Virtual Organizations

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Virtual Organizations (graphics not included)

The virtual organization is a network of independent suppliers, customers, and even competitors, generally tied together by computer technology (Roger, 1991). They share skills, costs, and access to markets. It is tend to have flat structures in which information and decision making move horizontally (Judith R.G, 2002). Through the support of modern electronic system, it becomes possible to link people across formal organizational boundaries (Judith, 2002, quoted in S.G. Straus, S.P. Weisband, and J.M. Wilson, 1998).

Virtual corporations have some major characteristics (Judith, 2002, quoted in Byrne. n.d.) as following state: technology, excellence, opportunism, trust and no borders. Technology makes distance no longer a problem while entrepreneurs or companies far away from, due to the computer networks link people all over the world. Excellence was showed by each partner bringing its core competencies to the corporation, which can exert all advantages. Companies make alliances for specific market opportunity and this is a more efficiency work way than any others. Members in a virtual organization must trust their partners due to they meet the need by cooperating. The new communication ways were brought by computer networks, which blur the traditional hierarchies and boundaries.

Metersbonwe took the lead in adopting virtual organization among Chinese garment industry by brand chaining operation. The company stated to take full advantage of market resources by controlling, retailing, the core segment in the link in order to concentrate on its core business, Brand construction and Design, while non-core business was outsourced: Manufacturing and Sales network. At present, over 200 manufacturing factories have established long-term cooperative relations with Metersbonwe Group, saving 62.5m$ for the company. More than 900 franchising shops save an average of 62.5m$ every year as well. At the same time the company collects capital from the franchising fees. Metersbonwe achieved great success by using this model.

Figure 1: Metersbonwe¡¯s network

MARKET-ORIENTED STRUCTURES

The market-oriented structure groups workers according to the market they serve, such as product, project, client, or geographical 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 that this structure is more adoptable by those multinational corporations which have to respond to diverse cultures and meet the unique needs of various countries. The teams have the same goal meeting the market demands.

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