NEW DESIGN OPTIONS

Virtual Organization – is a temporary alliance between two or more organizations

that band together to accomplish a specific venture. Each partner contributes to partnership
what it does best. Its goal is to deliver highest-quality product at the lowest possible cost in a timely
manner.

 Focuses on Core Competencies

 Maximize Market Opportunities
 Fewer mistakes
 Faster reaction
 Quicker profits

Types of virtual organizations

 Telecommuters - These companies have employees who work from their

homes. They interact with the workplace via personal computers connected with
a modem to the phone lines.
 Outsourcing employees/competencies - These companies are characterized
by the outsourcing of all/most core competencies. Areas for outsourcing include
marketing and sales, human resources, finance, research and development,
engineering, manufacturing, information system
 Completely virtual- These companies metaphorically described as companies
without walls that are tightly linked to a large network of suppliers, distributors,
retailers and customers as well as to strategic and joint venture partners.
Boundaryless Organization – seek to break down vertical and
horizontal barriers within the firm and between the firm and its suppliers and customers.
An association where management has largely succeeded in breaking down barriers
between internal levels, job functions and departments, as well as reducing external
barriers between the association and those with whom it does business.

 Joint ventures
 Mutual benefit
 Forms relationship
 Difficult to manage
 Participative Decision-making

Types of Boundaries

 VERTICAL BOUNDARIES - create barriers between the different levels of

management that are part of the structure of an organization.
 HORIZONTAL BOUNDARIES - These boundaries are called vertical boundaries
since they impede communication and interaction between organizational
members who operate at different levels within the organization.
 EXTERNAL BOUNDARIES- it divides a company from others in its value chain.
 GEOGRAPHIC BOUNDARIES - these are special form of boundary of horizontal
boundary. How will does a company cross national and cultural boundaries tha
divides its international operations from each other and itself from foreign
markets?