Virtual

Companies
An Informational Website

EXAMPLES OF VIRTUAL COMPANIES:

There are many examples of different types
of companies that operate as virtual
companies. One company, Ensemble - a
division of Hallmark, is an example of the
virtual enterprise that relies on outsourcing
to become a more successful
company. They rely on other companies to
handle their manufacturing and distribution.
Under an agreement, USCO handles their
entire order fulfillment, receipt of inbound
goods, warehousing, and outbound
transportation. Customers call in, fax, or
transmit their orders to Ensemble via
EDI. These orders then go to USCO. One of
the main benefits Ensemble gains is that
they only pay for the space and service they
require. By this, they can control costs,
have flexibility, and still generate dynamic
sales and marketing programs [4].

Another example of companies that become

some type of virtual company is an
insurance or financial service
company. They do this to achieve optimum
efficiency. The greatest improvement for
insurance companies is to eliminate tasks
by outsourcing, not by working to make
them more efficient. By relying on
telecommunications, they are more flexible
and able to meet the consumer's demand for
speed and responsiveness [5].

Consumers use virtual companies for

almost everything these days. From
buy.com to amazon.com, they can purchase
anything imaginable on the Internet.
Amazon.com and buy.com are virtual
companies that only exist on the web.
buy.com, a leading Internet superstore and
low price leader, sells a broad range of
categories including computer hardware
and peripherals, software, consumer
electronics, books, videos, DVDs, games,
music, golf, clearance equipment, and travel
booking services. The buy.com e-commerce
portal links ten specialty stores and features
products from thousands of popular
manufacturers such as IBM, Hewlett
Packard, Microsoft, and many
more. Product reviews in technology
categories, easy search functionality across
all categories, product recommendations,
best sellers, and music clips are among
some of the features that help customers
make better buying decisions. Individuals
can shop at buy.com 24 hours a day, seven
days a week, as well as track packages
online and have access to customer service
representatives at any time. The company's
virtual operating model allows for better
efficiency and entry into new categories
quickly, helping provide the best customer
experience with one-stop shopping, larger
selections and a low price guarantee [6].

Wedding Channel.com is another virtual

enterprise. This company works by linking
all of the needs of a bride to be into one
central location. They offer tips, advice,
links to invitation providers and bridal
registry stores, and planning tools. The
company does not sell everything one may
need for a wedding, but instead provides a
central location for a customer to go for all
their wedding planning needs.

Jobs.com is one of the many virtual

companies that have brought together job
seekers with companies. It is a national
website that links individuals with job
openings. With Job.com's advanced
 technology, it allows an individual to search
for a job by location, salary range, field and
level of experience. Jobs.com allows the
candidates to submit a resume on line and a
recruiter to receive emailed resumes from
candidates.

This service has had a drastic impact on the

world of recruiting. Jobs.com joins another
large web-based recruiting site,
Monster.com, as two of the largest on-line
recruiting sources. Monster.com provides
the same services as Jobs.com in that it
allows job seekers and recruiters to come
together throught the internet. These sites
also offer job seekers helpful information on
preparing a resume, salary information and
advice from the experts on searching for a
job [8].

CheMatch.com is an Internet exchange and

information resource for buying and selling
bulk commodity chemicals, polymers and
fuel products. It allows customers and
buyers to buy and sell chemicals 24 hours a
day 7 days a week around the
world. CheMatch acts as an independent
neutral third party, delivering instantaneous
access to an expanding list of commodity
chemicals, polymers and fuel products
traded on an exchange.

Just one click puts the consumer in touch

with a global pool of pre-qualified buyers
and sellers. In addition to the industry
leading exchange capability, CheMatch.com
offers online auctions, reverse auctions and
tenders a choice of market formats to meet
a company's strategic sales and sourcing
requirements [9].

Businessweek Archives
The Virtual Corporation
February 07, 1993

Cover Story

THE VIRTUAL CORPORATION

You know the problems. They're the stuff of Management 101. If you run a big, complex company,
you battle every day to get things done faster. If you're at the top of a small one, you often struggle
to find the resources to make a difference.

In today's world of fast-moving global markets and fierce competition, the windows of opportunity
are often frustratingly brief. Few companies boast the in-house expertise to quickly launch diverse
and complex products in different markets.

Ever hear of the virtual corporation? Before you roll your eyes, think again. In the view of many
leading business thinkers, what sounds like just another bit of management-consultant cyberspeak
could well be the model for the American business organization in the years ahead.

The virtual corporation is a temporary network of independent companies--suppliers, customers,

even erstwhile rivals--linked by information technology to share skills, costs, and access to one
another's markets. It will have neither central office nor organization chart. It will have no
hierarchy, no vertical integration.

Instead, proponents say this new, evolving corporate model will be fluid and flexible--a group of
collaborators that quickly unite to exploit a specific opportunity. Once the opportunity is met, the
venture will, more often than not, disband. "It's not just a good idea," says Gerald Ross, co-founder
of Change Lab International, a consulting firm in Greenwich, Conn. "It's inevitable."

TIME STRETCHER. In the concept's purest form, each company that links up with others to create
a virtual corporation will be stripped to its essence. It will contribute only what it regards as its
"core competencies," the buzz phrase for the key capabilities of a company. It will mix and match
what it does best with the best of other companies and entrepreneurs.

A manufacturer will manufacture, while relying on a product-design outfit to decide what to make
and on a marketing company to sell it. "Most companies put undue emphasis on owning,
managing, and controlling every activity," says Richard C. Marcus, the former chief executive of
retailer Neiman Marcus, who is now a partner in a consulting firm that models itself along virtual-
corporation lines. "If something was worth doing, you did it yourself. But there's just not enough
time in the day to manage everything anymore."

