Challenges and Success Achievement Factor For Virtual Organization Concept

1. Introduction

When we look at the literature on virtual organizations, we see that the attention is primarily focused on the virtual organization as a network organization, pointing out the changing nature of organizational boundaries. Network technologies facilitate processes of in- and exclusion of people and resources. Hence, typologies of virtual organization forms are often focused on the description of specific patterns of network relations. The question can be posed if the network metaphor is distinctive enough to describe a virtual organization, because virtual organizations resemble too much the idea of a network organization. One reason reflects the idea that electronic networks and network organizations are in essence the same; or that a virtual organization mirrors the electronic network which is seen as the basis for the development of a virtual organization. Other typologies are based on the combination of success achieve factor. In all these typologies a deterministic relationship is suggested between the structure, environment, performance,. …est. virtual organization and some hindrance and how to solve it. However, one can doubt if this is a promising perspective. Virtual Corporation Similar to Virtual Business, a Virtual Corporation can operate without a physical identity (on-line business, e.g.

2. Concept of virtual organization

Looking at the literature about virtual organizations, one stumbles about a variety of definitions; a variety which does not stimulate systematic research into this new organizational phenomenon. In literature, virtual organizations are described by pointing out the following characteristics:

– The virtual organization as a network organization. In this approach the emphasis lies on the location-independent and temporary collaboration between separate organizations which is based on the notion of interdependency. Information and communication technology (ICT) supports the collaboration between these organizations by facilitating the exchange, distribution and sharing of information, knowledge, know how and other scarce and vital resources.

– The virtual organization as fact and fiction. Virtuality points at the notion of “something appears to exist when in actuality it does not”. The virtual organization points at a situation where people or facilities that are not a part of an organization are linked to it as though they were. In this approach the emphasis lies on the contrast the between the people and resources which, in some situations, are apparently a part of the organization, while in other situations they are not.

– The virtual organization as an organization in cyberspace. Cyberspace specifically denotes the real and imaged space in which individuals meet in electronically mediated and simulated space. The emphasis lies on the establishment of an ‘information space’, which is created through the connection of computers and computer networks. The creation of this space facilitates the sharing of information and knowledge, as well as electronic communication. This connection results in the creation of a space of flows, which is compressed in time -Describes virtual organizations as spaces of flows, which are the material organization of time-sharing social practices that work through flows (of information, capital, images, sounds, symbols and interactions) between organizations and people.

– The virtual organization as the organization of memory. Central is notion of the dynamic allocation of information processing capacity within a network of connected computers and computer networks. Time-sharing, made possible by the connection of computers and networks, enables the parallel disclosure and use of information and knowledge within a network. The interconnection of information processing capacities enables organizations to develop a common memory, across organizational boundaries. trend(challenges) of Virtual Organizations-companies

Undoubtedly, the primary benefit of a virtual organization is that it can unite highly qualified people without location restrictions. Other reasons that an organization would want to consider being virtual rather than traditional are the ability to Leverage skills throughout the organization, Provide customers with the “best and brightest”, Balance work/home relationship, Save organization overhead costs

Virtual teams and virtual organizations obviously face many of the same opportunities and challenges. However, a virtual organization is at greater risk of failure, with more at risk as well. The high degree of interdependence required by virtual team result in a higher degree of performance. A virtual organization, however, will be somewhat more diluted in being specifically interdependent, since there will be multiple teams working on multiple projects, and requires even more work at making all teams feel more connected.

It requires a new management approach and an incredible awareness of the issues and challenges that could cause its demise. In a recent focus group represented by twenty members of a single virtual organization, but located at numerous site locations, the following challenges were recorded, Communication, Leadership/management, Knowledge transfer, Processes, Infrastructure. As you might guess, good communications must evolve into excellent communications and become a core competency. For this particular organization, there is actually a Communication Manager who has developed numerous communication vehicles, including: an intranet with the capability of sharing files, face-to-face group, team, and leader-ship meetings. In addition to all of the extra programs and vehicles provided by the organization, virtual employees must “go the extra mile” to keep others informed. It is a culture shift for many and critical to their personal and professional growth in a virtual organization. The organization and employees need to become active and constant communicators. This leads to this focus group’s second challenge – Infrastructure. Issues within infrastructure included: Lack of proper backup and tools , wasted administrative time (no on-site IT support) ,Knowledge sharing (loss of “water cooler” effect), and Need for corporate connectivity.

