A Model of Virtual Organization for Corporate Visibility and Competitiveness

Chinedu, Paschal Uchenna1, Joon, Ow Tuck2, Nworuh, Godwin E1; Osuagwu, Oliver E3 and Ahaiwe, Josiah1.

1Department of Management , Federal University of Technology, Owerri, Nigeria. Email: [email protected] Phone: +234-8068743545 2School of Computing, Engineering and Information Sciences, KDU University College, Malaysia 3 Department of Computer Science, Imo State University, Owerri, Nigeria.

Abstract

This paper considers the existing numerous research in business, Information and Technology (ICT), examines a theoretical framework for value creation in a virtual world. Following a proposed model, a new strategic paradigm is created for corporate value; and virtual organization (VO) apply the use of information and advanced ICT to ensure corporate visibility and competitiveness in the global marketplace. The concept of VO introduces an ICT business model that links and integrates enterprise strategic, operational and tactical issues for corporate competitiveness.

Keywords: Virtual Organisations, Virtual Enterprises, Business Process Outsourcing, Corporate Value, Value Creation, Information Systems, ICT Strategy

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1.0 Introduction Virtual Organisation (VO) refers to an shareholders’ wealth creation expectancy. organisational business concept which Over the years, all consumers and includes major elements of collaboration enterprises have been delimited by among a consortium of member renowned social and geographical companies, and integration of their core constraints that defined their individual competencies needed to develop new and industry environments and marketplaces customized products or services. This until 1993, when the and the concept is based on responses to the (WWW) emerged. customers’ ever-increasing demand or changing value, prompt reaction to changes in the market conditions, and

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A. The evolution of the internet The concept of the Virtual Organisation eliminated or greatly alleviated many of (VO) was traced to have sprung up since these constraints, hence, facilitated the 10–15 years ago, according to [12]. The global business environment which has report asserted that many of its practices net organisations and customers in could be traced back at least four decades. proximity all over the world than ever He further clarified by citing [18] before, thus, creating new business description on how many of the features of avenues. This paper considers the VOs could be identified within the existing numerous research in business organization of the housing construction and Information and Communication industry in Western Australia in the early Technology (ICT), examines a 1960’s [14]. In support of this, [7] as cited theoretical basis for value creation in a in [10] traced the origin of VO to the virtual world. Following a proposed developments and emergence of ICT and model, a new strategic paradigm is the internet respectively. According to the created for corporate value; and virtual publication, many definitions of VO are organization (VO) apply the use of specifically relevant to the industrial sector information and advanced ICT to ensure where main drive for its formation is the corporate visibility and competitiveness need to reduce costs through in the global marketplace. The concept of collaborations in Western Australia. The VO introduces an ICT business model economic concept is that costs can be that links and integrates enterprise minimized and value be created where strategic, operational and tactical issues. partners pull complementary expertise in The methodology takes a quantitative working together for some corporate (hypothetic deductive) approach to test objectives. For example, the infrastructural two established hypotheses of the study. costs for a small group will probably The results of the quantitative analysis experience reduction in total than the were discussed and interpreted in corresponding cost to a large group [14]. relation to the value drivers (key parameters) in the prescribed model to Background of study achieve research aim of the paper. And The problem of many organizations the outcome of the study underpinned a which defines the purpose of their virtual value creation model of Virtual existence has remain how to boost the Organisation that ensure corporate economic value of the organisation visibility for the established corporately in other to maximally increase organizations via collaboration and organisational value and shareholders’ leveraging on the core competencies of wealth while improving customers’ value. their partners to further position them The basis of economics theory has been on for competitiveness in the global the efficient use of the factors of digitized marketplace. production, such as land, labour and

capital [10]. Information, therefore, has remained the livewire for the existence

