures are the future of organizations as we embark on increased globalization within the world economy. Virtual organizations have their benefits as it breaks down the previous barriers of time and location to pool expert resources on the task at hand. However, it is important for the virtual structure to evolve to meet the common workplace structure. The first step for implementing virtual structures within an organization is to specifically define the objectives for the virtual aspects of the organization and determine quantifiable goals for employees. Thus, the possibility of losing touch by not operating through the common workplace is not lost in a virtual dead space. In “Mastering Virtual Teams” by Deborah Duarte and Nancy Snyder, the authors suggest that developing trust in the early life of virtual teams in the most essential factor for effectiveness. This trust is dependent on three factors: performance competency, integrity, and concern for others. Importantly, these factors must be established as they can differ across cultural lines. By establishing these factors for trust and defining quantifiable objectives, the virtual team creates the larger trust radius needed for a virtual team to maintain effectiveness beyond the traditional team of the common workplace.

    References:
    1. Virtual Organizations: http://www-staff.it.uts.edu.au/~igorh/cscw/busnets/virtual.htm
    2. Duarte, Deborah L. and Nancy Tennant Snyder. Mastering Virtual Teams. San Francisco: Jossey-Bass. 2006.

  13. Any business in the modern world must employ electronic and telecommunications in order to remain competitive, viable, and efficient. Whether it be simple emails or high-tech video conferences, virtual aspects of communication are crucial components of modern companies as it promotes flexibility and efficiency. The continual explosion of technology will further exacerbate this trend.

    However, there are many negative consequences that occur with a virtual organization. One major drawback is the aspect of trust and accountability. How can a manager know that workers are doing what they need to be doing when they need to be doing? This can first be assisted by elements such as, hourly conference calls and check-ins with employees and managers. Also, there must be extremely detailed understanding of roles, responsibilities and expectations. In addition there must be frequent audits of these items to determine if workers are performing sufficiently.

    Another major hurdle in the virtual organization exists in the difficulty in sharing information between different parts of the company. With such physical separation between these departments, info can easily be lost, mishandled or misinterpreted. A highly organized information system needs to be created ensures accountability, protection and distribution of information.

    References:
    http://www.sitepoint.com/blogs/2009/04/16/the-challenges-of-virtual-business/

    http://trendtracker.blogspot.com/2004/06/trend-small-businesses-go-virtual.html

  14. Any business needs a marketing mix: product, pricing, etc. for their structure online to be virtual. An effective virtual organization should be open around the clock and available from anywhere in the world, fully automated, and not require anyone to be in attendance. When the product or service involved is digitized information that can be relayed virtually, this allows effective functioning. Organizations such as Priceline, have successfully organized and built virtual structures that are effective and sustainable using these principles. Priceline is a $10 billion organization that generates $2.3 billion in annual revenues and with work force of 2000 employees. There marketing strategy is based on the internet and delivers its product digitized. They are a very profitable organization with high profit margins and sustainable growth.

    Virtual businesses can stay connected through video conferences using Skype. The effective virtual infrastructure, using the latest technology, can be built upon the latest internet video communication technology. One of the issues people raise about virtual communication is face-to-face contact, however, video conferencing allows real-time contact which allows not only one-on-one communication, but team based. This will result in huge cost savings for organizations and make them more highly efficient. Low cost; high efficiency.

    http://www.google.com/finance?q=NASDAQ:PCLN

    “priceline.com Incorporated: Ownership”. MSN Money.

    http://www.referenceforbusiness.com/management/Tr-Z/Virtual-Organizations.html

  15. Virtual board meetings promise to be more cost effective, convenient, and cutting edge in a more global business model. With all these benefits there are but a few concerns: visual communication and legality. While visual communication of body language can be resolved with video chat in an era of Skype©, the legality concerns are dependant upon the companies standing: partnership, LLC, or a corporation. The primary state of corporation also must be considered. Most laws require “board directors to be able to hear one another simultaneously at a board meeting; online meetings with no audio component would violate this legal requirement” (1). Online forums can be requested by legal written consent for official and legitimate voting systems. Only a few states have already changed their corporate laws from “hear each other” to “communicate with each other,” thusly bypassing the need for written consent for online forums.

    Reference:
    Hilliard, Tyra. “The Law of Virtual Board Meetings.” Corbin Ball Associates – Meetings Technology Speaking, Consulting & Writing – Corbin Ball Associates. 2002. Web. 14 July 2010. .