As you can see there is overlap in the two areas, specifically wasted administrative time and corporate connectivity. Bottom line is that a virtual organization needs to invest in technology and training. It must provide its employees with the proper tools and support to foster success. At this particular company a Virtual Help Desk was available to all of the members of this focus group. Thus, turning my attention to what I believe is the most critical success element of a virtual organization – active and constant communication. It will be interesting to see the evolution of the virtual organization can be a wonderful alternative to the traditional organization with multiple benefits to its employees provided management recognizes the challenges

4.Virtual Organization Success Achieve Factor

4.1 Structure, environment, and performance

Structure affects the performance of organizations, and relevant are structural dimensions to the performance of virtual organizations. It has long been argued that the more dynamic the external environment of the organization, hence unpredictability of customer demands, resources availability and similar factors, successful organizations would gravitate toward less mechanistic and more flexible or organic structures. Successful companies seem to adopt structures that favor less formalization, more decentralization, and coordination of differentiated units, thus striving for increased organist. But, are such structural characteristics a crucial determinant of organizational performance. The turbulence of external environments has been shown to influence organizational structure by way of the strategy chosen by companies to manage the dynamics of their market. Subject to the mitigating influence of strategic choices, the extant literature has suggested that successful, high-performance organizations (small and large) in dynamic or turbulent environments tend to have certain structural characteristics. These characteristics are measured by design dimensions such as centralization, formalization, and complexity. The relationship between structure and strategy has also been shown to be meaningful in organizations facing dynamic environments. This relationship is also defined as the “fit” between the structural arrangement and the strategy adopted by the organization. Simply stated, organizations that employ an organic and flexible structure are more likely to support changes in strategic choices in dynamic environments. Hence, adoption of strategic transformations, such as turnaround and reinvention, resulting in rapid adaptation to environmental changes. For the virtual organization, these findings are an important guideline. Facing turbulent and highly dynamic environments, they must structure themselves in a design that will “fit” the demands such an environment may impose on their strategic behavior. Therefore, a design that provides flexibility and organist will be correlated with strategic capabilities and with success and performance. There is a new venture organizations which concluded that new ventures in emerging industries (such as virtual organizations) have a high correlation between their level of performance and their level of organist.

4.2 Virtual teams

The team is generally defined as “a small number of people with complementary skills who are committed to a common purpose, performance goals, and the approach for which they hold themselves mutually accountable”. The creation of groups, that is, teams, “is a normal part of human social behavior”. Their importance for the organization lies in the fact that teams can make the organization “more flexible, quality-conscious and competitive. Accordingly, “the organizations that recognize the impact of teams on productivity can use that knowledge to their advantage”. The virtual team (VT) is one of the forms, characteristic for virtual organizations. It can be often heard that virtual teams represent the basic cell of the virtual organization. There are various definitions of the virtual team. What most of these definitions have in common is the fact that they emphasize that the members of the team are, besides being the representatives of the team, separated (in space and/or time) and that they interact primarily by e-mail. So, the virtual team is defined as “team(s) of people who primarily interact electronically and who may meet face-to-face occasionally” or “a self-managed knowledge team with distributed expertise, that forms and disbands to address a specific organizational goal” and “a group of people who interact through interdependent tasks guided by common purpose”, that “works across space, time, and organizational boundaries with links strengthened by webs of communication technologies”.

It is precisely in this definition that there is four essential dimensions of the basic model of VT “to hold something as distributed as a network and something as immediate as a virtual team-people linking with purpose over time”. The purpose, important in any organization, becomes a key factor in virtual organizations and teams, since it is the “glue” that holds them together. In fact, it requires the establishment of co-operative objectives, individual tasks and specific results. People make up the heart of the virtual team. One of the most stressed aspects is their high degree of independence or autonomy, while the need for interdependence and collaboration is also recognized.

Connections between the team members are critical and must be able to be made both by face-to-face interactions and through ICT (Information and Communication technology). Calendars, include team-specific result deadlines, task-completion milestones, and scheduled events, as well as holidays and other organizationally significant dates that impact timing.

They are three components to defining virtual team , Different geography of locations of team members: virtual team members can be located in different parts of a city or in different parts of the world. As the distance increases and more time zones are crossed, the window of synchronicity in the workday narrows. And, Team members from different organizations are parts of the organization: Team members can be from different organizations or from different parts of the same organizations. Finally Different durations or lengths of time that members work together as a team: Depending on its mission, a virtual team may unite for a project that lasts a few days, months, or years. There exist different variants of the virtual teams.

Certain authors (see: Snow et. al, 1999, p.18) speak about, the so called, “distributed teams” and some variants of the so called “cross-organizational teams”. Distributed teams are (teams) composed of people in the same organization who work in different places, either interdependently, or separately. The basic variants of the distributed teams are “task forces and project teams (as temporary teams). Such teams are formed specifically to solve a particular problem or to perform a specific task. When the problem is solved, or the task completed, the virtual team disappears (and team members go back to their normal duties). The basic variants of the so called “cross-organizational teams” are “collocated cross organizational teams” are “distributed cross-organizational teams”. “Collocated cross-organizational teams comprise people from different organizations who work together in the same place. On the other hand, the so called “distributed cross-organizational teams” involve people from different organizations who work in different places.

