What Are Virtual Organizations?

Virtual organizational structure refers to a temporary organization that temporarily gathers people to take advantage of specific opportunities and dissolves after the goal is completed. Virtual organization structure, also known as network organization form.

Virtual organization

Over the past two decades, the world economy has undergone tremendous changes. Advances in science and technology and the rapid development of information network technology have driven economic growth.

Virtual organizations are often described as a loose organizational structure with almost no level of control. The researchers mentioned that the virtual organization is a borderless connection that is constantly changing according to the needs of information processing. According to Sandhoff, on the one hand, virtualization can be seen as the disappearance of work and organizational units, and on the other hand, it can enable the organization to adjust its strategy and become a dynamic, re-allocated enterprise. Because adjustments can be made according to changes in the environment, this borderless organization loses its separation from the outside world and the general characteristics of traditional organizations.

Basic Strategy of Virtual Organization Structure

Since the establishment of Taylor's scientific management theory in the early 20th century, the traditional organization theory that emphasizes division of labor and centralized power has also formed. But recently

Schematic diagram of virtual organization (2 photos)

For many organizations, the market and competitive conditions have changed dramatically over the past decade, and the static environment of the past no longer exists. Therefore, traditional hierarchical organizations must change accordingly to meet the demands of a dynamic environment. Organizational changes include three basic strategies: modularization, networking, and virtualization. They are applicable to different prerequisites.

It is believed that the primary goal of efficient organizational structure design is to "rapidly achieve flatness to improve operational efficiency and enhance organizational capabilities." In order to achieve this goal, two means are required to ensure it.

First: The organizational structure should be as simple as possible, and then simplified, and it should not exceed four levels in the organizational hierarchy design.

Second: the level of personnel capabilities is in place and the enterprise has a cultural atmosphere of information sharing and cooperation. The availability of personnel capabilities mainly refers to the level of department heads' ability to meet the needs of management, the management cadre standards that can manage ten people and one hundred It's different. Therefore, the scale of an enterprise increases. If an enterprise arranges for an unreasonable department manager to work, it will inevitably lead to the failure of organizational change and invalid structural design operation. In this regard, many enterprises perform particularly well.

Enterprises have a cultural atmosphere of information sharing and cooperation. The organizational management model is transformed from traditional pyramid management to information sharing management. Only by shortening the internal communication channels of the organization and establishing a regular sharing mechanism, the organizational structure can truly reflect the strategic orientation and the improvement of operational efficiency .

In the construction process of engineering projects, the disadvantages of Taylor-style organization have also been fully reflected, such as:

(1) The project organization is largely based on standardized and centralized communication and coordination mechanisms, without considering some important principles necessary for integrated engineering construction and complexity overcoming, such as self-organization, team-based and Diverse communication relationships, etc .;

(2) The project participants must not only integrate into the determined project organization, but also be in a certain hierarchical structure of their "parent organization". They need to accept different instructions, which easily leads to conflicts and it is difficult to establish an effective interdisciplinary team;

(3) The traditional project organization does not fully consider the reorganization strategy of the organization, and cannot adapt to the dynamics of task requirements and constraints in the project construction.

Therefore, the above three basic strategies are also of great significance to the transformation of the project organization. And because the engineering construction process happens to have both a high degree of product complexity and a high degree of market uncertainty, the form of virtual organization is particularly suitable for engineering construction projects.

Virtual organization structure concepts and characteristics

The concept of virtual organization covers the characteristics of many new forms of organization, which can be traced to different origins. In 1992, Davidow and Malone promoted the concept of virtual organization to the general public through their new book The Virtual Corporation. In the book, they emphasized the temporary nature of the virtual organization, thinking that the composition of the virtual organization is to achieve the defined organizational goals within a certain period of time. Mowshowitz proposed the concept of virtual organization from the perspective of information science as early as 1985. He believes that, similar to the meaning of virtual storage, the task processing and processing resources of a virtual organization are logically separated.

A virtual organization can be defined as follows: "A virtual organization is a form of collaboration based on a common goal composed of geographically distributed enterprises, institutions and individuals. These legally independent members of the virtual organization have their own cores Competitiveness participates in horizontal and vertical collaboration. To third parties, they appear as a unified organization, and as the organization's goals are completed or interrupted, the entire virtual organization no longer exists. The virtual organization completely abandons the management functions of traditional organizations Centralization, the required coordination process is mainly realized by appropriate information / communication technology, and the meaning of virtual in virtual organization can be understood as the three-dimensional superposition of space virtual, time virtual and structural virtual.

Virtual Organization Structure Space Virtual

The participants of a virtual organization are often distributed in space, may be far away from each other, and their geographical locations can also move continuously

Virtual organization time virtual

The combination between the participants is temporary, and their collaboration can be flexibly arranged in time, either synchronously or asynchronously, and for global virtual organizations, it can even be around the clock, the so-called "round-the- clock ";

Virtual organization structure

Virtual organizations do not have a fixed organizational structure. There is no formal contractual relationship between the virtual organizations. The boundaries between the participants are blurred. Their collaboration is based on trust and resource sharing.

After induction, virtual organizations have the following important characteristics:

(1) Spatial distribution and limited time: Project participants of virtual organizations are usually geographically distributed, that is, they can come from different regions or countries. The existence of a virtual organization is a prerequisite for a certain engineering project, and the combination of its participants is dynamic and temporary. After the project is over, the virtual organization is also temporarily disbanded, but the network of relationships between the members of the organization can still exist. And once there is a new market opportunity, all project participants can quickly and spontaneously regroup on the basis of the relationship network.