For proof that many companies are starting to feel the same way, look to the growing number of
strategic alliances. American Telephone & Telegraph Co. used Japan's Marubeni Trading Co. to
link up with Matsushita Electric Industrial Co. to jump-start the production of its Safari notebook
computer, designed by Henry Dreyfuss Associates. MCI Communications Corp. uses partnerships
with as many as 100 companies to win major contracts with large customers. IBM, Apple
Computer, and Motorola are using an interfirm alliance to develop an operating system and
microprocessor for a new generation of computers.

EARLY GLIMPSE. Partnering--the key attribute of the virtual corporation--will assume even
greater importance, says James R. Houghton, chairman of Corning Inc. Corning may be the most
successful U. S. company at putting together alliances. Its 19 partnerships, accounting for nearly
13% of earnings last year, have let the company develop and sell new products faster, providing
size and power without the bulk. "More companies are waking up to the fact that alliances are
critical to the future," Houghton says. "Technologies are changing so fast that nobody can do it all
alone anymore."

But today's joint ventures are little more than an early glimpse of the highly adaptable,
opportunistic structure of the future. "When we talk about virtual corporations today, we're mainly
talking about alliances and outsourcing agreements," says John Sculley, chairman of Apple
Computer Inc. "Ten or 20 years from now, you'll see an explosion of entrepreneurial industries
and companies that will essentially form the real virtual corporations. Tens of thousands of virtual
organizations may come out of this."

The virtual corporation may now exist mainly in the imaginations of a few business thinkers and
theorists (page 41), but similar structures have long characterized several industries. In businesses
as diverse as movie making and construction, companies have come together for years for specific
projects, only to dissolve once the task is done. The leveraged-buyout firm of Kohlberg Kravis
Roberts & Co. forms virtual-style combinations when it assembles lawyers, accountants, and
investment bankers to do a specific deal.

What's different now is that large corporations have begun using elements of the virtual concept
to gain access to new markets or technologies. Apple Computer's long-standing strategy of
partnering is a key reason the company's revenues per employee, at $437,100, are nearly four times
those of competitor Digital Equipment Corp. and more than twice those of IBM. Lacking the
capacity to produce its entire line of PowerBook notebooks, for example, Apple turned to Sony
Corp. in 1991 to manufacture the least-expensive version. It was an obvious pairing, melding
Apple's easy-to-use software with Sony's manufacturing skills in miniaturization. A yearlater, after
selling more than 100,000Sony-made models, Apple ended its agreement.

The linkage served its purpose: to get an entry-level product out swiftly. Similarly, a small
company, TelePad Corp. of Reston, Va., is using collaborations with more than two dozen partners
and suppliers to bring its new pen-based computer to market.

If it becomes widespread, the virtual model could become the most important organizational
innovation since the 1920s. That was when Pierre S. Du Pont and Alfred P. Sloan developed the
principle of decentralization to organize giant, complex corporations. Even the spate of corporate
downsizings in the past decade has failed to break the vertical chains of command typical in most
large companies. Massive layoffs of middle managers have led to fewer layers of management but
have left essentially the same organizational structures.

SUPERHIGHWAY. Already, though, joint ventures and strategic alliances are blurring the
traditional hierarchies and boundaries that characterize this largely obsolete model. Customers are
helping to create and develop new products and services. Competitors are embracing one another
to enter new markets or make products they can't produce on their own. "It's a way to gain scale
without mass," says David Nadler, founder of New York-based Delta Consulting Group Inc.
Ultimately, these greater levels of cooperation among competitors, suppliers, and customers will
create so much overlap that it will be tough to determine where any one company ends and another
begins.

Technology will play a central role in the development of the virtual corporation. Roger N. Nagel,
operations director for Lehigh University's Iacocca Institute, envisions a world in which
technology could make the creation of virtual enterprises "as straightforward as connecting
components for a home audio and video system by different manufacturers." He foresees a national
information infrastructure linking computers and machine tools across the U. S. This
communications superhighway would permit far-flung units of different companies to quickly
locate suppliers, designers, and manufacturers through an information clearinghouse. Once
connected, they would sign "electronic contracts" to speed linkups without legal headaches.

Teams of people in different companies would routinely work together, concurrently rather than
sequentially, via computer networks in real time. Artificial-intelligence systems and sensing
devices would connect engineers directly to facture, while relying on a product-design outfit to
decide what to make and on a marketing company to sell it. "Most companies put undue emphasis
on owning, managing, and controlling every activity," says Richard C. Marcus, the former chief
executive of retailer Neiman Marcus, who is now a partner in a consulting firm that models itself
along virtual-corporation lines. "If something was worth doing, you did it yourself. But there's just
not enough time in the day to manage everything anymore."

If power and flexibility are the obvious benefits of the virtual corporation, the model has some real
risks, too. For starters, a company joining such a network loses control of the functions it cedes to
its partners--who may drop the ball. Proprietary information or technology may escape. And the
structure will pose stiff new challenges for managers, who must learn to build trust with outsiders
and manage beyond their own walls.

Still others are wary of the concept because it conjures up the idea of the hollow corporation, the
term coined to describe companies that have bolstered profits by abandoning manufacturing and
outsourcing production to plants in low-wage countries. Much of the thinking about the virtual
corporation, however, comes from experts at the Iacocca Institute who have examined the decline
of U. S. manufacturing. They believe the idea--coupled with computer-aided design and flexible
manufacturing--could keep jobs in the U. S. In their view, rapidly formed virtual corporations
composed of the best of everything will have the competitive advantage.

