Upload
ekta-singhal
View
224
Download
0
Embed Size (px)
Citation preview
8/7/2019 hrm paper detail
1/18
Research paper presentation at International Conference on Emerging Trends
in E-Commerce on March 16th and 17th, 2011 Organised by Department of
Commerce, University of Madras, Chennai.
Mr. Ritesh Kumar Singhal,
Assistant Professor in Economics,
Sydenham College of Commerce & Economics,
Churchgate, Mumbai-20
Contact Number: 09869109674
Email: [email protected] (Please send all correspondence at this
email address).
Dr. (Mrs.) Ekta Singhal (Physiotherapist)
Final Semester Student MBA-HRM, from Sikkim Manipal University
Dadar, Mumbai- 14
Contact number: 09969375623
Email: [email protected]
TOPIC: CHALLENGES IN A VIRTUAL ORGANISATION
1
mailto:[email protected]:[email protected]8/7/2019 hrm paper detail
2/18
Biographical Note:
Mr. Ritesh Kumar Singhal - M.A. (Economics), SET (Economics).
Mr. Ritesh Kumar Singhal is working as an Assistant Professor in Economics at
Sydenham College of Commerce & Economics, Mumbai, India. He is teaching in
Degree College since September 1997. He is been teaching subjects like Micro
Economics, Macro Economics & Indian Economy. He is also a visiting faculty at
Yashwantrao Chavan. Maharashtra Open University, as well as other courses of
Mumbai University likes B. Com in Banking & Insurance & Bachelor of
Management Studies. He also won the second prize for the best Research paper
competition held at S.N.D.T. University, Mumbai in October 2007. His paper had also
been selected at the International Conference on Applied Economics at Greece in May
2008. He has recently submitted his Ph.D. Thesis at the Department of Economics,
University of Pune in February 2011.
2
8/7/2019 hrm paper detail
3/18
Topic: Challenges in a Virtual Organisation
ABSTRACT:
This study aims to develop and offer some deeper understanding of the impact on
work created by virtual organisations. This study seeks to understand: what are the
advantages in the virtual arrangement that attracts the virtual workers? And what
aspects of the virtual worker enable them to function in this working environment?
The salient feature of the virtual organization is the flexibility to meet the changing
environment, its effectiveness in using electronic communication and the leveraging
of strategic partnerships. Todays organizations are faced with a dynamic and
turbulent environment that requires flexible and fast responses to changing business
needs. Many organizations have responded by adopting decentralized, team-based,
and distributed structures variously described in the literature as virtual, network, and
cluster organizations. Advances in communication technologies have enabled
organizations to acquire and retain such distributed structures by supporting
coordination among people working from different locations. Understanding virtual
work is important as e-commerce and e-business strategies are adopted and
implemented in organizations where flexible work practice is a key component of the
business strategy. Organisations and enterprises can work together in new ways
without leaving their core market and leverage becomes more important in these hard
times of commoditation. As convergence, integration, migration occurs between
technologies, markets and user demands, virtual organisations will be in a position to
react to these changes.
Key words: virtual organisation, e-commerce, communication.
INTRODUCTION:
Human resource management (HRM) is the strategic and coherent approach to the
management of an organizations most valued assets the people working there who
individually and collectively contribute to the achievement of the objectives of the
business. The terms human resource management and human resources (HR)
have largely replaced the term personnel management as a description of the
processes involved in managing people in organizations.
3
8/7/2019 hrm paper detail
4/18
Organizations have always tried to adapt their organizational structure to suit their
organizational strategy. The factory system that brought labour, materials and motive
power together in the industrial revolution was one example of this. In later years,
organizations have continued this trend of matching strategy with structure and have
gone through cycles of centralisation and vertical integration followed by
decentralisation and a focus on product groups or geographical markets.
Matrix management was an early example of this but proved difficult to manage in
practice, particularly in large, multinational organizations that spanned several time
zones. The notion of the 'virtual organization' is now seen as an organizational form is
capable of addressing the problem of managing transformations in the social,
economic and technological environments in which organizations now operate.
What are Virtual Organisations?
