Virtual Organizations

1. Virtual Organizations Jacek Wachowicz, M.Sc., M.B.A. Technical University of Gdańsk, Poland Schwerin, 1-6.07.2001

2. Evolution of workforce Source: Bell, The Social Framework for Information Society, p. 185

3. Partialy Centralized • Distributed • Loosely confederated Development of organizations • Centralized Idustrial agestructures Information age structures

4. Factors allowing this scenario • Economies of scale • Decreasing custom barreers • Development of Mainframes • Developement of PCs • MRP/ERP systems • Internet Idustrial agestructures Information age structures

5. Technology: Advantages of WWW • Immediate propagation • Up-to date • No volume of data bareers • Multimedial • Cheap • Easy to use • 24h/7days access

6. Technology: Evolution of Nets • Computer Networks • Distributed Applications • Internet • WWW • Intranet • Extranet

7. Organization (1): New ideas • Matrix organizations • Outsourcing • Virtual Organizations • Teleworking • Dynamic Networks / Agents

8. but... Linearity • Most industrial processes are linear - difficult to paralelize • So is work

9. Example • In San Francisco Building Contest the best team build a building within less than 3 hrs... • They did it thanks to massive paralellisation of work, a complex schedules and using special materials like pre-heated concrete

10. Organization (2): Matrix Organizations Dept.A Dept.B ... Dept. n Team A Team B Team C Team D ... Team n

11. Food Fixed Costs Savings Accounting / Audit Public Relaions Variable Costs Organization (3): Outsourcing

12. Organization (4):Virtual Organizations

13. Information Age work • Conceptual work is easier to paralelize • Concurrent Engineering • Planning • Management • Synchronization • Big Picture • Assembling • Motivation • Evaluation

14. Basic needs for VO • Prepare a reporting system • Hold more meetings • Stay on top of technology • Offer technological support

15. Roles in VO • Management • must be exceptionally responsive, since there are no face-to-face contact ability • VO are dependent on phone-calls, videoconferencing, e-mails etc • Technologists • staff buildig and maintaining hardware, software and communications elements of VO to make it easy to use, “look-through” • Staff • everyone must know, who does what and when and what would be consequences of any single failure

16. Teleworking: possible problems • Possible inter-cultural differences • Possible interference to family • Possible loss of privacy • Possible problems with self-motivation • Overworking • Underefectiveness • Children

17. The Big Problem • Trust • Dependence on other VO participants • Responsibility • New cathegory: Intermediaries (trusted third parties)

18. Advantages of VO • Faster • More flexible • Better use of talents/konwledge • Posssible use of rare knowledge • Taxation bonuses • Level of bureaucracy • Possible use of telework

19. Factors favourable to telework • Big share of information employees • Wide computer ownership • Increase in Internet usage • Increase in bandwidth • Decrease of Internet access costs • Increase in number of telephone lines • Small population density • Big costs of relocations • Cost of absentism

20. Teleworking: chances • Employee • Reduces stress • Saves travel to work • Flexibility in time • Cleseness to family • General • Less pollution • People with disabilities • Less populated regions • Corporate • Smaller absencies • Savings in office’s size • Greater possibilities to hire qualified workers

21. Basic needs for VO • Social and cultural Infrastructure • self-employment • relability • demand/supply • Legal infrastructure • law • taxes • Physical infrastructure • telecommunications • IT technologies • Information structure • databases

22. Strengths of VO • Competence: • VO can use benefints from a broad range of potential partners, each having competency that complements others’ • Communication: • VO capitalizes on ease of overcoming long distances • Timing: • VO uses “cybertime”, which extends a workhours to 24h/day, therefore responsiveness and availability becomes a key aspects of success

23. Threats to VO • VO tend to be more flat than traditional organisations, therfore some of senior employees may feel a loss of status • VO need growing level of self-management, which can be difficult to hold at home • Overworking • Underefectiveness • Children • Initial loss of productivity according to adjustment to new work environment • Difficulties in controll of work; therefore critical becames relayability;building a set of values, like in a family

24. Dimensions of VO (1) • Space • different locations / all around the world • Time • temporary allinces • Structure • many forms, according to current needs • may beformal: joint venture/ allinace or informal: a network of cooperating companies

25. Dimensions of VO (2) • Knowledge • different knowledge from different partners • managing pre-existing knowledge (Intellectual Property Rights) • absorbing knowledge from VO into the body of a participating organization • Managing the knowledge generated within VO • Developing ownership of generated knowledge

26. Dimensions of VO (3) • Cyberspace • activities are often localtion independent • problems with real world: taxation, legal conditions, point of transaction • indepndence of size of VO - it can appear as large company when it is not... • indepndence of size of VO - ease of consortia creation • Cybertime - much quicker, possibly 24h/day • Cyberknowledge - ease of contacts and publication of knowledge

27. Types of VO

28. Comparision of communication media

29. Organization (5):Dynamic Network / Agents Agent Agent Agent Operational Core (Broker) Agent Agent Agent

30. Telework in EU

31. Telework in Canada • Number of teleworkers in Canada increased 50% every 4 years in the period between 1993 and 2001

32. Impressions on teleworking • Teleworkers in Canada say, that telework: • improves overall quality of life (68%) • improves finances (57%) • improves standard of living (60%) • has positive impact on career advancement (36%)

33. Research on teleworking (1) • Research by AT&T showed: • Personal life: • More satisfied (73%) • Better relationship with spouse (88%) • Better personal morale (85%) • Fewer sick days (85%) • Better relationships with children (84%) • Better balance of work/personal life (83%) • Less personal stress (80%) • Neutral (19%) • Less satisfied (2%)

34. Research on teleworking (2) • Research by AT&T showed: • Career Effects: • Positive (63%) • Gained greater responsibility (24%) • Greater recognition for work (17%) • More productive (9%) • Recived promotion (7%) • More flexibility (7%) • Neutral (33%) • Negative (3%)

35. Research on teleworking (3) • Research by AT&T showed: • Isolation: • Same (62%) • More isolated (20%) • Less communication from co-workers (68%) • Less communication from supervisor (23%) • Miss ffice gossip (14%) • Miss office politics (9%) • Less isolated (15%) • More family contact (27%) • More social contact/friends/neighbours (27%) • More communication from supervisor (18%) • More communication from co-workers (9%)

36. Research on teleworking (4) • Research by AT&T showed: • Trust: • Remainded the same (63%) • Increased (19%) • Not sure (15%) • Decreased (3%)

37. Research on teleworking (5) • Research by AT&T showed: • Productivity: • Same (50%) • Increase (30%) • Uniterrupted/better concentration (71%) • Can work at peak times (28%) • Greater satisfaction/happier (18%) • Fewer meetings (11%) • Decrease (11%) • Too many interruptions (50%) • Lack of technical tools (14%) • Difficulty balancing child/elder care (7%) • Not sure (9%)

38. Thank You for the attention! Jacek Wachowicz M.Sc. M.B.A. Technical University of Gdańsk, Poland jacek.wachowicz@zie.pg.gda.pl