How Does A Virtual Network Structure Work ?


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The virtual network structure is a type of organisation structure whereby a firm outsources most of its major processes to different companies and coordinates their activities from a small headquarters organisation. An example of this is TiVo Inc - a company develops technology that allows users to record television program up to 80 hours and replay it whenever they want. The unique things are that this technology can eliminate the commercial interruptions and track down and record favorite shows as long as the schedule does not change.

Instead of building a complex and costly companies with various department, TiVo Inc decided to partner with other companies such as Sony, Philips for manufacturing and marketing. In essence, this is like TiVo says to its partners: " I provide the technology and you compose it into the product, manufacture and sell it to the market".

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