A virtual organisation consists a group of companies, acting as one company to fulfil
a need in the marketplace. These companies collaborate, share skills, information,
products, services etc in order to meet the goal of customer fulfilment. In deed, a
company can itself be a virtual enterprise consisting of interdependent departments.
These companies operate independently of each other but work together to meet a
common goal of meeting a need in the market. In deed, any company can partake
in more than one virtual organisation so long as this does not result in any direct
conflict of interest.
'Virtual organizations' are a set of organizations that rely on multiparty co-operative
relationships between people across structural, temporal and geographic boundaries.
Flexibility is brought about in part by reconfigurable networks of computer based
communications that allow organizations to co-ordinate their activities and in part by
a management philosophy based on collaboration and innovation.
CONCEPT DEFINITION
Davidov and Malone in their paper: The virtual corporation are credited for
initiating the discussion on virtual organizations use the term virtual corporation to
refer to a very broad concept encompassing any new organizational form, inter-
organizational forms, etc.
4
8/7/2019 hrm paper detail
5/18
Other definitions that can be found in the existing literature include:
VO is a form of cooperation of legally independent companies of people contributing
their core competencies to a vertical or horizontal integration and appearing as one
organization to the customer.
K. Laudon, J. Laudon and other authors claim that virtual organizations are
Organizations using networks linking people, assets and ideas to create and distribute
products and services without being limited by traditional organizational boundaries
or physical location.
Travicca gives a more comprehensive definition of the VO:
Virtual organization refers to a temporary or permanent collection of geographically
dispersed individuals, groups, organizational units which do or do not belong to the
same organization or entire organizations that are dependent on electronic linking in
order to complete the production process.
Why do we need virtual organisations?
Most markets require virtual organisations to fulfil the needs of customer/s that would
otherwise go unmet. We have seen some enterprises partially virtualise their
operations, Cisco operates virtual factories, so if we look at it from the point of view
of the factories that produce routers and switches. Cisco is the virtual organisation.
What are the charactereistics of a virtual organisation?
Dispersion. Virtual Organizations break the barriers of space and times, which may
even lead the virtual organization to become a 24-hour organization, thus improve its
responding to customers.
Based on core competencies. Core competencies form the fundamental nucleus of
Virtual Organizations. The combination of all core competencies leads to synergy and
enables a flexible way of meeting the customer demands.
Based on Information Technology. IT is a key factor in the spread of VOs.
Globally dispersed firms, individuals, material and information resources come
together in a VO by becoming connected through communication and information
flows. Important for a VO are the advances in transportation, communication and
computing and particularly the Internet.
Customer based and mass customization. A Virtual Organization is focused on
customers, who ask for individual products. VO should arise from a response to
customer need and it should disintegrate with the fulfillment of that need.
One identity. The VO must have its own identity and although it can consist by many
5
8/7/2019 hrm paper detail
6/18
partners it should be recognized as one by customers.
Interdependence. Interdependence among partners differentiates the virtual
enterprise from traditional ones. Participants share accountability and responsibility
for the success of the enterprise as a whole, as well as for their particular portion of its
operations and they are involved more or less actively in all enterprise operations.
Based on trust. There is need for trust at all levels i.e. between management and
employees, management and managers, employers and employees, and customers and
organizations.
What are the challenges against creation of virtual organisations?
There are different challenges to be overcome in the virtual organisation environment.
These challenges include infrastructure and people issues.
CHECK LIST FOR VIRTUAL TEAMWORK
1: SYSTEMS AND PROCESSES
technology
adequate resources
reward/recognition systems in place
system and metrics to measure performance
2. PEOPLE
necessary skills
skill based training programs
technology based training programs
senior leaders
selection practices
In order for a virtual organisation to operate efficiently, the flow of information toenable decision-making and management is required. This means that all members of
a virtual organisation need to introduce a coherent IT strategy that enables
information free flow. In the centralised example it will be the core
organisation/enterprise that takes the leading role in directing the IT strategy and in
the decentralised virtual organisation each member needs to agree to this strategy.
