Impact of virtual environments on organizations

By Priya Chetty on October 22, 2013

Virtual environments play an important role in determining the productivity of an organisation today. They help an establishment in a number of ways. In this section, I will discuss the advantages of virtual environments for a business organisation.

Reducing costs

Most business activities are primarily done with the motive of earning profits. Every businessman tries to maximize the profits by either reducing the total costs of operations or by increasing turnover. Both these alternatives lead to an increase in efficiency. Ultimately it results in maximizing the profits. With the use of virtual systems, the operating costs of the business are reduced manifold. They reduce the need of large number of employees for any task. This reduces various human resources costs, hiring costs, training costs, etc. Employees can work from anywhere so there is no need to transfer employees at different locations. This also saves a lot of costs.

Virtual environment helps in marketing

Looking into the marketing aspect, virtual environment technologies benefit the organizations. These technologies increase the scope of marketing by extending the target market. With traditional modes the products can be offered to a geographically limited target market. But virtual modes transform the whole world into target market. The products and services can be better demonstrated on computer before the purchase. This enhances the customers’ confidence on the offerings. All the queries of the prospects can be easily handled and well solved. Virtual environments also reduce the delivery time of services like education and consultation. So if the business is offering such services, it can benefit from reduced time-to-market. The customers’ needs can be better understood with virtual environments.

Virtual environment helps in financial management

Another very important function of any business organization relates to financial management. Finance is said to be the blood of a firm. If financial management of the firm is done efficiently, it can assure success to a great extent. Traditionally, finance managers used to spend hours in maintaining the accounts. Large amount of financial data had to be manually compiled. Then it had to be sorted and analyzed to reach to a conclusion regarding financial position of the firm. But with the developments in the field of human-computer interaction, the work load of the finance department has reduced largely. Almost everything is done by the use of automated technology. The present financial status of the firm can be concluded in minutes. It is also comparatively easy to make financial forecasts for the future. But, it needs a change in the mindset of the financial team. Financial managers must be given proper training so as to adapt themselves with new technology. Emphasis should also be laid on reducing current expenses and costs because implementing virtual environments do involve huge investment. (Warner and Witzel, 2004, p.131)

Virtual environment improves organisational efficiency

If an analysis of the impact of virtual environments on overall business firm is to be done, it can be said that virtual environments improve the overall efficiency of the firm. Virtual environments help to reduce the time and costs for various tasks. This saving in time and money can be better utilized for some other purposes. Thus, virtual environments lead to better utilization of firm’s resources. These virtual systems provide greater flexibility to workers thereby enhancing their productivity. There is better coordination in the organization because the geographical dispersion of workers is no more a problem. This also helps to secure better human resource for the firm and reduces the attrition rate. These systems also enhance the knowledge and experience sharing across the organization.. This improves the overall efficiency of operations. Many tasks are automated which saves the organization more time and resources. One of the most important benefits of virtual environments for a business is that these systems help an organization to quickly adapt to changing business environments. This enables the organization to respond quickly to the increasing competition (Shamsuddin et al., 2008)

From the above discussion it is very much clear that virtual environments have benefited every area of activity and have enhanced the individual productivity and organizational efficiency.


  • Warner, M., and Witzel, M. (2004). Managing in Virtual Organizations. Thomson Learning, London.
  • Wankel, C. (2010). Cutting-edge Social Media Approaches to Business Education. Information Age Publishing, USA.