What’s happening to the office? Technology has made it possible to redefine where work is done. The traditional notion of an office as the place where someone goes to work seems to be going the way of the buggy whip, the eight-track tape, and the stenographer.

Companies such as Procter & Gamble, IBM, Hewlett-Packard, AT&T, and Compaq have partially or fully eliminated traditional offices for field sales and customer service. Other companies have eliminated offices for workers including researchers, real estate managers, and accountants. For these businesses, work is becoming something you do, not a place where you go.

They are successfully replacing offices with technology; portable computers, cellular phones, and fax machines all enable remote or mobile work.

The “virtual” office appeals to many different corporate stakeholders. Mobile or remote workers value the freedom and autonomy that it provides.1 Senior managers like the reduction in real estate costs. As one Bell Atlantic manager noted, “This is not a perk for employees if you can cut half a billion off the bottom line.” Senior managers also value the opportunities that new technologies make possible for increased interaction between sales-people and customers.

However, some managers, particularly middle managers, are troubled by the virtual office. They may find it difficult to do their jobs because the employees they supervise are out of sight; also they may lose their traditional office perquisites. Some workers resist the virtual office as well; those who have too little space at home to set up an office, or distracting family or home environments, are at a disadvantage. While many companies express enthusiasm about virtual offices, a small but growing backlash to the concept is emerging. After implementing or experimenting with the virtual office, a few firms have abandoned it.

While we believe that the flexibility and the opportunities for increased productivity offered by virtual offices are real benefits, we give them only moderate praise because of the things that are lost. In this article, we discuss how firms can maximize the benefits while minimizing the losses of these alternative work arrangements.

How Are Some Companies Adapting to Virtuality?

In undertaking research on virtual offices, our purpose was to assess what is gained and what is lost in substituting technology for a physical office. We wanted to understand the range of approaches being used in different parts of companies and the implications of each approach. We saw a