Ethical Issues in Virtual Organizations


Mario Arias Oliva, Mar Souto Romero and Gustavo Matias Clavero


Organization designs have been determined during the last decades by classical scientific principles made by Taylor (1911). But nowadays, the new global and digital environment shows quite different conditions. The classical industrial stable mass production is not suitable any more (Wigand et al, 1997). Because of this we find that the ways of organizing activities based on conventional design paradigms are not adequate enough in order to fit with new environmental conditions. New organization design are appearing, such as the virtual forms. But what does it means exactly to organize in a virtual way?. An organization that sells through internet, Could be considered a virtual one?. Virtual organization is a buzzword, but there are no much scientific research about how to define a virtual organization, what are the key characteristics . A paradigm shift is taking place (Tapcott, Caston1993), and when a scientific revolution is occurring, crisis is a necessary precondition (Kuhn, 1962). During a crisis situation, scientific community try to find new evidences that sustain current paradigm. Incremental improvement occurs, but finally the core of the theory suffer a dissolution. Before the dissolution of the theory, practitioners with direct contact with reality are the first movers, leaving the current paradigms looking for a new framework that fits properly with real conditions (Applegate, 1994). At the present time, we are in this situation. It is difficult to assert that a new paradigm has arrived, as well as traditional ones are not longer enough. This paper aim to define a theoretical model about what a virtual organization design is. In the defined framework, we include some ethical issues that should be taking into consideration when a business design process is made. The ethical dimension of organizing can be reach in many different ways, such as trust. A virtual organization can be composed by a group of companies (Sieber, 1998), a network of independent enterprises (Bultje, van Wijk, 1998), units inside an organization (IMPACT, 1998), a legally network of independent enterprises with economic interdependencies (Sidow, 1996). In traditional environment the regulation inside an organization was easer to determine, due to the internal character of decisions and control processes with an establish hierarchy and authority. In this context, the ethical dimension was about behavior inside the enterprise. But according to new design forms, the control and decision process are crossing more than one enterprise, making more complex the regulation process. It is necessary to shift the regulation from hierarchies to other types of mechanism as self adjustments. Sometimes organizations sign up explicit agreements, but in many ones they work on the basis of implicit agreements (Rottering, 1993). That could provoke opportunistic behaviors. In that circumstances, the ethical issues are critical in the performance of an enterprise that is organize in a virtual way, and ethical considerations should be made during the organization design process. In this paper we will analyze those ethical considerations from the point of view of business organization design, focusing on information technology based virtual forms.


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