Real Strategies For Virtual Organizing N. Venkatraman – John C. Henderson

1. REAL STRATEGIES FOR VIRTUAL
ORGANIZING
N. Venkatraman – John C. Henderson
Presented By,
B. Sundaravadivelu
ESIGELEC, Rouen, France
Email: buvanesh.s@gmail.com

2. POINTS TO DISCUSS
 What is Virtual Organizing
 Dimensions
 Customer Interaction
 Asset Configuration
 Knowledge Leverage

3. VIRTUAL ORGANIZING
 Virtual Organizing is a strategic approach that is
singularly focused on creating, nurturing and
deploying key knowledge assets in a complex
network of relationships.
 Developed with IT at the center

4. DIMENSIONS
 Customer Interaction
 Company to Customer interaction
 Asset Configuration
 Manage firms requirements through business network
 Knowledge Leverage
 Share expertise across organizational boundaries

5. STAGES OF DIMENSIONS

6. CUSTOMER INTERACTION
 In Early days, this process happened through
multistage distribution network
 This involves retailers, wholesalers, service agents
 Evolving economy allows two way information link
between customer and company through remote
mechanism.
 This is available in business to business products as
well.
 Three stages of Customer interaction
 Remote experience of products and services
 Dynamic customization
 Customer communities

7. CUSTOMER INTERACTION – REMOTE EXP
 Sears, Roebuck was the first successful attempt of
creating a virtual product experience.
 Remote and continuous link with customers become
critical as the concept of brand identity and brand
equity.
 Internet has accelerated the possibilities of remote
product and service experience.
 Mailing services (FedEx)
 Stock services
 Airlines and Bank services
 Traditional selling of textbooks have changed to web
based links for books
 Website is essential

8. CUSTOMER INTERACTION – DYNAMIC
CUSTOMIZATION
 Focuses on dynamic customizing products and
services
 Based on three principles
 Modularity
 Partitioning into independent modules
 Reusability
 Intelligence
 Sites learn their visitors taste and deliver dynamic personalized
information about products and services.
 Organization
 Need to change how they look at marketing processes.

9. CUSTOMER INTERACTION – CUSTOMER
COMMUNITIES
 Communities are information gathering and information
disseminating platform.
 Five defining characteristics of virtual communities
 Focus
 Capacity to reach larger audience
 Appreciation of member generated content
 Competing offerings
 Commercial orientations
 Companies which have implemented
 Citibank – For customers to know their product
 Harley-Davidson – Share Harley owners pictures and stories

10. ASSET CONFIGURATION
 Acquiring critical assets and resources from external
markets
 Effective contracting for complementary capabilities
through a network of suppliers and subcontractors.
 Allows companies to focus on their core competencies
which will also obtain complementary assets through
inter-firm relationship.
 Three stages of Asset configuration
 Sourcing modules
 Process Interdependence
 Resource coalitions

11. ASSET CONFIGURATION – SOURCING MODULES
 Deals with the benefits of efficiently sourcing standard
modules or components.
 Sourcing logic plays a vital role for any company.
 Selection of assets is complicated because the criticality
of assets changes over time
 Personal computer market which was conceptualized by
IBM in 1980.

12. ASSET CONFIGURATION – PROCESS
INTERDEPENDENCE
 Focuses on interdependence of business processes
across organizational boundaries.
 Business process outsourcing with full control.
 This involves delegation of one or more business
processes to an external service provider
 Examples:
 DirecTV: Integrated satellite television, phone
 FedEx: Virtual order taking and processing of orders.

13. KNOWLEDGE LEVERAGE
 The basic economic resource is not land, physical
resources or capital but knowledge and intellectual
assets.
 Knowledge assets can support rapid execution of
strategies, increase learning rate of employees and their
response rate to customers.
 Three states of Knowledge Leverage
 Work-Unit Expertise
 Recognizing knowledge as Corporate Assets
 Professional community expertise

14. KNOWLEDGE LEVERAGE – WORK UNIT EXPERTISE
 Tasks can be decomposed and can be done at different
locations and time periods.
 IT functionality like group ware, video conferencing and
intranets are necessary to make processes effective in an
organization.
 Knowledge sharing sessions are held between teams to
share expertise
 Companies distribute work to teams in different time
zones.

15. CORPORATE ASSETS & PROFESSIONAL COMMUNITY
EXPERTISE
 Knowledge is a corporate wide asset that should be
systematically managed.
 Emerging virtual communities serve as a primary
mechanism for collecting and legitimizing knowledge and
expertise
 Multiple experts from different locations can
simultaneously interpret the meaning of unforeseen event
 Companies face the challenge of how to compensate and
motivate the expertise from multiple sources.

16. CONCLUSION
 Challenges for transition
 Designing new business model
 Interacting with customer for knowledge leverage
 Navigating across multiple communities
 Deploying IT platform
 Virtual organizing as a concept focuses on the importance
of knowledge and intellect in creating value.