Concept of virtual organisation

Virtual organisation is a new form of organisation that emerged in 1990. It is also known as network organisation, modular organisation or digital organisation. A Virtual organisation 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. The virtual organisation is a social network in which all the horizontal and vertical boundaries are removed. In the sense, Virtual organisation is a boundary less organisation. In the Virtual organisation, ICT coordinates the activities and combines the skills of workers and resources in order to achieve the common goal. 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.

Characteristics of Virtual organisation:Flat structure Dynamics Goal orientation Information sharing Knowledge workers Informal communication Vague organisational boundaries Home working Multidisciplinary teams.

DIFF. B/W traditional organisation and virtual organisation:In a virtual team, members interact primarily through some combination of electronic communication system to tie up dispersed members who never or rarely come face to face. Members communicate on line using links like e-mail, video conferencing and WAN (wide area network). 1. Absence of para verbal and non-verbal cues (e.g., facial expression, eye movement body language). 2. Limited social contacts. 3. Ability to overcome constraints of time and space.

Types of virtual organisations:-

1. Telecommuters:- In telecommuting companies, employees work from their homes. They interact with workplace via personal computers connected with a modem to the phone lines. For eg:- Dow chemicals, Xerox Coherent technologies are some examples of companies using some form of telecommuting. 2. Outsourcing employees:- These organisations outsource most or all core competencies. Marketing and sales, human resources, finance, research and development, engineering manufacturing, information systems, etc. are the areas of core competence with excellence and other functions are outsourced. For eg:Nike does product design and marketing very well and depends on outsources for information technology as a means for maintaining inter- organisational coordination. 3. Completely virtual:- This type of virtual organisation is tightly linked to a large network of suppliers, distributors, retailers and customers as well as to strategic and joint venture partners. IBMS development effort of the PC and Atlanta committee for the Olympic Games in 1996 are examples of completely virtual organisations.

Technology of virtual organisation:1. Technology :- The traditional ways of working has been transformed through new technology. Combination of computing and telephony 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. 2. E-mail integration:- The whole organisation can take advantage of SMS products such as Express Way by integrating SMS into the existing e-mail infrastructure. 3. Office systems integration:- SMS technology can greatly enhance the existing or new office systems. For eg, phone messages can be sent via sms rather than returning it in a message book. 4. Voice mail alert:- Addition of SMS technology to the existing voice mail system builds an effective method of receiving voice mail alerts. 5. Mobile data:- This enables a laptop to retrieve information anywhere through the mobile phone network. One can keep connected to his/ her virtual organisation from anywhere by linking laptop to mobile phone. Mobile data communications can revolutionise where and how work is done. Advantage and disadvantage of virtual organisations:Advantage Saves time and travel expenses. Provides excess to outside experts, without down time and travel or logging expenses. Dynamic team membership allows people to move from one project to another. Disadvantages Lack of physical interactions. Lack of synergies arising from face o face interaction. Non-availability of verbal and non-verbal cues such as voice, eye movement, facial expression and body language which make communication more effective.

Team communications and work reports are available on-line to facilities swift responses to the demands of a global market. Virtual teams are able to work even when they are miles apart. People who never get a chance to meet each other face to face can also work in virtual teams.

A virtual organisation is staffed by knowledge workers who are brought together under short-term market relationships. Jobs in virtual organisations are knowledgebased. Such jobs are assumed to require greater skills, have greater variety and offer better quality of working life (QWL).

The main human resource issues in a virtual organisation are as follows:1. Recruitment is conducted under time pressure and requires high performance expectations. 2. Both human capital (knowing ones job) and social capital (knowing each other) become extricably linked. 3. Social relationships do not require much stability. 4. Workplace is variable because there is high need for readiness to be mobilised at any moment. 5. Job status and project feedback is short term.

Employees selection and performance management are the two critical human resource problems in virtual organisation. People who are to work in a virtual organisation require the following traits. 1. Self guided and self motivated. 2. Familiarity and comfort ability with the job. 3. Effective communication skills- both oral and written. 4. Adaptability 5. Technical self sufficiency 6. Result orientation. Performance management is the most difficult problem in virtual organisations. It requires daily attention on three principles due to physical separation of workers and managers. 1. Define performance goal of each member or team clearly.

2. Facilitate performance by eliminating all obstacles and providing necessary resources. 3. Encourage performance by providing rewards.