4.3 Training consultants

Training consultants interact with end users to understand their training requirements and formulate them in a way that may be used to construct a personalized training programmed. And Training/eLearning providers also act as integrators, building bespoke training packages and co-ordination their delivery to the end user Content providers which are modular resources that may be used with training packages. The eLearning operator the operator provides additional services such as a specialized portal, payment services via banks, etc, as well as generic services supporting trust, security and contract management in the operation of the VO.

4.4 Attributes

Business difference lies in the networking capabilities and the Virtuality. There is vast use of information and telecommunications technologies that allow for portability, instant communication from anywhere, at any time, and the ability to offer access to unlimited databases of information about products and services. The distinctions of Business-to-Business (B2B) and Business-to-Customer (B2C) also allow for instant transfer of information, independently of place and time of day, and the ability to manipulate unlimited amounts of data in virtual storage. Clearly, there are far- reaching implications for organizing and managing the marketing function, and such issues as the “business model,” the role of branding, and cost-per-transaction.

Networks allow for instantaneous orders and information exchange in what is termed: The “24 7 worlds”. Networking also facilitates cooperation among vendors and with customers. Such trends require changes in processes of communication, control, and product flow within the virtual organization-thus influencing the composition of its value chain. Another attribute of virtual organizations is the networking beyond the boundaries of the enterprise, thus forming inter-organizational workflows, combined with problems associated with technological standards, connectivity, and cultural differences. This phenomenon of the “extended enterprise” creates a myriad of structural challenges (Eliezer Geisler, 2001)

5. virtual organization successful creation steps

(1) The virtual organization is created by the people with a common idea who are over a period of time connected by the information and communication technology. Even during the first contacts, which are the result of the common idea, there emerges the need for the creation of the team identity. The name of the team symbolically represents its identity.

(2) After the creation of the identity of the VO there follow the activities whose aim is to show the purpose of the existence of the team. The team mission has to be formulated in due time, that is, it has to be understandable and, what is especially important, it has to be accepted by each member of the VO. Having that in mind, the mission postulates have to be stated with accuracy and precision. For some, this means writing down the purpose in a formal mission statement; for some it is a list of outcomes; still other will embrace a diagram or picture that captures the essence of what the team is about. Every mission statement and its pro-posed result sit inside a broader vision, whether explicit or implicit. Written down, the vision serves as the preamble to missions and goals.

(3) For many teams, virtual or not, the period from the first quickening of vision to the stating of a clear purpose may take as long as the whole rest of the life of the team. Start-up can be frustratingly long or bewilderingly brief. Setting milestones signifies a quickening of the pace and advance preparation for implementation.

(4) Goals serve as headings for groups of tasks and results. Well- conceived goals mark the major ingredients of the team’s work and are the seeds around which sub teams take shape to actually do the work.

(5) The team is the result of the goal-oriented people. If the team states with precision certain details in accordance to its aim, it, at the same time, identifies those to whom they should be entrusted. The table with the names of the team members represents a very practical file model of the virtual organization members (that can also be used for creating the so called virtual organization directory). The starting list of the team members is rather dynamic. The people who entered the team having the original idea need not be the regular team members. The crucial people have to be recruited, and the team may identify the places that are not filled, and that call for the necessary education, experience, or representation. The lists of the names give some necessary information about the team (for example, the size of the team).

In order to contact the people in the virtual world, one must know their addresses. The contact addresses are of crucial importance for the team functioning and they usually provide the following: the office location, the post code, telephone numbers (office, home, car, cellular), fax number, e-mail. The people who are included in the VO have to be carefully selected. They have to posse’s necessary skills such as, the so called “virtual behavior”, which enables them to be the strong “team players” and which simultaneously establishes the necessary flexibility. The VO members have to posses the skills of information managing, running the on-line meetings and discussions and successfully dealing with technological changes. What is more important, the team members have to possess a whole set of modes of behavior which, among other things, includes everyday “logging”, formal and informal communication, the ability to deal with an overdose of information, etc.

(6) What is extremely important for the creation of a successful VO is the creation of the corresponding relations among the members. These relations include the following: who will contact whom and what the goal of their mutual contacts will be. That is the reason why the teams, especially those newly formed, are advised to anticipate the mutual relations of their members by forming, the so called, “relation maps” which are necessary for the VO goal accomplishment. The idea that each member of the VO should be involved in all the team tasks is a very serious danger to the team. That is why is must be clearly stated which tasks require which members of the team to be included and how.

(7) A very significant moment in the creation of the VO is the choice of the suitable medium (the way or means of communication and information). When choosing the suitable medium, different things have to be taken into consideration: the activity that the team members do, the media that are already being used, the team member’s preferences towards certain media, the readiness of the team members to accept the media that are not momentarily used, etc. There are three basic media types: face-to-face, virtual same-time (synchronous), virtual asynchronous.

