Virtual organizations
These are organizations which do not necessarily have
any physical presence or permanence. E-commerce companies such as amazon.com
are good examples: they have a 'reality' only on the worldwide web. They
can be formed and re-formed to meet the needs of new projects. From a HR
perspective, virtual teams may be composed of specialists working from
home, 'telecottages' or small companies. They work together for the purposes
of the project. Selecting, managing and assessing the performance
of virtual team members is a whole new ball game.
According to : "Teams dissolve on completion, to reappear in new combinations for other tasks. Departments, divisions and offices disappear leaving
an amorphous mass of people connected electronically and meeting - perhaps through
video-conferencing - only if and when required. Traditional hierarchical structures have
no role in this kind of organizational structure.
"Truly virtual organizations create new problems for human resource management. A networked
company does not require a personnel function but its core management must be adept in managing
people at a distance, some of whom may not be 'employees' as such. They are true 'human resource
managers' (Thomson and Mabey, 1994: 5). How does performance management or HR development take
place in such circumstances? How are they 'managed' on a day-to-day basis? Who resolves conflict
and disagreement? These questions are especially relevant in the case of teleworkers (...)
"Bradt (1998) cites the case of a manager working for the Bank of Montreal in Toronto,
Canada. She and her husband decided to return to Dorset, England on his retirement. She was
reluctant to leave her job and the bank did not want to lose a good manager. The Bank arranged
for her to manage her group in Toronto by means of teleconferencing, e-mail and voicemail. The
experiment was apparently successful, despite a 5-hour time difference. According to Bradt
(after a visit to her home): 'The image of a little office in the very archetype of English
thatched cottage tied to a group of people in a glass building in Toronto is a striking one.'
"Avery points out, however, that in practice most virtual organizations are only partly
virtual. Most companies of this kind have 'real world' elements which still use offices and
have face-to-face meetings. After all, human contact is invaluable for engendering good
relationships and sparking off creative ideas.
"In fact, there may be a continuum of virtuality. Bradt (1998) divides virtual organizations
into four types:
"1. The alliance organization, in which functions previously carried out within the boundaries
of one organisation are conducted by linked partners which concentrate on their 'core
competencies' (best strengths).
"2. Displaced organizations where individual members are distributed geographically and
connected by information technology, but appear to outsiders to be a single unified
organisation. One of the most common forms has customer-facing units or corporate headquarters
in one country and back office or support activities in another. For example, software
companies have made use of the considerable (and comparatively cheap) talents of Indian
programmers and data input staff. Clerical support for investment and insurance companies
can be placed in less expensive locations than the cities of London, New York or Tokyo.
Businesses can choose to centralise global or regional back offices or call centres or
decentralise them to staff working at home or in rural locations.
"Internationally, a virtual shift system may operate when teams around the globe deal with
the same project at different times, each group leaving progress reports for the next as
they conclude their working day. Virtual shifts operate in circumstances such as global
investment or vehicle design.
"3. The invisible organization has no physical structure as such. Bradt cites DirectLine
Insurance as a typical example. There are no visible high street branches, simply a network
of call-centres and back offices. Business is conducted by telephone.
"4. The truly virtual, such as the online Amazon.com bookstore. This is a combination of
the first three types. Customers come to the company via Internet Service Providers (ISP)s,
often from links on the web pages of 'affiliates' who promote particular books and are paid
by commission. Orders are processed centrally but relatively few books are held in stock -
mostly they are despatched from publishers' warehouses. Delivery is handled by independent
agents such as UPS or ParcelForce."
References:
Bradt, R. (1998) Virtual Organisations: A Simple Taxonomy, Infothink..
Price, A.J. (2000) ,
Blackwell, Oxford.
Thomson, R. and Mabey, C. (1994) Developing Human Resources, Butterworth-Heinemann.
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