Ensuring that the right IT infrastructure is deployed is paramount to achieving a
workable virtual organisation; it must conform to the ideals of being flexible and
scalable.
6
8/7/2019 hrm paper detail
7/18
The IT challenges that must be overcome include:
Availability as close to five nines as possible
Expense not cut corners
Performance no matter what the load is
Mobilisation is the network capable of going mobile?
Meet user requirements the user interface needs to be easy to use and meet user
needs
Architecture scalable, flexible, migratable
Integration networks of different members need to interoperate
Application support the network must support new applications
Communications how will members interact? Deployment of VPN, Extranet?
Security members should not be able to access information that falls outside the
remit of the virtual organisation
The people issues are easier to solve in the centralised model since the core
organisation is in the position of power and dictates objectives and solutions,
members that do not conform will not be chosen. The people challenges that need to
be overcome include:
Unrealistic expectations expectations of any part of the virtual organisation must be
achievable. Clearly defined objectives and solutions must be determined.
Different culture members of a virtual organisation must be able to work together.
Work cultures must be similar, bit discrepancies will lead to problems.
Collaboration over long-distances/time-zones people co-operate over long-
distance or time zones, this should not hamper workflow, the right IT solutions must
be out in place.
Diverse processes/procedures each member must understand his/her role,
responsibilities and objectives and so must the people that are included as part of the
virtual organisation. These must be clearly defined.
Management practices each member must be able to manage their objectives as
part of the virtual organisation to suit their needs and objectives.
The implementation of a virtual organisation portal will enable members to
effectively operate and access information, processes and applications to enable them
to achieve this goal. The information, processes and applications must be globally
7
8/7/2019 hrm paper detail
8/18
available in order to empower each member of the virtual organisation so that they
effectively operate. The virtual organisation portal provides a workplace solution on
which members and employees can:
Collaborate
E-learn
Information share
Web-conference
Delegate
Manage
Interact with customers, partners, suppliers
Project Manage
8
8/7/2019 hrm paper detail
9/18
Transact Value
(courtesy: gstatic.com images)
There is no hard and fast way to virtualise an organisation and which IT/Business path
to follow, there are many choices to be made, however some of the most important
9
8/7/2019 hrm paper detail
10/18
aspects that must be addressed in order to create a successful virtual organisation
include:
Virtualisation must be based on user, market and customer requirements
Define SLAs with external service provider and internally if needs be
Integrate solutions end-to-end across the virtual organisation network
Implement security end-to-end across the virtual organisation network
Build in scalable solutions and flexibility
Make sure there is Value for each partner
Go for Some quick short term wins whilst developing the infrastructure
/Organisation
Get hands-on management team even if it starts of as a project
What next for virtualised organisations?
Virtual organisations are beginning to emerge and develop, the market conditions are
right; the technology is there along with the drive to do it. The appearance of true
virtual organisations will take time to appear, it may occur in a phased approach and
develop out of many industries. Virtual organisations do not mean the imminent
arrival of another Dotcom type bubble; it is the creation of new business practices to
meet the demands of new market dynamics, being better able to react to the customer
demands. Virtual organisations will only work where there is benefit for all members,
whether it is a centralised or decentralised virtual organisation. It is quickly being
realised that in many emerging market it is very difficult for individual enterprises to
meet the demands of the individual and in many cases expectations go unmet. These
end-user needs can sometimes only be met through co-operation and in a virtual way.
As convergence, integration, migration occurs between technologies, markets and
user demands, virtual organisations will be in a position to react to these changes.
The VO problems and how to solve them
A virtual organization is dependent on technologies and experiences. However,
people are the entity who owns technologies and experiences. Therefore, how to
promote the knowledge capital of an organization through human resources
management is the key to improve the competitive advantages. Because of the special
virtual nature of the virtual enterprise, the human resources management faces new
problems.
10
8/7/2019 hrm paper detail
11/18
The fact is that the processes of the creation and functioning of the virtual
organization are not simple. Eliezer Geisler, , (2001). They are accompanied with
various problems, from those arising from the cultural differences among the team
members, their sometimes quite unreal expectations of what they and other team
members can and cannot do, to the problems concerning the coordination of all virtual
organization members.
