From the dawn of the information revolution, multinational companies such as the Big Six, have increasingly adopted the concept of virtuality in order to overcome geographic and other boundaries that previously limited entry into some markets. By virtualising, these companies are now able to cooperate spontaneously with partner companies in order to exploit temporary market opportunities. This report will look at how Coopers and Lybrand (CL) virtualised its operations and in doing so acquired a competitive advantage over its competitors. Moreover, the strengths, weaknesses and the future of PC in terms of virtualising operations will be explored.
Why Virtualise?.
In a market where the demand for one stop accounting and auditing services is growing rapidly and legal restraints create boundaries for multinationals to penetrate foreign markets, multinationals such as Coopers and Lybrand have to virtualise operations to gain a competitive advantage. In order to cater to those clients, whose activities were being conducted on an international scale, CL had to look for partners throughout the world who could provide these clients with accounting, consulting and auditing services. This is due to the fact that in many countries the law states that these services are to be provided by domestic companies and proves to be one of the driving factors for the move towards virtualisation.
The formation of virtual teams allowed CL to structure their network in a way that each participant is legally independent yet economically interdependent. This aspect of virtual work configurations also gives these participants freedom and flexibility to structure there activities as they pleased but at the same time carry out common business practices to ensure a competitive advantage for all by means of working together.
Virtual teams also allowed CL to have customer touch points globally and enable the cross boundary sharing of local knowledge.