Characteristics of virtual organizations (K.C.)
Title: Characteristics of virtual organizations
Authors: Jagers, H.P.M. & Jansen, W.
Publication: PrimaVera Working Paper 98-02. University of Amsterdam
Year of Publication: 1998
This abstract is the same as the abstract for the article "Sustained Competitive Advantage"
Nowadays we are seeing a fast change in the current organization environments. This phenomenon is partly due to the opportunities that information technology (both computer technology and communication technology) has brought. Organizations that wish to be successful and want to ensure their existence nowadays should not just be experts in their own business domain. These organizations should be able to respond quickly and adequately to changes. As Charles Darwin already said "It's not the strongest species that survive, nor the most intelligent, but the most responsive to change." Below I will review two articles that discuss how certain organizations work to achieve their business goals, and give a critical reflection.
Review and critical reflection
In this article the conceptual model of network organizations is mapped. They’ve tried to make a small distinction between virtual organizations and network organizations in general. In addition, the characteristic properties of virtual organizations are explained. From this article, it has become clear that the basis of a virtual organization is based on confidentiality and that technology alone is not enough. Virtual organization is not about using the technological possibilities but about the cooperation of different partners and employees which are working together to achieve the intended purpose. And the only way to achieve this together is to ensure the confidentiality between the different parties. Furthermore, one can conclude that by making use of Virtual organization the current organizations in the field of information provision could save costs. Information can be shared between the cooperating organizations namely by means of information technology. Virtual organization can reduce the operational costs of an organization such as housing, transport and increase the productivity of employees by letting them all use the same data from any place they want to use it without moving around. Because the work of this type of organization is not location dependent one can put their staff based on the competences which they have instead of finding their local skills. By using this approach a shortage of skilled staff in a particular domain can be reduced. Previously organizations could only be present in a number of places, this is no longer the case with virtual organization. Organizations can stay at one place and are reachable at that place from everywhere and are also accessible on each time. Another important point of virtual organization also called ‘’boundary less organization’’ is that people can remain in contact with each other regardless of the organizational boundaries, place or time. Virtual Organization has created many opportunities for current organizations which saves costs and time. However, this organization form also brings some disadvantages. With regard to the fact that with virtual organization there is cooperation between people which are in different geographical areas they must take into account, for example, different working hours. This requires high flexibility. It may be that the parties involved in a real time communication are in different time zones and so perhaps have to work at irregular working hours. It is necessary that people get training about the technologies used in virtual organization. Since there is no worldwide standardization for the resources that everyone uses it could be that additional hardware, software or networks will be deployed to get the virtual organization operational. For such a comprehensive cooperation one can assume that the confidentiality can not be guaranteed without the safety of all resources. Cooperating people should make sure that their data is not open and exposed for everyone. Because of this, it is certainly necessary to take additional security measures regarding the virtual organization.