Disadvantages of a Virtual Office Term Paper

Pages: 10 (2525 words)  ·  Bibliography Sources: 10  ·  File: .docx  ·  Level: Master's  ·  Topic: Business

Virtual Office Disadvantages

Disadvantages of Virtual Offices

Traditional Business Background

Disadvantages of Virtual Office

A & M. services is an alternative dispute resolution agency formed to provide arbitration and mediation services to businesses and individuals. It presently has six full-time employees who have been trained in alternative dispute resolution procedures and one half-time person who is responsible for scheduling and providing bookkeeping services. At the present time the business does not operate out of a physical location. Instead, everyone is connected to a central server that maintains all the records of the company including clients' names and addresses and contact numbers; records of all prior and ongoing procedures; and financial records. Due to some logistical problems that we are presently experiencing in regard to our lack of a physical storefront we are contemplating either renting or purchasing office space.

The remainder of this report will detail the specific problems that we have encountered relative to our operating as a virtual office. What began as an attempt to minimize overhead costs has resulted in our experiencing problems that we hope may be resolved through the adopting of a more traditional business structure and abandoning the concept of a total virtual office. Our present plans are to adopt a hybrid style virtual office that incorporates the benefits of said structure while avoiding some of the inherent disadvantages.Buy full Download Microsoft Word File paper
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Although the future of the virtual office is bright and will likely eliminate many of the problems that presently exist, we believe that the success of our business depends on our abandoning the concept as a total solution. A return to such structure in the future is a distinct possibility but the short-term solution is, as already noted, a hybrid form.



Traditional business structure

Technological response

Telephone, desk, file machines, copiers

Term Paper on Disadvantages of a Virtual Office Assignment

Efficient, time tested

Expense of operation

Rent, security, utilities

Commute time, equipment

Technological improvements

Computers, cell phones, email, laptops

Disadvantages of Virtual Office

Social isolation

Friends, family

Poor morale


: Protection of information

Technological improvements

Lack of Collaboration

Can lead to innovation

Lack of company unity

Prestige of Physical Plant

Clients and customers

Discipline / Distraction


Lack of focus

Technological Breakdowns

Internet difficulties



Technological change and improvement have inspired the growth of home-based businesses and the increased use of home offices for corporate employees. There are many who envision that employees' working at home instead of congregating every day in an office is the way of the future. These same individuals see such system as being a large cost saver; the source of increased morale; and elimination of unnecessary buildings and equipment. Yet, as good as the concept may sound it is not without problems.

Traditional Business Structure

Most business persons when they are considering the format under which they plan to operate their business still look at a building, a telephone system, desks, offices and lunch rooms. Such an image has been the American norm for several decades and escaping from that mindset is not easy. The traditional office developed as a result of the technology that existed as the American system of business matured and it worked successfully for many years. The system operated efficiently and profitably but as technology has improved bringing with it new equipment and devices even traditionalists are beginning to question whether there is a better way to conduct business.

Before the advent of the computer, cell phone, fax machine, and email the need for a physical location where a business could centralize its operation was an essential element. Businesses needed to have all their employees near at hand and their information easily accessible. There were no databases kept on computers or servers. Information was kept in paper files and folders and needed to be stored in file cabinets. This required a physical location and building. Cell phones did not exist. Employees were tethered to a land line and this required wiring and somewhere to keep the telephone. Meetings are an important part of any business operation and before computer software programs such GoToMeeting.com, Skype or Powerpoint these meetings needed to be held somewhere and an office building with rooms large enough for conference tables served this purpose.

The latter years of the twentieth century witnessed phenomenal changes in the business world brought on by technological improvements that altered the playing field. Beginning with the introduction of the personal computer and later the cell phone business personnel were gradually freed from the confines of their office and information that was formally stored in file cabinets was available without leaving one's desk. This was only the beginning. Soon laptops entered the market and cell phones became smaller and more powerful. Suddenly the desk, building and office were far less necessary.

As the twentieth century ended and twentieth-first century began a new concept became popular in the business world. This new concept, sometimes referred to as the virtual office, took on various forms and variations (Panchuk, 2010). Some viewed it as renting an office address and occasionally visiting said office while others viewed as a totally paperless office that had no permanent location. As time has gone on, the virtual office has developed into a hybrid of many different styles.

Maintaining a virtual office involves the full utilization of the available technology. This technology includes access to internet technology, facilities like Voice over Internet Protocol (VoIP) and video chat. For most virtual office practitioners their laptop is their office and all the information that they need to perform their work is contained on their computer or is available through their computer. For these individuals there is no need for a physical office as their cell phone keeps them connected to whomever they may need to reach. Such individuals are free at almost any moment to pick up their computer, their cell phone and associated appliances and they are ready to work anywhere (Burns, 1996).

This system of working can work as well for a small business as it can for the largest of corporations (U.S. Chamber of Commerce, 2006). For the small business owner the virtual office allows his business to appear as big as a General Motors. For the big business owner it affords him the chance to cut costs. For the virtual office worker it means no commuting time and the comfort of working in his own home.

The virtual office concept does not work for everyone. Manufacturing firms still need to have a facility to produce their products but their sales force, management, and marketing staff no longer have to be present in their physical offices in order to be productive. Professionals such as architects, lawyers, accountants are a natural for this style of business. Service businesses such a plumbers, carpenters, and appliance repairmen can effectively operate without a storefront.

The most obvious advantage of a virtual office is eliminating the cost of maintaining a physical plant. Such a facility involves the expense of Rent or mortgage, insurance, utilities, and maintenance. Without these costs a business has an excellent opportunity to cut its operating costs and frees his money for other purposes. For the start-up business not having these costs lowers significantly the capital needed to begin operations and allows said business owner the opportunity to concentrate his efforts on other concerns.

Not being tied to a physical location also allows a business the opportunity to attract employees from different areas as commute time is no longer a consideration. Plus, the employees are free to work comfortably in their own homes where they are exposed to less stress. Environmentally, less commute time, fewer vehicles on the road, and less need for dedicated office space means a reduction in the carbon footprint of each worker.

Disadvantages of Virtual Office

As wonderful as all these advantages seem there are disadvantages that must be examined. First, there is the loss of social interaction with fellow employees. The traditional workplace is highly social. It is the source of many friendships and a forum for expressing ideas and concerns. During a typical work week many employees spend more time with their fellow workers than they do with their family and friends. Going from a busy office full of fellow employees to a quiet virtual office may be psychologically difficult for many workers. The effect has been debated back and forth for years but there are studies that indicate that the more engaged workers are with each other the more successful the business itself will be. In a business that has limited interaction between its employees such as one highly dependent on employees there is little or no interaction between the employees and a feeling of isolation can develop and a disconnect with the organization.

Virtual offices also create some legitimate security concerns for the business. When employees are located in one building access to valuable and classified information is limited and can be controlled. When employees are spread all over the area and their only access to company information is through their laptops, PDA, or cell… [END OF PREVIEW] . . . READ MORE

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