Skip to main content
SpringerLink
Log in

Virtual or vague? a literature review exposing conceptual differences in defining virtual organizations in IS research

  • General Research
  • Published:
Electronic Markets Aims and scope Submit manuscript

Abstract

The concept of ‘virtual organization’ was coined about 15 years ago to describe changes in organizational structures and value creation, enabled by the affordances of ICT. Not surprisingly, the Information Systems community has been influential in researching virtual organization phenomena. However, it appears that, since the notion of ‘virtual’ in its most basic connotation only denotes some form of difference to a ‘traditional’ form of organization, the term VO has been interpreted in varied form with an unsatisfying mix of VO notions existing in the literature. What is more, papers frequently exhibit mismatches between what they characterize as VO and the real-life phenomena they discuss. Motivated by these observations we carry out a literature analysis to explore differing notions of virtual organization. Based on a systematic classification of VO definitions, we uncover three distinct types of VO that are used in the literature, each of which interprets the notion of ‘virtual’ differently, but is useful in its own right and exhibits unique management challenges. The first type, named Internal VO, revolves around internal virtualization based on distributed collaboration in virtual teams. It emerged on the back of emerging new groupware and communication technologies. Its main challenges stem from distributed project and work organization. The second type, named Network VO, describes a network of smaller companies that form a virtual entity, bringing in core competencies in short term collaborative projects. It emerged on the back of a emerging inter-organizational information systems and a trend of forming network arrangement. Its main challenges are with the governance of the multi-entity network. The third type, termed Outsourcing VO, refers to a hierarchical network of suppliers to which the focal firm outsources a significant part of its value creation, thus appearing as a virtual firm. It emerged on the back of the outsourcing trend of the last decades. Its main challenge is determining the optimal degree of integration and virtualization. With the identification and detailed exploration of the three VO types, our study contributes to a better understanding of the conceptual foundation of VO research and points to the necessity for conceptual clarity in future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Albers, S., et al. (2003). “Management virtueller unternehmen.” In S. Albers, & J. Wolf (Eds.), Management virtueller unternehmen (pp. 3–60). Wiesbaden.

  • Alt, R., Legner, C., & Österle, H. (2005). Virtuelle organisation–konzept, realität und umsetzung. HMD, 242, 7–20.

    Google Scholar 

  • Anand, V., Clark, M. A., & Zellmer-Bruhn, M. (2003). Team knowledge structures: Matching task to information environment. Journal of Managerial Issues, 1(15), 15–31.

    Google Scholar 

  • Andres, H. P. (2002). A comparison of face-to-face and virtual software development teams. Team Performance Management, 1/2(8), 39–48.

    Article  Google Scholar 

  • Arnison, L., & Miller, P. (2002). Virtual teams: A virtue for the conventional team. Journal of Workplace Learning, 4(14), 166–173.

    Article  Google Scholar 

  • Bekkers, V. (2003). E-government and the emergence of virtual organizations in the public sector. Information Polity, 3/4(8), 89–101.

    Google Scholar 

  • Berg, B. L. (1995). Qualitative research methods for the social sciences (2nd ed.). Needham Heights: Allyn & Bacon.

    Google Scholar 

  • Berger, M. (1996). Making the virtual office a reality. Sales & Marketing Management, 6(148), 18–22.

    Google Scholar 

  • Best, M. (1990). The new competition: Institutions of industrial restructuring. Cambridge: Harvard University Press.

    Google Scholar 

  • Bleecker, S. E. (1994). “The virtual organization”. The Futurist (2), 9–14.

  • Brandenburger, A. M., & Nalebuff, B. J. (1996). Co-opetition. New York: Doubleday.

    Google Scholar 

  • Bremer, C. F., et al. (2001). VIRTEC: An example of a Brazilian virtual organization. Journal of Intelligent Manufacturing, 2(12), 213–221.

    Article  Google Scholar 

  • Breu, K., & Hemingway, C. J. (2004). Making organisations virtual: The hidden cost of distributed teams. Journal of Information Technology, 3(19), 191–202.

    Article  Google Scholar 

  • Brütsch, D., & Frigo-Mosca, F. (1996). Virtuelle organisation in der praxis. IO Management, 9(65), 33–35.

    Google Scholar 

  • Bryman, A., & Bell, E. (2003). Business research methods. New York: Oxford University Press.

