- 10 Marks
Question
The emergence of globalization has resulted in some small and large businesses operating as virtual organizations.
Required:
Explain to your study mates the nature of this organizational type and state FOUR (4) benefits associated with it.
Answer
Nature of Virtual Organizations:
A virtual organization is any organization that outsources most of the key functions performed in the organization while maintaining a small core activity. Most virtual organizations conduct their operations electronically, with the organization’s website containing the database of information about suppliers, customers, and other stakeholders.
(2 marks)
Advantages of a Virtual Organization:
- Reduced Costs:
A virtual organization has reduced operational expenses because it incurs minimal administrative expenses.
(2 marks) - Fewer Employees:
A virtual organization requires fewer employees, leading to minimal salaries and fewer human resource problems to manage.
(2 marks) - Access to Specialists:
A virtual organization can access people with the needed expertise from around the globe, offering superior and better services to its clients.
(2 marks) - Instant and Effective Communication:
The development of strong Internet connectivity provides an effective communication network for the virtual organization, enabling it to offer excellent services to customers.
(2 marks)
- Tags: Globalization, Operational Efficiency, Virtual Organizations
- Level: Level 1
- Topic: Business and Organisational Structure
- Series: DEC 2023
- Uploader: Theophilus