In Search of the Virtual Organisation - Coursework Example

In search of the virtual organisation: a new organisational paradigm or just a different type of networked enterprise? Word Count: 1015 Faculty name Course Name Date Table of Contents I. Introduction II. Virtual organisation III. Features of Virtual Organisation IV. Modes of Communication in Virtual Organisation V. Decision Making in Virtual Organisation VI. Conclusion VII. Reference VIII. Bibliography I. Introduction The growth in the area of information technology has impacted business and the way businesses have been conducted in the past. This paper is an effort to understand the virtual organisations and different aspects of the same. II. Virtual organisation A virtual organisation is defined by different academicians and researcher in different ways. “The virtual corporation has been described as "a temporary network of independent companies, suppliers, customers, even erstwhile rivals -- linked by information technology to share skills, cost and access to one anothers markets" (Byrne, 1993 as cited by Fitzpatrick and Burke, 2000). III. Features of Virtual Organisation A successful virtual organisation has following features (Dickinson, 2004) Membership Information Technology Benefits Trust Collaborative Processes Commitment Mutual Support External Environment Selection of Choices Collaborative Goals Intermediary Geographic Proximity Membership A virtual organisation can have membership of different types like companies, business units of large companies, agent based companies, domestic, national or international companies. Information Technology On the information technology front the virtual companies has centralised portal from where information, projects and tasks are shared and specialised tools are provided. The group communications enables faster communication between various virtual teams and inform or alert members regarding different technological updates, new developments, threats or opportunities. Benefits Virtual companies get several benefits from their memberships and associations. These companies have strategic partnership, support for branding and promotional activities, as a member they are allowed to handle more complex projects and works, have access to the knowledge base of associated companies and empowerment and finally the cost involve is lesser as compared to the non member companies. On the other hand on the Hub-Host organisations the benefits to virtual companies are reduced cost, easy new ventures, support for brand development and management, centralised MIS system and performance based membership (KPIs). Trust Trust is important among the members of virtual team in order to ensure proper functioning of the organisation and share relevant information. Virtual members need to trust each other and the hub. Collaborative Processes The focus of the organisation should be maximising shareholders benefits and consumer’s value of the services profitably. This requires management of various aspects like value chain and project, joint projects, functional management like KPI, Accounting and finance, human resources, supply chain management and others. Commitment Commitment of the virtual team members requires achieving the organisational objectives and goals. These commitments can be of dedication, time, efforts and energy and to find out good reasons to work as a virtual team members. Mutual Support This helps in developing market, enhancing the value of networking events and success of formal supports like training and development etc. External Environment External environment has due impact on any kind of business whether it is virtual or traditional. In the case of virtual companies apart from the traditional elements of external environment, the intellectual property rights and copyrights are specifically important. The competition, consolidation, increasing complexity, market segmentation and focus on cost reduction are important factors. Selection of Choices Quality, profitability, accreditations and efforts of members are important aspects for making choices. Collaborative Goals Shared goals, values and expectations help organisations in working efficiently. The key performance indicators of groups and members are the tools of directing efforts and resources. Intermediary These can be the third party, corporate headquarter and smaller companies that makes the hub of the virtual organisation. The funding support comes for brand development and management and developing and supporting the core tools. Geographic Proximity The physical proximity is required even in the case of virtual companies. The regular meetings are required. IV. Modes of Communication in Virtual Organisation The hub becomes the centre for information distribution and communication in the virtual organisation. The latest and compatible technologies care used for the communication purposes like e-mail, tele- and video conferencing, shared data base, shared knowledge, transaction processing systems and others. V. Decision Making in Virtual Organisation There are various types of decisions taken in a virtual organisation as similar to the traditional organisation. These are strategic, tactical and operational decisions. Figure 1: Decision Making in Virtual Organisations IBM IBM (International Business Machines) Corporations has operations in more than 355,766 employees working across the world. It has its operations in different parts of the world. IBM utilises the virtual network for the acquiring new components from the retailers and dealing with suppliers, working on projects and with virtual teams of IBM from different parts of the work. Wal-Mart Wal-Mart stores have shifted to the virtual platform for numbers of its operations. Wal-Mart stores are the household name in US and many other countries today. Wal-Mart is largest retailing organization in the world and is listed on fortune 500 companies. It ranks two in the list with $315,654.0 million revenue. It ranks first in general merchandise group. The number of stores and the operations of Wal-Mart are spread across various nations. This indicates the complexity of operations and the importance of supply chain management into it. Supply chain management is very important for Wal-Mart stores to ensure availability of goods on its stores. It is also important to control cost and operations through this particular function. Wal-Mart has adopted various technologies like barcode technology and integrated various information technology systems and computers with it. It has supported the employees for their jobs in ensuring that right product is in right place and the level of inventory. All the data is stored and updated in main server besides the individual computers which can be shared by the packaging department and as well as other concerning departments. VI. Conclusion Virtual Organisations has various strengths over the traditional organisation. These organisations are an extension to the existing types of enterprise. These provide support to the traditional organisation. Virtual organisations functions well when it is associated with some companies. They receive various benefits from these associations like collaborative efforts in order to attract and retain customers, utilise resources and information. The key performance indicators are decided for various virtual teams. Even for the virtual organisations, it is important to have informal and formal meetings. Reference Ariss S, Nykodym and Cole-Laramore A. A. (2002) Trust and Technology in the Virtual Organisation, Journal SAM Advanced Management Journal, Vol. 67 (4), Society for the Advancement of Management Corporate Profile retrieved on 13 February 2009 from http://investor.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome Davidow, W., & Malone, M. (1992) The virtual corporation, New York: Harper Dickinson P (2004) Virtual Organisation Generic Image retrieved on 13 February 2009 from http://www.strategyforbusiness.co.uk/Virtual_Organisation_-_Generic.pdf Fitzpatrick, William M. and Donald R. Burke (2000) Form, Functions and Financial Performance Realities for the Virtual Organization, SAM Advanced Management Journal. Vol. 65 (3), Society for the Advancement of Management Hau L. Lee, and Corey Billington. The Evolution of Supply-Chain-Management Models and Practice at Hewlett-Packard, Interfaces 25 (pp.42-63): 5 September-October, 1995 Kotler, Philip: 2000 Marketing Management, New Jersey: Prentice-Hall Inc., 10th Edition Wal-Mart Supply Chain management retrieved on 26 October 2008 from http://icmr.icfai.org/pdf/Operations Case Study - Wal-Marts Supply Chain Management Pr.pdf Zeithaml Valarie A. and Mary Jo Bitner, 2002 ‘Services Marketing-Integrating Customer Focus Aross the Firm’. 2nd Ed., New York: Tata McGraw-Hill Bibliography Gardner, C, Mcnair, J and Tietjen P (2004) Communication in a Virtual Organisation, Journal Business Communication Quarterly, Vol 67 (2) Association for Business Communication Handy, C. (1995, May). Trust and the virtual organization. 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