    Google Scholar 

  • Bullinger, H.-J., & Thaler, K. (1994). Zwischenbetriebliche zusammenarbeit im virtual enterprise. Management & Computer, 1(2), 19–24.

    Google Scholar 

  • Bultje, R., & van Wijk, J. (1998). Taxonomy of virtual organisations, based on definitions, characteristics and typology. VoNet Newsletter, 3(2), 7–21.

    Google Scholar 

  • Burkhard, R. J., & Horan, T. A. (2006). The virtual organization: Evidence of academic structuration in business programs and implications for information science. Communications of the Association for Information Systems, 11(17), 1–48.

    Google Scholar 

  • Byrne, J., Brandt, R., & Port, O. (1993). The virtual corporation. Business Week, 8, 36–40.

    Google Scholar 

  • Camarinha-Matos, L. M., & Afsarmanesh, H. (2006). “Creation of virtual organizations in a breeding environment.” In Proceedings of INCOM’06, St. Etienne, France, 2006.

  • Christie, P. M. J., & Levary, R. R. (1998). Virtual corporations: Recipe for success. Industrial Management, 4(40), 7–11.

    Google Scholar 

  • Cohen, S. (1997). “On becoming virtual”. Training & Development May, 30–37.

  • Cooper, W. W., & Muench, M. L. (2000). Virtual organizations: Practice and the literature. Journal of Organizational Computing and Electronic Commerce, 3(10), 189–208.

    Article  Google Scholar 

  • Cox, A., Lonsdale, C., Watson, G., & Qiao, H. (2003). Supplier relationship management: A framework for understanding managerial capacity and constraints. European Business Journal, 3(15), 135–145.

    Google Scholar 

  • Coyle, J., & Schnarr, N. (1995). The soft-side challenges of the “virtual corporation”. Human Resource Planning, 1(18), 41–42.

    Google Scholar 

  • Cramton, C. D. (2001). The mutual knowledge problem and its consequences for dispersed collaboration. Organization Science, 3(12), 346–372.

    Article  Google Scholar 

  • Davenport, T. H., & Pearlson, K. (1998). Two cheers for the virtual office. Sloan Management Review, 4(39), 51–65.

    Google Scholar 

  • DeSanctis, G., & Monge, P. (1999). Introduction to the special issues: Communication processes for virtual organizations. Organization Science, 6(10), 693–703.

    Article  Google Scholar 

  • DeSanctis, G., & Poole, M. S. (1997). Transitions in teamwork in new organizational forms. Advances in Group Processes, 2(5), 121–147.

    Google Scholar 

  • Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 4(23), 660–679.

    Google Scholar 

  • Elliot, S. (2006). Technology-enabled innovation, industry transformation and the emergence of ambient organizations. Industry and Innovation, 2(13), 209–225.

    Article  Google Scholar 

  • Eversheim, W., et al. (1998). Globale virtuelle unternehmen. Entwickeln und produzieren in weltweiten netzwerken. Zeitschrift für Wirtschaftlichen Fachbetrieb (ZWF), 3(93), 62–64.

    Google Scholar 

  • Flick, U. (1998). An introduction to qualitative research. London et al.: SAGE Publications Ltd.

    Google Scholar 

  • Franke, U. (2001). The concept of virtual web organisations and its implications on changing market conditions. eJoV—The Journal for Networks and Virtual Organizations, 4(3), 43–64.

    Google Scholar 

  • Gallivan, M. J. (2001). Striking a balance between trust and control in a virtual organization: A content analysis of open source software case studies. Information Systems Journal, 4(11), 277–304.

    Article  Google Scholar 

  • Garbe, M. (1998). “The impact of information technology on the boundaries of the firm”. In Proceedings of the Twelfth Biennial Conference of the International Telecommunications Society, Stockholmr, Sweden.

  • Goldman, S. L., Nagel, R. N., & Preiss, K. (1995). Agile competitors and virtual organization: Strategies for enriching the customer. New York: Van Nostrand Reinhold.

    Google Scholar 

  • Gomes-Casseres, B. (1994). Group versus group–how alliance networks compete. Harvard Business Review, 4(72), 62–74.

