Changing market conditions and the fast development of information and communications technologies (ICT) have been the driving forces towards the virtualization of organizations (Franke, 2001). Today’s business environments are characterized as complex, uncertain, and interdependent. A virtual organization (VO) may be defined as “an entity that is capable of dealing with complexity and uncertainty through cooperation among members in a network that is managed like a single organization” (Saabeel et al., 2002). The goal is to create and nurture flexibility for meeting changing market conditions. In turn, this goal is attained by employing a core competence strategy (i.e., companies concentrate on what they do best), extending their value chains, and integrating many core competences of other stakeholders. The acquisitions and the development of all resources and capabilities needed for the exploitation of windows of future opportunities have become more time consuming and costly for many organizations that act on their own. Thus, VOs are being formed to exploit those opportunities where each member possesses different, but compatible knowledge, skills, and resources (Franke, 2001; Coulson & Kantamnen, 2003).
Key Terms in this Chapter
Virtual Construction Management Services Company (VCMSC): A VCMSC is a dynamic network of collaborating entities (e.g., special system contractors) that reconfigure around an organizational core whenever an opportunity arises. A single leading member guides a virtual network both on a short and long-term basis, members are geographically dispersed, and each member concentrates on those parts of the value chain with which it achieves the maximum added value.
Construction Management (CM) Services Company: A CM services company provides owners with its services within a defined scope needed for the management, leadership, administration, and implementation of their construction investments (projects) at hand, respectively. Under various CM contract forms, a construction manager works throughout all the phases of a construction project (i.e., overall planning, design, procurement, and construction works) and cooperates with an owner and designers in ensuring the attainment of an owner’s objectives.
Competitive Virtuality: A leading member of a virtual construction management services company (VCMSC) networks with two or more special system contractors (SSCs) that supply the same building systems (e.g., structural building frames), modules (e.g., office rooms), products (e.g., windows), functional elements (e.g., indoor climate), or other services (e.g., life-cycle services). The profitable performance of a VCMSC’s network is endangered without internal competition. Networked members and external suppliers are motivated to add value-for-client money through their system knowledge and product expertise, whereas the leading member focuses on enhancing CM expertise and processes in part within its staff pool.
Special System Contractor (SSC): A SSC provides a combination of the design, the engineering, the procurement, the manufacturing, the delivery, and the installation of its offering, that is, a system, a product, and/or one or several elements. In buildings, these prefabricated systems may involve foundations, frames, elevators, roofs, facades (with windows), space structures (in-fills, fit-outs), heating systems, ventilation systems, and electricity systems.
Gradual Virtualization: Traditional organizational forms exhibit at least some of the characteristics of a virtual company. Therefore the binary classification of organizations-virtual vs. non-virtual should be replaced by a concept of gradual virtualization. This way organizations would be classified according to their adoption of virtual structures on a continuous basis, the more virtual characteristics a company exhibits, the higher is its degree of virtualization DV.
Collaborative Management System of a VCMSC: The advanced management of an ideal VCMSC encompasses the management of relationships with clients and among SSCs besides conventional work. The overall management of a virtual construction management services company (VCMSC) is enabled by an IT-enabled collaborative management system that consists of seven sub-systems that collectively manage the (1) project owner relations, (2) project offering and bidding, (3) project design and engineering, (4) networked project procurement, (5) construction planning, execution and control, (6) commissioning and after-sales services, (7) network nurturing.