A virtual organization is defined as a temporary or permanent coalition of individuals and groups that pool resources to achieve common goals, without regard to geographical location. Key characteristics include flexible, horizontal hierarchies; emphasis on creativity and innovation; and coordination through trust and shared norms rather than formal processes. Challenges include measuring employee performance and building corporate culture without face-to-face interaction. Effectiveness relies on knowledge sharing, clearly defined processes, trust, and depth of relationships between members. Technology and electronic collaboration tools are essential for communication and coordination in virtual organizations.

2. DEFINITION OF VO
“dynamic collection of individuals and institutions
which are required to share resources to achieve
certain goals”.
“A temporary or permanent coalition of
geographically dispersed individuals, groups,
organizational units or entire organizations that
pool resources, capabilities and information to
achieve common objectives”.

3. VIRTUAL ORGANIZATION VS TRADITIONAL
ORGANIZATION
1. The existence of small partners, contributing
only with the essential competencies, but
having to display an enhanced flexibility and
speed of reaction.
2. The relationships established between partners
in VO are less formal and are maintained as
long as they explore a certain opportunity.
3. Replacing the traditional pyramidal hierarchy
in the traditional Organization with the flat
horizontal hierarchy.

4. 4. The difficulty in achieving a unitary
organogram, because the several organizational
structures for the virtual organizations
5. Team working, collaboration/cooperation is the
key for the organizations elements.
6. The emphasis is laid on the creativity and the
innovation capacity of all the involved partners.

5. ADVANTAGES AND DISADVANTAGES OF
VIRTUAL ORGANIZATION
- organizations can reduce the cost by having a
virtual organization
- virtual organization can increase productivity
for those who like to work at home or in a silent
place
- virtual organization allows firms to redesign
jobs to make employees more effective and
efficient

6. - it is hard for employees and employers to work
and understand about each other in a virtual
organization which could create a complex
corporate culture workplace
- Managers are hard to measure the performance
and commitment of their employees as they
work at their own places rather in the traditional
office which managers could see their workers
every day

7. VIRTUAL ORGANIZATIONS DESIGN
Formalization: Coordination of internal process
requires a high level of trust among its
members so norms and values are used as a
way to control.
Specialization: is high and not in one task, but in
multiple tasks (joint specializations) Employees
they have to deal with whole projects in all its
dimensions, employees should be trained in
entrepreneurship and self-management and
they should possess a wide range of skills.

8. Centralization : centralization is low, decisions
should be made in collaboration of
organization’s network members for this
purpose there could be made decision making
meeting in which issues should be discussed,
the decisions making authority have to be
transformed to employees on the lower level in
order to take advantage of being virtual and
respond to customers’ demands .

9. Professionalism: the employees have to become
their own mangers, they should coordinate their
own tasks and understand the other team's
tasks and each one needs to have a knowledge
in how all tasks can be performed. Management
of virtual should be less administrative and
more leadership oriented way .

10. VIRTUAL ORGANIZATIONS AND EFFECTIVENESS
The effectiveness can be enhanced through:-
- Knowledge sharing
- Well-defined Processes
- Shared Understanding
- Depth relationships
- Trust

11. TECHNOLOGY AND COMMUNICATION IN
VIRTUAL ORGANIZATION
According to Fong “it’s called an e-
collaboration” (Fong, 2004), where
companies consider e-collaboration as a way
to create value. Gronau depicts multiple ways
of collaboration between working employees
in distributed systems, these mechanisms
are considered as a single element of the
distributed systems:
1. Communication,
2. Coordination
3. Co-operation