Nike’s current challenges are capturing advantages of international operations in a sustainable way. Specifically, we examine linkages among task characteristics, emergent network structure and network performance (of communication It saves time, travel expenses and eliminates lack of access to experts. Core competencies are a competitive advantage and should provide access to a wide range of markets, should substantially contribute to the benefit of the product and should be visible for the client and also hard to copy and out of competitors reach. Another important advantage that can be obtained with the virtual network organization is that it tends to generate networks of customers, suppliers and partners that facilitate the creation of information resources so importantly in the new information economy. A virtual network structure facilitates the introduction of intelligent agents that can at the same time implement numerous orientations for network engagement with the market and its customers. A virtual network structure. Due to the shifting of industrial structure and the pressures creased by the globalization, MNCs are facing many external opportunities and threats. The companies in the network should be seamlessly integrated by information and communication technologies so that to the customer it is not apparent that the different processes are handled by separate companies. Is the use of authority and responsibility different compared to other forms of departmentalization? Traditional organisational structure had been characterized with tall hierarchy. The general purpose of virtual network organizations is to take complete benefit of the different core competencies of members within the network, operating as a single organization across partner organizations to deal with ever-changing demand. Nevertheless, being competent along does not guarantee the rapid growth of the business. In forming networks the most important point of partners are to achieve the flexibility to serve the rapidly changing and competitive marketplace, to share and expand the understanding and skills needed to complete, to accomplish operating best practice and create further value or benefits for their customers. The Core Competence Theory (Prahalad & Hamel, 1990) outlines that success and failure of an organization are necessarily based on its unique or specific potentials, assets, or resources. INTRODUCTION company, sharing knowledge by eNowadays, the rapid advancement of technology has caused of new organization structures in the … A virtual machine consumes resources like a physical appliance consumes electricity. A virtual organization is a network of companies which support each other around a product and or a service idea. To answer the fundamental motive of virtual network, if at all possible, network information is processed and distributed in real time throughout the entire network, which set aside network management to make decisions and bring together actions quickly in their drive to bring value and put up customer satisfaction. Virtual network structure also having expertise limitations because outsourced expertise at many different locations make close cross-functional teamwork more difficult. A second purpose is to consider whether the emergent structure that has evolved is suitable for the task being performed. A virtual organization might not have even have a permanent office. Network Structure What is Network Organizational Structure? Technology is one of the main determined driving forces which refer to how an organization ‘transfers its inputs into outputs in designing organization structure’. Citing Miles & Snow (1986), “organizational network structure is the basic principle to achieve flexibility, adaptability to the market and quick response in a highly complex environment”. Explain.Describe the main difference between manufacturing and service technology. In pursuing a global strategy, company must create the right type of organisational structure for managing the flow of the resources and capabilities between domestic and foreign divisions. In larger businesses, these networks are often designed by a network architect and implemented by network engineers. This is one key area that Nike cannot achieve in the USA as the labor costs in the developed country are much higher than those low-cost production facilities owned by the strategic partners in the developing countries. Fashion wear companies like Nike, for example, frequently produce none of their own clothing, focusing instead on building brand value through comprehensive marketing efforts and exercising tight control over their suppliers. But the buying company must be close enough to its partner to assess and name the particular people it wants; other provision may be worthless when it is considered necessary. By reviewing the history of development of technology, electricity took 40 years to penetrate 50% population in USA, computer took 30 years and the Internet took only 6 years. The central organization simply coordinates the activities of others so that the product reaches the ultimate consumer in an effective and efficient way. How do these differences influences the type of structure that will be most effective?3. The Virtual Network Structure suitable for certain firms in changeable environment. Besides, since mass production involve less innovative ingredients, imitation strategy requires both tight as well as loose properties in order to ‘minimize risk and maximize opportunity for profit in the organization’. Outsourcing or subcontracting has become an important strategy for many firms as recognized during the late eighties and nineties, partly due to an increased pressure towards downsizing and a growing recognition of possible advantages of cooperative inter-firm relations. Companies seeking to gain advantages through virtual operations must... See full answer below. Virtual network structure is a type of organization structure formed by creating alliance of several organization outsourced for developing product or... See full answer below. 