Virtual Companies

            Imagine waking up ten minutes before work and strolling into your office wearing your pajamas. This isn’t a dream; it is a reality for virtual companies. Virtual companies, also known as distributed companies, allow their employees to work directly from their homes. Automattic, the provider of “WordPress blogging software,” (Kopytoff) is an example of a successful distributed company. Automattic employees communicate through a blog with various discussion boards, organized by task or issue. Other forms of communication include Skype and instant messaging. All meetings are recorded and broadcasted. The main goal is to ensure that all employees are in the loop and aware of all projects and plans.

I acknowledge the positive aspects to the distributed model. Virtual companies can cut costs with smaller offices or even no offices at all. The company can hire the best employees, regardless of their location. Salaries can be reduced because they are based on the employee’s current residence. Employees can cut out commuting expenses. Especially in the current economic state, many businesses may be attracted to the virtual model.

            But personally, I do not believe that virtual companies will remain successful in the long run. According to the Businessweek article, the “distributed model appeals almost exclusively to small businesses” (Kopytoff). If a business begins to expand into a larger corporation, it will be extremely difficult to transition. The challenge of transitioning was proven by the publication Inc., which experimented with the virtual model for one month. The employees had trouble adjusting to working from home, often finding themselves overworking and missing meals. Many people already have difficulty separating their work from their home life and the distributed model blurs the lines even more. After one month, the majority of the employees surveyed did not favor the virtual model.

            One setback that is not covered in the Businessweek article is the legality behind virtual company salaries. Although salaries will most likely decrease, the company’s legal fees will increase. Since the employees are from various states, the company must adhere to each state’s laws and taxes. The company will have to hire a lawyer to ensure all rules are being followed.     

            Another negative aspect to the virtual company is the lack of face-to-face communication. There are no brief hallway chats or post-work dinners. These small daily interactions are what can help make work enjoyable. Inc. attempted to create a “virtual water cooler” (Chafkin) through Skype and video conferencing, but employees felt like video chatting with no purpose was a waste of time. Although the lack of distraction can make a worker more productive, it is difficult to establish a bond with a co-worker hundreds of miles away. Without the feeling of a team, employees may be inclined to make decisions independently rather than consulting with others.

            Overall, I believe that the virtual model may work for some small businesses that are looking to cut costs. But although expenses are decreased, it is not worth sacrificing a communal work environment, which helps employees focus on working together towards a common goal.

Sources

Main article:

http://www.businessweek.com/articles/2012-09-04/why-some-company-offices-are-virtual#p1

Supporting article:

http://www.inc.com/magazine/20100401/the-case-and-the-plan-for-the-virtual-company.html