(2) Legal independence and economic relevance: The participants of the virtual organization can be individual individuals (such as experienced project consulting experts) or part of large enterprises, but most of them are many small and medium enterprises . On the one hand, all participants are legally independent and equal in the virtual organization; on the other hand, these project participants are economically related, meaning that they have common project interests. Based on trust, these project participants complete their own determined tasks and jointly promote the success of the project construction.

(3) Fuzzy organizational boundaries and flexible organizational structure: The boundaries of virtual organizations are fuzzy and uncertain. Participants can change constantly during different project phases. But to the external end users, the virtual organization appears as a complete organization similar to traditional enterprises. In the organizational structure of a virtual organization, there is no hierarchical or vertical concentration, and its participants are only loosely associated with each other. The collaboration of virtual organizations widely abandons fixed, formal contractual relationships that have an absolute advantage in traditional organizations, and instead adopts so-called "relationship contracts." This type of contract generally provides only a framework for actions and relationships, and can be given a contract The true relationship between the two parties must have the necessary explanation space. Of course, the effective application of this form of contract relies heavily on the trust, consciousness and high loyalty of both parties to the contract. The malicious use of this interpretation space for self-interest can be limited through social sanctions. The flexibility of the virtual organization structure ensures that the virtual organization can respond quickly to the dynamic requirements of the outside world and the progress of the project.

(4) Complementation of core competitiveness and sharing of resources: For core competitiveness, we can understand it as a durable and convertible factor (such as specific resources, skills, and knowledge) that an enterprise possesses, and these factors can be an enterprise Brings a competitive advantage. In the construction industry, on the one hand, core competitiveness means value chain relationships.For example, designer firms are of course good at design work, and contractors are obviously mainly engaged in construction tasks.On the other hand, core competitiveness also refers to special experience and capabilities. For example, some project consultants are proficient in cost control, while others may be experienced in quality control. Due to the complexity of the engineering project, the cooperation of all participants in the virtual organization must be based on the complementarity of core competitiveness and the sharing of resources (such as information, experience and knowledge) as necessary prerequisites.

(5) Decisive information / communication technology support: The implementation of almost all the above features strongly depends on the support of information / communication technology. In fact, information technology is both a prerequisite for the emergence of virtual organizations and the technical foundation on which virtual organizations rely. Of course, merely having advanced information technology cannot build an effective virtual organization. Instead, information technology should be closely integrated with business strategy and organizational goals, and human factors in the organization should be properly considered. ^[2]

Virtual Organization Structure Model

Jarvenpaa and Shaw proposed in 1998: "The basic unit of a virtual organization is a virtual team." In fact, a virtual organization can include three levels, namely individuals, teams, and the entire organization. Among them, the team is an indispensable connection between macro organizations and micro individuals. But it should be noted that the team here is not a traditional team, but a so-called virtual team. Unlike traditional teams, virtual teams work across spatial, temporal, and organizational boundaries and make full use of information / communication technologies. In addition, the members of traditional teams are determined or their sources are fixed in advance, while the members of virtual teams are more dynamic and their sources are more flexible.

In essence, a virtual team is very similar to a virtual organization and has almost all the characteristics of a virtual organization. Therefore, the virtual team can be regarded as a small virtual organization to a certain extent, and these small virtual organizations together form a large virtual organization. For virtual teams, the following analysis can be made:

(1) The goal of the virtual team: The goal of the virtual team is to complete the determined object, and its production and operation are object-oriented.

(2) Classification of virtual teams: Objects can include specific tasks and overall project management. Therefore, virtual teams can generally be divided into task teams and project management teams. The task team is the specific bearer of the engineering task in the virtual organization and is responsible for completing certain engineering tasks, such as a certain design task, a certain construction task, a certain supply task, and so on. The project management team is the core of the entire virtual organization. It is mainly responsible for the determination of project goals, the decomposition and allocation of engineering tasks, the composition and monitoring of task teams, and various overall coordination and communication leadership tasks.

(3) The dynamic nature of the virtual team: As explained above, the existence of a virtual team depends on the object being processed. During the process, the team can join new members or leave old members according to actual needs. After processing the objects, the entire team was dissolved. Once there are new processing objects, a new team can be formed quickly. It is also very important that during the construction of the project, multiple virtual teams can be combined into a large virtual team according to actual needs. On the other hand, a virtual team can also be broken down into multiple small virtual teams.

(4) the size of the virtual team: for the size of the virtual team, too few members are not enough to complete the determined task object, while too many members will affect the flexibility of the coordination process in the team and lead to increased transaction costs. In the relevant professional literature, there is no consensus on the ideal size of the team. This mainly depends on the characteristics of the task, the number of professional disciplines involved, and the distribution of interests. Generally speaking, according to the type of team, the number of members should be between 3 and 8. If more members are needed during task processing, the team should break down or reduce its workload.

(5) Role distribution in virtual teams: Each virtual team is composed of leaders and general members. For task teams, their leaders can be called team leaders; for project management teams, their leaders can be called project leaders or project managers. The team leader is responsible for the specific management of the task team, and the project manager is responsible for the overall management of the entire project. ^[2]