Virtual departments are teams of employees drawn from multiple locations and divisions within an organization. The electronic space of the virtual department is where tasks related to the production function are integrated during reengineering processes, establishing new relationships among hierarchy, location, and This study assesses whether the virtual department breaks down or reinforces vertical chains and levels of command spanning many locations within an organizational hierarchy. Virtual departments in different organizational settings (different sectors, operational purposes, management styles) were tracked through their first ten years of growth. The research culminated in interviews with planners, departmental managers, and operatives to interpret virtual department-induced changes in hierarchy, location, and power. Contrary to claims in the literature, reengineering processes reinforce older hierarchical and spatial structures. They reproduce hierarchical human relations in electronic space, contributing to the formation of hierarchical levels of network access. Traditional locations of power are far from being erased or reduced even though an electronic geography remains superimposed on the physical one. The electronic spaces or virtual departments emerged as powerful technical and social ''machines,'' crucial to overcoming business problems, yet also spawning new social tensions in traditional hierarchical structures.
