The Virtual Organization: Characteristics and Opportunities


In a world that is extremely dynamic, business interactions are quickly turning to the idea of embracing electronic technology probably due to the advantage they present over the traditional method used in interaction. In the process of advancing this system, the evolution of virtual organization arose. This is a relatively new concept that arose in the wake of the 20th century having a definition that is different depending on the source that it is gotten from. “Whatis” (Wigmore, 2005) describes it as a company that has its members physically separated from one another.

These people then employ the use of e-mail or group-ware to communicate thus in a sense may appear in the eyes of many to be at one geographically location. “The virtual workplace”, a book that also names it virtual company, enterprise and even corporation refers to it as systems made through collaboration that give its members the freedom to interact, pull resource and share information despite the physical distance one might be from another (Igbaria, 1998).

“Virtual” as is commonly known is a term to mean that something is of existence but not tangible. Virtual organization is therefore a concept that relies heavily on non-tangible interaction between one party and the other. It does not just mean buying and selling over the internet. It entails structures in an organization that allow for consultancy, extra services in business, and even flexibility of partnership amongst different organizations.

The paper aims at looking deeper into this up and running concept that is slowly establishing an empire in the corporate world. Why this technology is being taken up in the world that we are living in. We are going to explore its characteristics and examine some of its advantages and challenges that the sector might be facing currently or even into the near future.

Characteristics of Virtual Organisation

Probably one of the most dominant characteristic of virtual organization is that they are created for a specific purpose. Take for example in the mapping of minerals in a minerals project. “Talk” (2006 para.2) explains how for the process to be workable, a collaboration among scientists, computer experts, code developers, and many other workers who relate closely in this field work together to achieve a particular goal. Note that they do not necessarily have to know one another or come from one distinct organization but a networking amongst, say, scientists, who need grid team to assimilate them concerning the working area.

One the other hand, the computer experts in charge of developing codes useful to the user will have to work quite closely to the scientist. A high level of collaboration is therefore needed to achieve profiting results in such a project.

Other characteristics include the fact that power is not necessarily distributed in terms of position. There is also a lot of informal type of communication used in this organization and the system of governance in virtual organization is never hierarchical. There might not be a single individual, who commands a leadership position in such an organization (Pattanayak, 2005). He further explains that the organization is goal oriented and quite dynamic to change depending on what circumstances may arise. Information sharing is also a common character in virtual organizations since without one facet in the system; projects simply go to a standstill.

“Xiaopengcao (2007) also asserts how there is a high dependency on networking. Symmetry between demand and supply is high, that is, the pricing, appearance and authenticity of products in the “virtual market” balance out with the price of sale. The aspect of time cannot be ignored. Due to the many networks that are created, virtual organizations are characterized by short time-frames of achieving particular goals. The ever-growing dependency on computers versus the demand for consumer satisfaction is making many people diverge into networking with other specialists to achieve their goals in as short a period as they possibly can.

Opportunities that Virtual Organizations Present

In the short case study mentioned above we can easily conclude that mining and analysis thereof can be easily be done even without involving a specialist organization that has mining as its specialty. Small companies are generally the more advantaged group when they embrace virtual technology. As “Virtual Organization” (O’Larry, 2004, pg.7, para.2) gives an analysis, if per say, a higher percentage of the population would have the freedom to work effectively from their home and not from their offices, then the end result will be that for that particular company, productivity will certainly increase at a potentially lower cost of sustaining the employees. Reduction in time for employees to commute benefits both the employer and the employee.

Virtual organizations give the female work force an opportunity to be occupied both at home and in the office in a more reliable way, thus an overall increase in workforce. O’Larry further explains how low income earners save a lot in costs of food while working from home.

“Affiliates in Commerce” (2010, para.2) give vividly the advantages of e-partnership. It explains how having the physical boundaries of an organization be eliminated opens new doors for collaboration. This is so because communication can now be unlimited and widespread across space and time. Product are now open for sell literally across the world and in doing so open new links to other potential buyers, markets that are more free, and less competitive markets.

A lot of information that lies within the interaction is also released, especially in managerial skills that should be adopted in a certain situation. Costs of operation in a company are greatly reduced. In the example given above with the e-mining, the links between grounds men, scientists, code experts who are specialists in their particular fields make it easy for their goal to be achieved and this mainly is credited to the low operational costs achieved by specialization.

