ICT Adoption by Virtual Organizations in the Developing Countries: A Case of SME Clusters in Pakistan

Background

With the advancements in globalization and ICTs, new organizational structures based on flexibility, efficiency and market mechanisms have emerged (Hamel & Prahalad, 1994; Hagel & Singer, 1999). Virtual organization is considered as the most flexible among these structures, which is based on temporary relationship of parties to exploit the emerging market opportunities (Hughes, O’Brien, Randall, Rouncefield & Tolmie, 2001; Lee, Eom, Kim & Katerattanakul, 2007; Travica, 1997). In his definition of virtual organization, Travica (1997) emphasizes upon geographical dispersion of parties and the importance of electronic communication to run the production processes. Malhotra, Majchrzak, and Rosen (2007) and Webster and Wong (2008) also present it as an organization with geographically distributed members, working together through electronic means of communication and information sharing. Whereas, Wang (2000) presents mutual objectives of participant organizations, ICT infrastructure, and dynamic relationships built on various standards and rules as distinguishing characteristics of virtual organization. A relatively broader definition of virtual organization is given by Lipnack and Stamps (1997) who define it as “groups of people interacting through interdependent tasks guided by common purpose that work across space, time, and organizational boundaries with links strengthened by webs of communication technologies” (p. 7).