'ROBUST.' A growing number of company chiefs agree. One is James C. Morgan, chief executive
of Applied Materials Inc., which makes the equipment to manufacture semiconductors. Applied's
success is based on a collaborative web of suppliers and customers. Each partner specializes in
doing part of a system very well, so Applied doesn't have to do everything well. "It's easier to
manage a bigger business if others are managing pieces for you," explains Morgan.

Many large corporations are using the virtual concept to broaden their offerings to customers or
produce sophisticated products less expensively. MCI, the long-distance telephone company, has
allied itself with an array of partners to offer customers "one-stop shopping" for all their
communications needs, including helping customers finance their equipment purchases. "Our
partnerships make us a more efficient competitor with a more robust set of product offerings," says
Daniel F. Akerson, MCI's president.

A central part of MCI's strategy is to match its core competencies in network integration and
software development with the strengths of other companies making telecommunications
equipment. The upshot: MCI doesn't have to spend its own capital to fund research and
development for hardware, leaving more resources for what it does best. MCI's alliances allow it
to offer customers a package of hardware and services based on the talents, skills, and resources
of as many as 100 other companies. "If we had to do it on our own, it would cost us at least $300
million to $500 million a year in extra expenses," says Akerson.

The virtual concept is also providing muscle and reach for some smaller companies and
entrepreneurs. Among its most vocal advocates is Ron Oklewicz, a veteran of Xerox Corp. and
Apple Computer who had an idea for a handheld, pen-based computer. Two years ago, he launched
TelePad, which has limited in-house design talent, a handful of engineers, and no manufacturing
plants. The computer was designed and co-developed with GVO Inc., a prominent industrial-
design company in Palo Alto, Calif. An Intel Corp. swat team was brought in to work out some
engineering kinks.

Several other companies have developed software for the product. A battery maker is collaborating
with TelePad to develop the portable power supply. And to manufacture the computer, the
company is using spare capacity at an IBM plant in Charlotte, N. C. The paychecks for its 14
employees are issued by an outside firm, Automatic Data Processing Inc. For his part, Oklewicz
brings his experience in selling computers to the government, a key potential customer of the
product.

His virtual organization avoids what Oklewicz calls the "vertical rat hole"--the inefficiencies and
costs of vertical integration--and seizes advantage of the best efforts of world-class partners to
bring his product to market faster. Through more than two dozen collaborations, Oklewicz figures
he is leveraging his puny work force into more than a thousand highly trained staffers in design,
engineering, manufacturing, and distribution. That Intel engineering team, for example, took only
one week to solve problems Oklewicz believes his company would have spent as long as five
months on. "We couldn't hire this kind of talent," he says. "The hiring alone would have killed us."

Of course, since TelePad is dependent on so many partners, it has ceded direct control of nearly
all its operations. Does that bother the founder? Not at all. "I can go to sleep at night confident that
IBM knows how to make this product, rather than worrying whether I made the right capital
investments or hired the right people," he says.
The idea has broad implications for service businesses, too. Consider InterSolve Group Inc., a
Dallas-based management-consulting firm that consists largely of four partners. For any given
assignment, InterSolve assembles "just-in-time" talent to solve problems or implement strategies
for clients that range from IBM to First Interstate Bancorp. Once a job is complete, the consulting
team disbands. "One of the founding principles of our firm is that we would assemble and
disassemble teams for work," says Edward R. McPherson. "We can bring the right talent to fit the
assignment as opposed to using talent already in inventory. We don't have to warehouse staff or
specialists."

InterSolve's recently completed assignment for First Interstate, for example, saw the creation of
four teams of 26 experts led by McPherson, who had met only one of the team members before
the assignment. The group squeezed nearly $14 million in annual savings out of First Interstate's
back-room operations. "The advantage is you get specialists to work on your problems," says
Hayden B. Watson, a senior vice-president at First Interstate. "As long as you keep their activities
coordinated, you're going to get a lot more result for the money you spend."

One of the big drawbacks to the virtual corporation is that it spells the loss of control over some
operations. A partnership among Intel and Japanese companies NMB Semiconductor and Sharp to
make products called flash memory chips shows the potential hazards. Worried that it couldn't
make the sizable investments to retain its lead in this important and growing market, Intel signed
up the two Japanese companies to make flash chips for it. But NMB Semiconductor Co. had trouble
getting its line up and running last year just as the market was taking off.

As a result, Intel couldn't get all the chips it could sell, and its share of the market dropped nearly
20 points in one year. Although he still believes in collaboration, Intel Chairman Andrew S. Grove
is no fan of the virtual corpmration. "I think it's a business buzz phrase that's meaningless," he
says. "It's appetizing, but you get nothing out of it."

Critics also point to IBM's experience in creating its first personal computer in 1981. To get into
the market quickly, the computer giant relied on a pair of outsiders for the key technologies: Intel
for microprocessors and Microsoft Corp. for the operating software. At first, IBM won widespread
praise for its unprecedented decision to develop a major product by forming partnerships with
others outside its corporate walls. But the approach also meant that IBM's system wasn't
proprietary, and IBM soon found that it had created a market it could not control. Hundreds of
clone makers emerged with lower prices and better products.

The more entangled companies become, the more chances there will be for them to stumble.
Besides the technological hurdles of information highways and networks of partners that will make
the virtual corporation a reality, the concept poses new challenges for management. Before
companies can more routinely engage in collaboration, they must build a high level of trust in each
other.

