Virtual Organisation

Essay by cranky1873 April 2006

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The way in which we work in the marketplace is changing. For companies to operate in a global arena they must now become super-efficient and stand up to the best competition in the world. The concept of becoming a Virtual Organisation is seen as one way in which companies can do this. This report seeks to clarify the concepts of virtual organisations and discuss whether, in future, all organisations will have to adopt a degree of virtuality.



There have been many varying definitions written regarding what a Virtual Organisation is and as such it becomes obvious that there is no agreed upon definition. For example Hoefling (2001) saw a virtual organisation as 'a task, project or permanent organisation, which is decentralised and independent of any spatial connection'. Whereas van de Ven (1974) defined it as 'two or more organisations joined together as an action system to attain a specific objective (not attainable separately) by performing a set or series of goal directed behaviour acts.'

Although there isn't an agreed upon definition, there are certain concepts which are put forward in most literature. For example:

-A virtual organisation is a temporary consortium of independent partners who come together to exploit a particular market opportunity

-Members are decentralised and independent of spatial connection. They are able to span multiple time zones and geographic locations

-The members share cost, skills and core competencies which enable them to achieve global solutions not individually achievable

-The virtual organisation is highly dependent on Information and Communication Technologies in order to communicate and co-operate between geographically dispersed members.


The key characteristics of a virtual organisation have been cited by Aris (1998) as being dispersion, empowerment, restlessness and interdependence:

-Dispersion - individual members of the virtual organisation are at least based at multiple locations,