Many organizations have embraced joint ventures and inter-organizational merges due to the advantages they have noticed they offer their individual companies. In the international market, these companies are given an extra push; their momentum is accelerated even without having to adopt certain managerial skills or principles or having to have mastered the markets in a more profound way. Just as there are advantages in starting companies for a businessperson over starting out a partnership deal, individual companies have the advantage of sharing risk. They also share capabilities and revenues making it easier to handle ones organization when in collaboration than handling the markets single handedly as an individual company.

If that is not all, the article continues in saying that complexities that may occur in handling new technologies are greatly reduced when working within a network. The scientist in the e-mining example does not need to have to be equipped with coding skills to complete a project laid in front of him. With the network in place, forwarding his research findings to a potential programmer will ease his burden and save precious time and human resource. In essence, the organization will have been able to tackle extremely difficult tasks through expertise. It seems, then, that virtual is the “way to go” especially when we are handling business projects that will require a certain area to be handled with some particular form of skill.

Challenges that Virtual Organizations face

In as much as there seems to be no negative consequence to forming such collaboration, the sector may well face a load of challenges in its efforts to make it work at maximum efficiency. The “Time management Guide” (2005, para.4) gives an array of challenges that can be a negative to those who would want to be part of this organization. Manufacturing industries and other industries, which rely heavily on sequential organization, cannot adopt virtual organization.

This is generally because for a task to be completed, one person relies heavily on the other person’s outcome in real time. In this system, then physical contact/interaction is needed to have a task complete. Another challenge as the article depicts is that not everyone is flexible enough to adopt the virtual kind of environment. This environment needed self-motivation which is a virtue lacking in a vast number of people. It is a field that contains minimal or no supervision on the part of the partner even though heavy reliance on him to play his part cannot be assumed.

The team player must be a very good communicator. He must be able to use the internet to bring across exactly what he wants to address in a way that all the other team players will understand. Since he is using e-mails and talking probably through Voice-Over-Internet communication (VOIP) his chances of being understood to the last point are greatly reduced. Many who do not have good communication skills end up not being good team players in the virtual world.

Bigelow, (2000 para.7) also give another challenge as lack of proper infrastructure. With lack of proper tools and equipment, the company or team player will never effectively work in the virtual world. In essence, he will waste a lot of administrative time trying and recourse both human and financial. It is also important to know that most of the time; the technology required for an individual to be set up to work in the virtual world may be quite expensive. Especially in the developing world, setting up internet-enabled stations to run virtually the whole day may incur someone a cost that he is not ready to handle.

The electronic world also faces challenges of its own. Sometimes they fail or experience disruptions, which consequently become a challenge to team players in virtual organizations. Time wastage is experienced more often than not and inefficiency follows suit.


In an electronic age like the one we are experiencing today, it is prudent to take advantage of some of the resources that we have been left to our disposal. What if I am to have a complete foreigner as my business associate with whom we break clean deals? The advantage of this is that both of us will be exposing ourselves to new environments whish is very good for business. He has ideas that might help me out and the opposite is true.

We experience a larger market for our product and further more he may be experienced in areas that I am not good at. Though many will shy away from the risk of doing business with “a stranger”, the opportunities they present are something to ponder about and probably consider. Setting up the organization takes time and effort, but for the one who has the right footing into this venture, I am positive has quite a good testimony to give about it.

Reference List

“Advantages of E Partnerships and Virtual Organizations”, 2010, free article tutorial. Web.

Deborah, Bigelow 2000, “Challenges to the Virtual Organization”, Expert Series. Web.

Igbaria, Magid. Tan, Margaret 1998, “The Concept of Virtual Organisation” The Virtual Workplace. Web.

O’Leary, Dustin 2004, “Positive and Negative Effects”, Virtual Organisations. Web.

Pattanayak Biswajeet 2005, “Characterictics of Virtual Organisation”, Human Resource Management 3rd Ed. Web.

Talk, Martin 2006, “Case study: Mapping the eMinerals project onto the concept of the Virtual Organisation”, Virtual Organisation. Web.

“The Characteristics of Virtual Organization” 2007, xiaopengcao. Web.

“Virtual team benefits and challenges”, 2005, Time-Management Guide. Web.

Wigmore, Ivy 2008, “Virtual organization”, What is. Web.

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