An Investigation into the Barriers to Introducing Virtual Enterprise Networks

Abstract

This chapter reports on a preliminary investigation into the barriers related to the development of a virtual enterprise network in the creative digital industries sector in South Yorkshire, United Kingdom. Based on the concept of a virtual organization, it is argued that the key factors in delivering an integrated virtual value chain are trust and the control of risk. The connection between trust and the control of risk is demonstrated. Trust can be examined along three dimensions: competence, integrity, and benevolence. These dimensions of trust were used by the small and medium-sized enterprises (SMEs) in this study as the criteria for choosing business partners. Risks such as poaching, stealing, transaction-specific, information asymmetries, and loss of resource control were confirmed by the SMEs as the main sources of their resistance to participation in a virtual value chain. It is proposed that managers should pay attention to trust building and the control of risks at all stages of the development of a virtual value chain in order to drive collaboration forward