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and re-evaluation of these resources constraints, hence, facilitated the global without which their development is business environment. The rules of impaired. Information has equally competition were swiftly changed as contributed vitally to management and traditional enterprises, such as value creation practices such that the Encyclopaedia Britannica were caught off developments of the twentieth century guard as their dependence on conventional have kept most of these other theories (e.g. print, distribution and sales systems in the economic theory) improper or insufficient production and marketing of its high- in the face of its explosion. priced multi-volume collection was nearly ICT accessibility and user friendliness eradicated overnight when its alternatives have promoted the ease of access and on-lines, such as Encarta which were lowered cost of every kind of information bundled with Microsoft with haven provided the necessary much multi-media capability, but at very infrastructure for high speed computing low costs and made available globally. and digitization, thereby, transforming the Amazon Books is another new venture way that information is accessed, among others which was purposely manipulated, transmitted and stored. This designed to take advantage of the new has helped to increase the level of it global environment of ICT, and flourished. distribution for decision making and Most existing collaborating enterprises strategic position of enterprises involved. such as the project based organisations are Recent changes in economic conditions, now beginning to appreciate the need to organizational structures, and enterprise operate with the support of ICT network processes are based not just on so as to break their geographical barriers, information availability and asymmetry, and create effective information systems to but on the way of its distribution. gain and sustain their competitiveness in Furthermore, enhanced communication the marketplace. This had resulted into the and distribution channels opened up by the recent emergence of project outsourcing advent of the Internet and other related and project team collaborations. communication technology has net In view of the importance of ICT today organizations and customers in proximity and its relation to VO, this is possible due all over the world than ever before, thus, to the growth and expansion of creating new business avenues [10]. globalisation and the global marketplace. Over the years, all consumers and The resulting challenges and concerns, enterprises have been delimited by therefore, have remained core in the minds renowned social and geographical of most corporate leadership. These seek constraints that defined their individual to interrogate on how any organisation can industry environments and marketplaces survive and boom in this emerging until 1993, when the Internet and the electronic business environment. World Wide Web (WWW) emerged. The evolution of the internet eliminated or greatly alleviated many of these

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1.2 Problem Statement technological solutions such as supply This research is primarily concerned chain management, workflow with - “How can an organisation create management, electronic data exchange, corporate value to ensure corporate and virtual marketplaces. According to visibility and competitiveness in the global him, all of these rely on, and are supported business environment by deploying a by ICT. Virtual Organization Model?” In Virtual enterprises therefore provide an suggesting answer to the above question, important improvement such as higher the research is not limited to the direct flexibility. The increased changeability of deployment of ICT alone. It further the environment of organisations has to depends an understanding of how a virtual necessitate a corresponding changeable organization model will enhance a business strategies and processes. So, by corporate information system and sharpen focusing on core competences and corporate strategy for global interacting with auxiliary, external competitiveness. partners or company can use its resources most effectively. Furthermore, different 2.0 Virtual Organization Model: degrees of virtualization can be Conceptual and Theoretical Framework distinguished to harness the benefits Insight from [17] maintains that as ICT evolving by new concepts. Certainly, most overcome the constraints of time and companies are applying some of them distance, creating VOs becomes a nowadays. These interactions between possibility. According to him, virtual is companies are increasingly realised usually taken to be something that does through networks coordinated and enabled not exist in reality. Hence, a typical by ICT [4]. definition of a virtual enterprise or The issue of value, its creation or corporation (taking the dimension of time) appropriation has in no doubt been is: "a temporary network of independent thoroughly examined by past researches companies linked by IT to share skills, from business and other related costs, and access to one another's markets disciplines, such as economics, (Business Week as cited by [17])”. mathematics, sociology, psychology, etc. He further provided another definition Several useful views and theoretical which relates to an organisation not having frameworks have been established a clear physical locus. Here a typical following the rigorous efforts definition is: "an organisation distributed accompanying them. But justifiably, the geographically and whose work is limitations of disciplinary boundaries or coordinated through electronic narrow single view of the subject have " [17]. undoubtedly affected the propagation of However, [4] pointed out that inherent in these contributions in this information age. VOs are not the concepts of trailblazing, Surprisingly the contributions of ICT standalone solutions but rather using and industry in economic value and combining existing organisational and organisational competitiveness seemed not

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to have been explored by most enterprises 2.1 Integrated Virtual Value for a long while. The recent advents of e- Creation Framework commerce, e-business and e-marketing The framework adopted by the greatly pioneered lots of ICT innovations researcher is Virtual Value Creation that have had revolutionary impact on (VVC) framework which theories address business in modern times. customer value and shareholder wealth Consequently, interdisciplinary research creation in a virtual organisation or virtual works on the subjects of value; business world setting as had been proposed by and ICT have undoubtedly remained on Hales [10] in a research. Organisational the minimal. In addition, previously Practice and the previous research works developed theories (as in management, on creation of corporate value, indicates and marketing) lack the perspective to the need for an integrated approach that sufficiently handle the issue of value, and combines already existing conventional wealth creation organisationally, in the theories from strategy, marketing, finance ever emerging information society which, and information systems with new [10] in reference to [8] highlighted as the viewpoints that highlights the uncertainty reason behind enterprise existence. of information resources. The integrated VVC framework answers to the said need.

