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172 vol. XVII no. 10 (2012) METALURGIA INTERNATIONAL

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THE IMPACT OF VIRTUAL CULTURE ON EFFECTIVE COMMUNICATION IN VIRTUAL ORGANIZATIONS

Mirjana RADOVIC-MARKOVIC1, Radmila GROZDANIC2, Dusan MARKOVIC1

1Akamai University ,USA, 2College of Business Economics and Entrepreneurship

============================================================================================= Key words: Communication, virtual organizations,virtual culture, information systems ,technological change

Professor Ph.D Professor Ph.D Lecturer Mirjana RADOVIC-MARKOVIC Radmila GROZDANIC Dusan MARKOVIC

Abstract. This paper explores the impact of virtual culture on effective communication in virtual organizations.The authors conluded that despite the technology as an important aspect of a virtual firm, there is still a human component that serves as the decision-making aspect and deals with judgment activities .They also pointed out that with the development of new technologies, can be expected that communication will continue to experience radical changes within modalities of communication in virtual enterprises. In their opinion it is not easy to predict in advance the direction in which these changes will be oriented. However, what is certain is that they will depend not only on technological change but also on the change in the employee awareness in virtual firms.

1. INTRODUCTION

Information systems play a vital role in the e-business and e-commerce operations, enterprise collaboration and management, and in the strategic success of businesses that must operate in an Internetworked global environment. The Internet services, in conjunction with the existing and more widely used communication media, provide the broadest enhancement of information and communication resources [12].

1.1.Definision of Virtual Organizations

“Virtual organization is a temporary network of independent business units – suppliers, customers, and even rivals – linked by information and communication technology to share skills, costs and access to different markets. This organizational model is flexible – groups of collaborators quickly unite to exploit a specific opportunity. In its most elementary form, the concept depicts any organization that interacts with other organizations to create a virtual corporation and that contributes only within the scope of its core competence. Central in the development of virtual organization is technology. Teams of people in different companies work together, via a computer network in real time.“[3]

This definition provides a clear structural perspective and a detailed picture of what makes a virtual organization.

1.2.Characteristics of virtual organizations

Virtual organizations are characterized by (a) highly dynamic processes, (b) contractual relationships among entities, (c) edgeless, permeable boundaries, and (d)

reconfigurable structures [4]. As the virtual organization consists of a network of

independent companies, each of these companies contributes with its core competence. The organization that initiates the cooperation defines the most appropriate business processes which in turn are complementary with the business skills of different firms. The synergy effect that is the result of combining all the core competences allows for creating an organization that meets the customer requirements in a flexible manner. According to [1], a virtual organization has to have its own identity. If the identity of a partner remains visible alongside the identity of the organization, it is defined as a “loosely coupled virtual organization“ whereas a “tightly coupled virtual organization“ appears to customers as a joint organization. The development of information and communication technologies allowed for the differencies in distances between virtual organizations to be solved so they can work together.

The partners in the virtual organization are equal, hence it is the organization without hierarchy. A favourable effect of such an architecture results in an improved organizational efficiency and responsibility [2]

The organizations consist of a network of autonomous companies, hence such an architesture is also known as a network architecture. It differs from a hierarchy architecture by a large number of lateral communications that make this organizational structure highly coordination-intensive (Figure 1).

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Figure 1. Matrix structure [9]

There are different virtual organization networking

modalities depending on the needs and possibilities for creating a degree of collaboration and management, and hence different types of information to be shared.

The types of necessary information to be shared in a manageable virtual organization on an e-level are the following:

 Planning (P): information used in defining a common purpose, in determining the scope and orientation of work of the entire virtual organization.

 Operational (O): information on the activities to be performed on a daily basis for each member.

 Coordinating (C): information flows to ensure that operational activities achieve their goal effectively.

2. VIRTUAL CULTURE AS BASIS FOR

EFFECTIVE COMMUNICATION IN VIRTUAL ORGANIZATIONS

An organization that has a large proportion of employees working in the virtual workplace faces distinct challenges related to building an organizational culture.When building a culture within a virtual firm, managers have numerous tools at their disposal to compensate for the lack of social context, geographical location, and the normal behaviours of a non-virtual firm. Managers of a virtual firm need to focus on results since they may not be able to see all of the work that is being done. They also need to be able to delegate and keep track of projects and work. Managers of a virtual firm should not be micro-managers as this style will most likely not be effective. Another requirement for a manger in a virtual organization is that he or she needs to be able to motivate his or her employees to go online. Since the majority of the firm’s work will be online it is important for the employees to be able to access the information they will need to do their jobs. This can be done by putting important news and updated online matter at a place where the employees will also find other job-related information. If the majority of the firm’s work will be online it is important to have an easy-to-use system. Employees will not want to go online or use systems that are hard to use and take too much time. When building a system it is important to get opinions from the people who will be using it. In addition, with all of the tools and systems that will be in place for a virtual firm, it is important that the employees know when and how to use the tools and systems they have access to. Sometimes it

makes a better business sense to meet a person face-to-face that try to communicate via e-mail. This needs to be understood by everyone, especially when dealing with clients.