The current clutch of strategic alliances and joint ventures could help here, too, since they give
companies a track record of cooperation. "People who think they can screw each other because
we're going to terminate six months later are missing the point, because what we're building is a
web of trust and shared understandings," says John Seely Brown. Brown heads Xerox' Palo Alto
Research Center, which recently developed new products jointly with Sun Microsystems Inc.

WIN-WIN DEALS. The virtual corporation will demand a different set of skills from all managers,
proficiencies not unlike those that distinguish the best venture capitalists. They'll have to build
relationships, negotiate "win-win" deals, find the right partners with compatible goals and values,
and provide the temporary organization with the right balance of freedom and control. That won't
be easy. "All of us are comfortable operating in a known environment," says John Vaughan, a
divisional vice-president at M/A-Com, an electronic-components maker based in Burlington,
Mass., which is joining with AT&T and others to create new products. "All the politics are local,
and all the management is personal. But this new model means you have to be more open in dealing
with outsiders. To some people, that sounds like fun. To others, it will be hell."

So common will collaborative work become that some gurus are already advocating the creation
of a new corporate position. Lehigh's Nagel suggests that companies appoint a "vice-president for
external interactions" who would oversee the dozens or hundreds of linkups that he believes will
exemplify the organization of tomorrow. Among other things, this corporate officer would monitor
the outflow of technology to make sure that the company doesn't inadvertently lose the capability
to compete.

A vice-president of virtuality? That would certainly be an irony--corporations may respond to this

idea, so antithetical to structure and hierarchy, by creating a new slot for it in their hierarchical
structures.A HANDBOOK FOR

VIRTUAL MANAGERS

Today's alliances have taught managers a few key lessons that should help when

the virtual corporation emerges:

MARRY WELL Choose the right partners for the right reasons--because they are

dependable, can be trusted, and offer the best products or services

PLAY FAIR Every link must offer a win-win opportunity for everyone, even if the

outcome isn't always successful. Partnerships must serve the interests of all

parties

OFFER THE BEST AND BRIGHTEST Put your best people into these relationships.

It's the easiest way to tell your partners your link with them is important

DEFINE OBJECTIVES When you ask the question, "what's in it for me?" you
should have a quick and ready answer. Know what you and your partners will be

getting out of the virtual enterprise

BUILD A COMMON INFRASTRUCTURE Until networks and standards let corporations

talk to each other across the street or across the ocean, information systems

must at least communicate with current and potential partners

DATA: BOOZ ALLEN & HAMILTON INC.

John A. Byrne in New York, with Richard Brandt in San Francisco, Otis Port in New York, and
bureau reports

Virtual business
From Wikipedia, the free encyclopedia

A virtual business employs electronic means to transact business as opposed to a traditional brick
and mortar business that relies on face-to-face transactions with physical documents and physical
currency or credit.

Contents

 1 History
 2 Physical/virtual blending
 3 Virtual worlds
 4 Virtual corporations
 5 Virtual enterprise
 6 See also
 7 References

History

Amazon.com was a virtual business pioneer. As an online bookstore, it delivered and brokered
bookstore services without a physical retail store presence; efficiently connecting buyers and
sellers without the overhead of a brick-and-mortar location. As Web 2.0 services have risen in
popularity, many businesses have begun to use these communicative and collaborative
technologies to reach their customers. With heightened security, PCI DSS compliance regulations,
and more stringent monitoring abilities, credit card transactions via the Internet are even more
secure than other options such as phone or fax. Along with connecting customers with physical
products, virtual businesses are starting to provide important services as well. Recently, the online
delivery of professional services such as administration, design, and marketing services have risen
in popularity. Such companies have refined their offerings to include services such as a Virtual
Assistant, in which the person providing the service works out of his/her own office and provides
services via the Internet or other technology.

Physical/virtual blending

Most brick and mortar companies reduce costs and increase market share by engaging in e-
commerce via web sites and by leveraging their existing telecommunications infrastructure. In
addition to sales and customer relations, such e-commerce may also include:

 Collaborating with suppliers and competitors.

 Outsourcing many of the business functions like marketing, operations management and new
product development,
 Telecommuting

Virtual worlds

Some virtual businesses operate solely in a virtual world. Environments such as Second Life have
enough economical activity to be viable for commerce and one can make a living from sales of
virtual property, products and services to virtual customers in these virtual worlds.[1]

Virtual corporations

In the USA groups of people can assemble online and enter into an agreement to work together
toward a for-profit goal, with or without having to formally incorporate or form a traditional
company. A virtual corporation (S-corp or LLC) may be required to maintain a registered agent
with a physical address but it can be started, operated and terminated without any of the principals
ever being in each other's physical presence. Global Healthcare Marketing and Communications,
LLC (Global HMC) is an example of a virtual corporation operating worldwide sans bricks or
mortar. The company provides medical education services to major pharmaceutical companies and
the business model differs significantly from traditional medical education agencies with a
physical presence.[2] [3][4][5][6]

Virtual enterprise

A virtual enterprise is a network of independent companies—suppliers, customers, competitors,

linked by information technology to share skills, costs, and access to one another's markets. Such
organizations are usually formed on the basis of a cooperative agreement with little or no hierarchy
or vertical integration. This flexible structure minimizes the impact of the agreement on the
participants' individual organizations and facilitates adding new participants with new skills and
resources. Such arrangements are usually temporary and dissolve once a common goal is achieved.
A virtual enterprise is rarely associated with an independent legal corporation or brick and mortar
identity of its own.

