Virtual organizations (VOs) emerged in the late 1990s alongside the rise of the internet, characterized by flexible networks that transcend geographical limits and traditional organizational structures. They rely on electronic communication to operate and can vary in type, including telecommuters, completely virtual setups, and outsourcing firms. While VOs offer benefits like access to new markets and reduced costs, they also face challenges such as communication difficulties, isolation among employees, and security risks.

1. NEW ORGANIZATIONAL FORMS
VIRTUAL
ORGANIZATION

2. New Organizational Form
PART 01
Virtual Organization
PART 02
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PART 03
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PART 04
Content

3. 1. NEW ORGANIZATIONAL FORM

4. When did it start?
During the last three decades, information technologies (IT) and telecommunications have
been improved and spread worldwide. From small firms to multinational corporations, it
became present in almost all management areas such as marketing, sales, human
resources and controlling.
New technologies emerged during the nineties such as multimedia and virtual reality, and
companies started to use them in activities such as product development, advertising and
communication. In the same period, Internet connections became available to general
public. Virtual organizations (VO) emerged at the end of 1990s with the dotcom companies
and the consolidation of internet usage among traditional companies.
This is the context where virtual organizations emerge and began to take place. Several
kinds of organizations labeled as been "virtual" or "digital" started to call attention in the
media and academic circles during the so-called "dotcom bubble" period. Researches in
fields such as management, economics and computer science argue that virtual
organizations have different characteristics than "traditional" ones. That comes from their
virtuality in terms of competing globally without geographical restrictions.
>

5. VIRTUAL ORGANIZATION
A virtual organisation is referred to as a flexible network of entities that are
linked by computing technologies to share knowledge and skills. This
electronic network goes beyond organisational and geographical
boundaries. It is often considered a boundary-less organisation in which
vertical and horizontal barriers are removed.
A virtual organisation is defined as an
organisation that is dependent on electronic
linking to complete the process of production. It
can be of permanent or temporary nature and can
include groups, individuals dispersed at various
locations, the entire organisation or even an
organisational unit. In simple terms, a virtual
organisation is referred to a company with an
electronic presence and one who does not have a
physical existence.

6. Virtual organization was defined by other researchers with different meanings,
to wit;
>
• Goldman, Nagel e Preiss argued that a virtual organization is an opportunistic
alliance of core competences to fulfill a specific demand
• Davidow and Malone agree that VO conduct common activities trough series of
relationships.
• Mowshowitz sees Virtual Organization as means to manage organizations by
key-activities such as the identification of demands that can be virtually fulfilled,
search entities that can supply those demands and dynamic associate entities
to the demands according to certain criteria.
• Authors like Hale and Whitlaw understand Virtual Organization as companies
are in constant need of changing. The ability to change processes to achieve
goals would be the essence of those organizations. Virtual Organization can
still be described as those that massively adopt technologies such as networks
that reduces their geographic, time and information restrictions.

7. CHARACTERISTICS OF VIRTUAL ORGANIZATION
>
• Dynamic in nature
• Flat organisation
• Power flexibility
• Informal communication
• Goal orientation
• Vague organisational
boundaries
• Virtual teams
• Knowledgeable workers
• Sharing of information
• Customer orientation

8. BENEFITS VIRTUAL ORGANIZATION
>
Some benefits of VOs include in the following:
• Save time, such as time to market and
• Reducing development process.
• Spreading costs and risks with partners.
• Improving quality factors such as performance and flexibility, exchange
and share knowledge, and marketing in high scale (global networks).
• Matching VOs with dynamic changes in marketing.
• Access to new technology and new customers.
• Access to new markets through partnership.
• Improving access to financial resources

9. TYPES OF VIRTUAL ORGANIZATION
>
1. Telecommuters
This type of virtual organisation hires employees that work
from home and interact with their workplace via personal computers.
2. Completely virtual
This type of virtual organisations are linked to a network of
retailers, distributors, suppliers and customers.
3. Outsourcing employees
This type of companies outsource almost all or a significant
part of core competencies. The virtual organisation own one or two
core competencies at which it is excellent and hires the rest. The
areas for outsourcing generally include information system,
manufacturing, fiancé, engineering etc

10. Components of a Virtual Organization
>
• A flat organization structure with less middle management
• Virtual teams
• Loose organizational structure
• Boundaries and expectations
• Power flexibility
• Informal communication

