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Virtual Management: A Cross-Section of the Management Process Illustrating its FundamentalFunctions of Planning, Organizing, Leading and Controlling in a New Era Organization

Vlado Dimovski & Sandra Penger (University of Ljubljana, Slovenia 2002)

Management entails the coordination of tasks and activities for the achievement of setobjectives and is defined as the creative solving of problems, which occur in the planning,organizing, leading and controlling of resources. At the turn of the 21st century, organizationsare facing the Internet revolution, which imposes on top management different newconceptual requirements. Therefore, ensuring business success in todays dynamicenvironment is increasingly difficult. Tackling fast changes is the most challenging problemmodern managers are facing. The challenges of today's environment require completelydifferent response from organizations. Many organizations are transforming into flexible,decentralized structures, which emphasize horizontal cooperation. Besides that the

boundaries between organizations are disappearing more and more, as even the competitorsare forming partnerships with intentions to become globally competitive. Consequently, therole of management is changing and moving from control and limited resources managementtowards exerting influence on networks of self-interested individuals or units from within andoutside an organization.

In the era of New Economy, organizational structures are taking on the shape of virtualnetwork structures, which are based on outsourcing; the organizational philosophy of thevirtual organizations is based on learning. While managers of the Industrial Age focused theirattention on the control of business operations and on hierarchical organizational structures,the New era managers, i.e. E-Managers, will structure and build associations of self-managedvirtual teams. The future has to be built on a new, fifth generation of management, which is

based on knowledge networking and emphasizes entrepreneurship and dynamic teamwork.E-Management is based on horizontal connectedness between members of an organization.

Recently, new leadership content has emerged in virtual enterprising. Virtual enterprising is aprocess in which organizations unite their competence and knowledge and establish multiplecross-functional teams together with members from external organizations.Virtualmanagement is a modern management paradigm, which contributes to all fundamentalmanagement functions with the new content of virtual environment. In the new virtualenvironment modern organizations are establishing new methods of virtual management thatare based on the global network, Internet and modern information and telecommunicationtechnologies. Virtual management focuses on helping teams and partners to better understandthe essence of changes and to reach agreement on what would be the best way to functionunder the given circumstances. Virtual organization produces and distributes products andservices through a network of connected people, without being limited with any traditional

organizational and physical boundaries.

A learning organization is considered to be the top stage of horizontal coordination, with notraces of organizational hierarchy remaining. A learning organization requires specificchanges in leadership, management and structure, the delegation of more powers to theemployees, communications, participative strategy and adaptive culture. Completeunderstanding, organizational learning and knowledge management need to be developed, inorder for an organization to learn more rapidly than its competitors. A major challenge inknowledge management is the transformation of personal and tacit knowledge intoorganizational knowledge. Knowledge management is understood to be a process ofsystematic, proactive management and the development of knowledge in the organization.

The development can reach levels that some organizations no longer exist in physical form.Then we speak about virtual organizations.

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In the age of the E-Economy, the process of management is undergoing radical changes in alldimensions of basic management functions. New solutions in information andcommunication technologies are constantly emerging in the forefront, changing andredefining the current content of management. In the New Economy, the production and

distribution of information and knowledge is the main source of a company's assets. Acompany's market value is made up of a companys financial capital and intellectual capital.Intellectual capital is an intangible asset source, which often isnt stated on the balance sheetand in its broadest aspect includes human and structural capital.

It has exhibited the extent of virtual management through the influence of the New Economyon the management process, as a structure of basic functions of planning, leading, organizingand controlling. The future of the management process raises the issues of how to manageinformation and knowledge, and how to develop intellectual capital. It is the newest approachtoward departmentalization, which spreads the idea of horizontal coordination andcooperation across organizational boundaries.

Rebat Kumar DhakalM. Phil in Educational Leadership

Campus Roll No: 125Kathmandu UniversitySchool of EducationBalkumari, Lalitpur

Word Count: 698

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