VIRTUAL ORGANIZATIONS
Photo by: sellingpix

The term virtual organization is used to describe a network of independent firms that join together,
often temporarily, to produce a service or product. Virtual organization is often associated with
such terms as virtual office, virtual teams, and virtual leadership. The ultimate goal of the virtual
organization is to provide innovative, high-quality products or services instantaneously in response
to customer demands.

The term virtual in this sense has its roots in the computer industry. When a computer appears to
have more storage capacity than it really possesses it is referred to as virtual memory. Likewise,
when an organization assembles resources from a variety of firms, a virtual organization seems to
have more capabilities than it actually possesses.

BACKGROUND

Traditional organizations integrated work vertically; that is, they delegated authority in a
pyramidal, hierarchical structure. As the pyramid shape suggests, power was concentrated
primarily among the handful of individuals at the top. This organizational form, shown in Figure
1, was first developed in the United States in the late 19th century with the advent of mass
production.

The prominent theorist of traditional hierarchical organizations was the renowned industrial
engineer, Frederick Winslow Taylor. His book, Principles of Scientific Management, introduced
the principles for designing and managing mass-production facilities such as Ford's automobile
factory in Michigan and Carnegie's steel works in Pittsburgh.
The hierarchical structure was designed to manage highly complex processes like automobile
assembly where production could be broken down into a series of simple steps. Hierarchical
corporations often controlled and managed all activities of a business from, the raw materials to
their allocation to consumers. A centralized managerial hierarchy controlled the entire production
process, with white-collar workers establishing rules and procedures to manage a blue-collar
workforce.

From World War II until the early 1980s, the trend was to build increasing layers of management
with more staff specialists. This centralized hierarchical structure

Figure 1
The Traditional Hierarchy

was seen as effective for managing large number of workers, but lacked agility and was unable to process
information rapidly throughout the organization.

NEW DEMANDS ALTER

ORGANIZATIONAL FORMS

Since the 1980s, many organizations have flattened their structures by shifting authority
downward, giving employees increased autonomy and decision-making power. Advantages of
flatter organization forms include a decreased need for supervisors and middle management, faster
decision making, and the ability to process information faster because of the reduced number of
layers in the organization.

A consequence of flatter organizations, though, is that employees tend to be more dispersed both
geographically and organizationally. Responding to this problem of dispersion, many
organizations have eliminated superfluous processes and begun focusing on their core, value-
added business. Flat organizations using joint ventures and strategic alliances are providing
increased flexibility and innovation, and are replacing many traditional hierarchies.
THE NEW BUSINESS FORM

Ray Grenier and George Metes discuss the shift to this new organizational structure as a response
to unprecedented customer expectations and alternatives, global competition, time compression,
complexity, rapid change, and increased use of technology. They describe the virtual model as a
lead organization that creates alliances with groups and individuals from different organizations
who possess the highest competencies to build a specific product or service in a short period of
time (see Figure 2).

Figure 2
The Virtual Corporation - A network
of organizations working independently
to bring a product to market

Grenier and Meters further explain that these alliances are virtual because products and services
are not produced in a single corporation whose purpose is longevity. Rather, these new virtual
organizations consist of a hybrid of groups and individuals from different companies that might
include customers, competitors, and suppliers who have a focused purpose of bringing a high-
quality product or service to market as rapidly as possible. These alliances may be temporary with
short concept-to-delivery cycles.

William Davidow and Michael Malone, authors of The Virtual Corporation, claim that virtual
corporations will be central to the new business revolution. Their concept of the virtual corporation
brings diverse innovations together such as just-in-time supply, work teams, flexible
manufacturing, reusable engineering, worker empowerment, organizational streamlining,
computer-aided design, total quality, and mass customization into a coherent vision for the
twentieth century corporation.

The virtual corporation is more permeable than traditional organizational forms. Interfaces in a
virtual organization between company, supplier, and customers continuously change, resulting in
a blurring of traditional functions. Inside the office, work groups and job responsibilities may shift
regularly. The virtual organization may not have a central office or an organizational chart.
Suppliers, customers, and even competitors may spend time alongside one another in the virtual
organization.

CHARACTERISTICS OF
A VIRTUAL ORGANIZATION

Partners in virtual organizations share risks, costs, and rewards in pursuit of a global market. The
common characteristics of these organizations include a purpose that is motivated by specific
market opportunities, world-class core competence, information networks, interdependent
relationships, and permeable boundaries.

Virtual organizations represent structures that are motivated by specific market opportunities.
Once the alliance has been formed and the opportunity has been exploited, partners may move on
to new partnerships and alliances.

Each partner in a virtual corporation contributes a world-class core competence, such as design,
manufacturing, or marketing. This ability of multiple firms to create synergies among world-class
functions and processes creates untold possibilities.

As organizations create these new linkages, advanced information technology becomes an

important element, and key to the success of a virtual organization. Computerized information
systems allow employees from geographically dispersed locations to link up with one another. The
virtual office may use desktop videoconferencing, collaborative software, and intranet systems to
enhance the flow of information among team members. Besides the need for instantaneous
communication with one another, members of these autonomous virtual teams have increasing
requirements regarding the amount and quality of information they need to do their work.

Members of the virtual organization, in turn, create a network of interdependent relationships.

These relationships require firms to be much more dependent on one another than they have been
in the past, demanding unprecedented levels of trust. Strong interdependencies cause
organizations' boundaries to be blurred as competitors, suppliers, and customers enter into
cooperative agreements. These new relationships among firms obligate organizations to use
innovative management practices.

