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The Impacts of Videoconferencing in Organizations

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Richard Coles

Bryan Seow

Chiew-Yen Ong


This report analyses the various influences of videoconferencing, both positive and negative, and evaluates its usefulness in organisations. One of the major points of discussion is how face-to-face meetings, whether virtual or physical, have been affected by the embracing of this new technology by various organisations and groups. Due to the radical nature in which traditional meetings and appointments have been challenged by videoconferencing, many issues have arisen regarding its application, like whether video-conferencing actually improves communication? Another important discussion involves the cost-saving benefits to organisations, primarily through reducing travel, and how this affects organisations strategically as well as other industries (i.e. hotels, airlines). Since many organisations now compete and communicate internationally, this potential elimination of travel for businessmen and women has far-reaching consequences. This essay seeks to explore these and other issues using three major themes: ICTs have unexpected and paradoxical effects, costs and benefits of ICTs are unevenly distributed throughout organizations and society, and ICTs and socio-technical context are co-produced.


Videoconferencing is an emerging technology which enables people from any location, with the appropriate set of equipment, to communicate with each other in a virtual 'face-to-face' manner. The impact of videoconferencing on organizations has been extensive, with the effects of this technology growing as it becomes more user-friendly and the cost of equipment decreases. As a promising technological advance, videoconferencing has already had recent impacts upon some organisations. From a positive perspective videoconferencing has permitted things like decreases in costs, greater flexibility, and heightened strategic opportunities. Nevertheless, caution must still be applied to videoconferencing, like any new device, with concern now emerging regarding the negative consequences of such technology. These extend too many areas for example interaction, psychological outcomes, and team dynamics.


A primary impact of videoconferencing is that it allows more people to conduct work from home. This has many implications such as reducing the levels of travel needed by employees and increasing the time they can spend with their family, etc. This aspect is particularly exciting in relation to disabled citizens, enabling them to do much of their work in the home office environment. It is important to note however, that this benefit is unevenly distributed throughout society. This is because people who require more sophisticated equipment or environments (assembly lines, construction areas, etc), have to be at their place of work and cannot operate from home.

Videoconferencing provides a cost-effective means of bringing a firm's managers and employers together with customers. Estimates are that the average cost of a videoconference is about 10 percent that of a physical meeting. This is supported by research in the Business Research International showing that videoconferencing can provide businesses with a 90% saving, versus the cost of travelling to the meeting in person. This is another example of an uneven distribution in society, due to the fact that such systems will be of greater benefit to larger companies, who have clients in a wider variety of locations.

In the hotel industry, videoconferencing has given hotels the opportunity to diversify business by investing in and providing videoconferencing facilities. This is because some users are also likely to use a combination of in-house and off-site facilities, to meet peak demand and to deal with simultaneous bookings of meetings. Bjorn Hanson, National hospitality chairman at Coopers and Lybrand, states that "hotels can play a large role in this continuing evolution of communications technology - if they enter the market now." He also adds that hotels are in a good position to provide videoconferencing facilities because they already offer complementary services. This presents an unexpected and paradoxical effect in that hotels can take advantage of this threatening technology, to maintain or increase business profits in the face of reduced travel volumes.

Another positive consequence of videoconferencing has been the marked ability it provides to interact face-to-face with clients, providing an extremely rich communication experience without the need to travel. This has allowed firms to greatly increase their presence by maintaining fast, convenient meetings with their clients. Face-to-face meetings are even more important depending upon emphasis of culture. This is supported by Leo Cortjens, vice president and general manager of Asia-Pacific operations for Polycom, who mentions "video becomes more valuable when the interaction involves a critical social component like trust." In countries like as China, trust and respect are highly valued characteristics. Videoconferencing allows these characteristics to be communicated through eye contact and body language. "You can actually look people in the eye, which is very important in this part of the world" said Cortjens. This again produces an uneven distribution, primarily benefiting organisations and countries that place greater importance in face-to-face contact. This benefit is contentious however, with many arguing video-conferencing actually degrades face-to-face contact.

Videoconferencing also enables companies to have greater flexibility in their operations. Meetings can potentially be organised and held instantly no matter where the involved parties are. This permits greater communication throughout the company and heightened productivity. Currently however, such communication advantages only really exist for top management, who are the individuals with regular access to videoconferencing systems. This may change in the future as desktop videoconferencing begins to become the norm.

Another positive outcome of videoconferencing was its ability to heavily assist the Asia Pacific region during the SARS outbreak. In fact, the company Premiere Conferencing, audio and videoconferencing specialists,



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