11. TYPES OF VIRTUAL ORGANIZATION
>
1. Telecommuters
This type of virtual organisation hires employees that work
from home and interact with their workplace via personal computers.
2. Completely virtual
This type of virtual organisations are linked to a network of
retailers, distributors, suppliers and customers.
3. Outsourcing employees
This type of companies outsource almost all or a significant
part of core competencies. The virtual organisation own one or two
core competencies at which it is excellent and hires the rest. The
areas for outsourcing generally include information system,
manufacturing, fiancé, engineering etc

12. TYPES OF VIRTUAL ORGANIZATION
>
1. Telecommuters
This type of virtual organisation hires employees that work
from home and interact with their workplace via personal computers.
2. Completely virtual
This type of virtual organisations are linked to a network of
retailers, distributors, suppliers and customers.
3. Outsourcing employees
This type of companies outsource almost all or a significant
part of core competencies. The virtual organisation own one or two
core competencies at which it is excellent and hires the rest. The
areas for outsourcing generally include information system,
manufacturing, fiancé, engineering etc

13. TYPES OF VIRTUAL ORGANIZATION
>
1. Telecommuters
This type of virtual organisation hires employees that work
from home and interact with their workplace via personal computers.
2. Completely virtual
This type of virtual organisations are linked to a network of
retailers, distributors, suppliers and customers.
3. Outsourcing employees
This type of companies outsource almost all or a significant
part of core competencies. The virtual organisation own one or two
core competencies at which it is excellent and hires the rest. The
areas for outsourcing generally include information system,
manufacturing, fiancé, engineering etc

14. CHALLENGES OF VIRTUAL ORGANIZATION
>
• Lack of camaraderie
Employees work isolated from each other, and they rarely meet face-to-face.
There are few opportunities for casual conversations to help build relationships.
• Difficulty developing company culture
Virtual organizations may struggle to develop and implement a company
culture. There may be a lack of cohesiveness among the team, as flexible
schedules can lead to employees feeling disconnected from each other.
• Increased importance of communication
Working in a virtual organization enhances the importance of good
communication. Employees cannot share information in passing like they would in
a normal office setting. It may be difficult for employees to meet from varied schedules.
• Potential compliance and security issues
Virtual organizations may present some compliance or security issues. These
organizations require employees to transport a lot of data across multiple networks,
some of which may involve connections that are not secure. While this may be a risk
for an organization, this may be a higher risk for companies dealing with sensitive
information in industries like healthcare and finance.

15. VIRTUAL
ORGANIZATION
ALLIANCE
ORGANIZATION
DISPLACED
ORGNIZATION
TRULY VIRTUAL
INVISIBLE
ORGANIZATION
TYPES OF VIRTUAL ORGANIZATION
(Bradt’s Classification)

16. TYPES OF VIRTUAL ORGANIZATION
(Bradt’s Classification)
>
• ALLIANCE ORGANIZATION
(Based on Core
Competencies)
• Partnering organization
replaces vertical integration
with virtual organization
• Horizontal networks between
business partners, rather than
vertical integration within an
organization.
• Each partner linked with the
Virtual Organization performs
differnt but related activities
• The core competencies of the
partners are combined to
produce synergy effect for the
VO.
• Example: Compaq, Lenovo

17. TYPES OF VIRTUAL ORGANIZATION
(Bradt’s Classification)
>
• ALLIANCE ORGANIZATION
(Based on Geographical
dispersion):
• The individual members are
geographically dispersed but
conmnected by information
technology
• The physical separation of members
is usually not known to the outsiders,
who perceive them as a single unit
• Make use of tele-conferencing,
video-conferencing
• “Hoteling” Being assigned to a
desk via a reservations system) and
“Hotdesking” (several people using
the same desk at different times)
• Example: IBM

18. TYPES OF VIRTUAL ORGANIZATION
(Bradt’s Classification)
>
• INVISIBLE ORGANIZATION
(Telephonically):
• Will not have a physical structure as
such, except that a small place will
be used as an office for more few
employees
• The products of such an
organization are mostly virtual and
directly downloadable from computer
• Operates through a network of call-
centers and back offices.
• Example: Fantasoft (Online Game
Developer)

19. TYPES OF VIRTUAL ORGANIZATION
(Bradt’s Classification)
>
• TRULY VIRTUAL ORGANIZATION
(Mixed/Blended):
• is a mixture of the characteristics of
alliance, displaced and invisble
organization
• The internet is the major platform for
offering its products or services to
the customers
• Example: Amazon

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22. • Challenges of a virtual organization