The virtual structure is a small, core organization that outsources major business functions. This structural form allows each project to be staffed with the talent best suited to its demands rather than just with the people employed by the studio. It minimizes bureaucratic overhead because there is no lasting organization to maintain. It lessens long-term risks and their costs because there is no long term—a team is assembled for a finite period and then disbanded.

The core of the organization is a small group of executives whose job is to oversee directly any activities done in-house and to coordinate relationships with organizations that manufacture, distribute, and perform other crucial functions. The major advantage of the virtual structure is its flexibility, which allows individuals with an innovative idea and little money to successfully compete against larger, more established organizations.

The structure also saves a great deal of money by eliminating permanent offices and hierarchical roles for outsourced functions. The drawbacks have become increasingly clear as popularity has grown. Virtual organizations are in a state of perpetual flux and reorganization.