The virtual organization has become popular with the rapid growth of electronic commerce and is regarded as one of the promising new organizational forms of the future. The jury is still out whether virtual organizations work well in all business settings. The authors address a variety of essential characteristics, design principles and enablers of virtual organizations, while recognizing that flexibility is the main goal when forming virtual organizations. Improved support of economic activities via modern information systems is a promising strategy for the expansion of human performance limits.
Trust counts as a decisive coordination mechanism for virtual organizations.
Conversely, opportunistic human behavior, in the sense of pursuing self-interests at another person's expense, causes risks. Several limitations, however, can be recognized, including the technical infrastructure, as well as human behavioral patterns imposed on institutions. Broadly speaking, this decade is regarded as a transition period from an analog to a digital world. Since the way to conduct business has changed dramatically with rapid technological development, new types of organization structures and forms are required to meet the needs of this new business environment. Such network or virtual organizations have surfaced in a wide range of industries, from airlines to computer chips and aircraft manufacturing.