Yet, the following may be the key problems:
(1) The problems of (un) trust among the team members, The all present danger in
most virtual teams is that the members who are from different places, belonging to
different cultures and possessing different level of technological knowledge feel some
kind of fear concerning the way in which their information will be used, or whether
other members of the team will give the same contributions to the realization of the
mutual task, etc. It takes some time to develop the "on-line" trust, although a little
time is usually spent on that.
(2) The problems of communication inside the virtual organization :Different
problems concerning communication represent the serious problem in the functioning
of the virtual team. One of such problems is the inability to view the whole project.
(Karin & Hemingway, 2004, p.195) The specific communication inside the virtual
organization may even create some situations in which a member of the virtual
organization does not under-stand the received message completely.
(3) The development of trust. This question has to be of the central importance to the
team managers. It is the fact that the old-fashioned ways of the management based on
the permanent supervision and control are not suitable for the virtual situation.
(4) The encouragement of direct (face-to-face) contacts, if at all possible. It is often
suggested to the virtual organization managers to organize at least one initial meeting
for the virtual organization members, so that they can meet one another in person and
develop some personal contacts. Such meetings, if they are possible at all, make
interpersonal contacts and relations among the virtual organization members stronger.
(5) To introduce the team members into the way and time schedule of the task
realization. The basic idea is to enable the team members to realize their own position
in the whole team. This can be done by showing the complete plan through the
electronic means.
11
8/7/2019 hrm paper detail
12/18
(6) To find the model how to avoid "delays".(P Kearney ,Trust ,2006) This model can
include, for example, the obligatory reply to the sent question, or the necessity to give
the needed information for the stated time period (24 hours, or 48 hour, etc.), or the
obligation to send the return information to the per-son looking for the answer that the
question has reached the proper ad-dress and that giving the answer will take some
time.
(7) To take records of each team member. (Deborah Bigelow, 2000). Although it can
be difficult to take records every day, it is advisable to send the information
concerning the absence of each team member to other members
(8) A framework for trust, security and contract management A new economy based
on virtual organizations requires an environment within which businesses can quickly
come together to share resources and work together to achieve the project goals. In
addition, there is a requirement for services to replace the trust inherent in operations
within an integrated real organization (trust in colleagues even when not known
personally, trust in procedures and processes, etc), and the trust between customer and
an established service provider with a clear legal identity and brand/reputation.
Human Resources Management Strategies in Virtual organizations
For the human resources management problems in virtual organizations, it is critical
to timely identify and fix them effectively. This is imperative to ensure the positive
development of the enterprise.
(1)Must establish a common goal.
In virtual enterprises, the ultimate goal is to achieve certain business functioning and
to realize projected economic and social values by utilizing market opportunities. The
goal of employees is to get competitive earning and to realize personal values.
(2)Experimenting virtual human resources department.
The temporal nature of virtual enterprise is not the absolute truth. the organization
should try virtual human resources department. A human resources management
team may be organized from resources of member companies HR departments. One
of the responsibilities of this team is to deal with the challenging problems related to
human resources in the virtual organization. However, the human resources
departments of member companies still function independently from each other.
(3)Develop trust and good relationship.
12
8/7/2019 hrm paper detail
13/18
Trust is the basic foundation of maintaining regular operations of virtual
organization. Distribution of resources, calculation of work contributions,
performance evaluation standards, information sharing, opportunities are all factors
in trust development. Therefore, the operation of the organization must be open with
high visibility, fare, and respectful to individuals knowledge, expertise, attitude,
behavior, and culture, etc. It also must establish and maintain good reputation.
(4)Cross culture training.
Cross culture training is the most effective measure to resolve culture differences and
realize good cross culture management. Generally, the main strategy of cross culture
training is to have cross culture sensitivity training to the managers of the member
companies having frequent interactions. The training can be many formats, including
culture education, interactive communication, cross culture study, and experiencing
inter-personal relationships from different culture societies. The goal is to give the
trainees an opportunity to learn the culture in other companies and understand the
existing differences. The training will help managers to gain skills of identifying and
resolving problems during collaboration and make it easier to have multiple-
company cooperation.
