Advantages and disadvantages of virtual organization

·      Advantages

1.     Be able to expert in located in any part or area of the globe

So the company can sell and deliver products and services most efficiency by having virtual organization. For instance, online shop nowadays like eBay or Walmart, without any physical store they can offer the products and services easily to customer from  different country, which do not require customer to go to that store directly, plus the company also can deliver it to their house with a shipping service. With this in mind, organization could have a greater business opportunity due to the fact that organization would have geographic coverage, which make customer to get access to the market more widely. Better markets understanding also play a crucial role to virtual organization since it would be able to increase the customer satisfaction with the given products, services, quality and the edge over the competitor. 

 

2.     Reduce the number of absentee

Just so you know, virtual organization member can work anywhere meaning that they don’t need to be in the same location and might not need physically office or places to work. Therefore, it can save time by not spending much on traveling and at the same time cut down a huge amount of expenditure. For example, a group of architecture that work for different tasks around the world can take advantage in term of time zone because when the shift in Europe finishes, the work is passed to the team members in the United States.

3.     Better management information and better integration of suppliers and vendors

Suppliers are able to supply or sell more products, yet organization can also reduce the production cost thus supplier will be delighted and have more incentive to work for the company. Additionally, feedback is another good method to boost the satisfaction of customer wants and needs, whether they like the product and service or not. With virtual organization, the supplier and vendor work together so all information that flow between them are collected to organization so then the organization would run much smoother with an effective way.

4.     . Increase of productivity and performances

Because the virtual team member can better focus on the result to be achieved with a clear goal and more effort among each other plus motivation, inspiration so it make all members to be more productive including with the reward if they can complete their task. Moreover, visual member or worker usually work outside the company so there will be no one who guide or illustrate them thereupon it is good to make sure that those workers can handle or be able to do that assigned work.

    5. Possibility to hire low cost but qualified labor force

Because they conduct an interview, recruitment or survey especially the area that labor forces are at low cost and well trained, so then it would point out with the best outcome. They have studied a lot before choosing someone with many people involve with it.

    6. Decrease of salary expenses

Because workers are paid with their task not their time spent at work which mean that no matter how long they work and with no specific task so you won’t get paid unless you work on your task and complete it properly as the manager assigned.

    7. Reducing of expense using working place and diminishing utilities expenses

Since we mentioned above that worker can work anywhere without any physical structure, hence it can reduce expense of renting a workplace because there is no need pay for rent, tax, or insurance plus utility expense like gas, electricity, or water so organization would get rid of this pressure by not involving with these kind of expenses.

    8. Participates can involve in decision making role

Because they have network that connect with all organizations with flow of idea from low level to upper level management of company, thereupon all workers would have more role to participate in decision-making. This can make the company work more effectively because it is about a group not an autocratic. It would be better because sometimes as a manager he or she can’t know everything so they could meet as a group to discuss and make a decision because two or more ideas are better than one.

·      Disadvantage

1.     Manager and employee would lost trust

As mentioned above, in the advantage that virtual worker can work anywhere and it can reduce physical structure of organization but at the same time it can make them lost trust by not having a meeting or face-to-face communication with each other so there will not be so much authority to charge of employee when they do their assigned work, thus it will lead to decrease the efficiency of the organization as well.

2.     Added complexity

With the reason that worker has distributed to various geography or location, it would be difficult to coordinate with various locations unlike only one location which we only focus on. On the other hand, it would be difficult to assign someone with those different locations and we cannot fully guarantee that the person will do good with this location or not since the situation in each country usually change due to many reasons and it is hard to blame for their performance, but sometimes it is the matter of the country. 

3.     Reduce productivity

As we mentioned earlier that people usually work outside or anywhere, thereby it could be hard for us to keep track on each worker whether they do their best and do it in a right way or not.

4.     Risk communication

Due to cultural and organizational difference to participant or worker with diverse area, so it is hard for them to adapt with each other because of difference culture. It could be many factors that relate to this point because if we talk about culture there are many aspects to cover, my culture can do this but your culture cannot and your culture go like this while my culture go like that. So it would be a big barrier for an organization.

   

v How can these advantages and disadvantages affect the structure of organization

 

-Basic structure of virtual organization

References

Globalization and Virtual Organizations - Introduction to Virtual Organizations. (2013). Retrieved from ecoggins.hubpages.com/: http://ecoggins.hubpages.com/hub/Globalization-and-Virtual-Organizations-Introduction-to-Virtual-Organizations

Virtual Organization. (2013). Retrieved from virtualorganizations.blogspot.com/: http://virtualorganizations.blogspot.com/2010/06/virtual-organization-structure.html