A virtual organization is a temporary collection of geographically dispersed individuals, groups, organizational units, or entire organizations that depend on electronic linking in order to complete the production process (working definition). Businesses come together to share skills or core competencies and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks. It is a manifestation of distributed collaborative networks. A virtual enterprise is a particular case of virtual organization. Virtual organizations do not represent a firm’s attribute but can be considered as a different organizational form and carries out the objectives of cyber diplomacy.
Definition Unfortunately, it is quite hard to find a precise and fixed definition of fundamental notions such as virtual organization or virtual company. The term virtual organization ensued from the phrase "virtual reality", whose purpose is to look like reality by using electronic sounds and images. The term virtual organization implies the novel and innovative relationships between organizations and individuals. Technology and globalization both support this particular type of organization. Virtual can be defined as "not physically existing as such but made by software to appear to do so", in other words "unreal but looking real". This definition precisely outlines the leading principle of this unconventional organization, which holds the form of a real (conventional) corporation from the outside but does not actually exist physically and implicates an entirely digital process relying on independents web associates. Thus, virtual organizations are centred on technology and position physical presence in the background. Virtual organizations possess limited physical resources as value is added through (mobile) knowledge rather than (immovable) equipment. Virtual organizations necessitate associations, federations, relations, agreements and alliance relationships as they essentially are partnership webs of disseminated organizational entities or self-governing corporations. In the USA groups of people can assemble online and enter into an agreement to work together toward a for-profit goal, with or without having to formally incorporate or form a traditional company. A virtual corporation (S corporation or LLC) may be required to maintain a registered agent with a physical address but it can be started, operated and terminated without any of the principals ever being in each other's physical presence. Global Healthcare Marketing and Communications, LLC (Global HMC) is an example of a virtual corporation operating worldwide sans bricks or mortar. The company provides medical education services to major pharmaceutical companies and the business model differs significantly from traditional medical education agencies with a physical presence.
Apparition and evolution The emergence of outsourcing in the 80s unquestionably played a significant role as its aim is to eradicate unproductive internal services and transfers the difficulty outside of the organization. Outsourcing necessarily implies partnerships as companies resort to other establishments. Thus, this method highlighted the necessity of alliances and networking in a business and provoked a great interest for new disciplines. Indeed, this process has dramatically changed the way organizations consider partners and has raised their awareness concerning the benefits smart alliances can offer. Though, until the early 1980s, this extremely bureaucratic organization arrangement (involving challenging, complex and slower decision-making) was considered adequate to manage a vast number of employees. The term was first utilized in the early 1990s as demonstrate the work of Jan Hopland, Roger N. Nagel, William H. Davidow and Malone. The table below allows us to understand more specifically their faintly distinctive theories:
As mentioned before, there is not yet a universal definition of the term virtual organization. Even though this concept started to evolve a long time ago it is still progressing nowadays. We can observe below the innovative virtual organization's model focusing on quickly and efficiently creating first-class products (using each partner core competence).
Projects Virtual organisations have become increasingly common in the area of research and development, with often far-flung organizations forming alliances that amount to a "Virtual Research Laboratory." Vassiliou (2007) outlined a broad continuum of possible virtual laboratory relationships, ranging from relatively simple outsourcing by a central organization to tightly knit consortia of collaborating entities. Several European Union projects in the Framework Programmes for Research and Technological Development focused on virtual enterprises:
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