VIRTUAL TEAMS

Virtual teams are often the group structure used in virtual organizations. Jessica Lipnack and
Jeffrey Stamps define virtual teams as "a group of people who interact through interdependent
tasks guided by a common purpose." Unlike conventional teams, a virtual team performs work
across space, time, and organizational boundaries connected by interactive communication
technologies. Virtual teams may include employees, management, customers, suppliers, and
government working together to achieve common goals. These teams often stay together only to
perform its episodic task. They may work jointly on a new project, but when the product is
designed and goes into production, the project is finished and the virtual team dissolves.
Lipnack and Stamps offer three key features for a successful virtual team. One is the choice of
team members with the appropriate skills and knowledge for the task; second is the definition of a
purpose to steer the group; and third is the effective linking of team members, including
communication channels, interactions, and relationships.

Virtual team members are required to learn a new set of skills. One skill is the ability to interact
with one another effectively despite infrequent or total lack of face-to-face contact. Another is the
ability to assimilate quickly and effectively into new teams. Virtual team members should be
technically adept to deal with the variety of required computer-based technologies. Additionally,
virtual team members may need intercultural skills to work effectively in multi-national
organizations.

VIRTUAL LEADERS

Greiner and Metes discuss the new leadership skills required to lead in the virtual environment,
including the ability to manage a network of interdependent firms, to design virtual operations, to
create and sustain virtual relationships with internal as well as external constituents, to support
virtual teams, and to keep virtual teams focused. The leader of a virtual organization demands a
new set of skills unlike the skills required in a traditional hierarchy.

VIRTUAL LEARNING

Another critical element to the success of the virtual organization is the ability of the organization
to create world-class learning systems. These learning systems help leaders sustain or create world-
class competencies. Effective learning systems can create pathways throughout the organization,
in network fashion, enhancing the innovative capabilities of the organizational members. An
organization's ability to sustain a leadership position in the world economy demands that
organizations be on the cutting edge to develop rapid and elegant solutions to emerging consumer
demands.

EXAMPLES OF VIRTUAL ORGANIZATIONS

An industry that is known for its use of partners and alliances is the entertainment industry, which
has partnered with the computing, communications, consumer electronics, and publishing
industries to convert movies, textbooks, and other software into digital formats.

Increasing numbers of firms are moving to these new organizational forms. Corning, the glass and
ceramics maker, is one such firm known for making partnerships work to their advantage. Corning
has partnered with such firms as Siemens, Germany's electronics conglomeration, and Vitro,
Mexico's largest glassmaker. Alliances are so important to Corning's business strategy that the
corporation has defined itself as a network of organizations.

Computer organizations that have successfully implemented forms of this new structure include
Apple Computer and Sun Microsystems. When Apple Computer linked its easy-to-use software
with Sony's manufacturing skills in miniaturization, Apple was able to get its product to market
quickly and gain a market share in the notebook segment of the PC industry.
Sun Microsystems has been considered another highly decentralized organization comprised of
independently operating companies. Sun positions information systems as a top priority, trying to
achieve faster and better communication. With numerous "SunTeams," members operate across
time, space, and organizations to address critical business issues. Sun managers identify key
customer issues and then form teams with the critical skills and knowledge needed to address the
issue. This team might include sales people, marketing personnel, finance, and operations from
various places around the globe; customers and suppliers may become episodic members as
necessary. Weekly meetings may take place via conference calls. Critical to the team's success is
the selection of talent from the organization, defining a clear purpose for the team's efforts, and
establishing communication links among the team members.

Sun has been working on further development of technologies such as EDI (Electronic Data
Interchange) and RFID (Radio Frequency Identification technology). Both EDI and RFID will
impact information exchange globally and across numerous industries.

CHALLENGES

Virtual organizations can be very complex and problematic; they fail as often as they succeed.
Among the many challenges of the virtual organization are strategic planning dilemmas, boundary
blurring, a loss of control, and a need for new managerial skills.

Strategic planning poses new challenges as virtual firms determine effective combinations of core
competencies. Common vision among partners is quintessential to cooperating firms. Focused on
a common goal, firms develop close interdependencies that may make it difficult to determine
where one company ends and another begins. The boundary-blurring demands that these
boundaries be managed effectively. Coordinating mechanisms are critical elements for supporting
these loose collections of firms.

Virtual structures create a loss of control over some operations. This loss of control requires
communication, coordination, and trust among the various partners, as well as a new set of
managerial skills. Employees are exposed to increased ambiguity about organizational
membership, job roles and responsibilities, career paths, and superior-subordinate relationships.
This ambiguity requires management to rethink rewards, benefits, employee development, staffing
and other employee-related issues. Developing leaders who are able to create and sustain these
organizational forms is critical.

Les Pang offers a list of best practices, based on a review of successful implementations of virtual
organizations.

 Foster cooperation, trust and empowerment.

 Ensure each partner contributes and identifiable strength or asset.
 Ensure skills and competencies are complementary, not overlapping.
 Ensure partners are adaptable.
 Ensure contractual agreements are clear and specific on roles and deliverables.
 If possible, do not replace face-to-face interaction entirely.
 Provide training that is critical to team success.
  Recognize that it takes time to develop the team.
 Ensure that technology is compatible and reliable.
 Provide technical assistance that is competent and available.