(5)Establish double incentive system primarily based on member companies and
supplemented by virtual organization incentives.
To have each employee highly motivated is the ideal situation desirable to virtual
human resources management. Human resources capital theory pointed out that
employees with human capitals play a decisive role to business performance. To
increase productivity of employees and use the maximum of their potentials, the
employer must declare that the employees own their human capitals. The employer
needs to share dividends with his employees and make his employees decision-
makers. The virtual organization built upon technical employees is not a legal
physical entity and it does not have the traditional performance incentive base.
Under this unique circumstance, the double incentive system is an alternative.
(6)Assist employee personal development.
Besides maintaining its normal business operation, the virtual organization may
develop an affordable employee career development plan. The organization should
assist its employees to expand their knowledge and potentials, provide opportunities
to fully utilize employee expertise, and help employees plan realistic career
development goals. Provide key employees with comfortable working environment
13
8/7/2019 hrm paper detail
14/18
and personal development opportunities in order to increase positive motivation and
creativity of these employees.
VIRTUAL TEAMS
The team is generally defined as "a small number of people with complementary
skills who are committed to a common purpose, performance goals, and the approach
for which they hold themselves mutually accountable". (Karin Breu, Christopher J
Hemingway, 2004, p. 192)
The creation of groups, that is, teams, "is a normal part of human social behavior".
Their importance for the organization lies in the fact that teams can make the
organization "more flexible, quality-conscious and competitive.
Accordingly, "the organizations that recognize the impact of teams on productivity
can use that knowledge to their advantage ".
The virtual team (VT) is one of the forms, characteristic for virtual organizations. It
can be often heard that virtual teams represent the basic cell of the virtual
organization. (Deborah Bigelow, 2000) There are various definitions of the virtual
team.
What most of these definitions have in common is the fact that they emphasize that
the members of the team are, besides being the representatives of the team, separated
(in space and/or time) and that they interact primarily by e-mail.
So, the virtual team is defined as "team(s) of people who primarily interact
electronically and who may meet face-to-face occasionally" or "a self-managed
knowledge team with distributed expertise, that forms and disbands to address a
specific organizational goal" and "a group of people who interact through
interdependent tasks guided by common purpose", that "works across space, time, and
organizational boundaries with links strengthened by webs of communication
technologies".
It is precisely in this definition that there is four essential dimensions of the basic
model of VT "to hold something as distributed as a network and something as
immediate as a virtual team-people linking with purpose over time" .(Bekkers,
2003,p.102) The purpose, important in any organization, becomes a key factor in
virtual organizations and teams, since it is the "glue" that holds them together. In fact,
it requires the establishment of co-operative objectives, individual tasks and specific
14
8/7/2019 hrm paper detail
15/18
results. People make up the heart of the virtual team. One of the most stressed aspects
is their high degree of independence or autonomy, while the need for interdependence
and collaboration is also recognized.
Connections between the team members are critical and must be able to be made both
by face-to-face interactions and through ICT (Information and Communication
technology). Calendars, include team-specific result deadlines, task-completion
milestones, and scheduled events, as well as holidays and other organizationally
significant dates that impact timing.
They are three components to defining virtual team,
Different geography of locations of team members: virtual team members can
be located in different parts of a city or in different parts of the world. As the
distance increases and more time zones are crossed, the window of
synchronicity in the workday narrows.
And, Team members from different organizations are parts of the
organization: Team members can be from different organizations or from
different parts of the same organizations.
Finally Different durations or lengths of time that members work together as a
team: Depending on itsmission, a virtual team may unite for a project that
lasts a few days, months, or years.
There exist different variants of the virtual teams.(Karin Breu, Christopher J
Hemingway, 2004, p. 192) About, the called, "distributed teams" and some variants
of the so called "cross-organizational teams".
Distributed teams are (teams) composed of people in the same organization who work
in different places, either interdependently, or separately. The basic variants of the
distributed teams are "task forces and project teams (as temporary teams). Such teams
are formed specifically to solve a particular problem or to perform a specific task.
