In contrast, virtual global companies have teams in all parts of the world that take advantage of the engineering in multiple geographic locations for collaborative and distributed engineering. For instance, global companies such as Microsoft, Intel, and Hewlett-Packard have outsourced their software development organizations mostly in India and Far East (Eppinger & Chitkara, 2006). Conventional global organizations such as Toyota, Siemens and General Motors still rely on certain countries for their engineering talents such as China, America and UK (Eppinger & Chitkara, 2006). The human resource management practices also differ due to the change in culture, organization structure and design. As team members in virtual organizations have never worked together unlike in conventional organizations, working styles of members differ. The practices of team leader in virtual organization is based on building trust by means of constant communication and managing virtual work-cycles and meetings as well as monitor the progress of each team while each of the member benefitting from participation in virtual teams (Malhotra, Majchrzak, & Rosen, 2007). In case of conventional organization, the members of a team are mostly acquainted with one another and can work easily without any communication mismanagement.
Francis Fukuyama famously defined some societies (Japan for example) as high-trust societies and some as low-trust societies. Qualify your country on Fukuyama’s categorization. What difficulties would you as a CIO have in setting up a virtual organization working with people from a society with a different level of trust?
Based in US, if I want to set up a virtual outsourcing organization in Korea which is a low trust society, I would have to face many difficulties. The first challenge that I would face would be the acceptability in their society due to cultural differences. Therefore, the first thing would be to educate myself about the Korean cultural aspects.