In the era of rapid technological advancements, the concept of virtual corporations has emerged as a transformative force in the business landscape. Virtual corporations challenge traditional organizational structures by leveraging information and communication technologies to foster collaboration and resource sharing among independent companies. This article aims to provide an in-depth analysis of virtual corporations, drawing upon insights from various sources, including Encyclopedia.com, Virtual-Corp.com, and David Skyrme Associates.
Key Facts
- Definition: A virtual corporation is a temporary network of independent companies linked by information technology (IT) to share skills, costs, and access to each other’s markets.
- Collaboration: Virtual corporations rely on online collaboration tools and platforms to facilitate communication and coordination between partnering companies.
- Types: There are three distinct types of virtual organizations:
- Online: These organizations operate in the e-commerce realm with fully electronic business structures.
- Collaborative: These organizations make use of IT applications to find other companies online that can provide necessary services.
- Hybrid: These organizations switch between being online organizations and collaborative organizations.
- Agility and Efficiency: Virtual corporations are hyper-agile entities that can quickly adapt to cultural trends and market changes by picking up or dropping departmental competencies from collaborating companies.
- Communication: Online communication is crucial for virtual corporations, and tools such as email, social networking, chat rooms, and video conferencing are used to facilitate communication between employees of partnering companies.
- Integration Levels: Companies can integrate effective electronic communication in their partnerships at different levels:
- Physical System Integration: Connecting physical departments and employees within the organization through online networks.
- Application Integration: Using IT applications such as wikis, forums, chat sites, and blogs to collaborate.
- Business Integration: Coordinating efforts into single supply chains and utilizing specialties to achieve maximum efficiency and quality.
- HR and Impression Management: Human resource departments play a key role in establishing virtual corporations by ensuring proper online correspondence and minimizing misunderstandings through impression management techniques.
- Trust and Legal Issues: Trust is essential in virtual corporations, and legal issues regarding virtual documents and e-signatures can be complex.
- Benefits: Virtual corporations offer benefits such as access to resources of larger organizations while retaining the agility and independence of smaller ones.
Definition and Characteristics
A virtual corporation can be defined as a temporary network of independent companies linked by information technology (IT) to share skills, costs, and access to each other’s markets (Encyclopedia.com). These organizations rely on online collaboration tools and platforms to facilitate communication and coordination between partnering companies. There are three distinct types of virtual organizations: online, collaborative, and hybrid (Skyrme, 1995).
Benefits of Virtual Corporations
Virtual corporations offer several advantages to participating companies. They provide access to a wide range of specialized resources, enabling them to present a unified face to large corporate buyers (Skyrme, 1995). Additionally, individual members retain their independence and continue to develop their niche skills. The ability to reshape and change members according to the project or task at hand enhances flexibility and adaptability. Furthermore, there is no need for complex “divorce settlements” as in formal joint ventures.
Collaboration and Communication
Online communication is crucial for virtual corporations. Tools such as email, social networking, chat rooms, and video conferencing facilitate communication between employees of partnering companies (Virtual-Corp.com). Effective electronic communication integration can occur at different levels, including physical system integration, application integration, and business integration (Skyrme, 1995).
Human Resource Management and Impression Management
Human resource departments play a key role in establishing virtual corporations by ensuring proper online correspondence and minimizing misunderstandings through impression management techniques (Virtual-Corp.com). This involves establishing guidelines for effective communication, addressing issues of time and spelling, and providing training to employees on appropriate online behavior.
Trust and Legal Issues
Trust is essential in virtual corporations, as partnering companies must rely on each other’s integrity and commitment (Virtual-Corp.com). Legal issues regarding virtual documents and e-signatures can be complex, and some states have enacted legislation to address these challenges (Encyclopedia.com).
Conclusion
Virtual corporations represent a significant departure from traditional organizational structures. They offer numerous benefits, including access to specialized resources, flexibility, and agility. However, they also present challenges related to trust, communication, and legal issues. As technology continues to evolve, virtual corporations are likely to become even more prevalent, transforming the way businesses operate and collaborate.
FAQs
What is a virtual corporation?
A virtual corporation is a temporary network of independent companies linked by information technology (IT) to share skills, costs, and access to each other’s markets.
What are the benefits of virtual corporations?
Virtual corporations offer several benefits, including access to specialized resources, flexibility, agility, and the ability to present a unified face to large corporate buyers.
What are the challenges of virtual corporations?
Virtual corporations face challenges related to trust, communication, and legal issues, particularly regarding virtual documents and e-signatures.
How do virtual corporations communicate?
Virtual corporations rely on online communication tools such as email, social networking, chat rooms, and video conferencing to facilitate communication between employees of partnering companies.
What are the different types of virtual corporations?
There are three distinct types of virtual organizations: online, collaborative, and hybrid. Online organizations operate fully online, collaborative organizations use IT applications to find other companies to provide necessary services, and hybrid organizations switch between being online and collaborative.
How do virtual corporations manage human resources?
Human resource departments in virtual corporations play a crucial role in ensuring proper online correspondence and minimizing misunderstandings through impression management techniques. This involves establishing guidelines for effective communication, addressing issues of time and spelling, and providing training to employees on appropriate online behavior.
How do virtual corporations address legal issues?
Virtual corporations must address legal issues related to virtual documents and e-signatures. Some states have enacted legislation to address these challenges, but the legal landscape is still evolving.
What is the future of virtual corporations?
As technology continues to evolve, virtual corporations are likely to become even more prevalent, transforming the way businesses operate and collaborate.