virtual management of global marketing relationships

7/30/2019 Virtual Management of Global Marketing Relationships

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V ir tua l M anagem ent o f G loba lM ark eting R elationsh ipsC H E RI S P E I E R M I C H A E L G . H A R V E Y

J O N A T H A N P AL M ER

A mechanism for rapid ly deve loping presence in the g lobal ma rke tp lace i s through formin g rela tion-ships with oth er organizations in dif ferent countries. These joi nt ventu res or strategic all iances have anum ber o f benefi ts that accrue to the various partners in the re lationship. The dif f iculty is how to man-age these re lationships e ffectively across cultures and dif fering organizational~management philoso-phies . Wha t i s recomm ended i s the deve lopment o f a v ir tua l managemen t perspec t ive and f ive d i f feren ttypes o f v i r tua l re la tionships are examined .

INTRODUCTIONi n today 's hypercom pet i t ive , globalm a r k e t p l a c e , m a n y o r g a n i z a t io n s

a re fo rming marke t ing r e la t ionsh ips ino r d e r to c o m p e t e e f f e c t i v e l y . T h e s ere la t ionsh ips a r e conce ived as a m eansto i n c r e a s e b o t h t h e e f f i c i e n c y a n def fect iveness of those invo lved in thesem a r k e t i n g r e l a t i o n s h i p ( W i l l i a m s o n ,1 9 9 1 ; G u n d l a c h , A c h o o l , & M e n t z e r,1 9 9 5 ) . I n t e r - o r g a n i z a t i o n a l r e l a t i o n -Che r i Spe ie r , E l i B road G radua te S choo l o fManagement , M ich igan S ta te Un ive rs i ty , Eas tLans ing , M 148 824 . .M ichae l G . Harvey . Pu te rbaugh Cha i r o f Am er i -can Free Enterpr ise, Michael F . Pr ice Col lege ofBus iness , Un ive rs i t y o f Ok lahoma, Norman , O K73019 . .Jonathan Palmer , Rober t H. Smi th Col lege ofBus iness , Un ive rs i t y o f Mary land , Co l lege Park ,MD 20742 . < jpa lmer@rhsmi th .umd.edu>.

ships have beco me o ne of the most f re-q u e n t l y u s e d m e a n s o f e n t e r i n g o rexpanding in to the g loba l m arke tp lace.There are a nu mb er of reasons given forf o r m i n g t h e s e g l o b a l m a r k e t i n garrangements, such as:1 . gaining access to new markets ;2 . enhan cing market pos i t ion in exis t-

ing m arkets;3 . augm ent ing exis t ing product l ines

with re la t ionship par tner ' s prod-ucts;4 . enter ing new market segments /domains by a l lowing par tners toselect ively incorporate exis t ingproducts into their l ines;

5. accelerating the rate of interna-t ional expans ion ;

6. reduc ing cost/r isk of participatingin internat ional markets ; an d

Virtual Management of GlobalMarketing Re lationships 263


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. lowering costs to gain/maintaincompet i t ive advantage (Varadara-jan & Cunningham, 1995) .

O n e t y p e o f i n t e r o r g a n i z a t i o n a l r e l a -t i o n s h i p , t h e s t r a t e g i c a l l i a n c e , h a se n a b l e d m a n y g l o b a l o r g a n i z a t i o n s t oo b t a i n s i g n i f i c a n t a d v a n t a g e s . T h e r e -f o r e , i t i s a n t i c i p a t e d t h a t m a n a g i n gthese and o the r t ypes o f i n te ro rgan i za -t i o n a l r e l a t i o n s h i p s e f f e c t i v e l y w i l lbecome increas ingly integra l to manag-ing global m arket ing opera t ions .