    Google Scholar 

  • Göransson, Å., & Schuh, G. (1997). Das netzwerkmanagement in der virtuellen fabrik. In G. Müller-Stewens (Ed.), Virtualisierung von organisationen (pp. 61–81). Stuttgart: Schäffer-Poeschel.

    Google Scholar 

  • Grabowski, M., & Roberts, K. H. (1999). Risk mitigation in virtual organizations. Organization Science, 6(10), 704–721.

    Article  Google Scholar 

  • Hamel, G. (1991). Competition for competence and inter-partner learning within inter- national strategic alliances. Strategic Management Journal, 4(12), 83–103.

    Article  Google Scholar 

  • Handy, C. (1995). Trust and the virtual organization. Harvard Business Review, 3(73), 40–50.

    Google Scholar 

  • Hannus, M., et al. (2004). Guidelines for virtual organizations. VOSTER project consortium. Espoo: VTT Technical Research Centre of Finland.

    Google Scholar 

  • Hans, C. (2008). Supporting partner identification for virtual organisations in manufacturing. Journal of Manufacturing Technology Management, 4(19), 497–513.

    Article  Google Scholar 

  • Hansmann, K.-W., & Ringle, C. M. (2005). Erfolgsmessung und erfolgswirkung virtueller unternehmungen. Zfo Wissen, 1(74), 11–17.

    Google Scholar 

  • Harland, C. M. (1996). Supply chain management: Relationships, chains and networks. British Journal of Management, 1(7), 63–80.

    Article  Google Scholar 

  • Hughes, J. A., et al. (2001). Some ‘real’ problems of ‘virtual’ organisation. New Technology, Work and Employment, 1(16), 49–64.

    Article  Google Scholar 

  • Jang, C. Y., Steinfield, C., & Pfaff, B. (2000). Supporting awareness among virtual teams in a web-based collaborative system: The teamscope system. ACM Siggroup Bulletin, 3(21), 28–34.

    Google Scholar 

  • Johansen, R. (1988). Groupware-computer support for business teams. New York: The Free.

    Google Scholar 

  • Jones, T. M., & Bowie, N. (1998). Moral hazard on the road to the “virtual” corporation. Business Ethics Quarterly, 2(8), 273–292.

    Article  Google Scholar 

  • Jurk, A. I. (2003). Organisation virtueller unternehmen. eine systemtheoretische perspektive. Wiesbaden: Deutscher Universitäts-Verlag/GWV Fachverlage GmbH.

    Google Scholar 

  • Kasper-Fuehrer, E. C., & Ashkanasy, N. M. (2001). Communicating trustworthiness and building trust in interorganizational virtual organizations. Journal of Management Information Systems, 27, 235–254.

    Google Scholar 

  • Kasper-Fuehrer, E. C., & Ashkanasy, N. M. (2004). The interorganizational virtual organization. International Studies of Management & Organization, 4(33), 34–64.

    Google Scholar 

  • Kemmner, G.-A., & Gillessen, A. (2000). Virtuelle Unternehmen. Ein Leitfaden zum Aufbau und zur Organisation einer mittelständischen Unternehmenskooperation. Heidelberg: Physica-Verlag.

    Google Scholar 

  • Kern, T., & Willcocks, L. P. (2002). Exploring relationships in information technology outsourcing: The interaction approach. European Journal of Information Systems, 1(11), 3–19.

    Article  Google Scholar 

  • Khanna, T., Gulati, R., & Nohria, N. (1998). The dynamics of learning alliances: Competition, cooperation, and relative scope. Strategic Management Journal, 3(19), 193–210.

    Article  Google Scholar 

  • Klein, S. (1994). Virtuelle organisation. WiSt, 6(23), 309–311.

    Google Scholar 

  • Klein, S. (1996). The configuration of inter-organisational relations. European Journal of Information Systems, 5(5), 92–102.

    Article  Google Scholar 

  • Kock, N. (2000). Benefits for virtual organizations from distributed groups. Communications of the ACM, 11(43), 107–112.

    Article  Google Scholar 

  • Larsen, K. R. T., & McInerney, C. R. (2002). Preparing to work in the virtual organization. Information Management, 39, 445–456.

    Article  Google Scholar 

  • Lawton, T. C., & Michaels, K. P. (2001). Advancing to the virtual value chain: Learning from the dell model. Irish Journal of Management, 1(22), 91–112.