Managers also need to be able to communicate through multiple channels on both formal and informal levels. There is a number of features of a virtual firm that should be considered as part of the culture to successfully run and manage the firm. The first feature of the culture of a virtual firm is trust [15]. Since a manager cannot always see his or her employees they have to be able to trust that they are doing the work that they are supposed to be doing. It should also be noted that since the majority of work will be done online, most of this work can be easily monitored and employees may worry about being spied on. The second feature of a virtual firm is leadership. It is important that a company’s leaders show the behavior that they want their employees to exhibit. These are the role models of the firm that will set the tone for the entire company. The third feature is that a virtual company needs to be OK with being different and doing things differently. Virtual companies will always be different from the traditional company and the culture needs to account for that. In addition, the employees need to be able to work in an environment that they may not be used to.

The fourth feature of a virtual company is that there will be some positions within the company that do very boring work, for example, an employee who works in a call center or at a help desk [15]. These employees will most likely be low paid so rewards and incentives need to be considered to reduce the turnover and increase efficiency. The fifth feature of a virtual company is communication. All the employees of a virtual company need to have good communication skills, including the upper level management. In a virtual company, employees do not have the ability to stop by a coworker’s office to quickly discuss a project. Instead, they will need to pick up the phone or send an e- mail, neither having the same effect as a face-to-face meeting. It is also difficult to show emotions over an e-mail and sometimes over the phone. Because of this, employees need to learn to express themselves effectively and to really listen. This includes discussions during group meetings or when working on team projects.

The sixth feature of a virtual company is the need for connectedness within the company .Since employees do not see each other regularly as in a traditional company, it is important to establish a connectedness of employees. This will make the company have more of a family feel and improve motivation. The seventh feature is shared values. In order to have a successful virtual company, everyone involved needs to share the same values. This is even more important in a virtual company because the company’s values cannot be instilled on a daily basis as in the traditional company due to the lack of physical connection. The eighth feature is that virtual companies will have slightly different jobs in comparison with the traditional companies. For example, a traditional secretary may be replaced by a virtual assistant. In addition, a larger number and more varied IT responsibilities may be required and employees may be needed to command knowledge in more than one areas.

3. COMMUNICATION IN VIRTUAL

ORGANIZATIONS Communication plays a key role in the work of virtual

174 vol. XVII no. 10 (2012) METALURGIA INTERNATIONAL

organizations. Without communication, the boundaries of operations of a virtual entity would be impossible to determine at any level [4]

Electronic communication allows for the distance connectedness of employees, regardless of time differences, of the culture and the language and of the jobs they perform, contrary to traditional organizations where all the jobs are performed at the same place and at the same time (Figure 2).

It also allows for a fast and easy flow of information between distant organizational entities, however, also among all the participants in the business chain – distributors, customers, etc. Besides, electronic communication can contribute significantly through forming its varied modalities, by innovation processes in the virtual firms operations. This is where its importance is crucial [5]; [6],[7]; [11];[14].

3.1.Implications of electronic communication upon virtual organizations

The research into six areas of electronic communication have ensured a better insight into the four major aspects of the virtual organization: (a) a highly dynamic process, (b) contractual relations between entities, (c) permeable boundaries, (d) reconfigurable structures [4]

Figure 2. Communication at any place and at any time [10]

In surveying these four areas, it is important to bear in

mind that a majority of findings were obtained on the basis of the study of electronic mail and e-conferencing, other forms of electronic communication, such as group voting, documentation management systems, or electronic data exchange not included. Furthermore, a large amount of research compares the modalities of electronic communication with oral speech, especially with a direct, face-to-face communication, despite the fact that electronic communications display a large number of properties similar to the written form of communication. Similarly to the face- to-face communication, electronic communication is interactive. The result is that the behaviour in electronic communication takes on the characteristics of both the documents – the written and the informal speech [13]

For the communication to be successful, it is necessary that communicators should have equal levels of knowledge which is difficult to achieve without physical and linguistic

presence. This means that the lack of the face-to-face contact in electronic communication may have a negative impact upon understanding the message, however, the literature is rather ambiguous as regards this issue. The research on understanding electronic communication has concluded that there are a number of difficulties to understand the meaning of the information as well as to manage the feedback information during a discussion. Regardless of the advantage in terms of the speed of exchange of information electronically and to larger distances, electronic communication revealed some additional misconceptions, e.g., the tasks will not be solved faster if set electronically. It has also been proven, however, that the lack of visualization has not significantly disturbed the control of conversation and its comprehensibility in case of synchronous communication via discussion groups [8]. Visualization is necessary, however, in resolving certain conflicting situations and complex activities, as well as in overcoming certain social and cultural differences.

The inter-organizational communication among virtual organizations assumes that the major portion of communication is conducted through transaction exchange within the network, which allows for a faster and larger information flow, especially in task setting, whereas a smaller amount of information is related to hierarchal flows. The communication among the departments of equal rank within the organization is conducted via synchronous technologies.

