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Background

Information technology and globalization are shaking up the concept and boundaries of organizations. The word “virtual” associated with “cyber”, Meta and the Internet become popular buzzwords today. Virtual commercial services such as virtual banks, virtual supermarket, virtual offices and the like are no longer a surprise to ordinary customers. Network organizations taking different names like virtual corporations, virtual companies, virtual teams and meta-enterprises become increasingly popular in the perception of managers and in business operations as we move from an industrial to a knowledge-based economy.

The Virtual Revolution is the defining business transformation of this generation (Malone & Davidow, 1994). Take Cisco system for example. Cisco is actually a network of suppliers, contract manufacturers, assemblers and other partners, which is connected through an intricate web of information technology. Seventy percent of Cisco’s products are outsourced through Cisco’s network. As soon as a client’s order is placed (usually through the Internet), suppliers send the required materials to assemblers who ship the product directly to the client, usually on the same day (McShane & Glinow, 2000). Over the past several decades, Japanese managers have chosen network organizations to facilitate the cooperation between big, medium and small enterprises and in manufacturing industries (Jin, 1999).


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