What Makes a Virtual Organization Work: Lessons From the Open-Source World

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Today's workforce is increasingly made up of volunteers — at least in spirit if not in fact. How will the traditional management tasks of motivating and directing employees change in the face of that new reality? The authors answer this question by examining an example of an economic enterprise that acts in many ways like a voluntary organization: the open-source software movement.

The authors became interested in the movement during the course of their work with a knowledge-based organization that was seeking a new model of organizational governance. After hearing open-source proponent Eric Raymond speak at a public forum, they began to think that the movement might offer just the model the organization needed. They then embarked on a case study that focused on the motivation of open-source participants and the coordination of their software development work.

The authors posed the following essential questions: What motivates people to participate in open-source projects? And how is participation governed in the absence of employment or fee-for-service contracts? The answers revealed some important lessons for traditional organizations about the challenges of keeping and motivating knowledge workers and the process of managing in the new arena of networked or virtual organizations.

The first lesson is that traditional organizations should plan for a broader array of employee motivations than they often do today. Money is only one, and not always the most important, motivation of open-source volunteers. Professional contributors are also motivated by the personal benefit of using an improved software product and by a number of social values such as altruism, reputation and ideology. In many cases, several motivations operate together and reinforce one another.

Second, traditional organizations should consider ways to shift from the management of knowledge workers to the self-governance of knowledge work. Despite their clear potential for chaos, open-source projects are often surprisingly disciplined and successful by means of multiple, interacting governance mechanisms. Membership management, rules and institutions, monitoring and sanctions, and reputation build on the precondition of shared culture to self-regulate open-source projects.

M. Lynne Markus is professor of electronic business, Department of Information Systems, City University of Hong Kong. Brook Manville, formerly a partner in the organization practice at McKinsey & Co., is chief learning officer at Saba Software in Redwood Shores, California. Carole E. Agres was a doctoral student at Claremont Graduate University in Claremont, California. Contact the authors at islynne@cityu.edu.hk and bmanville@saba.com.

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