Forming a Network of Strategic Alliances in a Virtual World
Another way in which virtual companies become more flexible and responsive is by forming strategic alliances, or teams of businesses, to share resources and reduce costs. These alliances are more than sources of capability for the entrepreneurial venture; they are the glue that holds the venture together. Strategic alliances are more like true partnerships. They may purchase major equipment jointly or share the costs of research and development and of training. Particularly in the area of R&D, it is very difficult for one small company to manage the expense alone.
Networking and business alliances enable smaller businesses to bid successfully against large companies. They offer the convenience and savings of access to one source for everything, shared quality standards, and coordination of vendors. The key to managing a small-business alliance successfully is being willing to share internal information such as manufacturing processes, quality control practices, and product information for the good of all.
Building a virtual company and dealing with strategic alliances is not without problems. For the entrepreneurial team that wants to maintain control of every aspect of the growing venture, it is frustrating to have to give up some of that control to other companies. Getting virtual partners to meet the entrepreneur’s demands for quality, timeliness, and efficiency can also be a long and difficult process. Consequently, it is important that the entrepreneur and the virtual partner come to a written agreement on their duties and responsibilities and that they both enjoy the benefits of the relationship.
Many entrepreneurs have found that the benefits of virtual partners far outweigh the problems and that the virtual corporation is the most efficient and effective way to give venture traction. However, there are management issues unique to this type of business, and they must be thoroughly understood.
Keeping Virtual Employees and Strategic Partners Linked
One of the important challenges that virtual organizations face is keeping everyone connected and in touch even though they are geographically separated. A virtual company may be a great way to keep overhead down and flexibility up, but it is no substitute for human contact and face-to-face communication. Even in a virtual environment, it is important to conduct a face-to-face meeting at least every one to six months. Arrange for employees and partners in specific geographic regions to meet regularly in between company-wide meetings.
It is also important to create a discussion area on the company’s Intranet and to encourage everyone to share important information and discussion points. A regular conference call should be set up once a week to stay in touch. In addition, it is a good idea to investigate video-conferencing. There are companies that rent video time to companies and individuals.