1. A virtual organization can develop in different ways in response to the different internal and external uncertainties (such as turnover, change in leadership) and exhibit any combination of these structural dimensions. A network organizational structure refers to a system of delegating and coordinating tasks among a number of partner companies or business entities with a common goal of producing a specific product. What is the virtual network approach to structure? Unlike conventional horizontal structure, those strategic partners have their own organisational structures that most suitable for their internal and external environment. Concept of Virtual Network Structure (VNS), Changing Nature of Modern Work Organizations, Organization Structure and Management Control, Zara’s Lean Operation: Source of Competitive Advantage. The example effectively demonstrates the importance for the founder of a great business to be an expert, or to be competent in the field. A service is an offering provided by a Service Provider that is composed of one or more VNFs. The demand on operational efficiency encouraged vertical organisational design, which emphasis on efficiency and control. The Virtual Organisation is a flexible network of independent entities linked by telecommunication and computing technologies to share skills, knowledge and access to expertise in non-traditional ways. Unlike conventional teams, a virtual team performs work across space, time, and organizational boundaries connected by interactive communication technologies. This difficulty can only be handled competently and successfully by advanced information and communication expertise that therefore, both straightforwardly and indirectly, viewed as an enabler and driving force towards the virtual organization. In a virtual private network (VPN), extra data is attached to the headers of packets, describing routing information that corresponds to a locally relevant address space. For example, in the case when the Virtual Network Structure became blind to changes in the market despite healthy profits, the designer may address those external threats by maintaining small size of core staff. Virtual network structure helps to create core competencies, which can be explained as the bundling of specific capabilities, and technologies that can provide as the source for the development and prerequisite of several products. For a list of supported VPN appliances and informatio… Secondly, for the face on the sharply environment change, HR managers should divide the tasks and then coordinate those, in essence balancing job-related specialization with group, inter group, and organisation-based integration as necessary. A firm that contracts out almost all functions. The dual network structure of organizational problem solving: A case study on open source software development Social Networks, Vol. It was Bowerman to design the first generation Nike shoes. In this way, a VPN produces a virtual addres… C. Global companies often use a _____ structure to achieve simultaneous coordination of … For example, Nike’s network structure enables direct communication across unit and firm boundaries, which improve the responsiveness to the rapidly changing business environment through reducing the dependence on the chain of command. The network organizational structure (also called virtual network structure) is a temporary or permanent arrangement of otherwise independent organizations or associates, forming an alliance to produce a product or service by sharing costs and core competencies. For MNCs like Nike, it has to secure the production several months ahead of the peak sales period. A core co… Virtual vs Network Organization structure. It is also found that need of virtual network organization is emerged because customer demands more specialized and particular products, which automatically leads organizations to a broader product variety and the result of individualization of products to consumer specification is that the complexity across all organizational functions increases. Generally, layer 3 devices divides broadcast domain but broadcast domain can be divided by switches using the concept of VLAN. Similarly, the VNS provide a great incentive for promoting synergy between modern organizations as the major attractiveness for them to form strategic partnership is due to the strong inter-dependency among them. 3. It was the marketing experts that Bowerman chose to partner recommended “Nike” as a word represents something which is extra ordinary. Virtual teams may include employees, management, customers, suppliers, and government working together to achieve co… When high bandwidth networking throughput is not required by a guest, then it is more efficient to share networking resources than to dedicate those resources to a guest that is not fully utilizing them. In organize to accomplish high levels of customer fulfillment, maintain customers over time and build market share, an organization must deliver ever-improving value to its customers with low cost. (i) Matrix Design: This is the most complex form of organization design. Accordingly, from the perspective of organisation structure, the design should reflect the way job tasks being formally divided in two different groups or among individuals according to their diverse knowledge levels. To each other around a product and or a service idea structure design makes chain of command lose its.. 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