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Virtual Organization: HR Functions

Introduction:
The emergence of the organizational virtualness has changed the HR dimensions and its role in the organization. New organizational forms are emerging that are different from traditional organizations. This document attempts to provide a model of HR challenges for organizations in different stages of virtualness. Global competition, advances in the computer technology, convergence of the various fields of technology, the emergence of new technologies, shift from the production oriented economies to service oriented economies.

DEFINITION&ORIGIN
A virtual company, defined in simplest terms, is an enterprise composed of a people, assets, and ideas linked by a technology. Additionally, the enterprise is void of traditional 'brick-and-mortar" components. No buildings or warehouses are used to house workers or products. The virtual worker is off-site and his product is an idea, concept, or process. Technology allows the virtual worker to bring the goods and services to market while he remains in his home office.

Mowshowitz, 1986 used the term Virtual Organization for the first time in 1986.Since then, there has been a lot of research on this type of networked Organizations and how they will revolutionize the way we work in the 21st Century. The advances in the computer technology, the information technology, communication technology and the convergence of the computer technology, communication technology and media, and the emergence of new technologies like virtual reality and artificial intelligence have changed the way an organization is functioning. The virtualness of organizational members as well as organization s themselves, enabled by these technologies has shifted focus from the concept of workplace to the concept of workspace. The traditional competitive advantage based on the access to resources, barrier to markets and unimitable technology and products are no longer valid in the turbulent and uncertain environments. These competitive advantages crumble to nothing against new organizations which compete on the basis of their ability to utilize Resources through the use of technology - to acquire and retain a distributed/virtual structure by supporting cooperation among people and organizations working from different locations.

A Virtual Organization is primarily characterized as being a network of independent, geographically dispersed organizations with a partial mission overlap. Within the network, all partners provide their own core competencies and co-operation based on semi-stable relations. The products and service s provided by a VO are dependent on innovation and are strongly customer-based. TYPES OF VIRTUAL ORGANIZATION S VOs may be of different forms like virtual teams, virtual functional units, virtual project teams, virtual network of organizations, virtual web, etc. The VO topology as in Campell (1997) and later adopted by Haveet at (1997) is mostly used and relevant here. Internal VO Stable V O Dynamic VO Web Company Internal VO This kind of VO could be described as one organization that aims at operating with internal teams. The VO consists of several business units that are composed of autonomous groups and teams. Management tasks are performed in a decentralized manner, and the availability of employees from different places is the key factor for the flexible structure of the organization. Stable VO The foundation for this kind of VO is the co-operation between different organizations and it aims contracting noncore-competencies out by a core partner. The committed suppliers of core-competencies are closely related to the core partner. Dynamic VO The dynamic VO co-operates on a large scale basis with other organizations. Opportunism and temporality are the foundation for the relations between them. Co-operation in these VOs are dependent on the occurrences of market incentives, offering a great deal of flexibility to the organization. Web-company The web-company, or agile organizations, is a temporary network of specialized Organizations based on the use of Internet (Bultje & van Wijk, 1998).The Internet is enabling the organization to offer their products and services on a global scale, and the key factors for a well functioning organization are knowledge management and knowledge sharing. Typology of VO Type Researched Organisations Internal Virtual Organization Stable Virtual Organization Nike, ING, Airbus Dynamic Virtual Organization TMG, Prolion Web-company Amazon.com

Why do we need virtual organizations? Most markets require virtual organizations to fulfill the needs of customer/s that would otherwise go unmet. We have seen some enterprises partially virtualized 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 organization. Indeed, Cisco works with partners in the field of software, equipment, consulting etc in order to fulfill customer/s requirements. Despite Cisco having a virtual feel it is not a virtual organization, but it does indicate the possibilities and opportunities that virtual organizations can deliver. Virtual organizations will develop in many industries as customer requirements become more difficult to achieve or where risk prevents enterprises from acquiring companies to fulfill customer or project requirements on their own, markets become more project orientated, the market consists of lots of small organizations and companies. The increasing prominence of eco-system partnerships and alliances indicates the migration to the virtual organization. Other stimuli are driving the development of virtual organizations, this includes increasingly dynamic markets having to react quickly to market demands; not all organizations/enterprises have the core competencies to react to changing demands. Changing value chains more services led as opposed to manufacturing led growth, particularly important in the western world. Convergence between technologies, services, products etc are changing value chains. Customers are more knowledgeable and demanding, expectations are very high. Personalization customers/end-users increasingly seeks differentiation or individually developed products and services. One-stop-shop and end-to-end service some customers/end-users seek one all encompassing solution from one company. Shrinking margins the manufacturing industry is particularly vulnerable to this and will seek new ways of delivering value to customers/end-users. Eco-system partnerships or alliances, some, will evolve into virtual organizations.

