When Is Virtual Virtuous? Organizing for Innovation

Abstract

Champions of virtual corporations are urging managers to subcontract anything and everything. All over the world, companies are jumping on the bandwagon, decentralizing, downsizing, and forging alliances to pursue innovation. Why is the idea of the virtual organization so tantalizing? Because we have come to believe that bureaucracy is bad and flexibility is good. And so it follows that a company that invests in as little as possible will be more responsive to a changing market-place and more likely to attain global competitive advantage.