What do you meant by Virtual Organization?
The term virtual organization is used to describe a network of independent firms that join together, often temporarily to produce a service or product. A virtual organization is often associated with terms as a virtual office, virtual terms, and virtual leadership. The ultimate goal of a virtual organization is to provide high-quality product services instantaneously in response to customer demand.
- It is a geographical distributed organization whose members are bounded by a long term common interest or goal.
- These organizations are distributed “business process”. These processes may be owned by one or more organizations acting in partership, for a specific project, resources are assembled to perform a business process on behalf of the project onwer, and then disassembled on the completion of the contract.
- It is an organization that has been developed not for profit but exist as a cooperate productive entity that does not have any central geographical location but exist through telecommunication tools.
Example of Virtual Organization
A small software company wants to bid for a new contract, which is beyond its scope. The company forms a VO with other similar small companies and by doing that it is suddenly able to compare with layer cooperations to gain the contract.
What are the features of Virtual Organization?
- It can be large or small long or short lived.
- VO exists for a specific purpose.
- It quickly deliver products/services that are innovative and customized.
- Membership and structure of a VO evolve over time.
- VO members can switch from one project to another.
- Dynamic VOs hava a capability to unite quickly.
- Resources, services and people that comprise a VO can be single or multi-institutional or may be homogenous or hetrogenous.
- It may follow principle of synergy ( many to one) and principle of divergence (one to many)
Advantages of VO ?
- Vo make it possible to satisfy constantly changing customer and market requirenments in a competitive manner.
- An Ability to participate in VOs increases the service range a company can offer its custromer.
- Participation in VOs increases the total number of end customers a comapnyt can reach indirectly via itd partners.
- It became possible to provide services precisly tailored to a specific customer need.
Disadvantages of VO?
- High cost
- Legal problems
- trust and respect issues
- cultural issues.