Reference no: EM131325493

Response to peer initial post: Word Count 150   

Discussion Question: Let's explore the virtual organizational form. Why would a firm decide to implement this approach to organizing?  What are the benefits? What is the downside? Provide examples of organizations that have used a virtual organizational structure. Again, be specific and give examples - do not regurgitate the textbook - tell me in your own words.

 A firm would chose to implement a virtual organization for several reasons, generally because more can be accomplished with several than one.The most important reason is that it allows organizations to pool their resources with other companies who have a specific goal or objective that will benefit all companies involved. Virtual organizations allow companies who may have never gotten together under normal circumstances to work together in a setting that forgets competition and market standing and each company uses the other to garner valuable information, technology or other factors that ultimately assist them in being able to go back into the market with some new resource and flourish financially and otherwise.

The benefits of a virtual organization are numerous. Companies get to save money and capital by "exploiting" the talents of other companies and contributing their best work to the entire collaborative. Virtual organizations have also been successful in helping organizations to find other areas of their business that can be improved by the knowledge they have gained. Once a virtual organization has been deemed successful the company will benefit from new found knowledge that they can put to use within their own organization which would in the long run increase profitability and visibility.

The disadvantages of a virtual organization would be that initially the firms' goals are all in line with each other but could change suddenly based on one or more of the company's organizational strategy or structure. Companies could also fail to create one unified business strategy for the virtual organization and instead feed their own internal strategies because that is what they are used to. Virtual organizations may also fail because each company is used to answering only to themselves; however, when forming this sort of alliance their needs to be a clear cut leader and this could pose an issue for those who covet that position. Firms could also lose their identity in the process of joining a virtual organization if they do not have well defined parameters before agreeing to become part of the alliance.

Examples of a virtual organization can range from doctor offices that share the same answering service, utilize the same staff to perform such tasks as entering patient information into the computer, scheduling appointments and / or answering phones, etc. Another example of a virtual organization would be a company such as Amazon. While Amazon does have warehouses that they store inventory in they also utilize third party vendors or sellers to ship products to their customers due to limited space and money to do so. Virtual organizations also exist with companies such as Café Press who sells t-shirts online by allowing customers to design their own shirts and Café Press then links the customers with t-shirt manufacturers who can offer the type of apparel the customer is looking for without the need for having a facility to store inventory or to decide the best type of product to have by serving as a middleman between the consumer and the supplier.

References

Beason, L. (2000, May). Communicating for Advantage in the Virtual Organization. Technical Communication, 47(2), 256. Retrieved from

Dess, G,G., & Lumpkin, G.T., Eisner, A.B., & McNamara, G. (2014). Strategic management: Text and cases. 7th Ed. McGraw-Hill: NYC.

Pacuraru, R.-O. (2012). Virtual organizations. Economics, Management, and Financial Markets, 7(4), 695+.