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'Where the virtual meets the real': management, skill and innovation in the 'virtual organisation'

Principal Investigator

Professor John A Hughes
Department of Sociology
Lancaster University
Lancaster LA1 4YL
+44 (0)1524 594174


Mr Mark Rouncefield
University of Lancaster

Professor Wes Sharrock
University of Manchester

Mr Peter Tolmie
Xerox Research Centre Europe

Research Period
1 October 1997 to
30 September 1999
Aims and Objectives
Project Design


In an increasingly globalised world, the creation and transformation of knowledge is paramount. In this world, a prevalent image of the necessary organisation form is that of the 'virtual organisation'. Its aim is to provide an organisational solution to problems posed by the uncertainties arising from increasingly intense global competition. Along with increasing reliance on IT, the idea of the virtual organisation emphasises the decentralisation of control, the creation of more flexible patterns of working, a greater empowerment of the workforce, the displacement of hierarchy by teamworking, the development of a greater sense of collective responsibility and the creation of more collaborative relationships among co-workers. IT is seen as a key element in supporting this organisational transformation, especially systems that facilitate coordination and communication, decision making and the sharing of knowledge, skills and resources.

Aims and Objectives

The research aims to examine empirically some of the claims embodied in the notion of the 'virtual organisation'. The project's field sites are the functional areas of a major retail bank. In the last few years, the bank has been undergoing major changes in its business delivery strategy. These have involved concurrent changes in working practices, the creation of a 'selling culture' and technological innovation through the increasing use of IT to facilitate decision making, coordination and the flow of work. Our interest is in how these concurrent changes are managed and implemented on a day-to-day basis. In particular, the project will focus on the creation, use and experience of 'virtual teams' for the flexible organisation of work, the use of 'expert programmes' and 'virtual customers' to support decision making and risk assessment, and the relation of IT support to processes of coordination, awareness of work and collaboration.

Project Design

Ethnographic fieldwork is carried out in a number of specialist centres in order to provide an in-depth understanding of the instantiation of strategic plans in day-to-day working practices, along with all the local contingencies that are a generic feature of organisational life. The aim is to examine the 'hands on' work of implementing and managing concurrent innovations in technology, culture and working practices. Managing innovation is a difficult business since, in this case, it involves concurrent changes which can present a number of tensions: for example, reconciling what can turn out to be incompatible strategic goals; understanding and developing the necessary support and skills; and the practical prioritisation and reconciliation of long and short term contingencies. These are, of course, generic problems across all organisations intent on relatively rapid innovation. This case study looks to throw light on the myriad of skills related problems in managing multiple changes.


The project will enable us better to understand a wide variety of aspects of the new organisational forms associated with the 'virtual organisation': for example, adapting to the working practices of 'virtual teams'; working with 'virtual customers' in a 'real world, real time' environment; the problems of adopting a new 'sales orientation' to customer relations; the organisational risks involved in authentic empowerment; the tensions between specialist and routine work; and the practical management of the infrastructures of new cultural, organisational and technological forms. Through a case study of a particular organisation, it is intended to draw general lessons of interest to a wider audience.

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Contents current at 12th December 2000