FUTURE OF VIRTUAL ORGANIZATIONS

The business environment will no doubt require firms to become even more flexible, more agile,
and to bring products and services to market at an increasing rapid pace. Traditional organization
forms are no longer capable of sustaining the needs of this relentless pace. New forms of
organizing, such as the virtual organization, hold promise as organizational leaders experiment
and learn new strategies for managing in the twenty-first century and beyond. These new
structures, however, will require managers and leaders to face exciting challenges as they move
into an environment of increased uncertainty and volatility.

Read more: http://www.referenceforbusiness.com/management/Tr-Z/Virtual-

Organizations.html#ixzz3SFt6b0PO

Tech 3/06/2012 @ 11:54AM 10,804 views

Types of Business Networks

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CEO: I’ve been thinking about our network.

COO (looking confused): Our network? Which one?

We often speak of a business network without consciously realizing that every organization is built
and run on more than one type of network. The word ‘network’ is most commonly associated in
business peoples’ minds with the infrastructure used to connect computing assets within and
between organizations, so they may share data and information.

However, there are many other types of networks commonly found in the business world,
including:

Voice: Don’t forget about the POTS (Plain Old Telephone System) connected by miles of copper
wire. This has been a very valuable information network within and between businesses for
decades now. POTS has even carried digital data between fax machines and computers equipped
with modems. Increasingly, business voice communication is being done on mobile phones linked
together by cellular networks or on smartphones connected to Voice over Internet Protocol (VoIP)
networks.
Financial: There are many types of financial networks. Some allow printed money and checks to
flow between individuals and banks, while others enable electronic transfer of funds. Automated
Teller Machine (ATM) networks are a familiar example of the former. They may link financial
activity within one bank (i.e. Bank of America’s branded ATM machines) or between a consortium
of financial institutions (i.e. the CIRRUS network). Businesses are more likely to use the
Automated Clearing House (ACH) network, through which their banks transmit electronic
payment requests and disbursements. Even financial instruments may be networked through the
practice of creating derivative assets, as we learned following the near collapse of the US financial
industry in 2008.

Supply: This network type hardly needs an introduction. The last few decades have seen the rise
of comprehensive, managed supply chains, through which manufacturers buy the raw materials
and fabricated components needed to produce finished goods. Impressive, efficient networks,
through which large retailers source the products they sell, have also been built.

Transportation: Networks have long existed to facilitate the movement of physical goods and
people. DHL, FedEx, and UPS are well-known examples of package distribution networks. ABF
Freight, CSX, and Schumacher transport goods between manufacturers, warehouses, retailers, and
buyers. Amtrak, Greyhound, and JetBlue are all in the business of transporting people through
networks of destinations.

Retail: There are two types of retail networks, those affiliated with one specific brand and others
that sell goods from multiple manufacturers. The former is either owned and operated by the brand
itself or franchised to third-party operators. Apple and Nike operate stores that sell primarily their
own products. General Motors and McDonalds are well known examples of retail franchises with
exclusive brand affiliations. Many retailers, such as BestBuy and Macy’s operate wholly-owned,
branded networks of stores that sell merchandise from a wide variety of manufacturers. And many
manufacturers, such as Hewlett-Packard and Whirlpool, sell their products through multiple
channel partners, many of whom also offer competitors’ wares.

Service: Many businesses have built large networks of wholly-owned or franchised locations
where services are sold and performed. Some exist only to service products from a specific
manufacturer, such as Maytag or Ford. Others, such as Jiffy Lube and Geeks On Call, are agnostic
to the brand of the product. Other service networks focus on taking care of people; Lahey Clinic
and SuperCuts are two examples.

Content: Data, information, and knowledge that we create and consume in the course of doing
business flows over physical computing and voice networks. However, content may also
distributed to multiple networked nodes of affiliates. Radio and television networks are clear
examples of distributing centrally-created content through multiple broadcasting affiliates.
Content Distribution Networks are a modern equivalent for digitized content. Content can also be
assembled from multiple network nodes and published in a spokes-to-hub model. Within
businesses, compound documents take content from multiple individual documents and merge it
into a single document. Web content management systems are used by businesses to gather digital
text, images, audio, and video from multiple sources and publish it together on web pages.
Social: These days, it seems that the word ‘network’ is most frequently used in reference to the
relationships between people, the sum of which is referred to as a social network. While social
networks have always been foundational to business, and have even been studied for some time
by academics, executives and employees are just now considering what networks of people exist
in (and spill outside of) their organization and how those social networks can be used to produce
measurable, positive impact business results.

This list should be regarded as a starting point, not a comprehensive catalog of networks types
used to conduct business. What other types of networks do you see deployed within and between
businesses? Please leave examples in the comments below.

Definition:

What is Business Networking? Business Networking is a skill and a low cost method of marketing
that is used to build new business contacts through connecting with other like minded individuals.
Business Networking is generally done through face to face meetings almost anyplace or anytime
but is commonly done at business or community events and even more specific, Business
Networking events that are hosted by business networking groups or organizations. These events
can be on a local or national level. The events are usually planned around an activity, such as a
conference speaker. Either before or after the activity, attendees are given the opportunity to meet
and interact with one another to share business thoughts and ideas with the intent to build business
relationships that will be of benefit to each involved. Most networking groups meet once a month
or sometimes more frequently.

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 London Business Network

 Business Name
 Networking
 Online Social Networking
 Registering a Business

There is also business networking that is done virtually through the use of online Business
Networking sites which are also very low cost and often free. An online Business Networking
website may have the additional benefit of being able connect their members with contacts that are
worldwide as well as local.
Because business networking is based on the building of relationships with people, it is a ongoing
and long term method of gathering business contacts but can be very effective.

