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Virtual Organizations

University of Oxford_061422B
[University of Oxford]


- What is a Virtual Organization?

Virtual organizations are temporary or permanent collections of geographically dispersed individuals, groups, organizational units, or entire organizations that rely on electronic links to complete the production process. The virtual organization does not represent the attributes of the enterprise, but can be regarded as a different organizational form to achieve the goal of cyber diplomacy.

There are many definitions of virtual organizations, including:

  • A flexible networks of independent, globally distributed entities (companies, institutions and/or individuals closely linked to advanced telecommunications and computing technologies) that share skills, knowledge, resources and work toward a common goal.
  • A form of cooperation involving companies, institutions and/or individuals delivering a product or service on the basis of a common business understanding. The units participate in the collaboration and present themselves as a unified organization.
  • Virtual organizations do not need to have all of the people, or sometimes any of the people, in one place to deliver their service. The organization exists but you cannot see it. It is a network, not an office.
  • A temporary network of inde-pendent linking by Integrated Technology to share skills, costs, and access to one another’s markets.
  • A virtual organization is any organization with non-co-located organization entities and resources, necessitating the use of virtual space of inte-raction between the people in these entities to achieve organization objectives.


- New Forms of Organizing

Virtual can be defined as "not physically present but made by software", in other words "not real but looks real". This definition accurately encapsulates the main tenets of this non-traditional organization, which externally takes the form of a real (traditional) company but does not actually exist, and implies a fully digital process that relies on independent network employees. As such, virtual organizations are technology-centric and put physical presence in the background. Virtual organizations have limited physical resources because value is added through (mobile) knowledge rather than (immobile) equipment. 

The distributed and pervasive nature of the Internet, and the ease with which institutions can now communicate across great distances, have made new forms of organizing possible for institutions. These various forms of organizing have attractive benefits for institutions, including cost savings and increased flexibility.

As institutions have taken advantage of these new technologies to distribute their work and workers, and to re-shape information flows in the pursuit of mission, strategy, and business objectives, they have moved towards being virtual organizations.

A virtual organization can bring together, often temporarily, independent entities in partnering or outsourcing arrangements, enabling them to share expertise, resources, and cost savings until objectives are met and the network is dissolved.

Virtual organizations are virtual not only in the sense that they exist largely in cyberspace, but also in that they are unconstrained by the traditional barriers of time and place.

The ultimate goal of the virtual organization is to provide innovative, high-quality products or services instantaneously in response to customer demands.



[More to come ...]

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