Figure 2.1: Integrated Virtual value creation framework [10]

The Figure 2.1A above is a customer and a customised value proposition, focused VVC framework that strategically classifying the vital functional and appreciates value creation comprising the foundational drivers’ requirements of customer, and customer value. It depicts value creation, pictorially expounded in the interlinking between customer value Figure 2.1B following.

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Figure 2.1B: Virtual value creation framework [10]

digitisation, infrastructure and the B. The functional drivers of value prevailing ICT environment [10]. creation consist of customer value,

customisation, strategic sourcing, core Since the long term existence of any competence and the integrated value firm anchor back to the existence of its chain. Three foundational drivers customers, the VVC framework provide support for these functional deliberately and unashamedly maintains drivers. They are digitisation, customer focus. Converse to the demand infrastructure and environment. Jointly, of the short term enterprise goal of these two drivers form a strategic creation of competitive advantage without framework the organisation may use to customer focus, the long-term goal of assess its value creation capability. Core developing sustainable competitive elements of business theory in the advantage, customers’ satisfaction and functional drivers and core elements loyalty becomes of high demands. And as from IS/IT are integrated in the VVC. [10] rightly asserted, “successful value Though suited for an information rich creation is essential for building commercial environment, this new sustainable competitive advantage and its model approach centred on the success is directly contributions to the organisation’s use of information does shareholder’s valuation of the firm.” not seek the replacement of the other Hales’ concept of VVC [10] agrees with researchers’ inputs in strategy and [3] in his research on the new logic of value creation but rather an integration value creation which cited [16] into the said approach. So far known, development of a model for a virtual value no other model has been able to take chain. According to the research, value such integrated path to intimately creation at any given stage of the VVC correlate with virtualisation building on entails a series of five activities: gathering,

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selecting, organizing, synthesizing and proposition and its transformational distributing information which in processes set limits to the degree to which combination with the VVC forms a value information can be utilised to create value matrix that enables enterprises to and gain competitive advantage. Secondly, effectively recognize customers’ value and adequate ICT infrastructures to guarantee satisfy them more efficiently. the required connectivity with high speed Values being a subjective issue depicting information transmission across the value customers’ perceived value which networks occurring in a timely and secure recognizes the features of a product or manner should be in place to facilitate and service that are the most imperative and manage effective capture, storage, and thus most extremely valued by the manipulation of information, and swift and customer. The enterprises’ value seamless occurrence of information proposition need to mirror the set of integration organisational, and perceived value requirements of the internetwork based applications should customer by ensuring full customer also be in place. Finally, [10] added “the participation in the development and extent that information and ICT can production processes, thereby reducing the contribute strategically and operationally risk of producing inappropriate products to value creation is a matter of managerial and services. It is the goal of the attitude within the enterprise, the value enterprise to make that match more chain and industry”. Though it is vital for consistently and profitably than its VVC that management be familiar with competitors [10]. ICT strategic capabilities, yet successful In order for the organisation to acquire value creation also entails an integrated the best available pool of resources consortium of clients, partners and competencies, strategic sourcing and core suppliers in a VO formation to ensure that competence are necessary. An integrated the best possible mixture of resources are value chain depends on information to used to produce customised best value integrate both suppliers and customers into customers products and services at all the logistics and transformational times. processes in order to ensure efficient C. The relevance of information as upheld by production and delivery of mass [10] in determining commercial relationships, customised. Virtual organisation (VO) use defining organisation structures, developing of ICT to integrate these sources of value information based products and services, and creation (discussed in detail in chapter creating a new business environment generally two) into a single coherent strategy is the can never be overemphasised. This implies the need for a new set of management concepts basis of the functional drivers of VVC needed to justify the creation of value. VO is, [10]. therefore, one such concept providing VVC The existences of the three essential model that sits properly within that paradigm. foundational drivers provide needed Although the VVC is somewhat speculative, it is support to the value creation process. firmly grounded in existing theory and practice and it provides a realistic description of the Firstly, digitisation of the firm’s value organisations instant capacity in corporate value

