Virtual organization and the SMEs: a review and model development

Timo Pihkala, Elina Varamaki and Jukka Vesalainen

Entrepreneurship & Regional Development, 1999, vol. 11, issue 4, 335-349

Abstract: Virtual organizations have been presented as one solution for SMEs aiming to increase their competitiveness. This paper seeks to clarify those preconditions that affect the abilities of SMEs to participate in virtual organizations. The reviews on the networking literature and the resource-based theory show that the demands that virtual organizations set to the SMEs are substantial, and that from this point of view getting access into this type of networking is possible only for those SMEs that are competitive already. In the theoretical part of the paper a typology of SMEs is created, highlighting the resource base and networking capabilities of different MEs. The paper presents four illustrative cases, reflecting the theoretical types. The cases bring out the nature of SME networking as an iterative process: the more the firm participates in networking the better it is capable of creating new co-operation. On the other hand, if the firm is either unwilling or incapable of networking with other firms the preconditions for participating in a virtual organization become unreachable.

Date: 1999
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Citations: View citations in EconPapers (23)

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DOI: 10.1080/089856299283146

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