According to Chuck (235), virtual companies or organizations can be defined as those organizations whose members or stakeholders are geographically apart, but work through computer groupware or e-mail while seeming to others as a single and unified organizations that actually have physical location. The globalized world is characterized by virtual organizations and this ensures various organizations to have competitive advantages over their competitors within the global market (Kreitner 8). Organizations wish to maintain the market share in order to become leaders in their preferred areas. If an organization gains competitive advantage within the global environment, it will be continually reshaped and will therefore utilize its resources in the best way ever.
Development of virtual teams is one way of maintaining the market share and competitive advantage (Chuck 232). This enables the organizations to go beyond space and time constraints. With virtual organizations, members do not physically interact with each other but this arrangement ensures desirable outcomes for the management in an effective and efficient way. The physically separated teams use computer mediated communications for the achievement of their good results. However, there are several concerns and issues facing the virtual organizations and that hinder the success of their objectives.
The challenges that experienced in the virtual organizations especially by the manager include problems of communications across cultures, factors of accountability, issues of commitment and trust, role clarity, leadership issues, credibility, lack of visibility in the project, motivations issues, and time zone differences (Chuck 233). Communication is of prime significance in the success of virtual organizations since it clarifies goals, responsibilities and relationship, and therefore mitigates risk. Communications also allows for the clarification of thoughts, precision and accuracy in team work and organizational growth. The time zone difference possibly restricts the informal and formal social exchanges, and can possibly result in misunderstanding and ambiguity. The manager should therefore ensure that the working is aware of the time differences to promote understanding.
It is a difficult task to build trust among the geographically separate teams because they don't experience a face-to-face type of interaction. Trust is very necessary during team development, such that lack of mutual trust hinders the achievement of commitment from the members of the organization. Trust allows for the willingness and ability to learn, and promotes performance. It has been found that high degree of trust strengthens the bonding the organization's members. This creates a unique culture within the organization and therefore resulting in a successful virtual team (Chuck 231). Because the members of the virtual organization do not easily meet, experienced managers should encourage and recommend the use of communication technology such as cellular phones, faxes, pagers, and the e-mail in order to share logos, mottos, and jokes. This type of communication is aimed at sharing experiences among the members of the virtual organization and therefore promotes trust.
Leadership plays a very significant role in the virtual organizations; however, it is defined differently from the type of leadership that involves face-to-face contexts. It has been suggested that the virtual organizations' leaders perform multiple leadership tasks and at the same time encourages, motivates, and rewards the members. These leaders offer empathy and mentoring to the members of the organization, therefore reinforcing the development of health relations with the entire group (Chuck 231). The manager should be extremely effective by offering detailed, prompt and regular communication with the members of the organization. Motivation is also a significant issue when it comes to commitment and dedication of the members. In spite of advanced communication that supports the virtual organization, the members experience problems as they work outside their interest and expertise. This may lead to wrong performance measures and therefore contributing to the organization's failure. It is therefore a great change experienced by the managers to build the relationship, and to motivate the members.
A virtual organization should be encouraged in confidence building and team building psychological actions that promote commitment, trust, accountability, reliability and dependability among individuals within the virtual organizations. The project manager must ensure that the team of workers communicates and participates in group work as well as building relationship. It is necessary for the manager to unite the work of his or her team and deliver the desired outcomes in a cohesive manner, as demanded by the clients of the organizations (Chuck 234).