Virtual Organizations - 21st Century Organizational Paradigms


Advances in media technology gave birth to a new organizational paradigm; virtual organizations are business and organizational models made possible by globalization and developments in transportation, information, and communication technologies in the late 20th and early 21st century. Indeed, due to the rapid advances in information and communication technologies, virtual organizations are expected to play an increasingly important role in the global economy. Virtual Organizations Composed of Multiple Team Members First, a virtual organization is an enterprise composed of multiple members. A member of a virtual organization could be defined as any individual, group of individuals, or formally organized enterprise recruited to serve as a satisfier of an input needed to produce a desired outcome. For instance, for a computer manufacturer in California, a virtual member could be an individual software programmer in India or Ireland; a supplier of a part in Singapore; and or a PR or sales representative located in Germany.

Members Dispersed in Different Geographic Regions of the World Second, members of virtual organizations reside in geographically dispersed locations i.e. they do not live within reasonable driving distance of each other and are restricted by location from sharing the same physical workspace. Often, members of virtual organizations live in different countries and across multiple time zones. Virtual Organizations Coordinate Efforts through Media Technology Third, members of virtual organizations communicate and coordinate activities through technology media. Because team members are dispersed around the globe, they rarely meet face-to-face. The types of media technology used to coordinate activities include email and or Internet applications like Skype, Instant Messenger, and go to Meeting. Accordingly, participants in virtual teams must be proficient in the use of media technology applications. Virtual Organizations Collaborate for Achievement Finally, members of virtual organizations are brought together to fulfill a purpose. They are goal-oriented enterprises recruited to collaborate together for the fulfillment of a stated vision, objective, or tasks relevant to a particular project. Effective collaboration in virtual teams includes cross-cultural sensibilities and skills; emotional intelligence in communicating through electronically sent messages; and well-defined processes and roles whereby every member works from the same page. EXAMPLES OF VIRTUAL COMPANIES

There are many examples of different types of companies that operate as virtual companies. One company, Ensemble - a division of Hallmark, is an example of the virtual enterprise that relies on outsourcing to become a more successful company. They rely on other companies to handle their manufacturing and distribution.

Consumers use virtual companies for almost everything these days. From buy.com to amazon.com, they can purchase anything imaginable on the Internet, Amazon.com,buy.com, a leading Internet superstore and low price leader, sells a broad range of categories including computer hardware and peripherals, software, consumer electronics, books, videos, DVDs, games, music, golf, clearance equipment, and travel booking services.

Wedding Channel.com is another virtual enterprise. This company works by linking all of the needs of a bride to be into one central location. They offer tips, advice, links to invitation providers and bridal registry stores, and planning tools.

Monster.com, Jobs.com, Naukari.com in that it allows job seekers and recruiters to come together through the internet.

Virtual Team
Virtual team management is the ability to organize and coordinate with effect a group whose members are not in the same location or time zone, and may not even work for the organization. The predictor of success isas always clarity of purpose. But group participation in achieving that is more than ever important to compensate for lost context. Virtual team management requires deeper understanding of people, process, and technology, and recognition that trust is a more limiting factor compared with faceto-face interactions. The Challenges of Virtual Teaming: It is of course vital that virtual teams enjoy the same (or higher) critical foundations as effective face-to-face teams. In the absence of the normal give-and-take of face-to-face interaction, they must overcome the obstacles associated with time, distance, organization, and culture. Seven critical success factors can be identified, each calling for dedicated organizational policies, strategies, and partnerships, including their design, implementation, results, and associated business processes: Human Resource Management. Building and maintaining virtual employee identity in modern organizations is a new challenge: human resource management must resonate with virtual knowledge workers, and deal with unique issues such as visibility in the organization, career options, and paths to advancement. Virtual staff needs to feel they are on a par with other workers in the organization and that their different personal and work circumstances are understood. Human resource management must overcome the perceived natural advantage of in-house employees, with possible implications for organizational design. Lack of a sense of belonging can show up in human resource indicators, such as low morale and retention. Learning and Development. Modern organizations must commit to, and make resources available for, training and other ongoing learning development activities focused on working in a virtual environment. They must also educate all employees, not just virtual employees, in virtual team culture. Organizational Culture. Leadership and organizational commitment must recognize that virtual teaming is fast becoming a preferred way of working. Recognition entails promoting virtual teaming and rewarding and recognizing team members who lead and participate in virtual teams. Leadership. Senior leadership must recognize that virtual teaming is fast becoming a preferred (and useful) way of working. Cross-functional management teams must be established to handle and resolve the complex,10 cross-functional, and virtual issues that virtual teams deal with. Management system flaws in decision making must be resolved if virtual projects are to succeed. Because problems from one team can pollinate other virtual teams, management must define the escalation path to resolve cross-functional, virtual team issues. Team Leader and Team Member Competencies. Team leaders must see themselves as critical to facilitating the teams success, with a particular role in bringing the team closer together and building the interpersonal relations its members need to