The f i r s t sec t ion of the paper br ief lydesc r ibe v i r t ua l o rgan i za t i ons t ha t canbe used in a market ing context . The sec-ond sec t i on i l l us t r a t e s f i ve mode l s o fvi r tual organizat ions and the thi rd sec-t i o n d e v e l o p s a v i r t u a l m a n a g e m e n tp e r s p e c t i v e t h a t i s b e n e f i c i a l w h e na t tempt ing t o m anage g loba l marke t ingre l a t i onsh ips . T h e f i na l s ec t i on o f thepaper desc r ibes impl i ca t ions o f v i r tua lma nagem ent in global organizat ions

THE VIRTUA L ORGANIZATIONCONCEPT

A virtual organiza t ion is "a col lectionof bus iness un i t s in which pe op l e an dwork processes f rom the bus iness uni t sinteract in tens ively in order to per formw o r k w h i c h b e n e f i t s a l l " ( G o l d m a n ,N a g e l , & P r e i s s , 1 9 9 7 , p . 1 5 8 ).A l t h o u g h v i r t u a l o r g a n i z a t i o n s h a v eb e c o m e a r e l a t i v e l y w i d e s p r e a d b u s i -ness approach t o s t ruc tu r ing bus iness ,the under lying concepts o f linking com-petencies across bus iness uni ts or orga-n i za t i ons have ex i s t ed fo r some t ime .These bus iness l inkages enable organi -za t i ons t o more t i gh t l y coord ina t e t he264 J o u r n a l o f W o r l d B u s i n e s s / 3 3 ( 3 ) / 1 9 9 8

t r a n s a c t i o n s a n d a c t i v i t i e s a c r o s s avalue chain.

Vi r t ua l o rgan i za t ions enab l e o rgan i -za t iona l an d /or i nd iv idua l core com pe-t e n c i e s t o b e b r o u g h t t o g e t h e r w h e nn e e d e d a n d d i s b a n d e d w h e n n o l o n g e rr e q u i r e d . T h e s e n e w f i r m s m i r r o r t h ef lu id i t y o f t he g loba l marke t s , c r ea ti ngand disbanding resou rces as dic ta ted byt h e m a r k e t p l a c e . G l o b a l l o c a t i o n a l ,t echnical , workforce and market exper-t i s e a d v a n t a g e s c a n b e h e i g h t e n e dthrough the use of the vi r tual organiza-t i o n a l s t r u c t u r e ( D a v i d o w & M a l o n e ,1992).

T h e r a t i o n a l e f o r f o r m i n g a v i r t u a lo r g a n i z a t i o n v a r i e s f o r t h e d i f f e r e n ten t i t i e s i nvo lved i n each r e l a t i onsh ip .One p r imary r a t iona l e fo r c r ea t i ng v i r -t ua l o rgan i za t i ons has been t he ab i l i t yt o b r in g k e y p l a y e r s f r o m a v a r ie t y o forgan i za t i ons t oge the r i n o rde r t o pur -s u e a s p e c if i c g l o b a l m a r k e t o p p o r t u -n i t y . V i r t ua l o rgan i za t i ons a r e ab l e t og e n e r a t e n e w p r o d u c t s m o r e q u i c k l y ,d e c r e a s e t h e ri s k o f p u r s u i n g a n e woppor tun i t y , i nc rease " apparen t " o rga -n i z a t i o n a l s i z e , a n d d e c r e a s e c y c l et imes by re lying on the core competen-c ies of the mem bership. Character i s t icsof v i r t ua l o rgan i za t i ons a r e con t inu ingto evo lve . However , some cha rac t e r i s -t i c s t ha t have been i den t i f i ed i nc lude(Goldman et al . , 1997): a web of com panies each cont r ibut -ing resources vir tual ly vert ical ly integrated l inked throug h inter-enterprise busi-

ness and product ion sys tem s a imed a t reduced bus iness cycle

t ime a imed a t one-s top shopping.


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T h e s e c h a r a c t e r i s t i c s a r e c l o s e l ya l i g n e d w i t h a s s e s s i n g a l l m a r k e t i n gact ivit ies across the ent i re global valuecha in i n o rde r t o " v i r t ua l l y ve r t i ca l l yintegra te" across a "we b of comp anies . "I t would appea r t ha t c r ea t i ng a v i r t ua lo r g a n i z a t i o n t o g e n e r a t e a p r o d u c t o rservice m ore ef fec t ively can take one oft w o f o r m s : ( 1 ) r e m o v i n g i n e f f i c i e n tt r ansac ti on cos t s f rom the v a lue cha in ,such as reducing t ime to market ; and (2)adding value to exist ing act ivi t ies in thevalue chain enhancing the overa ll va lueof the product or service .

