What is Virtual Organisation

The keiretsu, a system of organizations with integrated and interlocking business relationships and joint shareholdings, is a form of networked organization. As an affiliation of enterprises, the keiretsu plays an important role in the growth of automotive manufacturing in Japan. For example, Asanuma and Kikutani (1997) conducted an empirical study of supply chain relationships in the automotive parts industry and electric machine manufacturing and found the longstanding transactional relationships among the keiretsu as a crucial factor for acquiring economic rationality. From a managerial standpoint, Imai and Kaneko (1988) pointed out that organizational structures evolved from the traditional vertical hierarchy to modern horizontal structures through the support and development of information technology in the keiretsu. They also predicted that the “network organization” form will be a most important type of enterprise in the future. According to Lincoln and Gerlach (2004), “the most distinctive form of network organization in Japan—and the most critical to understanding its economy—is the clusters of industrial, commercial, and financial corporations known as the keiretsu ”(p. 15).