succeed.11 Just as importantly, team members must be proficient in the use of interactive technologiesworking across time, distance, organization, and culture with sensitivity to project and time parametersand able to network. In a VO the role of a HR professional is that of a coordinator and facilitator. The HR professional in a VO is more like a consultant (may actually be a consultant on contractual basis rather than on permanent employment).The skill set required is different from that of a HR professional in traditional organizations. There may be a convergence in the required skill sets in VO and the organizations of the twenty-first century. Hunter of Anderson consulting Identifies the following skills as required by their Consultants. A deep knowledge of traditional HR related activities, experiences, and processes. Process redesign Defining competencies and designing training Relationship management, including fostering communication General business knowledge Strategic skills, particularly cost cutting and cost maximization and Organizational change navigation, which covers leadership and general change management and cultural issues

Virtual Human Resources


Organizations have been providing virtual human resource services for several years, and now some leading organizations are taking virtual HR to another level. Organizations often leverage virtual technologies to outsource payroll, benefits administration, and even human capital management. Virtual Recruiting: A virtual job fair featuring webcasts, webinars and video interviews is an accessible and effective way to conduct a vital business event online. Interact with students, job candidates, and employee prospects around the world via a digital expo. Instant access to a global audience: Engage and process a broad range of candidates around the world. Costeffective: Interact with employee candidates in oneonone virtual interactions like chat, or even video. Targeted: Enable virtual networking based on specialties. Virtual HR Structure: Host HR programs and services in your always on virtual environment. Virtual Onboarding: The days of the traditional orientation in a room with other new hires are a fading practice. When most of your talent is virtual, onboarding must be virtual, engaging, and connect people to the critical information and resources they need. Easily onboard a global workforce

Bring in company experts without disrupting their schedules Gain insights and tips from peers The ability to go back to the environment any time in order to access content and peers.

Virtual HR Departments: Achieving all of these goals simultaneously requires a dramatically different approach to HR organization. A virtual HR department is a network-based structure built on partnerships and mediated by information technologies to help the organization acquire, develop, and deploy intellectual capital. The backbone of virtual HR is information technology(IT). Its impact within HR has been both pervasive and profound. IT allows firms to store and retrieve large amounts of information quickly and inexpensively. It also enables them to rapidly and accurately combine and reconfigure data to create new information. Further, because it allows them store and quickly use the judgment and decision models developed in the minds of experts, IT systems help firms to institutionalize organizational knowledge. With IT networks, they can communicate more easily and selectively with others in remote parts of the world, thereby allowing for even better use of the information at their disposal. In that regard, IT can be a potent weapon for lowering administrative costs, increasing productivity, speeding response times, improving decision making, and enhancing customer service. It is also completely vital for coordinating activities with parties external to the firm. Ultimately, IT can provide a data and communications platform that helps HR link and leverage the firm's human capital to achieve competitive advantage. Emergence of e-HRM: Generalized access to Internet that is available through multiple channels and the fast developments around the world-wide-web has led to the proliferation of many terms such as the e-commerce, e-business, e-work, e-government, etc. To put it in a more emphatic way it seems that in the first years of this decade everything became esomething. Similarly, Business-to-customer (B2C) and Business-to-Business (B2B) are other examples of popularized terms. Shaping organization is essential and required task for any management to produce a qualitative and reliable product for their customers. So, today we can easily see a concept of Human Resource Management (HRM) in every organization for internal management and efficient utilization of resource to produce a better and new technological product for their customers. The importance of human resources to any organization need not be over-emphasized. Human resource is the wealth of a nation and an organization. Basically, every organization is directly depend on the HRM for good implementation of resource for the task design and planned by top level management. If an organization has good and responsible HRM then the output of that company automatically would be excellent. HRM is generally the essence of being a manager who has to get things that done by others. It generally leads to the maximum utilization of human resources, reduces excessive labor turnover.

