[8] 2002 e-business-strategies-for-virtual-organizations

e-Business Strategies for Virtual Organizations
1.6 Technology as enabling virtual
organizations
12
If we accept the notions of the new economy and/or the Internet
economy, we expect that these constructs will have implications
in the nature and operations of enterprises within the new
economy. As the transaction cost of locating, evaluating, and
interacting with other organizations drops dramatically in price
(in terms of both money and time) in the new economy, we
could expect to see the boundaries of an organization becoming
more fluid as the distinction between work done within an
organization and work prepared or processed outside, but for,
the organization becomes clearer. We are seeing, it is argued, the
emergence of boundary-spanning networks as a characteristic of
our age in the same way as the industrial revolution gave rise to
distinctive organizational forms around 200 years ago. Today’s
strategic challenge of doing more with less has led firms to look
outward as well as inward for solutions to improve their ability
to compete without adding internal resources. Viewed through
this lens, we may identify three strategic options for firms to
cope with increasingly competitive markets. Firms can either
pool their resources with others, form alliances to exploit market
opportunities, or link their organizational systems in partnerships.
The value of going virtual is often espoused in the
management literature but there is as yet little empirical
research to show that value and virtuality are directly related.
Indeed, there are so many fuzzy concepts related to virtuality
that any broad statement made with regard to virtual organizations
must be regarded with suspicion. It could be argued that
there is a degree of virtuality in all organizations but at what
point does this present a conflict between control and adaptability?
Is there a continuum along which organizations can position
themselves in the electronic marketplace according to their
needs for flexibility and fast responsiveness as opposed to
stability and sustained momentum?
While there may be general agreement with regard to the
advantages of flexibility the extent to which virtuality offers
flexibility and the advantages that this will bring to a corporation
have yet to be measured. There is an assumption that an
organization that invests in as little infrastructure as possible
will be more responsive to a changing marketplace and more
likely to attain global competitive advantage but this ignores the
very real power which large integrated organizations can bring
to the market in terms of sustained innovation over the longer