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Strategies for Managing the Virtual Organizations


A virtual organization can be defined as an organization with a collection of a number of organizations. These several organizations are bound by an agreement to become members of the virtual organization. These set of organizations are generally legally distinct entities and when under the umbrella of the virtual organization, they act as though they are one. The purpose of the virtual organization is to share skills and knowledge so that it can achieve a common goal.

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Virtual Teams

Virtual organizations use virtual teams which are usually structured in a set. Lipnack and Stamps (2007, p.15), say that virtual organizations are “a collection of people who are motivated by a common goal or purpose and interact with each other by performing interdependent tasks”. This team often works across a diverse space and time scale. They are contained by the organization’s boundaries and connected by the aforementioned advanced and interactive information technology.

Main characteristics of virtual organizations

One of the key characteristics of virtual teams is partnership. The member companies or organizations of the virtual organizations have to co-ordinate their actions such that the customer or client will see them as one. This means that collaboration of the business partnerships of highest order is needed so that they can have unity and “present themselves as one” to the public and all the shareholders of the business (Lipnack and Stamps, 2007).

As business partners in a virtual organization, they are supposed to share risks, expenses and profits equally in the world market. Another major trait of such organizations is that they have a general aim that is driven by particular opportunities in the market. The often seek to attain a competence that is world class with the best communication networks. For them to achieve this, they have firmly established interdependent relations between one another while at the same time allowing for porous boundaries for easy communications and exchange of ideas and information.

Their structures have been built in a way that they are tailored to meet particular market opportunities. The members of a virtual organization form an alliance, and then they move in unity to exploit a certain business opportunity after which they can come up with new alliances and business partnerships.

The other major characteristic of such organizations is that all its members contribute a globally ranked proficiency. For example the manufacture or marketing of a product should be carried out competently to meet the first class global standards. This “uniform” competence makes this collection of organizations to be able to craft synergies among global-class processes and utilities. This makes the business partnerships in such organizations have a high power of meeting very many expectations from all their clients.

As all business partnerships carve out these new connections, one of the most significant elements is superior information technology. This is the means to such organizations can use to ensure that they are successful in business. Information systems that are computerized and advanced enable al the virtual employees of virtual organizations who are located in different geographical locations to connect with each other and enable the carrying out of business globally.

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Some of the modern tools that can help in setting up the virtual office are the use of videoconferencing (Greiner and Metes 1995, p.71). The organization can also use software that is collaborative that enables all of them to link up. In cases, where the virtual employees can not be able to meet, they can use an intranet system for instance a highly interactive company website to communicate with each other. These enhances that information flows within all the team members are connected.

All the member organizations in the virtual organization have to create a form of interdependent relationships. For this relationship to work, all the members have to trust each other fully and depend on each other so that they can be able to work together. The creations of strong interdependencies make the operation boundaries of member partners to diminish.

Opportunities and challenges facing the management of virtual teams

The effectiveness of a virtual team greatly depends on the communication tools and technologies that the virtual organization will employ. Other factors that greatly determine the success of these teams is the selection of the employees who will make the virtual teams and the specific task that the team will work on. Their performance also relies on the way they are managed.

The opportunity that this organization gets from managing virtual teams is that they are able to traverse a huge geographical area at a short time. Due to the use of advanced information technologies, the virtual members in a vast geographical area can be able to communicate with each other at the same time. This makes it easy for them to co-ordinate their activities and therefore be able to present themselves to the client as one. Managers can use information technology, to manage a virtual team at any given time. These teams are often assembled by the virtual leaders to perform a specific task. Once they are through, the management can decide to dissolve the team. The use of virtual teams cuts the costs of operation of members of the virtual organizations. These expenses are like travel, lodging costs and other miscellaneous expenditure that are used in business management. Through virtual teams, these organizations are able to share skills from people who do not feel like travelling to different areas or relocate from their home towns.

Virtual teams enable virtual organizations enable to build an imposing presence in the world. This will help the virtual organization in marketing their products. The fact that these teams are located in a diverse geographical area, they are able to come up with unique designs because the diverse environments have varying levels of varying creativity.

The biggest challenge in the creation of virtual teams is the people and communications issues. Efficient management and operation of virtual organization requires that the flow of information between the entire members of the organizations is smooth. This implies that all the people in a virtual team have to be knowledgeable in the information technology field so that information can flow freely. The information technology approach used should be decentralized in the entire virtual organization and all its associates have to concur with the approach.

