Virtual Organisations and Virtual Teams

1
Virtual Organisations and Virtual Teams

• Ho Sooi Hock

2
Outlines

• Driving Forces
• New Strategies
• Virtual Organisations
• Definitions
• Defining Characteristics
• Benefits and Problems
• Critical Success Factors
• Supporting Technologies

3
Driving Forces

• Technology
• Performance, connectivity, portability
• Information/Knowledge Work
• gt70 of work is information intensive
• Globalisation
• Markets, products and resources/labour
• Competition

4
Knowledge Workers

• What are the differences?
• Ask the question What is the task instead of
  What is to be done
• Responsibility lies with the individual instead
  of with management
• Continuous innovation instead of routine tasks
• Continuous learning for product improvement
  instead of process improvement
• Productivity emphasis on quality instead of
  quantity
• Worker is an asset instead of a cost

5
New Strategies

• 24-hour unmanned shop
• The WWW e.g. amazon.com models.
• Remote back-office, call centre
• UK banking industry
• Outsourcing
• Consultancy units in the UK/US and software in
  India
• Global partners/individuals
• Manufacture in UK, designer in Finland
• Teleworking
• Work from home, work related travel substituted
  by telecommunication technologies

6
New Forms of Organisation

• Current organisational theories focus on nature
  and structure of organisations.
• When knowledge is a commodity, an organisation
  should be flexible. The free flow of information
  and knowledge is often impeded in a formal
  organisation structure.
• New forms of organisations thus emerge which are
  broadly termed virtual organisations with the
  work units called virtual teams

7
Definitions

• A virtual organisation or company is one whose
  members are geographically apart, usually working
  via networked computer applications while
  appearing to others to be a single, unified
  organisation with a real physical location.
• An organisation distributed geographically and
  whose work is coordinated through electronic
  communications.

Adapted from http//www.cs.nott.ac.uk/tar/DBC/db
c-lecture13and14.pdf
8
Definitions (contd)

• An entrepreneurial situation in which
  organisations or pieces of an organisational team
  exploit opportunities or take advantage of shared
  expertise, market access, or sharing of costs and
  risks.
• The virtuality of virtual organisations has been
  described as having two key features
• creation of a common value chain between distinct
  entities and distributed.
• information technology (IT) supported business
  processes (Seiber and Griese, 1997).

9
Definitions (contd)

• Virtual Organisation is a form of cooperation of
  legally independent companies or people
  contributing their core competencies to a
  vertical or horizontal integration and appearing
  as one organisation to the customer (Rittenbruch,
  Kahler, and Cremers, 98).
• A virtual team is a group of people who work
  interdependently with a shared purpose across
  space, time, and organization boundaries using
  technology.

10
Defining Characteristics

• Complementary Core Competencies
• Network of Independent Organisations
• Vague/Fluid Boundaries
• Response to Opportunity
• Participant Equality
• Changing Participants
• Staff Empowerment and Low Bureaucracy
• Geographical Dispersion
• A High Degree of Informal Communication
• IT Based Electronic Communication

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Benefits

• Cost Reduction
• Cutting travel cost and time, designing better
  digitally enhanced processes
• Shorten Cycle Time
• Serial to parallel processing, speedier
  communications of ideas and decisions
• Shorter time to market
• Increase Innovation
• Permitting more diverse participation,
  stimulating creativity
• Leverage Learning
• Wider access to expertise and sharing best
  practices

12
Benefits

• Extend Reach
• Access to new markets and new technologies
• Access to financial resources
• Overcoming trade barriers
• Enhanced Partnership
• Shared information, cost, risks, and benefits
• Economy of Scale
• Size advantage
• Create Synergies
• Better capacity utilisation

13
Problems of Virtual Organisations

• Nontraditional Organisation
• Flexibility may cause actions by different
  subgroups to be inconsistent.
• Control of Proprietary Information
• Difficult in an environment with fuzzy boundaries
• Across-Boundary Reporting Relations
• Propinquity may not be the best criteria to
  decide on reporting requirements
• Reliance on New Technologies
• Bleeding edge instead of leading edge

14
Critical Success Factors

• Shared Purpose/Vision
• Serve as the glue for the participants during
  the life cycle of virtual organisations
• High Level of Trust
• Replacing usual rules, procedures and policies
• Willingness to Share Risks
• Due to interdependent nature of activities
• Mutual Benefits
• Increased productivity, revenues, profitability,
  market share etc.
• Reliable and Robust Communication Infrastructure
  and Groupware Systems

15
Supporting Technologies

• Groupware
• Conferencing
• Audio conferencing
• Data conferencing
• Video conferencing
• Electronic Mail
• Electronic Whiteboards
• Document Management System
• Workflow System
• ERP System
• Security

16
References

• Virtual Organization, http//www.seanet.com/daveg
  /index.htm
• J.W. Palmer, C. Speier, "A Typology of Virtual
  Organizations An emperical Study", In
  Proceedings of the Association for Information
  Systems 1997 Americas Conference, Indianapolis,
  August 1997.
• Henry, Jane E. Hartzler, Meg, Tools for Virtual
  Teams. 1998. ASQ Quality Press Milwaukee,
  Wisconsin.

17
Acknowlegement

• This module was taught by Dr. Payam Mamaani
  Barnaghi since 2005. Most slides have been
  adopted from his lecture materials with some
  changes.