Virtual organization

A virtual organization is an organization involving detached and disseminated entities (from employees to entire enterprises) and requiring information technology to support their work and communication. Virtual organizations do not represent a firm’s attribute but can be considered as a different organizational form.

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.

It is not achievable to affirm precisely the time of the apparition of virtual organizations’ notion. This concept was not born in one day nor conceived by one distinct individual but results from several factors including our constantly changing and evolving society as well as the development in the information and communication technologies.

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.

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