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creation as well as a recommendation of its value use to plan and control the activities of the creating potential [10]. firm” [9]. D. 2.2 Definitions and assumptions - Book Value- Refers to strategies and processes “Book value is the worth of a company designed to identify, capture, structure, based on its financial statements. This value, leverage, and share an means the net asset value of a company organization's intellectual assets to [19]. enhance its performance and competitiveness. It is based on two critical Electronic Marketplace- activities: (1) capture and documentation Electronic Marketplace is a virtual, of individual explicit and tacit knowledge, online environment (a website, for and (2) its dissemination within the example) that allows individuals or firms organization [6]. to conduct business electronically [6]. Marketplace- Information- Alternative term for market: It is actual Information represents data offered in a or conceptual place in commercial world form that is valuable in a decision-making where forces of demand and supply activity. The information diminishes operate, and where buyers and sellers uncertainty and enhances knowledge about interact (directly or through a given area of concern, hence useful to intermediaries) to trade goods, services, or the decision maker [9]. contracts or instruments, for money or barter. Markets include mechanisms or Information Systems- means for (1) determining price of the Information Systems are the formal traded item, (2) communicating the price group of processes that, operating on a information, (3) facilitating deals and collection of data structure according to transactions, and (4) effecting distribution. the needs of a company compiles, Marketplace for a particular item is made elaborates and distributes part of the up of existing and potential customers who information necessary for the decision- need it and have the ability and making processes necessary to carry out willingness to pay for it. All markets, the business functions of the company [2]. ultimately, consist of people [6]. Information Systems are a “man-made system that consists of an integrated set of Market Value- computer-based and manual components “Market Value is the price at which established to facilitate an organisation’s buyers and sellers trade similar items in an operational functions and to support open marketplace [19].” management decision making by providing information that managers can New Economy-

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‘An economic model founded on the set network for a definite task and dissolved of interrelated policies observed to achieve after the task has been completed [20]. maximum sustainable long-term growth, in which networked information 3.0 Methodology dramatically increase the The research questions of this study amount and value of information available concentrated on the process of creating to individuals, firms, markets and corporate value in an enterprise by the governments, allowing them to make more deployment of VO system in the global effective choices, and leading to superior marketplace. The identification of needed performance’ [12]. variables of sources of value in the enterprise as well as description of the Project- degree of operation of these value drivers Project is a temporary endeavour (key parameter) aided this study. undertaken to create a unique product, This research adopted both Positivist service, or result [15]. and Quantitative approaches which has to do with quantity and measurement as well Project Management- as interaction with stakeholders [13]. The Project management is the application researcher used questionnaires and of knowledge, skills, tools and techniques observation instruments of the survey to project activities to meet project methods of research. This approach is requirements. Project management is considered competent as data collected accomplished through the application and was randomly sampled from the identified integration of the project management population. There was consistency in the processes of initiating, planning, characteristics of the population with executing, monitoring and controlling, and regards to the research question. closing [15]. 3.1 Sampling Frame Value- The population of this study comprised Value refers to “precise signification; stakeholders from some selected import; as, the value of a word; the value organisations with those in a project based of a legal instrument.” Or Value could be setting inclusive. The selected defined as “Esteem; regard.” [5]. organisations were those in or with prospect of multi-organisational project Virtual Organisation / Virtual management, some form of strategic Enterprise- outsourcing, suppliers, and virtual A temporary consortium of partners collaborative venture with other from different organisations established to enterprises. fulfil a value adding task, for example a The sample population was 200 people product or service to a customer. The which comprised stakeholders sampled lifetime of a Virtual Organisation (VO) is from the following organizations shown in typically restricted: it is created from the Table 3.1 below:

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Table 3.1 Table showing the components of the sampledpopulation

3.2 Respondents Of the 200 population sample, 133 Yammeh’s standard formula as cited by respondents were selected to constitute the [1] for the determination of the sample required respondents using Yaro size from the population. This is given as:

Standard Formula and Determination of Sample Size n = N 1 + N(e)2

Where: n = sample size N = study population e = level of significance chosen analysis. The researcher has chosen 5% to represent the level of significance. This mean that n will be determined as: n = 200 1 + 200 (0.05)2 Thus n = 133,

Therefore n = 133

Figure 3.2: Standard formula for the determination of sample size [1] These constitute a fair representation of They included 80 Employees, 10 the Stakeholders. Thus, of a total of the Shareholders, 20 Customers, 13 Suppliers hundred and thirty- three copies of the and 10 Strategic Partner Organisations questionnaire distributed by the researcher, including local and international partners.

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only 45% (representing a total of 60 Excel computer software package. The copies) were properly filled and returned. frequency distribution and percentage method of analysis were used to analyze 3.3 Method of Data Analysis the data. Just as [11] puts it “the The statistical data has been sorted, percentage method is widely used in presented and analyzed according to the managerial and social researches”. research’s interest using Microsoft Office According to him the formula is:

Figure 3.3A: Showing standard formula and determination of percentages

Also, the hypotheses drawn from the differences between the expected research questions were tested in the frequencies and the observed frequencies. relevant section of this paper using the chi- It has been calculated using the formula square (X2), which measures the

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: Figure 3.3B: Showing standard formula for calculating chi-square

4.0 Research Questions and Hypotheses 4.1 Research Questions The following research questions has been answered by this research paper: • Is there any relationship between the size and degree of virtualisation of an organisation? • Is there any relationship between the nature of business and the degree of virtualisation of an organisation?

4.2 Research Hypotheses Sequel from the above research different classified sizes of organisation questions, the following research who responded to the measures of the hypotheses sufficed and had been duly degree of virtualisation are relevant in tested: conducting this test. The data presented in HO: There is no relationship between table 6.1 following, provides the sum of the degree of virtualisation and the size of the frequency of responses under the three organisation and the nature of business degrees of virtualisation for this question set against the different sizes of 5.0 Data Presentation and organisation. Hypotheses Testing Hypothesis 1: 5.1 Based on the Size of HO-A: There is no relationship between Organization the degree of virtualisation and the size of The statistical data on the frequency organisation. distribution of the respondents under the

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Table 5.1: Frequency of response on degree of virtualisation against size of organisation Size of High Medium Low Total Organisation Small 0 12 9 21 (10- 50) Medium 32 52 10 94 (50- 100) Large 41 11 11 63 ( >= 100) Total 73 75 30 178 Hint: At Degree of Freedom = 4 and Significance level = 0.05, the Table or Critical Chi-square value = 9.49 For details of the calculated value of Chi-square, refer to Test of Hypothesis 1: HO-A in Appendix G.

Thus, the calculated value of Chi-square Decision Rule: is 43.39. This is obtained from the Since the calculated value of Chi-square calculations of the required expected 43.39 is more than the tabulated value of frequency, and frequency deviation/ chi- Chi-Square 9.49 as graphically illustrated square computation under Test of in Figure 5.1, the alternative hypothesis is Hypothesis 1: HO-A within Table A5.1a hereby accepted. And so, there is and Tables A5.1b respectively. Refer to relationship between the degree of Appendix A of this report for details. virtualization and the size of organisation.

Figure 5.1: Graph showing the table and the calculated value of chi-square computation for hypothesis 1 (HO-A)

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5.2 Based on the Nature of Business The statistical data on the frequency responses under the named three degrees distribution of the respondents under the of virtualization. nature of business who responded to the assessment against the degree of Hypothesis 2: virtualisation are also relevant in HO1-B: There is no relationship between conducting this test. Table 5.2 below the degree of virtualisation and the nature contains the sum of the frequency of of business.