  16. As the world moves to global virtualization, medicine should steer clear. There has been some talk of virtual physicians. Some avenues described include an actual robot in the place of the physician creating a means for examination, tests, etc. with high definition cameras, infrared sensors, and other tools for diagnostics. The arguments for this sort of virtual medicine include the ability to have access to the best specialists from miles away, or to increase accessibility to medical areas of shortage. Julie Connely of University of Virginia brings some realistic views to this virtual world. She states in her article Are We Ready for Virtual Physicians, “Of course there are limits to what the robot can do. What if the hospitalized patient tells the robot, “My belly hurts and I’ve noticed some blood in my stool.” What then? … it apparently cannot examine the patient–do a rectal exam to check for post-op bleeding, for example. And if it could, I wonder what being touched by its steely “hands” might feel like.” As an Osteopathic Medical student we are constantly told to “put our hands on the patient.” Going virtual takes away one of our most valued tools, our hands.

    Journal article by Julie Connelly; The Hastings Center Report, Vol. 34, 2004

  17. Carly states that key feature of virtual organizations is a high degree of informal communication. Because of a lack of formal rules, procedures, clear reporting relationships, and norms more extensive informal communication is required. You work with teams of people you never see and may have never met except in the virtual sense. If you do have a place of work, the people in it come and go at all hours. It is not improbable that you work out of your home. HBS states that people come and go from employment in the company rapidly. Some work for other firms that are temporarily connected with you in joint alliances. Some work for subcontractors that have long-term relationships with your company, and some simply work for themselves, having given up on corporate employment altogether. All of this complexity adds up to one certain issue: good communication has become more difficult than ever. How do you ensure that it happens successfully, and often enough to get the job done? What are the new ground rules of communication in the virtual age? Virtual communication puts stress on three competencies that have always been important: accountability, trust, and adaptability.

    Carly, Kathleen. “Network Structue in Virtual Organizations.” JCMC. June 1998. Web. 14 July 2010. .

    Harvard Management Communication Letter. “Communicating with Virtual Project Teams/Creating Successful Virtual Organizations – Virtual Communication – HBS Working Knowledge.” HBS Working Knowledge – Faculty Research at Harvard Business School. 2000. Web. 15 July 2010. .

  18. Virtual teams (VT) have an opportunity to be a successful and main source of communication among businesses in the future. Although, there are several things that must be accomplished in order to have an effective VT. According to Deborah L. Duarte in Mastering Virtual Teams, there are seven key success factors for VT such as: 1. Support from human resource policies, 2. Complete training and on-the-job education, 3. The use of standard organizational and team processes, 4. Successful use of electronic collaboration and communication technology, 5. An organizational culture built around VT, 6. Leadership support of VT, 7. Team leaders and team members must be completely competent of VT systems. There must also be a method of rewarding “cross boundary work and results” in order to offer recognition to individual VT members. In this same manner, performance could be based on their individual result/reward status each month. One of the biggest problems is that companies want to spend plenty of money on the most innovative technological equipment, but virtually none on training each employee on proper, effective use of the VT equipment. Leading this battle will take many great minds, but if conquered it will change the business world forever.
    1.) Duarte, Deborah L., and Nancy T. Snyder. “Chapter 1.” Matering Virtual Teams. Web. 15 July 2010. .

  19. Building a virtual structure that is effective and sustainable requires that organizations establish a culture that cultivates a feeling of belonging. Even if its employees telecommunicate all or most of the time, when employees feel appreciated and recognized, loyalty and teamwork is enhanced. As human beings, there is no denying that we are social creatures. In as much as virtual organizations can operate solely by telecommunicating, organizations must endeavour to include some face to face time. Whilst this may be difficult geographically, an organization can have a yearly face to face meeting to at least create a sense of togetherness.. Organizations can also create employee loyalty by recognizing achievements publicly on the virtual system. Even though each employee is alone at home, when they sit down on their computer the organization should aim to make them feel like they have just walked into the office. According to Noble of 3D learning , organizations must have clearly stated mission, goals and objectives and each employee’s responsibilities should be clearly defined. Finally employees should have an avenue to communicate back to the hub that is easy and non-threatening. The communication channel should be available to them at all times.

    http://www.seanet.com/~daveg/chapter6.htm

  20. The need to keep ahead in this world moving further into the realms of virtuosity in medicine and patient care is imminent. While many have focused on the traditional business model, I will focus on the doctor patient executive board meeting that we will experience every day, we’ll at least in the patients mind. The worst thing that anyone wants to do is have to go to the doctor when they are sick and feeling under the weather. In addition, who wants to get granny out of bed and go through the tribulations associated with making a visit, and the waits, etc. “Doctors are always looking for the next technological marvel to help them treat patients more effectively, whether it’s robots that can find cancer cells or medical records on iPhones”as stated by UC Irvine scientist Lauren Biron. The ability to close the gap with patients virtually as well as physically both at home and abroad will be the paradigm shift in medical delivery. PriceWaterhouse Cooper stated the need for virtual house calls being one of the forefront technological transitions in 2010. Physican’s need to focus on now technical and diagnostic methodologies to better treat the patient from remote locations.

