Challenges in the management of virtual organizations

Abstract

Virtual organizations (VOs) are considered to be an answer to tightening requirements of cost-effectiveness, time and quality, especially in a global environment. In addition, it is expected that collaboration within VOs contributes to flexibility, agility, customer orientation and decrease of risks. However, these objectives are not achieved automatically. The management of independent entities with individual, sometimes even contradictory, aims is a difficult task containing uncertainty. The Inter-organizational distribution of processes and activities may lead to high coordination costs, delays in deliveries, quality problems, information leaks and loss of knowledge. To prevent the problems, proactive VO management is needed. The paper discusses the challenges for the development of proactive management. The main experience behind the paper comes from the one-of-a-kind manufacturing. © 2004 Springer Science + Business Media, Inc.