The strategic virtual corporation: bridging the experience gap

The organizational concept of virtual Web organizations encompasses three organizational elements, namely the relatively stable virtual Web platform from which dynamic virtual corporations derive. Virtual corporations are interorganizational adhocracies that are configured temporally of independent companies in order to serve a particular purpose, such as joint R&D, product development, and production. The third element of this organizational construct is the management organization that initiates and maintains the virtual Web platform as well as forms and facilitates the operation of dynamic virtual corporations. Since the organizational concept of virtual Web organizations is hardly researched this chapter aims to provide readers with a better understanding of the organizational concept of virtual Web organizations and in particular of how such an organizational construct is managed. Based on empirical research the author developed a competence-based management model of virtual Web management organizations. This competence-based view of virtual Web management organizations presents an overview of a set of common sub-competencies underlying the three virtual Web management’s main competencies of initiating and maintaining virtual Web platforms and forming dynamic virtual corporations. Furthermore, the developed competence-based management model describes the content of the individual sub-competencies and it explains the purpose, the interrelateness and the temporal dimensions of the virtual Web management’s sub-competencies.

Can firms and coevolutionary groups suffer from too much interdependent complexity? Is complexity theory an alternative explanation to competitive selection for the emergent order apparent in coevolutionary industry groups? The biologist Stewart Kauffman suggests a theory of complexity catastrophe offering universal principles explaining phenomena normally attributed to Darwinian natural selection theory. Kauffman's complexity theory seems to apply equally well to firms in coevolutionary pockets. Based on complexity theory, four kinds of complexity are identified. Kauffman's “NK[C] model” is positioned “at the edge of chaos” between complexity driven by “Newtonian” simple rules and rule-driven deterministic chaos. Kauffman's insight, which is the basis of the findings in this paper, is that complexity is both a consequence and a cause. Multicoevolutionary complexity in firms is defined by moving natural selection processes inside firms and down to a “parts” level of analysis, in this instance Porter's value chain level, to focus on microstate activities by agents. The assumptions of stochastically idiosyncratic microstates and coevolution in firms are analyzed. Competitive advantage, as a dependent variable, is defined in terms of Nash equilibrium fitness levels. This allows a translation of Kauffman's theory to firms, paying particular attention to (1) how value chain landscapes might be modeled, (2) assumptions underlying Kauffman's models making them amenable to firms, and (3) a delineation of seven of Kauffman's computational experiments. As part of the translation, possible parallels between the application of complexity catastrophe theory to coevolutionary pockets and studies by institutional theorists and social network analysts are discussed. The models derive from spin-glass microstate models resulting in Boolean games. Kauffman's Boolean statistical mechanics is introduced in developing the logic underlying the somewhat simplified NK[C] model. The model allows the use of computational experiments to better understand how the dependent variable—value chain fitness—is affected by changes in the number of internal interdependencies K, the number of coevolutionary links with opponents C, the size of the coevolutionary pocket S, and the number of simultaneous adaptive changes, among other things. Various computational experiments are presented that suggest strategic organizing approaches most likely to foster competitive advantage. High or low Nash equilibrium fitness levels are shown to result from internal and external coevolutionary densities as a function of links among value chain competencies within a firm and between a firm and an opponent. Complexity phenomena appear to suggest a number of expected (and thus validating) and surprising strategies with respect to complex organizational interdependencies. For example, moderate complexity fares best and external coevolutionary complexity sets an upper bound to advantages likely to be gained from internal complexity. Various complexity “lessons” are discussed. Models such as the NK[C] could offer insights into strategic organizing.

The nontraditional export (NTE) sector promises to be the antidote to Africa's economic woes in the face of dwindling traditional exports. Adopting the Porter's Value Chain Framework and a case study design, we explore how alcoholic beverage companies in the African NTE sector could create value in their upstream, midstream, and downstream value chain activities through effective governance and digitization. In exploring these intricacies of governance and digitization within African global value chains (GVCs), we draw on two major case studies, Diageo South Africa and Kasapreko Ghana Limited. Our study shows that the NTE sector can contribute to both economic and social upgrading activities, contribute to industrialization and create international competitiveness for African firms. Second, GVC governance and digitization, even though still at its infant stages in Africa, has the potential in propelling economic value through the NTE sector.

Virtual corporations as well as traditional companies need a planning and control system in order to guarantee the organization's competitiveness in markets. This paper outlines the design of VICOPLAN (VIrtual COrporation PLANning and control system), a prototype of a planning and control system for virtual corporations in the service industry. VICOPLAN consists of three modules to support the management of virtual corporations. These modules allow the offering and allocation of sub-orders within the pool of partner companies of a virtual corporation. Furthermore, with VICOPLAN, orders may be calculated and costs may be controlled during the execution of the orders. VICOPLAN also offers multiple analysis methods, including the analysis of the behaviour of the partner companies, the allocation of sub-orders, as well as the goals of the partner companies. Finally, the implementation and testing of VICOPLAN is described briefly. An outlook on the next generation of VICOPLAN is also given.

