Managing technology as a virtual enterprise

The complexity of R&D projects and growing international competition are fa ctors leading to more cooperation especially among small and medium-sized f irms. But even large integrated firms are often not willing or able to perf orm the necessary amount of R&D and to cope with the uncertainty associated with radical innovations. In a virtual company, members form a network, thereby enabling projects to be pursued by combining member's resources. Specific assets of a virtual co mpany are its flexibility and ability to handle variety. Costs of co-ordina tion and motivation are lowered if the virtual company succeeds in building trust and commitment. On the other hand, lack of these pose severe problem s. In markets with a strong scientific-technological basis and rapid rate of c hange the concept of a virtual organization seems appealing. High R&D costs and risks can be shared, developments and time-to-market can be accelerate d and the partners can concentrate on their respective core competencies. In the paper we use an example from the biotechnology industry as a case st udy and discuss some of the theoretical and practical problems that are enc ountered in the virtual enterprise.