Special Section: Information Technology and the Virtual Organization

Theodore H. Clark, Guest Editor
International Journal of Electronic Commerce,
Volume 3, Number 1, Fall 1998, pp. 4.

In this special section on virtual organizations, papers were selected for review from three of the minitracks from the Internet and the Digital Economy track of the thirty-first annual Hawaii International Conference on Systems Sciences (HICSS-31), held in January 1998. Of the nine papers presented on this topic at the HICSS-31 conference, four were selected and reviewed for consideration in this special issue. These four papers were each revised by the authors, based on external reviewers’ comments.

One of the most common issues raised by reviewers addressing this topic was: “What is a virtual organization and what makes it different from a traditional or “‘nonvirtual’ organization?” The authors in this special section have all attempted to address this issue in the context of their individual papers, but an integrated definition of what makes an organization virtual also seems to be appropriate for inclusion in this introduction. The range of definitions presented is so wide that if all the attributes mentioned were to be included in this definition, it might be difficult to find any nonvirtual organizations. However, there are some common themes that emerge in most of the papers in this issue and in most of the previous literature on this topic.

One important aspect of virtual organizations for researchers in the field of information technology is that these organizations tend to be very communications-intensive. Thus information technology, especially various forms of communications capabilities, has been critical in enabling the growth of virtual organizations. All the papers in this special issue describe important interactions between information technology capabilities and the extent to which virtual organizations are viable and attractive alternatives to traditional organizational structures and coordination mechanisms (e.g., hierarchy).

Virtual organizations have at least one of the following four characteristics relative to their individual units or members: geographic separation, functional specialization with separate reporting hierarchies (or including multiple firms), transitory membership driven by evolving needs over time, and separation of production across different time dimensions (e.g., shift workers performing the same task at different times). Cultural differences can, when combined with the above factors, also increase the extent to which members or units within a virtual organization feel separated from one another.

Most papers addressing virtual organizations focus on the geographic separation of work tasks, such as telecommuting or global teams to address specific needs. Certainly physical separation is one attribute suggesting that an organization is virtual, but there are other important dimensions that can increase the extent to which organizational units or members might feel separated from one another. Thus the extent to which organizational members feel separated or remote from other members of the organization defines the extent to which an organization is virtual. For example, when differences in location, function, team composition, or work schedules make it difficult for teams to have extensive face-to-face discussions, they will generally find it more difficult to coordinate their activities than those that do not have these barriers.

One of the challenges in describing what is or is not a virtual organization is the degree to which an organization can be described as virtual is not a binary measure. Some organizations have some attributes of being virtual but clearly function using traditional coordination mechanisms without major problems. Other organizations have many attributes of virtual organizations, and find that traditional coordination processes are simply not viable and would result in members feeling separated and independent. This comes full circle to the description of virtual organizations as being communications intensive, in that other forms of communications and coordination must be used to substitute for the missing face-to-face dimension and other forms of traditional organizational coordination (e.g., hierarchical command structure).

Of course, we might ask why we would even want to create virtual organizations in the first place if they are less connected and more difficult to coordinate. Many books and papers have been written, describing the benefits of various forms of virtual organizations, in terms of increased flexibility, enabling global reach and perspective in management, faster responsiveness, better decision making for complex issues, improved leverage of scarce resources, and reduced cost by accessing least cost or best resources worldwide. However, for these benefits to be realized, we need to effectively support these virtual teams using new forms of communications media and information-technology-processing capabilities to decrease the effective “distance” between people involved in coordinating activities.

Information technology in the virtual organization enables members of the organization who would feel separated from one another to function effectively to accomplish shared tasks by overcoming physical, functional/hierarchical, or synchronicity barriers to communications and coordination. In time, information technology advances will redefine the boundary of where organizations appear to be virtual or traditional, as distances are effectively reduced by use of improved communications capabilities. For now, the virtual organization is a real management challenge and opportunity that requires utilization of alternative forms of communications and coordination to overcome the barriers of separation that make traditional coordination ineffective.

The papers in this special section address different issues related to the management of virtual organizations and the application of information technology capabilities to enable expansion of this alternative organizational structure. The first paper, by Adams et al., examines the potential for e mail to provide an alternative communications and coordination tool in a virtual organization environment. This paper was selected as one of two “Best Papers” for the Internet and the Digital Economy track at HICSS-31. Their research findings suggest that managers have been able to adapt e mail, a medium that has been traditionally viewed as relatively low in media richness, to new uses in the virtual organization that expand the richness of the media. In addition, managers in virtual organizations appear to be willing to make trade-offs in choice of media based on attributes of alternative media, which have not been in most applications of the Media Richness Theory. Thus, this paper extends our understanding of how managers make media choices and trade-offs in the context of a virtual organizational setting.

The second paper in this special section, by Palmer and Speier, also examines the issue of media choice in virtual organizations, focusing specifically on several different types of virtual teams. This paper also develops the concept that the degree to which an organization or team is virtual represents a nonbinary dimension along which different types of teams can exhibit varying degrees of “virtualness.” Their research findings suggest that the choice of media across different types of teams varies in part based on the extent to which these teams can be described as virtual along a variety of dimensions examined.

The next paper, by Sengupta and Zhao, describes the potential for virtual organizations to improve coordination and communications effectiveness through the use of workflow technologies. Given the high communications and coordination costs associated with virtual organizations, the use of information technology automation and efficiency tools, such as workflow automation, can improve the ability of these organizational forms to respond effectively and efficiently to rapid changes in their environment or tasks. This paper also examines the challenges of managing virtual organizations when the composition of the virtual team or organization is transient as well as cross-functional.

The final paper in this section, by Stephens and Szajna, describes perceptions and expectations of employees and managers when considering telecommuting as an alternative to physical colocation of work activities. This paper focuses on the motivations and trade-offs involved in employee selection of this alternative form of work structure and provides some interesting insights regarding potential challenges and barriers to adoption for telecommuting for companies that may be considering this as an alternative to traditional office-based work environments. Firms considering virtual organizational alternatives, such as telecommuting, must consider the impacts of these new forms of coordination on employees, as well as considering the business effectiveness and efficiency trade-offs involved. For many employees, the loss of physical contact with coworkers and other disadvantages of a virtual workplace more than offset the advantages provided by this new alternative. Firms should consider individual employee preferences and circumstances when determining the extent to which virtual workplace alternatives can be used to substitute for traditional organizational structures and work design.

Together, these papers address a number of issues regarding virtual organizations and help improve our understanding of how we can effectively use information technology to support and facilitate the rapidly expanding use of virtual organizations and teams.

THEODORE H. CLARK is an assistant professor at the Hong Kong University of Science and Technology (HKUST) in the Department of Information and Systems Management, School of Business Management. His research focuses on issues related to interorganizational systems (IOS) and electronic commerce, and he is particularly interested in the role of IOS in restructuring channel relationships, processes, and markets. He has published many case studies and research articles related to the use of information technology in supply-chain management, logistics, electronic commerce, organizational change, and reengineering. Dr. Clark received his B.S. in electrical engineering at Brigham Young University and his M.B.A. and D.B.A. from Harvard Business School, where he graduated as a Baker Scholar.