6. The VO problems and how to solve them

The fact is that the processes of the creation and functioning of the virtual organization are not simple. They are accompanied with various problems, from those arising from the cultural differences among the team members, their sometimes quite unreal expectations of what they and other team members can and cannot do, to the problems concerning the coordination of all virtual organization members. Yet, the following may be the key problems:

(1) The problems of (un) trust among the team members, It is supposed that the essential problem of the virtual organization is not the physical, but, the so called, psychological distance, among the members. The all present danger in most virtual teams is that the members who are from different places, belonging to different cultures and possessing different level of technological knowledge feel some kind of fear concerning the way in which their information will be used, or whether other members of the team will give the same contributions to the realization of the mutual task, etc. the trust which prevents the physical distance from becoming the psychological barrier in the communication of the team members. It takes some time to develop the “on-line” trust, although a little time is usually spent on that.

(2) The problems of communication inside the virtual organization Different problems concerning communication represent the serious problem in the functioning of the virtual team. One of such problems is the inability to view the whole project. The members of the virtual team know what they as individuals do, but they are not always quite certain whether and how the results of their work “fit” in the total, overall picture of the team task. Consequently, there sometimes can a rise problems like the delay of the information needed for accomplishing certain tasks, and accordingly, the delay of completing the whole work. The specific communication inside the virtual organization may even create some situations in which a member of the virtual organization does not under-stand the received message completely. What is needed in order to solve or moderate, lessen, the above mentioned problems of the virtual organization is a very adequate managing.

(3) The development of trust. This question has to be of the central importance to the team managers. It is the fact that the old-fashioned ways of the management based on the permanent supervision and control are not suitable for the virtual situation.

(4) The encouragement of direct (face-to-face) contacts, if at all possible. It is often suggested to the virtual organization managers to organize at least one initial meeting for the virtual organization members, so that they can meet one another in person and develop some personal contacts. Such meetings, if they are possible at all, make interpersonal contacts and relations among the virtual organization members stronger.

(5) To introduce the team members into the way and time schedule of the task realization. The basic idea is to enable the team members to realize their own position in the whole team. This can be done by showing the complete plan through the electronic means.

(6) To find the model how to avoid “delays”. This model can include, for example, the obligatory reply to the sent question, or the necessity to give the needed information for the stated time period (24 hours, or 48 hour, etc.), or the obligation to send the return information to the per-son looking for the answer that the question has reached the proper ad-dress and that giving the answer will take some time.

(7) To take records of each team member. Although it can be difficult to take records every day, it is advisable to send the information concerning the absence of each team member to other members (absence from home, town) on time..

(8) A framework for trust, security and contract management A new economy based on virtual organizations requires an environment within which businesses can quickly come together to share resources and work together to achieve the project goals. The negotiation, monitoring and enforcement of contracts and agreements that takes into account reliability, accounting, security and other issues such as IPR, will be an important component of this environment. In addition, there is a requirement for services to replace the trust inherent in operations within an integrated real organization (trust in colleagues even when not known personally, trust in procedures and processes, etc), and the trust between customer and an established service provider with a clear legal identity and brand/reputation.

7. Conclusions

We expect that the virtual organization concept will be widely taken up. It offers substantial business opportunities to service providers, especially existing operators of telecommunications networks, data centers and application, facilities. The existence of virtual, environment implementations will create opportunities for companies and other organizations to form enterprise networks and other communities on a commercial or public service basis. The literature on traditional and entrepreneurial organizations has established the crucial role that structural dimensions play in the performance and the success of such organizations. The same conclusions can be implemented in virtual organizations. These organizations are better served when they adopt a structure that offers flexibility and organist-measured by design dimensions of formalization, departmentation, centralization, and complexity.

Thus, virtual organizations can learn from the experience. The relationship between environment, strategy, and structure is as relevant to virtual organizations it is to traditional organizations. As we accumulate empirical knowledge on this relationship, we may now address the unique attributes of virtual organization asserting that this knowledge is highly relevant to their structuring and to their success. Any organization, when faced with the challenges of a highly dynamic external environment, must employ its design dimension in such a manner as to provide it with adequate agility and organ city, so that drastic strategic choices may be implemented in a timely and successful fashion. Virtual organization is one of the forms of the teams typical for the virtual organizations.

The virtual organization represents a group of people who primarily interact electronically and who may meet face-to-face occasionally. It is the team which, thanks to its specific traits, exceeds areal, temporal and organizational borders, and with its numerous advantages enables the organization to attain superior results. The virtual organization creation represents a rather complex process that includes several phases: Create identity, Draft mission, Determine mile-stones, Set goals, Identify members, Establish relationships, and Choose media. The virtual organization functioning is accompanied with various problems which can be successfully solved only with an adequate action of the virtual organization management.