    Google Scholar 

  • Leimeister, J. M., Weigle, J., & Krcmar, H. (2001). Efficiency of virtual organizations—the case of AGI. eJov—Electronic Journal of Organizational Virtualness, 3(3), 13–43.

    Google Scholar 

  • Lin, L.-H., & Lu, I.-Y. (2005). Adoption of virtual organization by Taiwanese electronics firms: An empirical study of organization structure innovation. Journal of IOrganizational Change Management, 2(18), 184–200.

    Article  Google Scholar 

  • Lipnack, J., & Stamps, J. (2000). Virtual teams: People working across boundaries with technology (2nd ed.). New York: Wiley.

    Google Scholar 

  • Mertens, P. (1994). Virtuelle unternehmen. Wirtschaftsinformatik, 2(36), 169–172.

    Google Scholar 

  • Mertens, P., & Faisst, W. (1996). Virtuelle unternehmen. Eine organisationsstruktur für die Zukunft? WiSt, 6(25), 280–285.

    Google Scholar 

  • Mertens, P., Griese, J., Ehrenberg, D. (1998). Virtuelle unternehmen und informationsverarbeitung. Berlin Heidelberg.

  • Miles, M. B., & Huberman, A. M. (1994). Qualitative data analysis–an expanded sourcebook (2nd ed.). Thousand Oaks: Sage.

    Google Scholar 

  • Moller, C. (1997). The virtual organisation. Automation in Construction, 1(6), 39–43.

    Article  Google Scholar 

  • Olsen, R. F., Ellram, L. M. (1997). “A portfolio approach to supplier relationships”. Industrial Marketing Management (26), 101–113.

  • Orman, L. V. (2009). Virtual organizations as electronic services. Communications of the Association for Information Systems, 40(24), 701–718.

    Google Scholar 

  • Pihkala, T., Varamäki, E., & Vesalainen, J. (1999). Virtual organization and the SMEs: A review and model development. Entrepreneurship & Regional Development, 4(11), 335–349.

    Article  Google Scholar 

  • Putnam, L. (2001). Distance teamwork—the realities of collaborating with virtual colleagues. Online, 2(25), 54–58.

    Google Scholar 

  • Rahman, Z., & Bhattachryya, S. K. (2002). Virtual organization: A stratagem. Singapore Management Review, 2(24), 29–45.

    Google Scholar 

  • Riemer, K., & Klein, S. (2006). Network management framework. In S. Klein & A. Poulymenakou (Eds.), Managing dynamic networks (pp. 17–66). Berlin et al.: Springer.

    Chapter  Google Scholar 

  • Riemer, K., & Klein, S. (2008). Is the V-form the next generation organisation? an analysis of challenges, pitfalls and remedies of ICT-enabled virtual organisations based on social capital theory. Journal of Information Technology, 3(23), 147–162.

    Article  Google Scholar 

  • Riemer, K., Klein, S., Selz, D. (2001). “Classification of dynamic organizational forms and coordination roles.” E-work and E-commerce (Proceedings of the e2001 Conference on E-work and E-business), Venice, 2001.

  • Romero, D., & Molina, A. (2009). “VO breeding environments & virtual organizations integral business process management framework”. Information Systems Frontiers (11), 569–597.

  • Saabeel, W., et al. (2002). A model of virtual organisation: A structure and process perspective. eJoV—The Journal for Networks and Virtual Organizations, 1(4), 1–17.

    Google Scholar 

  • Scholz, C. (1996). Virtuelle organisation: Konzeption und realisation. Zfo, 4(65), 204–210.

    Google Scholar 

  • Shin, Y. (2004). A person-environment fit model for virtual organizations. Journal of Management, 5(30), 725–743.

    Google Scholar 

  • Sitek, P., Seifert, M., & Thobe, K.-D. (2010). Towards an inter-organisational perspective for managing quality in virtual organisations. International Journal of Quality & Reliability Management, 2(27), 231–246.

    Article  Google Scholar 

  • Talukder, M. I. (2003). The perception of professionals and management personnel on the virtual organization. The Journal of Computer Information Systems, 3(43), 92–99.

    Google Scholar 

  • Tianfield, H., & Unland, R. (2002). IT enabling: Essence of virtual organizations. International Journal of Information Technology and Decision Making, 3(1), 367–370.

