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258 Chapter 7

Impact of Virtualization on Culture
The basic challenges that culture faces in a virtual organization are:
• No formalization, each person follows his own norms, styles and ideas
• No shared values, beliefs, ideas, or norms
• No frameworks or policies that guide individuals working in the organization
The interaction and communication between the members of virtual organizations
is so limited and through channels so impersonal (the computer) that the scope for
development of a shared sense of belonging or a climate in the organization is almost
nonexistent.
Virtual organizations are here to stay and what they need to do today is to build a
culture that would give an existence to the organization in the minds of its members
and a sense of identifi cation and belonging that will bring them together in spite of
limited interactions. Within this culture it is necessary for each individual to take his
or her own developmental path, which is actually the core of the functioning of virtual
organizations.

Strategic Implications of Organizational Culture

Kanter (1989) refers to the paradox implicit in linking culture with change. On the
surface, culture has essentially traditional and stable qualities; so how can you have
a “ culture of change ” ? ( Fullam 2001 ). Yet this is exactly what innovative organizations
need. If real change is to occur in organizations rather than cosmetic or short-lived
change, it has to happen at the cultural level. Corporate culture has many powerful
attractions as a lever for change. The problem is how to get a hand on the lever. Firstly,
cultures can be explicitly created; you have to be aware of what it takes to change an
existing culture.
The ability of companies to be culturally innovative is related to leadership. Top
management must be responsible for building strong cultures. Leaders construct the
social reality of the organization, shape values, and help to create and attain the vision
of the organization.
The knowledge culture change adoption process will necessarily be a long one. You
should not expect results overnight. In fact, the more dispersed the organization, the
longer it has been in existence, and the less stable its environment and workforce,
among other factors, the longer the cultural change period that will be needed. For
some organizations, this may be as long as ten years. However, this does not mean
that small, meaningful steps cannot be taken to progress toward the overall cultural