Topic > Virtual Organizations - 1352

Virtual Organizations (graphics not included) Virtual organization is a network of independent suppliers, customers, and even competitors, usually tied together by information technology (Roger, 1991). They share skills, costs and access to markets. It tends to have flat structures where information and decision making move horizontally (Judith RG, 2002). Through the support of modern electronic systems, it becomes possible to connect people across formal organizational boundaries (Judith, 2002, cited in SG Straus, SP Weisband and JM Wilson, 1998). Virtual societies have some main characteristics (Judith, 2002, cited in Byrne n.d.) as follows: technology, excellence, opportunism, trust and borderlessness. Technology means that distance is no longer an issue while entrepreneurs or companies are far away, thanks to computer networks that connect people all over the world. Excellence was demonstrated by each partner bringing their own core competencies to the company, which can exercise the full benefits. Companies form alliances for specific market opportunities, and this is a more efficient way of working than any other. Members of a virtual organization must trust their partners to meet needs by cooperating. New modes of communication have been introduced by computer networks, which blur traditional hierarchies and boundaries. Metersbonwe has taken the lead in adopting virtual organization in China's apparel industry through brand chaining operations. The company said it is making full use of the market's resources by controlling, retailing, the core segment of the link to focus on its core business, brand building and design, while non-core activities have been outsourced: manufacturing and sales network . Currently, more than 200 manufacturing plants have established long-term cooperative relationships with Metersbonwe Group, saving the company $62.5 million. Additionally, more than 900 franchised stores save an average of $62.5 million each year. At the same time the company raises capital from franchise fees. Metersbonwe has achieved great success using this model. Figure 1: Metersbonwe Network MARKET-ORIENTED STRUCTURES The market-oriented structure groups workers based on the market they serve, such as product, project, customer or geographic area. Large companies that implement a market-oriented structure may have market-based divisions or create a conglomerate of separate subsidiaries (Judith R. Gordon, 2002). I believe this structure is more adoptable by those multinationals that need to respond to different cultures and meet the unique needs of various countries. The teams have the same goal of satisfying market demands.