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.
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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.
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Virtual team is an emerging new-age trend with followers across business sectors. Just like any other new trend, virtual team also has to undergo strict scrutiny of researchers to weigh its advantages and disadvantages before being accepted by the professionals. The advantages and disadvantages of virtual teams can be looked upon from three levels - individual, organizational and societal as a whole. This article summarizes different perspectives on the advantages and disadvantages of the virtual team and serves as ready reference guide to our readers.
Advantages of Virtual Teams
- Cost savings - The biggest advantage of virtual team enjoyed by an organization is the associated cost savings. The organization can do away with huge expenses on real estate, office spaces, utilities bills such as gas, electricity, water etc. and executives’ travel. Many organizations outsource their operations to the low-cost regions. Thus production cost also decreases with the reduced raw material cost, operational costs and lower wages of the employees in these geographic locations.
- Leverage Global Talent - Virtual Teams allows organizations to look for talent beyond their country of origin. This brings together the experts and specialists from across the globe to work together on the project. Increased knowledge sharing and greater innovation happens as organization’s human capital share their understanding of global and local markets as well as best business practices.
- Increased Productivity & Higher Profits - Members of virtual teams tend to have higher focus on the task at hand. As a practice virtual team supports flatter organization structure. The members do not have to deal with unnecessary bureaucracy which slows down the decision making. This enhances the productivity which shows as higher profits.
- Reduced Time to Market - Since the members span the time zones, there could be different team working on the same project 24*7, so when one member sleeps there will be another one somewhere else who would start work where the former had left. This shortens the product development time as well as faster response time to demands in both global and local markets.
- Newer Opportunities - If we see at larger societal level, virtual teams have created newer opportunities for people who are less mobile and hesitant to relocate due to either family requirement or physical challenge. Now any task that does not require the physical presence of a person and which can be supported by communication technology throws an opportunity for many deserving candidates.
Disadvantages of Virtual Teams
- Cost of Technology - The successful working of virtual team is supported by the efficient use of multiple communication technologies such as instant messaging, emails and video-conferencing, among others. No one tool can provide the complete support. The cost associated with these installation and maintenance tools is little on the higher side.
- Conflicts, Lack of Trust & Collaboration - The cultural differences between the members of virtual teams gives rise to number of conflicts. For example, while an American would write a straightforward email describing a bad situation, this would be perceived as impolite by a South Asian (say Japanese) member of the team. This would lead to conflicts, mistrust and difficulties in fruitful collaboration which is so vital for the success of virtual team functioning. These challenges are also precipitated by the absence of non-verbal cues so intrinsic to face-to-face interactions.
- Social Isolation - Many members of virtual teams are adversely affected by the lack of physical interactions. Most of the communications in virtual environment is task-oriented. In today’s society where job is an important social force for most of us because many of our workplace colleagues also constitute our close friends, this gives a not-so-good feeling of social isolation. This in turn counter-effects productivity as well as leads to stress.
All these disadvantages can be overcome by following a different leadership/managerial approach, trainings, greater role clarity and effective communication strategies. Organization both big ones such as IBM, Microsoft, Whirlpool as well as SMEs are reaping the benefits of virtual teams for some time now. It has been a well-recognized fact that Virtual Team is not a passing tide but it is here to stay.
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