The features of virtual organizations (part 1)

According to Wikipedia, virtual organizations can take one of the following forms:

  • an organization that outsources the majority of its functions
  • independent organizations that share resources to achieve their goals
  • an open business

Put in another way – some organizations become increasingly virtual over time – whereas others are born virtual.

This is in fact an important distinction, as the “organizational glue” in the case of the legacy firm needs to be replaced by artificial structures – embracing people, who have essentially not chosen to operate in a virtual way, but are forced to do so as a result of a corporate transformation program.

The questions is – could the mechanisms of the natural born virtual organization (NBVO) be analysed and assessed as possible strategies for change management in the virtualization of traditional organizations?

Henry Mintzberg has provided a good framework for analyzing organizational structure. In the following, NBVO’s are analysed based on Mintzbergs organizational elements:

Ideology:

Ideology is the traditions and beliefs that make an organisation unique.

The NBVO are clearly driven by shared values and codes of conduct. These norms maybe explicitly stated or part of a tacit belief system. For example, there are integral codes of conduct on online communities like myspace and facebook that regulates the style of communication between users.

Operating core:

The operating core is defined as the people directly related to the production of services or products.

This is true also in the case of a virtual organization –  it is here it all happens. The success of its operation is defined by the level of contribution and interaction, which is again determined by the contributors themselves.

The key forces of motivation are burning excitement around the area of contribution and the social capital acquired through contribution. In some cases, this explicitly awarded, as contributers rate each others contribution, showing their appreciation through symbolic gestures of accreditation.

Some communities may also introduce “user levels”, in which users can gain promotion to a more exclusive user status through contribution over time.

Strategic apex:

The strategic apex serves the needs of those people who control the organisation.

This is non-existing in a virtual organization, as the direction of the organization is decided entirely by the contributors. There might of course be an “owner” of the network, but these owners are bound to loose control of the organization over time, which can be seen in the case of Facebook.

Middle line:

A NBVO is essentially non-hierarchical in the traditional sense, and therefor has no middle line. Hierarchy in virtual organizations is replaced by a mechanism akin to natural selection –  the advancement of those contributors, who are tacitly embraced by the community as the focal points of contribution and interaction. In other words, the contributors who leverage and grow their social capital in the most efficient way, become the focal points of the organization

Technostructure:

While traditional organizations may have a rather rigid technostructure, this is more or less completely missing in the case of the NBVO, which are often driven by lay people rather than experts

Support staff:

Support staff are the specialists who provide support to the organisation outside of the operating core’s activities.

In a NBVO, the support staff is often very limited due to the non-profit character of collaboration. However, as these organizations are often ICT based, IT support and basic adminstration is needed at a certain level.

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