Text

Groupware / CoTechnology - 2                          W. Hugh Chatfield I.S.P.

In Business Week, Feb 8, 1993 their cover story was "The Virtual Corporation". Here are some of the key points from that article.

Big complex companies usually can't react fast enough. Small nimble ones may not have the muscle. What's the answer? A new model that uses technology to link people, assets, and ideas in a temporary organization. After the business is done, it disbands. It's called the virtual corporation. Just another management fad - or a vision of the future?

There are 5 key ideas to a Virtual Corporation

1. 1. Technology
   

2. 2. Excellence
   

3. 3. Opportunism
   

4. 4. Trust
   

5. 5. No Borders
   

Technology

"Informational Networks will help far-flung companies and entrepreneurs link up and work together from start to finish. The partnerships will be based on electronic contracts to keep the lawyers away and speed the linkings."

In fact, although the article seems to take the point of view that it will be the companies that will be the drivers in this, it could well be the entrepreneurs ( or the microBusinesses as I call them) which could be the driver, simply because of the next point.

Excellence

"Because each partner brings its core competencies to the effort, it may be possible to create a best-of-everything organization. Every function and process could be world-class - something that no single company could achieve."

If 50-60% of the North American economy is made up of microBusiness, it could well be that most of the "best in class' could be self employed.

Opportunism

"Partnerships will be less permanent, less formal, and more opportunistic. Companies will band together to met a specific market opportunity and, more often than not, fall apart once the need evaporates."

This is true for both the company (which can no longer afford to keep armies of people seated at workstations with loaded rates of $100-$200K per seat) and for the individual (who may actively select those opportunities appropriate for their expertise and interest areas).

Trust

"These relationships make companies far more reliant on each other and require far more trust that ever before. They'll share a sense of 'co-destiny', meaning that the fate of each partner is dependant on the other."

For the microBusiness there is

No Borders

This new corporation model redefines the traditional boundaries of the company. More cooperation among competitors, suppliers and customers makes it harder to determine where one company ends and another begins.

The virtual company 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.

...fluid, 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.

James R Houghton - chairman, Corning - (partnerships accounted for nearly 13% of earnings last year)

"more companies are waking up to the fact that alliances are critical to the future. Technologies are changing so fast that nobody can do it all alone anymore."

... technology could make the creation of virtual environments as straightforward as connecting components for a home audio and video system by different manufacturers."

Reference: Michael S Malone - William H Davidow - The Virtual Corporation