In the present context of digitalization across all industries, most of the organizations are investing in that equipment, tools, and solutions which will help their procedures, employees, apparatuses, and also the goods to integrate into the solitary system. This single network will be helpful for data collection, analyzing data, and also evaluating the development of the company and its performance as well. In this chapter, authors have tried to understand the impact of 4.0 on the company using the Porter's value chain model, which is quite crucial for the area which is primarily concerned with the value creation with the customers. It has been analyzed that 4.0 primarily influence the process of value creation, and so far had a larger impact in this area. The main aim of the learning is to explore how corporations functioning in India understand the occurrence of 4.0, what equipment and tools they are using for Internet of Things for supporting the process and challenges faced by them during the adaptation. At the end of this chapter, it has been identified that due to real-time data spreading across companies—probably all the necessary tools and methods are available, it can surely have a larger impact on the company. Additionally, it has been concluded during the study that the majority of the companies have moved toward the evolution in a digital way, and they have already started investing in this area.

Engineering activities have in some sense reached a mature level. It is, however, well recognized that the results have not satisfied the corporate strategy that was determined in advance. This is probably due to the lack of another context for reflecting on the corporate strategy in engineering activities, and this may lead to failure in the competitive global market. The present work intends to develop a conceptual framework for engineering activities, in particular, focusing on the process system synthesis and design that are most influential to the other activities and congruent with a corporate strategy. The new context for the process system synthesis and design emphasizes on value-added activities. The discussions are based on the well-known concept of Michael Porter's value chain and on the extensive application of Bellman's “the principle of optimality” in a modified form. Despite the need for ongoing strategic corporative operations to be successful, these two concepts are not combined in an explicit way. The author proposes a conceptual framework for process system synthesis and design by combining the value chain concept with the modified form of “the principle of optimality” to satisfy multiple objectives. There are two sequential problems: the first is to maximize the monetary value added, and the second is to have the Pareto optimum or compromised solutions. Both are discussed, and an illustrative application is described.

This chapter endeavours to clarify some of the concepts related to the virtual organisation and to move away from the definition of a “virtual organisation” as one with few or no tangible assets, existing in virtual space created through information communication technologies (ICT) (Warner & Witzel, 2004). The authors focus on the concept of an organisation, which is “virtually organised,” employing ICT for the majority of its communication, asset management, knowledge management and customer resource management, across a network of customers, suppliers and employees (Venkatraman & Henderson, 1998). The authors consider the concepts of virtual organisations and virtual organising and develop an instrument that can be used to evaluate organisational readiness to exploit virtual networks. The instrument can be used initially to measure the value of virtual models to the organisation and then reapplied to measure the extent to which these values are actually embraced.

Boeing is the largest export manufacturer in the United States and has been the world's leading aerospace company since 2012, with overseas sales accounting for more than half of its revenues. Boeing's successful internationalization strategy, studying and learning its management strategy is of tremendous practical significance. What kind of company is Boeing? What are the significant milestones in Boeing's international journey? What is Boeing's value-creating strategy? What are the positive and negative elements of these strategies, and what are their preconditions? What should Boeing do to strengthen its value creation over the next five years? This report will use theoretical models in International Business Management, such as Robinson's six-stage theory, SWOT analysis, Boston matrix, Michael Porter's value chain model, and RBV model, to answer these five questions.

Service oriented architecture (SOA) enables organizations to easily integrate systems, data, and business processes. Implementation of SOA solution in private sector is widely used and successfully proven to increase their profit. But there are different challenge in public sector which is not profit oriented and has different business model. In public sector, user satisfaction on government agencies is one of common indicator to measure quality of public service. This paper presents SOA solution for public sector using SOMA to conduct a service integration for optimizing public satisfaction. We also combined SWOT and Porter's Value Chain to support business modelling analysis. The result shows that there is a simplicity and feasibility for users to access the service after SOA integration, which improves user satisfaction.

Health care delivery is moving toward a value-based environment, which calls for increased integration between physician groups and health systems. Health executives sit at a key nexus point for determining how and when physician-system integration occurs. The objective of this study was to identify the organizational factors that health executives perceived to have made physician-system integration successful. We used a multiple-case study research design. We conducted semistructured, qualitative interviews with 25 health executives in the roles of CEO, chief medical officer, chief financial officer and physician group chief executives from eight of Washington State's largest integrated delivery systems. To guide our analysis, we employed open systems theory and Porter's Value Chain to identify physician group and hospital factors that were integral to successful integration. Using the executives' perspectives, the factors grouped into three themes: (1) organizational structure-a mix of integration contracts united by common structural characteristics between physician groups and hospitals); (2) organizational culture-alignment of leadership between physician groups and hospitals; and (3) strategic resources-designated resources to establish and support care coordination activities. Our work indicates that health systems should focus on the pathway to integration success through the alignment of structure (not just the integration contract), culture, and resources and not on an end goal of the physician employment model. Health system executives are key drivers for when and how physician groups are integrated into health services organizations. This article provides executives with an evidence-based model to aid in formulating integration approaches that combine elements of organizational structure, organizational culture, and strategic resources.