Also Known As: Networking

Examples: John connected with Gerry, at the Houston Business Networking Event, and Gerry was
able to arrange for John to meet with the CEO of a major company that John had been trying to
make a presentation to for several months.

Top Network Marketing Companies in the Philippines (MLM)

admin 308,929 1007 29-November-2014

Network Marketing Businesses (MLM) in the Philippines are spreading like a virus. From
Top Multilevel Network Marketing Companies to some unregistered Network Marketing
Businesses in the Philippines, many pinoys are so crazy engaging in these kind of business.
Especially if they heard about the "kitaan" or "compensation plan" and they see the 'million-
income-potential', they tend to take the bait and register to the Network Marketing company
they are invited in. For you to know the Top Networking Companies in the Philippines (MLM
pioneers and huge number of distributors), here's a list of them that will help you in choosing
which is the best and more experienced Network Marketing Company for you.

We got here as claimed by others the hottest, the latest, the most exciting, the most dynamic, the best
network marketing companies in the Philippines

MLM - is more on Empowering People

Top Network Marketing Companies in the Philippines (MLM)

1. UNO (Unlimited Network of Opportunities) - PR Newswire reported UNO as the largest network
marketing (MLM) company in the Philippines with over 300,000 individual
distributors/members in the Philippines.
2. DXN International Private Ltd
3. AVON Products Inc.
4. Forever Living Products Philippines, Inc.
5. Nu Skin Philippines, Inc.
6. Herbalife
7. Usana
8. Aim Global Inc.
9. Frontrow Enterprise Philippines, Inc.
10. Global Entrepreneurship Merchandising Inc. (GEM)
11. Amway
12. FERN Inc.
13. Supreme Wealth Alliance (SWA)
14. Global Pinoy Remittance and Services (GPRS)
15. Classique Herbs Corporation
16. Greenworld Woo Tekh Philippines
17. Flitrep
18. Health and Wealth (Green Barley)
19. Samerica
20. Fern-C
21. Lifemax
22. VMobile Technologies Inc. (Loadxtreme)
23. CF Wellness
24. Global Fusion Incorporated!
25. Betternet777
26. GDI (Online Based)
27. Winalite International
28. Max International
29. MyOwnBiz
30. Sante International
31. Diamond Lifestyle Corporation (DLC)
32. International Marketing Group
33. Global Green Life
34. PlanetBizWorld – RENEFX
35. Empower Marketing
36. Felta Multi-media, Inc.
37. Filway Marketing, Inc.
38. 4 Life Reserch Phils.
39. GanoiTouch
40. GNLD International
41. Mary Kay Philippines, Inc.
42. New Image International F.E. (Philippines.), Inc.
43. Nikken Philippines, Inc.
44. Reliv Philippines, Inc.
45. Sunrider Philippines Inc.(MLM)
46. Symmetry Phils., Inc. (MLM)
47. Tianshi Philippines, Inc.
48. Unicity Network Philippines, Inc.
49. Dynapharm International Philippines, Inc.
50. Waters Philippines (MLM)
51. First Vita Plus Marketing Corporation
52. Alivemax
53. Vital C
54. Essensa Naturale
55. HB&W Marketing
56. Lifestyles Asia
57. Triumph International
58. Royale Business Club, Inc.
59. Agel Enterprises
60. Victory Global
61. Custrich Healthcare Products, Inc.
62. Unlimited Possibilities World Marketing Corporation
63. Momentum Kinetics International
64. GMACS Cosmetic Distributor - SkinGlow by GMACS
65. FM Group Fragrance
66. Bionutriwealth International Corporation
67. UBX Online
68. Charmica Power Life Corporation
69. Business Empire, Inc.
70. Syntek Global, LLC.
71. LifePharm Global, Inc.
72. Global PINAS
73. MyBeeWay Corporation
74. Maxceemum Corporation
75. TodayAdz
76. MIYO Marketing Systems
77. MMobile Technologies Inc.
78. 1BRO Global, Inc.
79. QDynamics Global Corporation
80. Nutribiz International, Inc.
81. Herbenna Stores, Inc.
82. My Jinga Juice Incorporated
83. ModelCoup International Inc. e-NuVVo Division
84. Organo Gold
85. Zmartpro International
86. E. Excel International (Philippines), Inc.
87. Edmark International
88. I-GEE System (by Topland Management & Marketing Corporation)
89. Powerline Global (Powerline World Online Marketing)
90. Telepreneur Corporation
91. Real Life Bliss International Corporation
 92. LiCHAN International Co. Ltd.
93. I AM RICH Wellness Product Enterprises
94. MyProtectLine Int'l Company
95. Premium Health Provider International Inc.
96. Technowise 360 Inc.
97. PlanProMatrix
98. BWL Health and Sciences Inc.
99. Unlimited Power Matrix (UPMatrix)
100. NBW5 Trading Corporation
101. doTERRA Essential Oils
102. Vantage International
103. Ebiz Upnorth Communications Co.
104. Ignition Marketing
105. Extreme Pro Marketing Inc.
106. LongRich Philippines

Read more:
http://www.affordablecebu.com/load/business/top_network_marketing_companies_in_the_philippine
s_mlm/6-1-0-121#ixzz3SFu8k8XW
Inactive Network Marketing (MLM Companies) in the Philippines

1. AD-FOR online advertising media company (inactive)

2. Adszens Broker Corporation
3. Oks Global Wellness, Inc.
4. Mega-C

Read more:
http://www.affordablecebu.com/load/business/top_network_marketing_companies_in_the_philip
pines_mlm/6-1-0-121#ixzz3SFuCE9Gp