Assignment



Assignment

In pursuit of competitive advantages, virtual organizations (VO) have been crystallized in recent years as a new paradigm of organization design (Camarinha-Matos et al., 2005b). A VO is a group of independent firms that link together and form a single temporary company. It operates as a federated collection of firms tied together through contractual and other means. In the electronic commerce (EC) age, many VO have emerged in cyberspace. Enabled by information technology (IT), VO replace traditional, unitary business forms with contractual relationships, and provide management with maximum flexibility in response to market changes.

Whereas division of labor is designed to improve the efficiency and effectiveness of productivity by manipulating the internal structure of a task, a VO works by manipulating relations between collections of tasks. The management of VO is called meta- management. Meta- management provides a systematic approach to the exploitation of competitive economic advantages for a VO. It consists of basic activities including analyzing and tracking requirements, allocating satisfiers to requirements, and adjusting the optimality criteria.

Compared to traditional management, meta- management of a VO has two major distinct characteristics. First, a VO must make goals explicit. Intangible goals, such as subjective loyalty to the community, are not allowed in the meta- management of VO. Second, the central task in meta- management is the maintenance of the temporary partnerships within a VO. Dynamic switching from one virtual organization to another is becoming a standard instrument in the meta- management toolkit.

Advanced IT (computing and communication) has made it possible to manage the complexities of a VO efficiently and effectively. With IT, the processes of making a product or providing service can be differentiated, distributed in different places, and executed at different times with assurance that the whole process can be integrated and controlled effectively. This paper elaborates on meta- management responsibilities, and discusses the role and challenges of IT in support of VO.

Advantages for Furniture Works

The virtual organizational structure has several advantages for Furniture Works over the M-form structure.

Adaptability, flexibility, agility, and speed of a small company. Furniture Works using this structure will, in general, be smaller than firms using an M-form structure. Because of this, there are less levels of bureaucracy which allows the interfirm alliance to react more quickly. Also, Furniture Works will be more specialized to a particular task. For example, two smaller firms specializing in manufacturing and distribution will be better at these separate tasks than one large firm that attempts to do both. In the past, the costs of external coordination between the separate firms made their performance lower, but now, because of improvements in coordination technology, the separate, specialized, firms may actually perform better.

Resources (including money, technology, labor, managerial skills, etc.) of a large company. Furniture Works using this structure are only limited by their ability to identify and evaluate a large number of potential partners. The resources available to a firm working in a virtual organization partnership, after it has been formed, is the sum of all of the resources of the ...