e-HRM (Electronic Human Resource Management) is advance business solution which provides a complete on-line support in the management of all processes, activities, data and information required to manage human resources in a modern company. It is an efficient, reliable, easy-to-use tool, accessible to a broad group of different users. E-HRM is a way of implementing HR strategies, policies, and practices in organizations through a conscious and directed support of and/or with the full use of web-technology-based channels. It covers all aspects of human resource management like personnel administration, education and training, career development, corporate organization, job descriptions, hiring process, employee's personal pages, and annual interviews with employees. Therefore e-HRM is way of doing HRM. One approach can also be considering as a technical perspective, the IT possibilities for HRM are endless in principal all HR processes can be supported by IT. E-HRM is the relatively new term for this IT supported HRM, especially through the use of web technology. According to todays trend each company need HRM like interface to manage a proper balance in between employees or managers and sometimes it gets failure due to the human or social related problem but from e-HRM we can easily overcome from all these problems. The performance of the workers could be improved and increased by proper motivation. Most people can exercise far more creativity, self-direction and self-control than their present jobs demands. It is, however, necessary to create an environment in which all members can contribute to the limits of their ability. Through e-HRM we can build a transparent environment for employees because the e-HRM has no any emotions and nobody can blame to e-HRM for partiality e-HRM improves organization climate very clearly and in good climate everybody gets relaxation and can do their job very well, so it relates to the excellent production or enhance quality.

CHANGING ROLES OF HR
The roles of HR in an organization is changing dramatically with information technology development, turbulent environment, uncertain markets, changing norms of work society interactions and globalization. HR Challenges The HR challenges are: Developing relationship management skills Attitude change to trust suppliers as team members Creativity and innovation management Developing inter personal skills in virtual environment

Developing team building and maintaining skills in an virtual environment Individual & team (both internal & external) performance evaluation systems.

Potential Advantages and Disadvantages of Virtual Organizations Potential advantages:

Reduction of expenses involved by the necessity of using working spaces rent, maintenance, insurances etc. More efficient usage of office space, in the case when some employees work according to the traditional system, while others prefer a telecommuting system. Decrease of salary expenses, as the virtual team members are paid for their task and not for their time spent at work. Possibility to have experts located in any part of the globe. Possibility to hire low cost but qualified labor force (recruiting the personnel can be done in geographic areas where the labor force is low cost and well trained). Increase of productivity and performances due to the fact that virtual team members can better focus on the results to be achieved. Reduction of the number of absentees because the virtual team members work at home. Creation of jobs and employment opportunities in rural or disadvantaged areas.

Potential Disadvantages: Added complexity due to the participants being distributed to multiple geographical locations and restricted from face-to-face interaction. Increased risk of communication breakdowns due to cultural and organizational differences inherent to participants from geographically diverse regions of the world. Reduced productivity due to a lack of shared meaning and cohesiveness that shared meaning can produce between members of an organization. For those who telecommute i.e. work at home, reduced productivity due to a lack self-discipline and an overabundance of distractions around the home.

Conclusion
One of the most important challenges in the transition of the organization towards virtualness is changing the Mindset of the organization to accept virtualness as a strategic variable. The new business models and the IT based systems call for a change in the processes, for the introduction of the systems to be effective. Technology introduction without changing the processes to align harmoniously will not lead to any perceptible change. The development of virtual alliances requires the development of interpersonal and team skills in a virtual environment.

References
Campell, A. (1997), Creating the Virtual Organization and Managing the Distributed Work Force, Paisley, UK, University of Paisley. Venkatraman, N. and Henderson, J. C. (1998). "Real Strategies for Virtual Organizing", Sloan Management. www.wikipedia.com www.citehr.com

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