Risk Mitigation in Virtual Organizations

This paper examines the problem of risk mitigation in virtual organizations (VOs). We begin by discussing risk propensity in virtual organizations, and draw on a variety of research to suggest processes important in obtaining high levels of reliable performance in VOs. From this research we identify four processes we think are important: organizational structuring and design, communication, culture, and trust. Based on existing research done in conventional and high reliability organizations (HROs), we suggest how these processes may enhance reliability in VOs. We discuss how thoughtful management of these attributes can mitigate risk, and conclude with a theoretical and research agenda for future work.