The Online Encyclopedia and Dictionary






Virtual management

Virtual management seeks to separate certain responsibilities of managers from the actual site of production, the workers and resources at that site. It orients managers more directly to the needs of a service economy - wherein "commodity" and "product" relations are no longer a source of sustainable competitive advantage, due to global competition or inability to predict liability.

Its major advantage, according to supporters, is to focus on the customer and the value chain from which the customer derives value. Its major drawback, according to detractors, is that commodity and product relations "outsourced" to developing nations do tremendous harm. Others see benefits, but note that it tends to specialize these nations, as under colonialism, when they fed "natural resources" and "human resources" to developed nations, into narrow and limited supply roles.

While seeking organisational effectiveness in the current capitalist mode of production, especially profit-making organisations are increasingly recognising the competitive advantage of concentrating on their core competences and outsourcing all or most of other operations. Another economical driving force is the shift from traditional consumerism to relationship marketing and Customer relationship management (CRM). Companies try to introduce products to potential customers earlier in their life and then try to keep them as customers as long as possible. In addition, companies may consult users for research and development purposes to increase customer satisfaction.

These operations may also be more project-based, involving organisations that may or may not formally belong to any of the units involved. All this creates new kinds of interlinked networks of suppliers, buyers, producers and customers, where the factors of production are being acquired as conveniently as possible to make deliverables that can be seamlessly supplied to the people who need them, to where and when they need them.

These networks are called Virtual organizations. They may consist of any form and number of people of individuals, teams, companies and / or stakeholders, managed from one clear point with and organised long-term strategy or conjured up in an ad hoc style to solve a particular problem with a few hours' time scale. People working in these organizations can be seen as virtual workers, and leaders as virtual managers, depending on their involvement and location in time and space.

Further, Virtual Management becomes easier in the current information-intensive work, as information itself has becfome the new factor of production. Raw data can be conveniently mined, processed and sold as information, which in turn can function as raw material or end product for others, depending on the importance, accuracy and timeliness of that information. Advanced Services , including insurance houses, financial institutions, advertising, real estate, consulting, marketing, PR, security, management of information systems, and news and entertainment publishers, are at the core of these operations. On the other hand, any company, however traditional in its field of business, can be seen as virtual, if it is

  • Spatially decentralised, having suppliers, managers, employees and customers in a large geographical area
  • Temporally dispersed, having the above also on several time zones
  • Technologically harnessed, as it is the newest technology that has created the "explosion" of virtually interlinked global players.
Due to this, employees in these companies may commute to their local workplaces every day, or they may work distantly from one or several places, or they can be completely mobile, as some sales representatives might do. All this creates an increasing need to communicate, through technology, with customers and other employees that the employee might never meet. The workers might also be members of virtual teams , consisting of experts in different countries, some of them belonging to the physical organisation and some of them not, having an objective to fulfil, for example a product concept development. The members of this team might meet physically at some point, or they might never do it, depending on their virtual working skills and availability of technology enabling sensible communication.

Where there are virtual organizations, there is also virtual management, which is thus about

  • Managing organisations from a different place
  • Managing organisations from a different time
  • Managing something that is not part of your organisation
  • Something that is almost like management, but not quite (when referring to the term virtual reality) - or "more management than there actually is" (referring to the term virtual memory).1
  • Managing by using technology (because traditional management does not necessarily require tech)
  • Managing organisations by sending people out there physically to do it for you (referring to colonialism, which the anti-globalization movement claims as a form of VM)
  • Any combination of the above

1There is potential for a joke here: "Almost like management, but not quite"? You mean "Managing, but not quite succeeding in it?". Seriously, if virtual management is not traditional management, what is it then? Because fundamentally it is just Management and involves accomplishing something by making people do whatever is necessary to reach those goals.

See also

Last updated: 09-12-2005 02:39:13