A virtual organization is an organization involving detached and disseminated entities (from employees to entire enterprises) and requiring information technology to support their work and communication. Virtual organizations do not represent a firm’s attribute but can be considered as a different organizational form.Virtual can be defined as "not physically existing as such but made by software to appear to do so", in other words “unreal but looking real”. This definition precisely outlines the leading principle of this unconventional organization, which holds the form of a real (conventional) corporation from the outside but does not actually exist physically and implicates an entirely digital process relying on independents web associates. Thus, virtual organizations are centered on technology and position physical presence in the background. Virtual organizations possess limited physical resources as value is added through (mobile) knowledge rather than (immovable) equipment. Virtual organizations necessitate associations, federations, relations, agreements and alliance relationships as they essentially are partnership webs of disseminated organizational entities or self-governing corporations.
- What is a Virtual Organization? Wikipedia