Nature of High Medium Low Total Business Education 4 18 2 24 Manufacturing 4 23 12 39 Service 44 21 7 72 Finance 23 7 3 33 Agriculture 0 6 6 12 Total 73 75 30 180 Hint: At Degree of Freedom = 8 and Significance level = 0.05, the Table or Critical Chi-square value = 15.51 For details of the calculated value of Chi-square, refer to Test of Hypothesis 2: HO-B in Appendix G. Table 5.1: Frequency of response on degree of virtualisation against nature of business

Also, the calculated value of Chi-square Decision Rule: is 60.38. This is obtained from the Since the calculated value of Chi- calculations of the required expected Square 60.38 is more than the tabulated frequency, and frequency deviation/ chi- value of Chi-Square 15.51 as graphically square computation under Test of illustrated in Figure 5.2, the null Hypothesis 2: HO-B within Table G5.2A hypothesis is hereby rejected. This implies and Tables G5.2B respectively as detailed an acceptance of the alternative hypothesis in Appendix A of this paper. with the conclusion that there is relationship between the degree of virtualisation and the nature of business .

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Figure 5.2: Graph showing the table and the calculated value of chi-square computation for hypothesis 2 (HO-B)

6.0 Analysis of Results Therefore, evident from the first test business and collaboration to ensure same result, that there is relationship between level of ‘presence’ and service as in the degree of virtualization and the size of working within the geographical company organization, it is justifiable that as premises with their office colleagues. This organizations increase in size, their need satisfaction has propelled many activities and business processes broadens medium and large-sized organisations to requiring more data/ information with introduce secure real-time, anytime, and effective information management to anywhere business operations and create better knowledge of the existing communications to these collaborative opportunities and challenges in the workers. The implication of taking business environment. In order to properly advantage of this form of collaboration for manage these situations and justify small size organization include maximum corporate purpose of existence, effective impact and improvement on their and efficient IS management integrated corporate image and profile, bring them to with exploitation of available the global arena as key players in the complimentary expertise under the competitive market thus creating platform of advanced ICT usually become outstanding customers virtual value and a mandatory requirement. The result of shareholder’s wealth. this among most medium and large-sized Furthermore, our second hypothesis test organisations is the need for break the proves that there is relationship between barrier of geographical restrictions with the degree of virtualization and the nature dispersed workers, including mobile of business. Justifiably, this could be workers, road warriors, teleworkers, and investigated by due consideration of the those in remote offices, needing to secure information needs or dependence of

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organizations of these nature. Among as organizations move from small to service, finance and educational medium-size reflects the execution of a organizations where business inputs and business strategy to integrate inherent outputs are that of the intangibles for organizational and technological solutions, example, higher dependence definitely like management of workflow systems, will be on raw data and information. The supply chain management with electronic need for effective and efficient IS causes data exchanges, and electronic the urgency for ICT infrastructure and marketplace rather than seeking for environment; as well as some inter- concept of popular, standalone solutions. organizational or international IS that Smaller-sized organizations capitalize would necessitate alliance, merger, or more on the value creation strategy of VO collaboration among complementary than most larger-sized organizations do so businesses so as to keep concerned as to secure the strength and corporate organizations strategically positioned, image of the highly competitive firms to visible, accessible, relevant and their advantage. competitive in the global marketplace The results on the degree of harnessing its incurring enormous value virtualization, and experience of the and benefits. Therefore, the satisfaction of functional VVC drivers (i.e. strategic customers value proposition, shareholder sourcing, customized value proposition, wealth, and overall stakeholder value core competence, and integrated value net) creation remain an urgent factor of the among the medium and large-sized degree of virtualization, and strategic organizations, as observed during the partnership formed for efficient services, research field survey, suggest the pulling of core competences and existence of some form of virtual knowledge management to sustain high groupings, such as virtual network level of competitiveness within the organizations and virtual teams. changing market conditions. Researchers’ observations also affirm this with the presence and reliance on mobile 7.0 Conclusions and workers, road warriors, and tele-workers Recommendations in the said organizations. Evident among 7.1 Summary of Findings the different sizes of organizations is the The degree of implementation of the fact that various degrees of virtualization Virtual Organization strategy (such as can be notable to exploit the benefits virtualization technologies) increases as evolving by this new concepts. organization’s size increaxes, and this has The nature of business of an a direct relationship with the extent to organization determines the degree of which corporate value is created to ensure virtualization and the resultant corporate the visibility and competitiveness of the value creation. Virtualization in VO organizations in the globally digitized begins with digitization and ICT marketplace. The improvement on the infrastructural support: the more degree of virtualization and value creation information based an organization is, the

