What are the advantages of using a "virtual organization"? What are the disadvantages?
Ans: There are so many advantages as well as disadvantages in virtual organizations. Some of them are as follows:
Advantages:
• The main advantage is that you don't have to be multimillionaire company to be virtual. This implies that every willing entrepreneur can start its own business without high financial barriers to entry, since there is choice of outsourcing.
• The second thing comes is flexibility, because it is the main need for any organization. This means thatchanges in environment do not bother Virtual Organizations, because it is easy to them to switch. It gives the opportunity for switching suppliers and human resources in accordance with the stated objectives.
• There are faster reaction times to new products emerging in global and local markets
• There is more free money as a Virtual is not paying enormous amount of money for building fabrics or other stuff; so it has more money to invest in its core value, which is very much needed for it.
• Reduction of expenses involved by the necessity of using working spaces – rent, maintenance, insurance n etc.
• More efficient usage of office space, in the case when some employees work according to the traditional systems, while others prefer a telecommunicating system.
• Reduction of consumable materials and also avoiding utilities expenses.
• There is also reduction in salary expenses, as most of the employees are paid for their tasks not for their which they spent on work. And also there is possibility of the experts placed anywhere around the globe.
• You can also hire the employees from any city or country where the capital labor is low, but should have required skills for the job. There is also chance of creating jobs in rural areas.
• In these systems, there is less a chance of absentees, as