Batubara Regency, North Sumatra, has significant potential for developing palm oil-based MSMEs through the downstream processing of palm sap into brown sugar. This study analyzes innovations in production processes and business management practices in palm sap brown sugar MSMEs in the region, focusing on two MSMEs in Lautador District. Using a qualitative single-case study approach based on Local Economic Development (LED) Theory and Porter's Value Chain model, primary data were obtained through semi-structured interviews, participant observation, and focus group discussions (FGDs) with 10-15 business actors and stakeholders. Results show that the innovation of a semi-automatic steamer increased production efficiency by 105% (from 22% to 45%), monthly revenue increased by 132% to IDR 5.8 million per unit, and the share of digital sales reached 75% (a 1400% increase). Key obstacles include the lack of halal certification and village road infrastructure. Recommendations include facilitating BPDPKS (Indonesian Palm Oil Development Agency) for production equipment and certification, as well as establishing a joint production house. This study contributes to the literature on palm oil downstreaming and sustainable LED strategies.

The work under new conditions of information technologies’ development and adoption of new forms of organizations, such as virtual organization, has not only advantages, but also causes certain problems such as personnel loyalty because of dispersion of personnel of virtual organizations. In the article the conception of loyalty and loyal employee, forms of organizational commitment, interaction of loyalty and motivation are analysed, the main factors of personnel loyalty formation in virtual organizations are identified. In the article is presented results and analysis of the research. The main task of the research was to identify the most important factors that determine loyalty of personnel and the main differences of these factors in virtual and traditional organizations.

PurposeThis study aims to develop a comprehensive framework for discussing sustainability within the insurance industry, extending the traditional Environmental, Social, and Governance (ESG) dimensions to include economic and technological considerations. This inclusion is vital, recognizing that financial stability and the adoption of innovative technologies are fundamental to meeting other sustainability targets.Design/methodology/approachWe base our findings on an extensive literature review, case studies, and interactive workshops with key stakeholders in the insurance industry. Our analytical framework employs Porter's (1985) insurance-specific value chain, complemented by Berliner's (1982) insurability criteria, to distinguish between insurable and non-insurable risks.FindingsOur results show that the insurance industry is sustainable because it actively incorporates and contributes to sustainability goals across environmental, social, economic, and technological dimensions. This is illustrated through the identification of 50 distinct contributions across the insurance value chain, showcasing the sector’s unique position to significantly influence the sustainability discourse.Practical implicationsAddressing the pressing challenges of sustainability and insurability necessitates a strategic, collective response from the global insurance and risk management community. This paper proposes several policy recommendations, including enhancing risk assessment methodologies, diversifying insurance product offerings, encouraging cross-sectoral collaboration, and prioritizing investments in resilience and preventive measures.Originality/valueBy broadening the sustainability discussion to encompass economic and technological facets, this paper enriches the dialogue surrounding the insurance industry’s role in sustainability. It aims to inform decision-makers across the industry, political spheres, and broader society about the necessity of sustainability, fostering pertinent political discussions and highlighting avenues for future research.

Over the past decade, with the advent of the Internet, organizations have changed the way they communicate internally and externally, the way they are configured, and the way they build partnerships. Today’s complex and volatile business world calls for changes and alternatives to the old and conventional paradigm of organizational design and new ways of doing business with others. E-business becomes one of the most important forces shaping today’s business. Virtual corporations and e-partnerships become increasingly popular in the perception of managers and in business operations.

The concept of the virtual organization (VO) has engendered great interest in the literature, yet there is still little common understanding of the concept, as evidenced by the multitude of labels applied to VOs. In this article, we focus on a "Weberian-ideal-type" definition of the interorganizational VO, posited in our earlier work (Kasper-Fuehrer and Ashkanasy 2001). We argue, however, that this definition left unanswered critical questions relating to the nature and effects of interorganizational VOs. We answer these questions here by explicating the terms in the definition and deriving ten corollaries, or "natural consequences" of our definition. The corollaries posit that interorganizational VOs are temporary in nature, are network organizations, are independent, and are based on swift trust. We suggest further that interorganizational VOs enable small to medium enterprises to exploit market opportunities, and enable VO member organizations to create a value-adding partnership. We also identify information and communication technology (ICT) as the essential enabler of VOs. Finally, we argue that interorganizational VOs act as a single organizational unit and that they therefore constitute a uniquely distinguishable organizational form. We conclude with suggestions for further research, including trust, organizational behavior, transaction economics, virtual HRM, and business strategy.