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more its tendency for higher degree of • Multinational and Project based virtualization and the more efficient its organisations should maximize the value creation strategy is. inherent potential benefits for economic value creation through 7.2 Conclusion the establishment of VO to digitise The virtual value creation framework all project deliverables for efficient offered by Hales (2005) has been inter-organisational IS described, demonstrated and prescribed as management, using the support of a multidisciplinary model that fits properly their existing ICT infrastructure. within the paradigm of instant capacity • Partners in VO systems should and potential in corporate value creation to formalize their agreement to create facilitate corporate visibility and better understanding among all sustainable competitiveness for parties in the collaboration in order organizations in the digitized marketplace. to instill and develop trust and Its focus on customer value makes it promote greater supply of core unique not just for gaining but sustaining competencies. competitive advantage in a rapidly changing business environment. 7.4 Recommendation for Further Research 7.3 Recommendation It is recommended that the follow-up of From the output of this research, this research be conducted with the findings and conclusions so far drawn, the analysis and design of how to develop the following recommendations are proposed: next generation Operating Systems (OS), which are capable of providing VO • Virtual Organisation systems management support in a secure and should be incorporated and scalable way, should be sufficiently practised as core organisational undertaken. culture in Nigeria to promote Further studies should be focused on multi-organisational collaboration VO formation under the cloud computing and virtualisation by enterprises framework for reduced corporate IT wishing to sustain their expenditure and increased participation in competitive edge in this emerging the virtual market place. digitalized marketplace.

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[2] Andreu, A., Ricart, J. E., & Valor, J. (1992). Information systems strategic planning: a source of competitive advantage. England: NCC Blackwell Limited. [3] Aura, H. (2000). The new logic of value creation. An e-Publication submitted to the Avdelning Institution, Linkopings University, May 30. Available online at http://www.ep.liu.se/exjobb/eki/2000/allek/031/ (Accessed: 10 June 2008). [4] Bischofberger, T. (2004). IT-Infrastructure for Dynamic Virtual Enterprises: Master Thesis submitted to the Department of University of Zurich. Appenzell, Switzerland [5] BrainyQuate (2008) Definition of value. Available online at http://www.brainyquote.com (Accessed: June 14, 2008). [6] BusinessDictionary.com (2008). Available online at http://www.BusinessDictionary.com (Accessed: 16 July 2008) [7] Davidow, W. & Malone, M. (1992). The virtual corporation. New York: Harper Collins. [8] Drucker, P. (1998). The Next Information Revolution, Forbes, 28 August, pp. 47. [9] Gelinas, U. J., Sutton, S. G. & Fedorowicz, J. (2004).Business processes and information technology. Ohio: Thomson Learning. pp. 3 – 23. [10] Hales, K. R. (2005). Value creation in a virtual world. A PhD Dissertation ePublications submitted to the School of Information Technology, Bond University, Australia. Available online at http://epublications.bond.edu.au/theses/hales/ (Accessed: 08 June 2008). [11] Ike, K. R. (2003). Introduction to research method. Umuahia, Nigeria: Chudy Publications. [12] Mann, C. L. & Rosen, D. H. (2001). “APEC and the New Economy” APEC Economic Committee Project, August 2008. Available online at http://www.sccp.org /sccplibrary/meetings/August2001/nuecon.doc - (Accessed: 16 July 2008) [13] Mitchell, S (1993). Studies in History and Philosophy of Science. Philpapers: Philosophical Research Online Part A 24 (4):565-583 (1993) [14] NIEES GRIDINFO (2006). VIRTUAL ORGANISATION. MODIFIED 07:36, 12 MARCH 2006. AVAILABLE ONLINE AT HTTP://GRIDINFO.NIEES.AC.UK/INDEX.PHP/VIRTUAL_ORGANISATION (ACCESSED: 03/07/2008) [15] PMI (2004). A guide to project management book of knowledge: PMBOK guide (3rd ed). Pennsylvania: Project Management Institute, Inc. pp.4 – 17. [16] Rayport, J., Sviokla, J. (1995), ‘Exploiting the Virtual Value Chain’, Harvard Business Review, Nov-Dec, pp.75-85. [17] Skyrme D. (1999). Virtual Organisation. David Skyrme Associate: Insight, Retrieved on November 21, 2007 from ttp://www.skyrme.com/thevirtualcorporation.htm [18] Sor R. (1999). "Virtual Organisations - Not Such a New Idea: A Case Study of the

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Appendix A: CHI-SQUARE CALCULATION

The tables below details the steps and results from the calculation of the expected frequencies, frequency deviation, and chi-square computations for the section 5.0 of this report: Presentation and analysis of data according to tests of hypothesis.

