Measuring the degree of virtualization - an empirical analysis in two Austrian industries

Abstract

Strategic management literature suggests that especially in young and dynamic industries virtual corporations are more likely to emerge, as this type of organization is flexible enough to deal with rapidly changing environments. This paper challenges the proposition that environmental uncertainty and technological change lead to organizational adaptation towards virtual structures. We analyzed companies of two Austrian industries, data processing and engineering, which are characterized by different rates of innovation and environmental uncertainty, and compare their strategic, structural, and process characteristics by measuring their degree of virtualization. Results indicate almost no difference in the degree of virtualization. From these findings, we draw implications for the theoretical concept of virtual corporations as well as for empirical research.

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