Virtual Company

What is virtual company? The virtual company is a temporary network of independent companies-suppliers, customers-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 of a physical address as registered offices, it has IP address. Instead of faxes they use , and so on

Virtualness is defined as the ability of the organization to acquire and maintain critical competencies through its design of value-adding business processes and organizational structure.

The Evolution of Virtual Company The term was a buzzword in the 1990s for several reasons. The concept became popular during the dot-com era, when demand was high for new kind of services that traditionally organized companies relied on outsourcing to perform. In the day of the dot-com related businesses it seemed like everyone was so busy that they had to outsource most of their jobs to someone else. The idea that you actually didn't need to have a large number of regular employees to be a major player caught on, and thus virtual corporation became one of the typical ways of describing this phenomenon.

The motives for virtualization are many and varied. Often it is seen as a way of reducing complexity, thus permitting greater flexibility of response. Other reasons include basic legal conditions or an improved incentive system that hamper vertical integration.

Evolutionary Stages Of Virtual Company Stage 1: a network of companies is formed that supplies the same goods or services to the market. Stage 2: Use of Inter-enterprise information systems. This stage is often accompanied by the introduction of Electronic Data Interchange (EDI) and just-in-time delivery arrangements.

Stage 3 : The third evolutionary stage is characterized by the integration of customers and/or suppliers into the value adding process. Here, too, information systems play a significant role.

Dimensions of Virtualness a corporation passes through three stages of virtualness, whereby it aims to achieve efficiency in three main areas:  resource efficiency for example:out sourcing virtual storage strategic partnership  market efficiency for example :EDI,web marketing,etc.  process efficiency for example:wireless technologies by implementing virtual organization

Information and Communication Systems in Virtual Corporations Electronic interoperation is supported by three pillars:  automation of information flow and the elimination of media breaks ) machine-to-machine communication: EDI(  the interchange of unstructured data (human-to-human communication: Groupware(  the linking of several local area networks into wide area networks man-machine communication both within and outside the corporation's site(

In virtual company, partners change as the markets change. This means that it must be possible to implement such changes quickly without sacrificing the necessary security. System functionality must be as broad as possible in order to support the three forms of communication mentioned above. This places very high demands on standardization.

“When we talk about virtual corporations today, we're mainly talking about alliances and outsourcing agreements,” says JohnSculley, chairman of Apple Computer Inc.