TEST OF HYPOTHESIS 1:

HO-A: There is no relationship between the degree of virtualisation and the size of organisation.

Please refer to the table for frequency of response on degree of virtualisation against size of organisation (represented by Table 5.1) of this report.

Fe = RT x CT N Where: RT = Row total CT = Column total N = Grand total Fe = Frequency Expected The Degree of Freedom is given by (R-1)(C-1) Level of significance is taken at 5%

Degree of Freedom (R-1) (C-1) = (3-1) (3-1) = 4

Chi-square for 4df at 0.05 level of significance (tabulated value- Refer to Appendix F) = 9.49

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Table A5.1a: Table showing the calculation of all required frequency expected

Fo Fe Fo – Fe (Fo – Fe)2 (Fo – Fe)2 / Fe 0 8.61 -8.61 74.13 8.61 12 8.85 3.15 9.92 1.12 9 3.54 5.46 29.81 8.42 32 38.55 -6.55 42.90 1.11 52 39.61 12.39 153.51 3.95 10 15.84 -5.84 34.11 2.15 41 25.84 15.16 229.83 8.89 11 26.55 -15.55 241.80 9.11 11 10.62 0.38 0.14 0.01 Total 43.39

Table A5.1b: Frequency deviation/ Chi-square computation

Therefore, from the computation in the Table A5.1b above, the calculated value of Chi- square = 43.39.

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TEST OF HYPOTHESIS 2:

HO-B : There is no relationship between the degree of virtualisation and the nature of business.

Please refer to the table for frequency of response on degree of virtualisation against size of organisation (represented by Table 5.2) of this report.

Fe = RT x CT N Where: RT = Row total, CT = Column total, N = Grand total, Fe = Frequency Expected, The Degree of Freedom is given by (R-1) (C-1), and Level of significance is taken at 5%

Degree of Freedom (R-1) (C-1) = (5-1) (3-1) = 8 Chi-square for 8df at 0.05 level of significance (tabulated value- Refer to Appendix F) = 5.51

Calculation of all Required Frequency Expected

Fe; R1C1 = 75 x 24 180 = 10 Fe; R1C2 = 75 x 24 180 = 10 Fe; R1C3 = 30 x 24 180 = 4 Fe; R2C1 = 75 x 39 180 = 16.25 Fe; R2C2 = 75 x 39 180 = 16.25 Fe; R2C3 = 30 x 39

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180 = 6.5 Fe; R3C1 = 75 x 72 180 = 30 Fe; R3C2 = 75 x 72 180 = 30 Fe; R3C3 = 30 x 72 180 = 12 Fe; R4C1 = 75 x 33 180 = 13.75 Fe; R4C2 = 75 x 33 180 = 13.75 Fe; R4C3 = 30 x 33 180 = 5.5 Fe; R5C1 = 75 x 12 180 = 5 Fe; R5C2 = 75 x 12 180 = 5 Fe; R5C3 = 30 x 12 180 = 2

Table A5.2a: Table showing the calculation of all required frequency expected Fo Fe Fo – Fe (Fo – Fe)2 (Fo – Fe)2 / Fe 4 10 -6 36 3.6 18 10 8 64 6.4 2 4 -2 4 1 4 16.25 -12.25 150.06 9.24 23 16.25 6.75 45.56 2.80 12 6.5 5.5 30.25 4.65 44 30 11 121 4.03 21 30 -9 81 2.7 7 12 -5 25 2.08 23 13.75 9.25 85.56 6.22 7 13.75 -6.75 45.56 3.31 3 5.5 -2.5 6.25 1.14 0 5 -5 25 5 6 5 1 1 0.2 6 2 4 16 8 Total 60.38 Table A5.2b: Frequency deviation/ Chi-square computation Thus, resulting from the computation in the Table A5.2b above, the calculated value of Chi- square = 60.38.

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