Managing the Virtual Organization


With the inception of globalization, the business environment has experienced radical changes. From how the running and managing of the organization to the relevant aspects of technology, revolution has been witnessed all over. It is as a result that the need to evolve newer strategies to handle the new challenges was necessitated. This has taken place across organizational boundaries.

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Virtual organizations have not been left behind in the whole process. The operations and activities of virtual organizations have also witnessed a radical switch (Witzel &b Warner 2004). Virtual organizations can be described as those business firms that operate in technological means through which resources are shared among the members. As a result virtual organizations don’t necessarily work in one physical setting; they are spread out all over with a link of communication between them.

The paper takes a critical look at the nature and operations of virtual organization. Priority is going to be given to the unique characteristics of virtual organizations and how they provide challenges for managing the same. Discussion will be centred on aspects of technology, communication and decision making of virtual organizations.

Characteristics of Virtual Organization

Virtual organizations have unique attributes and their forms of operations differ with the ordinary forms of organization (Beard 2004). As a result the management of these organizations needs to be done with customized skills about the same. First and foremost virtual organizations don’t exist in the manner like other organizations; they include a group of people who network from different locations.

Telecommunication therefore is the link between them, as far as the sharing of information is concerned. Another common issue among virtual organization is the decision making process. Due to the unique manner of the organizational structure decision making process of virtual organizations is different from that of normal organizations (Joja 2003). In essence the unique ness of virtual organizations not only emanate from its operations and organization structure but also the whole operation of events. It becomes necessary therefore for a proper understanding of virtual organization for the management to be successful. Specialized skills are of great essence in the running of virtual organizations. Only mangers who command great experience in the operation of virtual organizations will be successful.

In summary the following are the characteristics of virtual organizations;

  • Location
  • Communication
  • Decision making
  • Knowledge management
  • Flexibility
  • Dispersion
  • Telecommunication

Challenges of Managing Virtual Organizations

Managing virtual organization is by all means a tall order. One of the reasons behind the success of managing theses organization is a better understanding of their unique attributes (IEE Engineering Management Society 2008). Virtual organizations are not to be confused with ordinary organizations. They are by all means different from the normal type of organization. The differences range from the organization structure, manner of operations, and use of technology and sharing of resources.

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Another significant attribute is the independence in the manner in which the virtual organization’s employees operate. All these add to the complexity of the process of managing the same. As a result a proper understanding of these attributes is essential for the success of the process. The challenges of among organizations essentially emanate fro the distinct attributes of their design. Lack of proper understanding of the same is a great handicap in the whole process of managing them. It is against this backdrop that relevant experience in the same field in a prerequisite for the appointment to the managerial position.

The success of the management lies in their proper understanding of the operations of the same (Franke 2002). Adequate background in the field is of great essence for the success of the whole process.

The challenges of managing virtual organizations include the following:

  • Communication
  • Time factor
  • Goals and duties
  • Safety
  • Motivation and discipline
  • Distance

Success of Virtual Organizations

The success of virtual organizations depends on several factors. A better understanding of virtual organization is necessary for the success of its operations (Tein et al 2004). As a result the most vital part of the success of the organizations comes from the ability of the management to come up with customized strategies that enable the organization to make qualitative and quantitative progress. The ability of the leadership enhance cooperation in the organization s one of the key success factors in the virtual organizations.

Through empowerment each member of the organization is made to take part in the affairs of the team. This leads to a level of full collaboration and harmony. The dispersed nature of virtual organizations makes unity and common purpose difficult to achieve. As a result the management must come up with methods for enhancing togetherness and group work to steer the organization to great success (Fong 2005). Synergy is the main focus in such an endeavour where people are made to pool their resources and work together. For the organization to be successful the abilities and competence of employees must be brought in harmony.

This can be de by ensuring that the relevant attributes of each employee works together with the other employees. This brings about an aspect where the organization achieves greatness through the harmony of attributes.

The ability of the employees to get used to various situation and environments is vital for the success of the organizations. Virtual organizations keep changing in the manner in which they operate. The business environment of virtual organization is tectonic and thus is subject to sudden changes. The management should put the employees n a position where they can easily get accustomed to the change of situation. This will bring a bout an aspect of stability in the organization thus begetting success.

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The concept of training has a lot of relevance to the while field of virtual organizations. To be successful virtual organizations ought to constantly provide training to their employees in areas in which they need support (Greenberger 2002). A vital area is that of the essence of team work, employees need to be trained so that they can appreciate team work and cultivate an attitude of working together. Virtual organization exists based on technology, without technology virtual organizations cannot operate. As a result the nature and type of technology used is a major consideration in the success of the organization (Gingrich 2003). Technology must represent the nature and needs of the organizations. As such technology must conform to the utility value of any virtual organization.