    Google Scholar 

  • Tjaden, G. (2003). Erfolgsfaktoren Virtueller Unternehmen. Eine theoretische und empirische Untersuchung. Wiesbaden: Deutscher Universitäts-Verlag/GWV Fachverlage GmbH.

    Google Scholar 

  • Torraco, R. J. (2005). Writing integrative literature reviews: Guidelines and examples. Human Resource Development Review, 3(4), 356–367.

    Article  Google Scholar 

  • Travica, B. (2005). Virtual organization and electronic commerce. Database for Advances in Information Systems, 3(36), 45–68.

    Article  Google Scholar 

  • Tuma, A. (1998). “Configuration and coordination of virtual production networks”. International Journal of Production Economics (56/57), 641–648.

    Google Scholar 

  • Upton, D. M., & McAfee, A. (1996). The real virtual factory. Harvard Business Review, 4(74), 123–133.

    Google Scholar 

  • Vakola, M., & Wilson, I. E. (2004). The challenge of virtual organisation: Critical success factors in dealing with constant change. Team Performance Management, 5/6(10), 112–120.

    Article  Google Scholar 

  • vom Brocke, J., Simons, A., Niehaves, B., Riemer, K., Plattfaut, R., Cleven, A. (2009). “Reconstructing the giant: On the importance of rigour in documenting the literature search process”, Proceedings of the 17th European Conference on Information Systems (ECIS), Verona, Italy, 10th June 2009.

  • Voss, H. (1996). Virtual organizations: The future is now. Strategy & Leadership, 4(24), 12–16.

    Article  Google Scholar 

  • Watson-Manheim, M. B., Chudoba, K. M., & Crowston, K. (2002). Discontinuities and continuities: A new way to understand virtual work. Information Technology & People, 3(15), 191–209.

    Article  Google Scholar 

  • Weibler, J., & Deeg, J. (1998). Virtuelle Unternehmen–Eine kritische analyse aus strategischer, struktureller und kultureller perspektive. Zeitschrift für Planung, 2(9), 107–124.

    Google Scholar 

  • Weisenfeld, U., et al. (2001). Managing technology as a virtual enterprise. R&D Management, 3(31), 323–334.

    Article  Google Scholar 

  • Werther, W. B. J. (1999). Structure-driven strategy and virtual organization design. Business Horizons, 2(42), 13–18.

    Article  Google Scholar 

  • Wirtz, B. W. (2000). Wissensmanagement und kooperativer transfer immaterieller ressourcen in virtuellen organisationsnetzwerken. ZfB-Ergänzungsheft, 2/2000, 97–115.

    Google Scholar 

  • Zwicker, H.-R. (1996). Die virtuelle firma–ein zukunftsweisendes Modell für Kleinunternehmen. IO Management, 9(65), 36–38.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. The University of Sydney, H69–Economics and Business Building, Sydney, NSW, 2006, Australia

    Kai Riemer

  2. Department of Information Systems, The University of Münster, Leonardo Campus 11, 48149, Münster, Germany

    Nadine Vehring

Authors
  1. Kai Riemer
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Nadine Vehring
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Kai Riemer.

Additional information

Responsible editor: Hans-Dieter Zimmermann

Appendices

Appendix 1

The following table provides a list of all criteria used in classifying VO definitions taken from the papers examined.

Table 1 The classification criteria
Full size table

Appendix 2

The following table is the result of the main analysis step. Constituent characteristics are marked yellow.

Table 2 Final classification table
Full size table

Appendix 3

The following table provides an overview of criteria distribution across the papers. It is the basis for identifying constituent and further characteristics of the three types of VOs. Marked in green (yellow) are all criteria per group that were mentioned in at least 66 % (33 %) of all definitions.

Table 3 Distribution of criteria across VO types
Full size table

Appendix 4

The following table shows all papers in which VO cases or examples were discussed. Marked with grey colour are those papers in which the definitions provided did not match with the characteristics of the examples discussed.

Table 4 Deviations between definitions and case examples
Full size table

Rights and permissions

Reprints and permissions

About this article

Cite this article

Riemer, K., Vehring, N. Virtual or vague? a literature review exposing conceptual differences in defining virtual organizations in IS research. Electron Markets 22, 267–282 (2012). https://doi.org/10.1007/s12525-012-0094-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12525-012-0094-2

Keywords

JEL classification

Search

Navigation