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Virtual organizations are extremely popular today, but their establishment requires much knowledge and skills. This paper aims to assist start-ups and already existing virtual firms that are willing to improve their performance. It points out three main elements they should consider, based on the success and failure of other organizations, such as hiring and personnel selection, employee communication, and structural changes. Finally, it provides information on how to implement the lessons learned in real life.
Long ago, organizations started to operate in various locations to improve their performance and extend their targeted market. Today, employees often work on one project across geographic boundaries, due to virtual work arrangements. These teams are “a vital option for organizations that need to work in multiple locales at once and draw on vast global expertise” (Earnhardt, 2009, p. 1). Virtual teams allow companies to save time regarding face-to-face communication, send important information, refer to online learning, and improve document management.
These virtual teams reduce a firm’s expenditures (office needs) and allow the selection of employees from the global workforce (Zofi, 2012). Still, the organization should be efficiently implemented and organized to achieve such benefits. Gleaning from the experience of other companies is likely to help in this process.
Hiring and Personnel Selection
When The Executive Roundtable turned into a virtual organization, its owner implemented a range of successful changes that allowed the company to remain efficient. However, this company had issues with human resource management. The most critical downside Roberts-McCabe faced involved in hiring junior personnel. With their lack of experience, new employees were not able to cope with their duties. Unlike senior employees, they required much practice and time for adaptation, because their training was almost ineffective, and they were hardly productive.
Still, Roberts-McCabe coped with this issue. First of all, she extended the time for training, which allowed time to deal with the main problems. Then, she emphasized the necessity of maintaining mutual support among all staff members, which improved their relations and had a positive effect on employee performance (Roberts-McCabe, 2014).
In order to improve the company’s performance, Sun Microsystems implemented changes in the process of team creation. It was considered that the success of the organization and the virtual team depends heavily on the characteristics of the people who work in it. The selection of talent from the company’s employees depends on skills and knowledge. The team is built while taking into consideration the problem that is to be solved.
Managers define who can provide solutions, and use their knowledge to form a team that is designed to fulfill its particular purpose. They also make sure that all members can communicate with each other easily. In this way, “salespeople, marketing personnel, finance, and operations from various places around the globe” start cooperating (Virtual Organizations, 2016, par. 29). Sometimes customers and suppliers can also be involved in this process.
Executive Roundtable is an organization focused on coaching and mentoring business leaders. Its founder shares her experience in managing a virtual team, for other professionals to draw upon, that they may avoid the most common mistakes. First of all, Glain Roberts-McCabe emphasizes the significance of communication. She says that any fully virtual organization presupposes a lack of communication. Thus, it is critical for all employees to take responsibility for informing their colleagues.
Roberts-McCabe spent much time on leadership in this framework because she had to text and call her employees over and over. Still, she believes that this effort was not in vain, as now she always receives feedback from her group. It is also a great way to get to know the perspectives of the workers. The founder pays much attention to the integration of new people into the team. Moreover, the owner’s involvement in the creation of working relations among the employees can streamline this process and improve the outcome (Roberts-McCabe, 2014).
The decentralization of Sun Microsystems turned out to be reasonably effective for the improvement in communication. Consisting of independently operating companies, Sun paid much attention to the interaction among its numerous teams. Information systems were thoroughly considered and discussed because the employees had to interact across time and space in order to find resolutions to the most critical problems the company faced.
As in Sun Microsystems’ example, from the very beginning of this process, managers define main customer issues. Then they form teams, gathering workers who have the skills and knowledge required to find a resolution. In order to control the situation, managers set up weekly meetings. With the help of conference calls, they share significant information (Virtual Organizations, 2016).
Franke (2001) believes that virtual teams cannot reach enormous success if they have issues with reporting, because this factor involves the transfer of the very information that is to be shared among the personnel for effective functioning. As one example, communication turned out to be a critical issue for Barings. Though it was the greatest merchant bank, it was not able to control its workers and failed. Problems with reporting were crucial for this bank within the framework of business failure because if the managers had learned that inaccurate data had been shared, they would have had an opportunity to cope with this problem before it affected the whole company.
In order to make their business successful, a lot of virtual organizations use partners and alliances. For example, many companies that operate in the entertainment industry seek opportunities to cooperate with representatives of computing, publishing, and other industries to convert various types of software into digital formats.
Today, the tendency to work in cooperation is often discussed, as it has proved to be advantageous for different kinds of businesses. Corning is an organization focused on the production of glass and ceramics. In order to improve its performance, it created an international partnership with the electronics conglomerate known as Siemens and another glassmaker – Vitro. The company also creates alliances, which makes it more authoritative and influential, because it starts attracting various customers as a network of organizations.
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Structural changes that occur due to cooperation with various organizations are also considered to be at least somewhat beneficial for business in the sphere related to computers. For instance, Apple Computer received an opportunity to improve its position in the market. This organization provided mainly easy-to-use software, and because of this factor, much time was needed to win market share. However, successful partnerships with Sun Microsystems and Sony allowed the company to improve its products, improving its ability to enter the market faster than usual. Because of that, it reached the notebook segment and increased revenue (Virtual Organizations, 2016).
Implementation of Lessons Learned
Taking into consideration the information received from both positive and negative experiences of various organizations, a plan of action for a virtual start-up can be developed. Of course, it can also be beneficial for the firm that is already in operation but is willing to improve its performance.
First of all, it is critical to pay attention to the creation of the virtual team. New employees should receive efficient training, in order to be able to cope with everyday duties. As the new employees start working, other staff members should provide assistance and support to streamline the process of adaptation. Additionally, it would be beneficial not to form a team initially, but to let the managers form people into groups, depending on their abilities and the problem that requires resolution.
Serious attention should be paid to the employees’ communication. The leader of the organization should take responsibility for establishing the foundation for a positive relationship among the personnel (Lepsinger & DeRosa, 2010). A leader should encourage frequent communication, and initiate it from the very beginning. Weekly meetings and conference calls can be used to ensure team communication and decent reporting. Sharing information every day, employees can make note of inaccuracies and save the firm from failure. It would also be beneficial if sometimes face-to-face meetings were arranged, as they make people feel united.
When the company does not have personnel issues and works effectively, it can try to implement structural changes. These allow the organization to improve its performance, with the help of beneficial partnerships and alliances. A start-up should investigate the industry and consider other companies with an eye to cooperation, paying attention to products and services provided. For example, firms focused on software can benefit when their partners are hardware manufacturers.
The success of the virtual organization depends on its implementation. The leader must keep in mind that this process has many hidden hazards. In order to avoid problems, a leader should refer not only to the theoretical knowledge learned during the educational process, but also pay attention to the experience of existing organizations, regardless of whether they failed or succeeded. Leaders and managers should learn from the mistakes and achievements of others, with an eye to considering how people should be hired and teams created, how efficient communication can be supported, and in what way other markets can be reached.
Earnhardt, M. (2009). Identifying the key factors in the effectiveness and failure of virtual teams. Web.
Franke, U. (2001). Managing virtual web organizations in the 21st century: Issues and challenges. Hershey, PA: Idea Group Publishing.
Lepsinger,R., & DeRosa, D. (2010). Virtual team success: A practical guide for working and leading from a distance. San Francisco, CA: John Wiley & Sons.
Roberts-McCabe, G. (2014). Lessons learned: How to manage a virtual team. Web.
Virtual Organization. (2016). Web.
Zofi, Y. (2012). A manager’s guide to virtual teams. New York, NY: American Management.