Human Resource

Management

In

Virtual
Organisation
 Abstract

● Concept of virtual organisations

● Distinguish between traditional organisation and
virtual organisation
● Types of virtual organisations
● Advantages and Disadvantages of virtual
organisation
● Human resource issues in virtual organisations
 Concept of virtual organisation
● Virtual organization is emerged in 1990. Virtual organization is also known
as network organization or modular organization or digital organization.
● Virtual organization is a network organization which is known as ICT is
called as information communication and technology to create market in
dynamic ways.
● Information coordinate the activity and combines to achieve the common
goals.
● Network relationship : manufacturing, distribution, marketing and
business function.
● Manager are do their are activities in house and their are coordinate
external relationship with computer network links.
● The network relationship comes under computer links nike, reebok, puma,
etc.
 Distinguish between traditional organisation and
virtual organisation
1.Activity in orderly manner driving forces is the virtual team.

2.Members interact through some electronic communication who never come to face to
face they communicate on online using links:
∆ email
∆ Video conference
∆ WAN ( wide area network)

Follows :
∆ Absenses of verbal and non- verbal example facial expressions, body language, eye
contact.
∆ Ability to overcome constraints time and space.
∆ Team cannot work successfully without trust relationship establish through face to
face interaction and communication technologies.
 Types of virtual organisation

● Telecommuters – This type of virtual organisation hires employees

that work from home and interact with their workplace via personal
computers.
● Completely virtual – This type of virtual organisations are linked to
a network of retailers, distributors, suppliers and customers.
● Outsourcing employees – This type of companies outsource
almost all or a significant part of core competencies. The virtual
organisation own one or two core competencies at which it is
excellent and hires the rest. The areas for outsourcing generally
include information system, manufacturing, fiancé, engineering etc
Advantages and Disadvantages of Virtual Organisation

Advantages Disadvantages

Higher employee satisfaction Lack of solidarity

Boost in employee efficiency Reputational risks

Broader talent pool Less communication

Overhead costs are low Compliance and security issues

Improved employee retention High maintenance cost

 Human resource issues in virtual organisation

● Recruitment is conducted under time pressure and requires high

performance expectations.
● Both human capital (Knowing one’s job) and social capital (Knowing
each other) become extricably linked.
● Social relationships do not require much stability.
● Workplace is variable
● Value of idleness is shown in terms of learning by watching what
others do.
● Job status and project feedback is short-term. Therefore, virtual
organisations require a heavy investment to create systems and
staffing structures.
Cont.
Employee selection and performance management are the two critical human resource problems in virtual
organisation. People who are to work in a virtual organisation require the following traits:

● Self guided and self motivated.

● Familiarity and comfortability with the job.
● Effective communication skills - both oral and written.
● Adaptability.
● Technical self sufficiency.
● Result orientation.

Performance management is the most difficult problem in virtual organisations. It requires daily attention on
three principles due to physical separation of workers and managers:

● Define performance goal of cach member or team clearly.

● Facilitate performance by eliminating all obstacles and providing necessary resources.
● Encourage performance by providing rewards.

To conclude, human resource management in virtual organisations requires shift from person-job fit to
person-role fit.
 Thank you

By
S²Y²