Managing Knowledge for Strategic Advantage in the Virtual Organization

Abstract

This chapter looks at the virtual organisation and suggests that the basic concepts of virtual management are so poorly understood that there are likely to be very few such organisations gaining strategic advantage from their virtuality. The authors begin by providing some clear definitions of virtual organisations and different models of virtuality which can exist within the electronic market. Degrees of virtuality can be seriously constrained by the extent to which organisations have preexisting linkages in the marketplace and the extent to which these can be substituted by virtual ones, but also by the intensity of virtual linkages which support the virtual model. Six virtual models are proposed within a dynamic framework of change . In order to realise strategic advantage, virtual organisations must align their virtual culture with the virtual model for structural alignment. This paper further proposes a model for virtual organisational change which identifies the factors internal to the virtual organisation that need to be managed . Critical to this is the role of knowledge management. The authors develop this concept within a framework of virtual organising and relate this to organisations using ERP in an Internet environment. Specific examples will be used relating such developments to organisations employing SAP and illustrating strategic advantage.