The virtual web as a new entrepreneurial approach to network organizations

Ulrich J. Franke

Entrepreneurship & Regional Development, 1999, vol. 11, issue 3, 203-229

Abstract: The term ‘virtual organization’ has become a very popular expression to describe a new evolving organizational form. However, for many people it is difficult to distinguish between the different forms of virtual organizations. From an inter-organizational perspective the virtual organization is a network of companies. This paper reviews first the different typologies of interorganizational networks before it presents a case study of a stable SME network. The member companies of this stable SME network have decided to extend their network, which leads to a virtual web. The ‘virtual web’ is basically a pool of independent enterprises that have generally agreed to co-operate. The partnerships deriving from the virtual web are called ‘virtual corporations’, which exist only for a certain period of time or for a particular project. Both concepts are described in detail. Based on the presented case study, possible implications of the evolution process from a stable network to a virtual web are identified. One of the major concerns of this development process is that it leaves the virtual web with a managerial vacuum. A possible solution to overcome the lack of management at the macro-organizational level is to implement the ‘net-broker concept’. The net-broker's task is to initiate and maintain the virtual web as well as to facilitate the formation of virtual corporations. A discussion of the traditional understanding of entrepreneurs and the net-broker identifies the net-broker as an entrepreneur, but an entrepreneur with a different understanding of conducting business.

Date: 1999
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Citations: View citations in EconPapers (5)

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DOI: 10.1080/089856299283173

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