The need to be adapted to the changes in the environment, to improve the operational efficiency, and to increase the level of satisfaction in customers has promoted the redesigning of the firm’s organisational processes. Firms tend each time to externalise activities at a different level by making the appearance of new models of organisation possible. The analysis of different theories coming from a variety of literature reviews offers us the opportunity to affirm that being virtual is a characteristic present today in firms at different levels (Shin, 2004). In this article, we offer a definition for the concept of virtual systems. An explanation from the strategic management field is also accompanied. Finally, this analysis attempts to draw an explanatory model of the capacity of value creation in the virtual systems in comparison with traditional alternatives.
There is not a uniquely recognised definition for virtual systems (De Pablos, 2006). Some authors consider virtual systems as intermediate mechanisms that operate between markets and hierarchies for organising the economic activity (Davidow & Malone, 1992). This perspective describes a virtual system as a group of interlinked networks sharing a specific problem (Greiner & Metes, 1995; Lipnack & Stamps, 1997; Preiss, Goldman, & Nagel, 1996).
Many of these analyses recognise that the virtual systems imply the integration of different value chains, where any of the agents is specialised in a phase of the process and offers its core competencies to the rest of the partners. This way, a group of competitive advantages and upper gains can be obtained. Besides, these systems offer great difficulty in identifying the participants and their real value to the final product or service. This can be a key success factor to sustain competitive advantages through time (Goldman, Nagel, & Preiss, 1995; Nikolenko & Kleiner, 1996).
Key Terms in this Chapter
Dynamic Capabilities: Organizational actions that use resources to integrate and reconfigure actions in order to match and create changes in the market.
Information and Communication Technology (ICT): A wide term that includes any communication device or application, for example, Internet, radio, television, cellular phones, computer and network hardware and software, satellite systems, and so on, as well as the various software services and applications associated with them, for example, the ERP systems, data warehouses, and so forth.
Tacit Knowledge: It is knowledge that people carry in their minds and is therefore difficult to access. The transfer of tacit knowledge is difficult and generally requires extensive personal contact and trust.
Business Process Redesign: A systematic way of improvement that drastically evaluates, rethinks, and implements the change of processes of an organization. The main goal of this orientation is to achieve dramatic improvements in performance in processes.
Intangible Assets: Those resources that cannot be seen, touched, or physically measured in a firm and which are created through time and/or effort.
Virtual System Management: It is the process of managing the allocation and use of remote located resources capabilities.
Core Competencies: The principal distinctive capabilities possessed by a company.