Analysis and Evaluation

Virtual organizations are those which exist in a sharing of resources through technology. There operations are therefore unique from those of ordinary organizations. A look at the design of the organizational structure of these companies reveals uniqueness which translates to operations of the same. The analysis part of the paper will primarily focus on the organizational structure and its impact in the decision making of the organization. The organizational structure of a virtual organization has certain traits that are of impact of the whole operations of the same. The structure is designed in a manner where the manger occupies a solitary position in the hierarchy of the organization. This is an implication of the decision making process in which the manager ahs greater say.

This is to mean that in virtual organizations decisions are made primarily by the management. The role of employees in the process of decision making is thus reduced. In ordinary organizations the organization structure is designed in such a manner that the decision making process involves the employees. Such a structure involves a design where the chart indicates a slight distance between the manager and the employees. Another significant aspect of virtual organizations is the role played by teamwork. Under normal circumstances the members’ role is defined in terms of teams. Through this synergy is achieved around the objectives of the organization. Participations encouraged around the organizations through the use of groups. The success of the groups is achieved through the specific design of obligations of the same.

The following diagrams indicate the design of organization structure of virtual organization.

Hierarchy-Matrix-Virtual Organization

Management: Post-Heroic Leadership.’ Journal of International society for performance improvement.
(Fig 1) Eicher, JP. 1996. ‘Management: Post-Heroic Leadership.’ Journal of International society for performance improvement.

Decision Making Process

Leaders in virtual organizations must endeavour to make decisions that boost the effectiveness of their firms. The complex and unique nature f virtual organization makes the whole process of decision making demanding. As a result tact and skill are required in the whole process of decision making. Of added advantage to the managers and leaders of these organizations is the proper understanding and experience of the relevant operations of virtual organization (Filipe et al 2009). Decision making in virtual organizations is thus different form other types of organizations. S a result there are various strategies and method used to effect the decision making process in virtual organization.

Decision Making (Virtual Organization)

“A Diagram Showing the Elements of decision making in a Virtual Organization”

Management: Post-Heroic Leadership.’ Journal of international society for performance improvement.
Management: Post-Heroic Leadership.’ Journal of international society for performance improvement.


Virtual organizations are unique both in design and nature of operations. As a result the management of such organizations needs customized approaches to address the issues of virtual organizations. The can be described as organizations which exist fundamentally based on technology. Therefore the trends in technology have a lot of impact on the operations of this organization.

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However there are two major distinctions between ordinary organizations and virtual organizations. First is the organizational structure and secondly is the decision-making process. A proper understanding of the two is essential to the success of these organizations. The paper has taken a critical look at the operations and management of virtual organizations. To be successful in the endeavour the paper has taken an analytical look at the whole system of management of the virtual organizations. More focus was given to the unique attributes of these organizations.

The success factors of this category of organization have also been explored. As a result the paper is a successful attempt to explore the whole area of virtual organizations. A critical look at the whole subject has been the focus of the analyses part of the paper. It can thus be said that special skills are necessary for the success of the management of virtual organizations.

Reference List

Beard, J. 2004. Managing impressions with information technology. New York: Greenwood Publishing.

Eicher, JP. 1996. ‘Management: Post-Heroic Leadership.’ Journal of international society for performance improvement.

Filipe, R. et al. 2009. Enterprise Information Systems: 11th International Conference, ICEIS 2009, Milan, Italy, 2009, Proceedings. New York: Springer.

Fong, L. 2005. E – Collaborations and virtual organizations. Washington: Idea Group.

Franke, U. 2002. Managing virtual web organizations in the 21st century: issues and challenges. Washington: Idea Group.

Gingrich, G. 2003. Managing Information technology in government, business and communities. Washington: Idea Group.

Greenberger, D. 2002. Human resource management in virtual organizations. Indiana: IAP.

IEE Engineering Management Society. 2008. Managing virtual enterprises: a convergence of communications computing, and energy technologies. Michigan: University of Michigan.

Joja, A. 2003. IT-based management: challenges and solutions. Washington: Idea Group.

Tein, S. et al 2004. Management: A Pacific Rim focus. New York: McGraw-Hill.

Witzel, M. and Warner, M. 2004. Management in virtual organizations. New York: Cengage Learning.

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