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

e-Business Strategies for Virtual Organizations
Figure 2.4
Critical success factors
for the virtual
organization
28
With a trusting relationship in place amongst virtual organization
members, there is also a requirement for the risk(s)
associated with the joint initiative (i.e. inherent in the purpose of
the virtual organization) to be shared. In traditional organizational
structures, risk is typically totally the preserve of a single
organization, which alone tends to implement measures to
manage its exposure to risk. The more interdependent the
nature of the activities of the virtual organization, the more risk
must be seen to be and accepted as shared. If risk is to be shared,
and high levels of trust maintained, then clearly the purpose of
the virtual organization must be such that all members benefit in
more ways than they would from remaining outside the virtual
organization relationship. Thus, the successful virtual organization
relies on the ability of the alliance to offer benefits to
individual members in terms of increased productivity,
increased revenues, increased profitability, increased market
share, and the like.
Fundamental critical success factors for the virtual organization
can therefore be posited as being a shared purpose, a trusting
relationship, a willingness to share risk, and a mutual benefit
being derived from the virtual organization’s existence. This is
illustrated in Figure 2.4.
Thus it is argued that a successful virtual organization is very
much based on the notion that mutual benefit for the parties
involved is derived through the timely and appropriate initiation
and formation of alliances to take advantage of possibly
short-lived business opportunities. But for the alliances to
operate in an efficacious manner providing benefits to all
concerned, then there is the very important assumption made
that management activity has achieved the requisite level of
shared vision and purpose, a high degree of trust amongst
Shared
RISK
Shared
PURPOSE
MUTUAL
BENEFIT
TRUST