The features of virtual organizations (part 2)

In the last blog post I elaborated on the features of virtual organizations from a Mintzberg / structural perspective.

To sum it up, natural born virtual organizations (NVBO) rely on shared goals and values as the prime organizational glue. They have no central management team, no middle management, very limited technostructure (such as moderators) and support staff (such as IT support)

They are non-hierarchical, but tend to promote those individual contributors in the operational core who appear to leverage their social capital in the most beneficial way.

This has vast implication for strategy, operations management and change management, which is something I will get back to in future posts.

But how about the organizations that “go virtual”? What similarities and differences are there in comparisson with the NBVO?

Organizations that “go virtual” are very different from the NBVO. Based on a traditional bureaucrazy / divisionalized / matrix organization, they are basically virtual only in the sense that they are structurally segregated from the “mother-organization”.

This segregation is often related to outsourcing, shared services and the like, and part of a corporate strategy to reduce cost and focus (administrative) competencies.

As a consultant I have been part of this essentially painful journey a number of times. The issues that typically arise include:

  • Mismatch of expectations between mother organization and offshore units leading to internal customer satisfaction issues
  • Vast communication issues between onshore and offshore
  • Cultural conflicts, including the formation of a “us vs. them” mentality
  • Lack of flexibility in Service Level Agreements can lead inefficient shadow structures appearing over time
  • Employee retention issues
  • Increasing travel costs

So are their no similarities at all with the NBVOs?

Well yes, both types of organizations rely on IT as primary communication channel.

In the next blog post I will try to elaborate more on how the insight into the dynamics of the NBVO can be used to better facilitate the transition towards virtual effeciency

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