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Tuesday, 24 June 2014

Challenges of a Virtual Organisation: Empirical Evidence from Australian SMEs

Page 1

Global Journal of Finance and Management.

ISSN 0975-6477 Volume 6, Number 9 (2014), pp. 919-924
© Research India Publications

Challenges of a Virtual Organisation: Empirical Evidence

from Australian SMEs

Walied Askarzai, Yi-Chen Lan and Bhuvan Unhelkar
School of Business University of Western Sydney, NSW Australia
Virtual Organisation (VO) status has been idealised as desirable, with
the lure of promised low production costs and work-home balance
amid other advantages. Many organisations have hastened to acquire a
reputation as VO and many more appear to be on the verge of
achieving this. However, the empirical results of this study suggest that
face-to-face interaction needs to be assured, along with other
traditional work values, lest such organisations risk losing employee
Keywords: Virtual Organisation, SMEs, Virtual Employees

1. Introduction

The VO is acquiring growing reputation through the omnipresent technologies of the
Internet, a globalised workforce, decentralised management structure and freelancing
spirits of the employees. Increasingly, Small and Medium-sized Enterprises (SMEs)
see the VO concept as a way to shift from organisational rigidity.
Yet how the VO is perceived by employees is something that should not be
overlooked. Despite extensive research there is not even a single study that adequately
covers the ways Virtual Employees (VE) perceive Virtual Management (VM). This
study addresses the question of how Virtual Employees (VEs) as opposed to Non-
Virtual Employees (NVEs) perceive VO and Virtual Management. Through the use of
in depth semi-structured interviews the study addresses the question, “Are VEs more
contented than NVEs?”

Walied Askarzai et al

2. Literature Review

For the purpose of this study the term VO refers to the VM being undertaken within
VO. Hence for the sake of practicality, we have used the two terms interchangeably.
Askarzai [1] defines Virtual Organisation as a type of temporary or permanent
organisation with geographically and time-dispersed members (individuals,
departments or organisations). The members share their core-competencies towards the
production of a product that cannot be achieved by a standalone member. Core
competencies refer to the main strengths of an organisation that can be utilised as
competitive advantage. The operation of VO is enabled by Computer Mediated
Communication (CMC). CMC refers to communication processes where computer-
mediated technologies are used as a medium. CMC is divided into two synchronic
states; asynchronous (different-time) communication, such as e-mails, and
synchronous (same-time) communication, such as video conferencing. The essence of
a VO is process management and customer satisfaction.
Although Virtual Operation was formerly reserved to large organisations, it now
promises lower production costs, competitive advantage and focus on core
competencies for SMEs. However, collaboration with marketing agencies, accounting
firms and IT services is needed to take full advantage of what VO offers [2]. Full or
partial transformation to VO status can enable sharing of knowledge and resources
over a wide geographical area. VO has been seen as a way for SMEs to increase their
competitiveness [5]. The Virtual Organisation can be a strategic tool for an SME to
reach foreign markets [6].
A considerable amount of literature has been published on VO. However, far too
little attention has been paid to understand the perception of VEs towards VM.
Perception is a process of interpreting and giving meaning to one’s surroundings in
order to make judgements and decisions. Perception may differ from reality [7, 8 & 9].
Factors that shape one’s perception are three dimensional: there are factors within the
perceiver, factors in the object and factors in the environment [7].
The objectives of this research are to determine whether or not VEs are more
contented than NVEs and what then can VOs do to create perception of a good work
environment by VEs?

3. Methodology

Various methods have been developed to determine employee perception of
management; for the present project, it was decided to conduct in-depth semi-
structured interviews. Nine VEs and nine NVEs volunteers participated in the study.
The participants were randomly recruited from SMEs located in Greater Western
Sydney, the fastest growing region in New South Wales, where SMEs play a major
role [10]. VE and NVE are used as codes for the two groups of participants. Thematic
analysis was used to analyse the interviews.

Challenges of a Virtual Organisation: Empirical Evidence from Australian SMEs 921

4. Results and Discussion

Six NVEs had a positive perception of their organisation and management, as
evidenced in the following NVE statements:
“The organisation is conscious of environment and safety of employees” (NVE 1).
“The organisation provides me greater choice in learning and development and areer
progression” (NVE 4).
“Management is supportive and consultative” (NVE 8).
Three NVEs had a negative perception, as evidenced by the following statements:
“The organisation does not invest in innovation and its people” (NVE ).
“Management conflict of opinions does take place—the stronger party wins, but
the stronger party is not stronger by numbers but by position” (NVE 9).
\Seven VEs had positive perception of their organisation and management, as
evidenced by the following VE statements:
“I do like the VM scenario” (VE 2).
“VM is a feature of future work-environment” (VE 1,VE 2 and VE 5).
“The benefits of VM are very useful” (VE 8).
“I perceive VM as very positive”(VE 9).
Two VEs had negative perception of their organisation and management (i.e. VM):
“I don’t like virtual management” (VE 2).
“VM will not take the place of face-to-face work. VM can be seen to be inefficient
sometimes” (VE 7).
The benefits of VM were perceived positively by all nine VEs. For example:
“Work flexibility, working out of office hours, working independently, working
more freely and better work-life balance” (VE 1, VE 2, VE 5, VE 8, VE9) were among
the benefits of VM.
Overall the VEs were more content than the NVEs. However, the VEs were still
concerned about some aspects of traditional work environment, in particular face-to-
face interaction with co-workers. For example: “VM will not take the place of face-to-
face work” (VE 7).
Furthermore, five VEs cited lack of face-to-face interaction as a major downside of
VM and wanted some kind of face-to-face interaction in the VM context. Five VEs
stressed that their team norms and culture had been affected by VM:
“Team culture is difficult to keep strong after VM” (VE 1).
“Team culture has been affected after VM” (VE 5, VE 8 & VE 9).
The results of this study corroborate findings of previous work in this field, for
instance, [Biglow 11, Brown et al. 12, Cisco 13, Derven 14, Ebrahim et al. 15, Foti 16,
Gupta et al.17, Hunsaker & Hunsaker 18, Intranet Focus 19, Mulki et al. 20, RW
Culture Wizard 21, Sundin 22, Pang 23, Vinaja 24].

Walied Askarzai et al

5. Conclusion

This empirical study highlights the need for VOs to maintain aspects of a traditional
work environment. Face-to-face interaction appears to be vital in the shift from non-
virtual to VM.


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Challenges of a Virtual Organisation: Empirical Evidence from Australian SMEs

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