Modular Organizations

Virtual Organizations

A modular organization possesses a structure in which core business activities are performed by the company and all noncore business activities are outsourced to other firms that specialize in those activities and provide stable relationships that result in combined competitive advantage. Advantages of using a modular organization structure include decreased financial costs associated with business operations and increased efficiency of task performance through strategic partnerships. Disadvantages of using a modular organization structure include loss of control of value$-$adding, noncore business activities and reduced competitive advantage if a shift occurs that requires the company to develop its own specific competencies in noncore business activities.

Select the best response to the following questions.

A company's $$ processes refer to the external collection of activities that transform inputs into outputs and create customer value.

Select the best response to the following questions.

An advantage of $a(n)$ organization is the flexibility to respond to emerging customer needs through network relationships.