Nov 2016 Q2 b.
The management of a medium- sized company has adopted the virtual organizational structure as a result of its expanded activities to different parts of the world.
State FOUR advantages and THREE disadvantages of the adoption of this decision (14 marks)
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ADVANTAGES OF VIRTUAL ORGANIZATIONS
- There will be lower administrative costs.
- The amount of salaries paid to employees will also reduce.
- Virtual organizations have the advantage of attracting specialists from all over the world.
- Virtual organizations have the advantage of instant communication.
- Employees will have job satisfaction because they can work from home.
- There is time savings.
- There is increased productivity for the organisation. (Any 4)
DISADVANTAGES OF VIRTUAL ORGANIZATIONS
- It is difficult to control employees’ working hours.
- There can be problems of service quality delivery.
- The electronic communication systems can break down, hence affecting the company’s operations.
- Virtual organizational systems cannot be applied in every part of the world as a result of poor telecommunications infrastructure.
- There is increased operational complexity for the organization as a result of different cultural backgrounds of employees.
- Lack of cohesiveness among the employees can affect the morale of employees.
(Any 3)