When the problem is solved, or the task completed, the virtual team disappears (and
team members go back to their normal duties). (P Kearney ,Trust ,2006)
15
8/7/2019 hrm paper detail
16/18
The basic variants of the so called "cross-organizational teams" are "collocated cross
organizational teams" are "distributed cross-organizational teams". "Collocated cross-
organizational teams comprise people from different organizations who work together
in the same place. On the other hand, the so called "distributed cross-organizational
teams" involve people from different organizations who work in different places.
CONCLUSIONS
virtual organizations may well be non-hierarchical and decentralized from an
authority standpoint; however, from a communication standpoint they may still be
hierarchical and somewhat centralized. The reason for this rests in the communicative
efficiency and robustness of the hierarchical form and in the benefits of role
specialization. Virtual organizations allow relatively easy access to people in the
know by making it easy to obtain information from experts, regardless of where they
are located
The challenges virtual team leaders face are often exacerbated by their virtual settting.
Effective leaders may be pinpointed to have five leadership differentiators :
top performing team leaders are able to successfully manage change,
foster collaboration,
communicate team goals and direction,
use strong interpersonal communication skills,
and empower team members.
Understanding that leading from a distance can be more challenging than leading
from co-location is the first step in adressing the problems of virtual team leaders.
Many companies feel that if theyy have the technology their virtual teams cannot fail.
As a result, they neglect other interpersonal and structural factors necessary for virtual
teams.
Technology is of course, only a tool. It is important for virtual teams as a prerequisite
rather than a differentiator. Technological advancements will certainly continue to
impact how people collaborate and work from a distance. Organisations need better
planning and the right mix of communication technologies to address particular
business needs. In addition to technology leaders need to have the skills to lead from a
distance.
16
8/7/2019 hrm paper detail
17/18
(courtsey; Plexus Communication.)
REFERENCES
www.tekplus.com
[1] Davidow, W., Malone C. The Virtual Corporation: Academy of Management
Annual Meeting Best Paper
Proceedings.,1992
[2] Laudon, K., Laudon, J. Management Information Systems: A Contemporary
Perspective. New York:
McMillan Publishing, 1998
[2] Travica, B., 1997, The design of the Virtual Organization: A research model,
Association for Information
Systems Proceedings of the Americas Conference on Information Systems, pp. 417-
419, 1997
[3] Ahuja, M., D. Galletta, & Carley, K. Individual centrality and performance in
virtual groups. Working
Paper, Florida State University, Tallahassee, FL, 1998
[4] Alexander J., & Randolph, W., The fit between technology and structure as a
predictor of performance in
nursing aubunits. Academy of Management Journal, 28 (4), 844-859, 1985
[5] Mills, D. Rebirth of the corporation. New York: John Wiley and Sons, Inc., 1991
17
8/7/2019 hrm paper detail
18/18
[6]DeSanctis G., Jackson, B. (1994). Coordination of information technology
management: Team-based
structures and computer-based communication systems. Journal of Management
Information Systems, 10 (4), 85-110,
1994
[7] Drucker, P., The coming of the new organization. Harvard Business Review, Jan-
Feb, 45-53, 1988
[8]Carley, K., & Svoboda, D. Modeling organizational adaptation as a simulated
annealing process.
Sociological Methods and Research, 25 (1), 138-168, 1996
[9]Krackhardt, D., & Hanson, J., Informal networks: The company behind the chart.
Harvard Business
Review, 71(4), 104-111, 1993
[10]w w w . p r i m e t . r o
[11] Ahuja M., Carley K., Network Structure in Virtual Organizations, Journal of
Computer Mediated
Communication, 3 (4), June 1998.
[12] Norton,B. and Smith, C., Understanding the Virtual Organisation in a week,
Headway-
Hobber&Stoughton, London, 1996
[13] Harvey M., Novicevic M., Garrison G., Challenges to staffing global virtual
teams, Human Resources
Management Review, Vol. 14, pp. 275-294, 2004.
[14] Papadakis, K., The virtual organization, University of Strathclyde, Glasgow,
1999
18