Two Cheers for the Virtual Office

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Technology has made it possible to redefine where work is done. The "virtual office" offers companies and their workers many benefits: lower real estate costs, higher productivity, and increased flexibility. At the same time, organizations forfeit the benefits of the traditional office: a shared understanding of the corporate culture; a sense of loyalty; informal communication; access to people, information, and materials; and managerial control. Drawing on the results of field research, the authors discuss how firms can maximize the benefits while minimizing the losses of these alternative work arrangements.

The authors identify five common arrangements: "telecommuting" refers to situations in which workers with fixed offices occasionally work at home; "hotel"-based workers come into the office frequently, reserving a cubicle where they can use the telephone and link their laptop computers to the network; the "tethered worker" has some mobility but reports to the office on a regular basis; "home" workers work entirely from a room in their homes; and "fully mobile" workers are on the road or at customer sites during the workday. Companies considering adopting virtual work must be clear about the type of virtual office that best addresses their needs and its advantages and disadvantages.

If virtual work is to pay off, managers must adopt new approaches in five key areas: managing people, managing information, managing teams, managing processes, and managing facilities. Companies need to institute new information flows to replace those that are lost; educate workers on how to be more effective providers and consumers of information; provide training in virtual worker management skills and personal work strategies; and create dialogue on how to deal with changed family relationships.

Effective management of alternative work arrangements means mixing virtual and nonvirtual offices. Companies should analyze the variety of approaches possible and their particular circumstances to determine just how much virtuality is appropriate.

Thomas H. Davenport is a professor of information systems at Boston University School of Management. Keri Pearlson is an assistant professor at the University of Texas Graduate School of Business.

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