    Biron, Lauren “House Call 2.0: Telemedicine brings doctors into home. OCLNN. 2010. http://www.oclnn.com/orange-county/2010-03-22/business/the-future-of-health-care-telemedicine-brings-doctors-into-home

    Top ten health industry issues in 2010 (December 2009)
    c/o Price Waterhouse Coopers

  21. In a virtual organization, constant communication is going to be the solution to sustaining an effective and efficient company. In general, lack of communication equates to a lack of productivity for a virtual company. It is important to have the group of employees meet and work in person for a couple weeks before they go virtual, just to get to know one another and personalize the situation. In addition to the initial meeting, the group should get together multiple times a year, whether it is for holiday parties or general meetings, to promote communication and cohesion within the organization.
    In addition, it is crucial for this communication to be reciprocated by the managers. Melissa Raffoni, in an article titled “Managing Your Virtual Company: Create a Communication Plan,” claims that “When individuals lose sight of the overall organizational goals, they work on the wrong things, projects are duplicated, and efforts are disjointed.” If these communications are achieved, the managers and employees will be able to maximize the performance and the market share of the company.
    Reference:
    Raffoni, Melissa. “Managing your Virtual Company: Create a Communication Pln.” Harvard Management Communication Letter. April 2000, Vol. 3 Issue 4, p7.

  22. In management strategy must precede structure. An organization must first determine their strategy in order to evaluate the benefits of building a virtual organization. Just as the development of any business or organization one must have a firm understanding of the marketplace, the competitive forces and the overall business model. I think that if organizations can utilize a SWOT analysis in order to evaluate the risk vs. benefit of a virtual structure it will maximize the probability of success. A recent article in BusinessWeek suggested that while the benefits can be well worth the transition as in the case of IBM which saved $100 million “that executives must prepare for the transition”. With preparation and effective strategic planning, organizations can recognize their existing strengths and work to improve those and implement them successfully into their virtual structure. Making sure that the structure enables the team members to better serve their customers and execute strategy is perhaps the most important aspect in developing an effective and sustainable virtual structure.

    BusinessWeek: Virtual Workplace Dos and Don’ts By Rachael King September 17th, 2007

  23. Within the many variables of a virtual structure, it seems the source of much turmoil introspectively is a matter of trust. In the article, “Communication and Trust in Global Virtual Teams,” Sirkka and Leidner attempt to evaluate these matters of trust through descriptive case studies, also factoring in location and culture gaps. They found that through creating these virtual structures there was essentially a short-term “swift” trust, but sustainability was quite fragile and temporal. To combat this ineffective system, they recommend starting at leadership. All the case studies that had negative outcomes were lead ineffectively. So, to make a virtual system work, it is important to choose leadership wisely in order to be effective and sustainable.

    Jarvenpaa, Sirkka L. and Dorothy E. Leidner, “Communication and Trust in Global Virtual Teams.” Organization Science, Vol. 10, No. 6, Special Issue: Communication Processes for Virtual Organizations (Nov. – Dec., 1999), pp. 791-815.

  24. With such trends as increase in the use of technology or increase in technological advancements that is seen today, virtual workforce is something that cannot be ignored. In order to stay competitive or profitable, organization must merge with the pace of technology. To build and implement a virtual structure that is both effective and sustainable, organization should not only empower their employees but hold a monthly face-to-face meeting with focus to discuss issues and answer questions. The organization could express the level of trust it has in its employees which according to Hackman et al., is essential for organization success in their book titled Building the High-Trust Organization. When employees feel that their leaders trust them with their work, they will be most likely to do their job efficiently and effectively no matter where they are located. Overall by instilling trust, holding face-to-face meeting, and by training organization could build virtual stricter that is both effective and sustainable.

    Hackman, et al. Building the High-trust Organization: Strategies for Supporting Five Key Dimensions of Trust. [San Francisco, CA]: International Association of Business Communicators, 2010

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