In case more consensus among the participants on different levels is required, and in case non-synchronous communication is pursued, the result may be a highly intensive exchange of messages in order that a more detailed harmonization and understanding should be achieved.

4. CONCLUSION

Communication is fundamental to any form of

organizing, however, it is especially important for virtual organizations. Relative to more traditional settings, communication processes that occur in virtual contexts are expected to be rapid, customized, temporary, larger in volume, more formal, and more relationship-based [4]. While technology is an important aspect of a virtual firm, there is still a human component that serves as the decision-making aspect and deals with judgment activities. With these components there is definitely a shift in the structure of a virtual firm. For instance, there seems to be less middle management within a virtual firm in comparison with a traditional firm. Some firms have developed employee orientation tools to guide them through the virtual work .This can include written guidelines, training, and networks for colleagues. Virtual firms should consider a computer-based chat room, where employees can work on projects with other team members and get information on the work they are doing. They should also have a social protocol for employees and teams that have information on common cultural values. In addition to email, a virtual firm needs to have access to video and audio conferencing. This will allow employees and managers to work with one another from a distance and have the effect of working from the same location. A virtual firm needs to be able to balance the virtual with the face-to-face. It should also make sure it can manage schedules online and require employees to be on time even though they do not have to physically show up. In addition to attendance, it is important to make sure that employees participate in meetings and in work in a virtual setting. Many virtual firms

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are sharing the corporate information and even financial information with all their workers. This ensures a better relationship between the upper level management and employees. In addition, there seems to be a more even division of power. This is linked directly to the virtual culture of empowerment and self-control. We would like to point out that a virtual company needs a technology infrastructure to survive, but there is also a need to have a solid cultural infrastructure in place that not only deals with the human aspect but with the technology aspect as well.

With the further development of new technologies, we expect that communication will continue to experience radical changes within modalities of communication in virtual enterprises. It is not easy to predict in advance the direction in which these changes will be oriented, however, what is certain is that they will depend not only on technological change but also on the change in the employee awareness in virtual firms. In other words, they will depend on their ability to oversome the present differences (gender, language, emotional, cultural, perceptional and other) and create an efficient communication in virtual firms. There fore, the human factor will play a role in improving communication in virtual firms as important as that of the development and improvement of the present technologies.

5. REFERENCES

[1] Aken, J. van, Hop, L., and Post, G.J.J. (1998). The Virtual Organization: a special mode of strong interorganizational cooperation, in: Hitt, M.A., Ricart I Costa, J.E., Nixon, D. (eds), Managing Strategically in an Interconnected World, Chicester, John Wiley & Sons. [2] Bultje, R. and Van W. J. (1998). Taxonomy of Virtual Organisations, based on definitions, characteristics and typology. VoNet: The Newsletter http://www.virtual- organization.net, 2(3), 7-20. [3] Byrne J. A. (1993). The virtual corporation, Business Week. Feb.8, 98-102. [4] DeSanctis G .and Monge P., Communication Processes for Virtual Organizations, JCMS 3(4):1998 [5] DeSanctis, G., and Fulk, J. (Eds.) (1999). Shaping organization form: Communication, connection, and community. Newbury Park, CA: Sage.

[6] Karsten, H. (1995). Converging Paths to Notes: in search of computer-based information systems in a networked company, Information Technology and People, 8(1), 7-34. [7] Lucas, H.C., Jr. (1996). The T-form organization: Using technology to design organizations for the 21st century. San Franciso: Jossey-Bass. [8] Marshall, C., and Novick , D. (1995). Conversational effectiveness and multi-media communications. Information Technology and People, 8 (1), 54-79. [9] Mowshowitz, A. (1999). The Switching Principle in Virtual Organization, Electronic Journal of Organizational Virtualness. [10] O’Hara-Devereaux,M. & Johansen,R. (1994). Global Work: Bridging Distance, Culture and Time. Jossey-Bass, San Francisco. [11] Orlikowski, W. J., and Robey, D. (1991). Information technology and the structuring of organizations. Information Systems Research, 2(2), 143-169.. [12] Radović-Marković,M.(2011b), Organizational behavour and culture:globalization and the changing environment of organizations.VDM Verlag Dr. Muller,pp.348 [13] Wilkins, H. (1991). Computer talk: Long-distance conversations by computer. Written Communication, 8, 56- 78. [14] Valacich, J. S., and Schwenk, C. (1995). Devils advocacy and dialectical inquiry effects on face-to-face and computer-mediated group decision making. Organizational Behavior and Human Decision Processes, 63(2), 158-173. [15] Van de Bunt-Kokhuis,S .(2000).The virtual workplace and the company culture Employee oriented tools to build a corporate web culture. Available on the Internet: http://www.managementsite.com/261/The-virtual-workplace- and-the-company-culture.aspx

Correspondence to:

Mirjana Radovic-Markovic [email protected], Akamai University Radmila Grozdanic [email protected], College of Business Economics and Entrepreneurship, Belgrade Dusan Markovic [email protected], Akamai University

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