Managers face the task of selecting people who are competent in IT because this is the main way that all the people will be communicating. The IT difficulties that should be overcome are availability. Internet should be full available in all locations in the world do that the virtual organization can be able to use applications like web conferencing or videoconferencing. This is a problem because some people may be located in remote areas thus posing a great challenge in internet connectivity and availability. The expenses of assembling all the virtual teams in the world where all teams are located is also a problem. At times, the virtual organization is forced to incur expenses where the people have to move from a place where the internet is unavailable to a place where they can access internet.

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The information technology strategy used should have a system that is able to be mobile. The user interface has to be in such ways that all the people in the virtual organization are able to use it easily and it can be able to meet all the requirements of the use. The architecture of the technologies used should be very flexible and scalable. This eliminates the problem of fixed and un-migratable networks that can not be relocated incase of any natural disaster (Hilty, Seifert and Treibert 2005, p. 21).

The problem of security should also be addressed to the detail. The members should not access information that jeopardizes the operation of the virtual organization. The systems used should be set in a way that the members of different levels are able to access different and distinct levels of information. The network should be desired in a way that it can be able to aid the hosting of new applications. It should also be able to incorporate the networks of different associates’ thus making inter-operation to be easy. This is will make is easy for people across the globe to connect.

In terms of performance, not every associate of a virtual team can perform to his or her best. The virtual organization’s management has to work with virtual teams in that they motivate them and make them to work autonomously. At times, the projects are cumbersome and information has to flow fast. If anyone in the chain does not communicate well then all the other processes are impaired somehow. This means that all the team members should be able to work effectively without immediate controls. The communication expertise of people in the virtual teams can enhance the success or failure in the management of virtual organizations. The virtual team should be able to communicate with each other and make up for the lack of nonverbal clues of face to face dialogue. This means that any slight cases of misinformation or lack of discipline means that all the other people and processes in a virtual organization are severely affected.

The other problem is the differing time zones. The company needs to motivate its workers so that they can be motivated to sacrificing and working at odd hours. Some means to motivate these workers are giving them good payment rates and compensating them for working during odd hours. The corporation should have a system that motivates the collaboration of its members (Malone and Davidow 1992).

The problem of people should also be critically addresses. A close analysis of virtual teams reveals that these people are being connected by a “mere” information technology. The organization should set its goals to a level that are the conflicts of interest that arise between all the associates are lessened to minimum rates and at times they re not given any chances of occurring. The way all the members of the virtual organization relate to each other should be managed and “regulated” or moderated. The members should be trusted to carry out a specific task at any given time. For example, employees should not be allowed to overuse social networking sites like facebook at the expense of work and lack of external controls. This implies that every center where virtual teams will be located will be required to have an “overseer” or manager to ensure that all the rules are followed by all the parties involved. The management processes should be well defined such that all the associates are able to adhere to their objectives while serving the full interest of the virtual organization.

The major challenges that people are set to pose for the virtual organizations include: members having unrealistic expectation. To eliminate such a challenge, the organization should have well defined aims and solutions that must be met. Since virtual organizations are represented world wide, it is allowed for the associates to have different cultures. The objectives of the virtual organization should be set in a manner that all the people should be able to work together. The diversity of processes of virtual organizations necessitates that all associates should comprehend fully their responsibilities and goals so that their respective tasks do not come into conflict with each other even when the communication systems is down.


In the 21st century, virtual organizations need to be very flexible and fast so that they can be able to meet customer needs at a “spark”. Management of the virtual teams need to be done in the most effective manner that does not compromise on any of the agreements and trust between the partner members. The virtual leaders should understand the problems facing virtual organizations (Kirkman 2004, p. 59). They should know that such organizations are not developed overnight and that they are fostered over time and the members have to be highly trained so that they can be able to meet their objectives.

Reference List

  1. Greiner, R & Metes, G, 1995, Going Virtual: Moving Your Organization into the 21st Century, Prentice Hall, Inc, Upper Saddle River, New Jersey.
  2. Hilty, L,M, Seifert, E,K & Treibert, R 2005, Information Systems for Sustainable Development, Idea Group Publishing, Hershey, Pasadena.
  3. Kirkman, B, L, Rosen, B, Tesluk, P,E & Gibson. C, B 2004, ‘The Impact of Team Empowerment on Virtual Team Performance: The Moderating Role of Face-to- Face Interaction’, Academy of Management Journal, vol.47, no. 2, pp. 175–192.
  4. Lipnack, J & Stamps, J, 2007 Virtual Teams: Reaching Across Space, Time and Organizations with Technology, John Wiley and Sons, New York.
  5. Malone, M, S & Davidow, W, H 1992, The Virtual Corporation: Structuring and Revitalizing the Corporation for the 21st Century, Harper Collins Publishers, New York.

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