Advantages and disadvantages of virtual organization

From the past up to now, the organization has changed a lot in order to make the jobs and employees to become more effective and efficient. Among these changes, we have noticed many organizations nowadays try to restructure their organization’s structure to move toward “virtuality”. According to the Modern Management book, virtual organizations refer to as network organizations or modular corporation (Samuel & S. Trevis, 2012). There are both pros and cons for having a virtual organization.

To begin with the positive points, organizations can reduce the cost by having a virtual organization. In this way, they can reduce some cost for working spaces and as well as utility expenses such as rent, maintenance, insurances, water, electricity, and raw materials. Secondly, some employees may find themselves to work faster at home rather than in the company’s office. Working at the office can sometimes be very disturbed as there can be a lot of people in one office. Thus, virtual organization can increase productivity for those who like to work at home or in a silent place. Finally, virtual organization allows firms to redesign jobs to make employees more effective and efficient. For example, some jobs do not require employees to come to office every day as the jobs require employees to work directly with customers, so it is not important for them to be present at the office every day. As a consequence, they can get access to the customer more quickly and save time.

Moving onto the negative points, first, it is difficult to build a desired corporate culture in a virtual organization. In this respect, 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 as they are coming from different cultures or geographies. There is a high possibility that conflicts could exist in a virtual organization as well. For example, Cambodians find it is not appropriate or impolite to speak something bad directly with the managers, whereas, westerners like to complain about something directly.  Difficulty for managers to control workers is another disadvantage of virtual organization. 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. Lastly, it makes communication more difficult for virtual offices because there are less physical interactions and we need to arrange the actual time and date for an online meeting.  Similarly, workers who are working in different time zones will even find it more difficult in order to communicate with other employers or employees. Due to all the above reasons, managers need to consider attentively before making the decision to implement virtual organization structure.

In conclusion, virtual organizations are getting attention from many contemporary managers as they find it is beneficial since it can cut some expenses for the organizations, increase workers’ productivity, and allow firms to redesign jobs to make employees more effective and efficient. However, employers also need to be aware for the drawbacks of virtual organization. As discussed above, virtual organization creates a complex corporate culture, difficulty for managers to control workers, and makes communication more difficult. Most mangers find that the advantages of virtual organization seems outweigh the disadvantages, and that is why many organizations around the world commence to adopt virtual organization structure.

Reference

-          C. Certo, S., & Certo, S. T. (2012). Modern management. (12th ed., p. 354). London: PEARSON.