M any of t he phys i ca l ac t i v i t i e s t ha tex i s t i n a t r ad i t i ona l marke t i ng va luechain (e .g . , d i s t r ibut ion) wi l l a l so needto exis t in a vi r tual g lobal value chain.H o w e v e r , t h e f o c u s o n v i r t u a l g l o b a lm a r k e t i n g v a l u e c h a i n a c t i v i t i e s i sm u c h d i f f e r e n t t h a n i n a t r a d i t i o n a lp h y s i c a l v a l u e c h a i n ( s e e F i g u r e 1 ) .W h e n p e r f o r m i n g g l o b a l v a l u e c h a i na n a l y s i s a c r o s s v i r t u a l o r g a n i z a t i o n stha t a r e b r ing ing d i f f e r en t core com pe-tencies together , the focus should be onthe necessary shar ing and integra ting ofinformat ion and learning capabi l i ty . Asi l lustrated in Fig ure 1, these vir tual glo-b a l m a r k e t i n g v a l u e c h a i n a c t i v i t i e sinclude g athering, org anizing , selecting,synthesizing, and distr ibut ing the neces-sa ry i n format ion t h roughout t he mem-b e r s o f th e v i r t u a l g l o b a l m a r k e t i n gva lue cha in i n o rde r t o r educe t r ansac -t i on cos t s and i nc rease va lue (Raypor t& Sviokla, 1995).

VIRTUAL GLO BAL ORGANIZATIONALMODELSV i r t u a l g l o b a l m a r k e t i n g o r g a n i z a -

t i ons i nvo lve i n t e ro rgan i za t i ona l r e l a -

t ionships that exis t in a var ie ty of forms.T h e s e r e l a t i o n s h i p s c a n b e b a s e d o nex i s ti ng r e la t i onsh ips am ong f i rms andof ten ref lec t pr ior comp et i tive or coop-erat ive interact ions (Hil l , Hit t , & Hosk-i s s o n , 1 9 9 2 ) . I n a d d i t i o n to t h e s ein t e ro rgan i za t iona l ma rke t i ng r e l a t ion-s h i p s , f i r m s m u s t h a v e a n e c o n o m i ci n c e n t i v e f o r p a r t i c i p a t i o n . S t r a t e g i cneeds , des ir e fo r pe r fo rman ce enhance -ment s , o r an a t t empt t o fos t e r i nnova-t ion can drive these incentives.

F i v e i d e n t i f i a b l e m o d e l s o f v i rt u a lglobal market ing organizat ions begin toem erge f rom the exis t ing l i te ra ture ( seeFigure 2) . These models share commone l e m e n t s o f c o o r d i n a t i o n t h r o u g h t h euse o f IT and com mun ica ti on t echno lo-g i e s, a n d th e p e r f o r m a n c e o f w o r kacross time and space .M ODE L h S h a r e d P a r tn e r s h i p

T h e f i r s t m o d e l i s a s h a r e d g l o b a lpa r tne r sh ip w i th each pa r tne r b r i ng ingnea r ly equa l am ount s o f comm i tment t ot h e v i r t u a l o r g a n i z a t i o n . T h i s s h a r e dpar tne r sh ip r equ i r e s a compa t ib i l i t y o fp a r t n e r g o a l s a n d v a l u e s ( D e s s ,Rasheed , M cL aughl in , & P r i em, 1995)and evolves f rom exis t ing re la t ionshipsthat are s t rong between par tner ing orga-nizat ions. A specif ic shared global part-nership i s l ike ly to occur when severa lo rgan i za t i ons wi sh t o under t ake a g lo -bal market ing projec t , where the groupof o rgan i za t ions , i n aggrega t e , posses sthe necessary ski l ls and resources agreeto work together for e i ther the dura t iono f t h e p r o j e c t o r f o r s o m e e x t e n d e dp e r i o d . I n t h i s d e s i g n , o r g a n i z a t i o n sf o r m a l l i a n c e s o r c o n s o r t i a t o b r i n gc o m p l e m e n t a r y m a r k e t i n g e x p e r t i s et o g e t h e r i n m e e t i n g c o m p l e x g l o b a l

Virtual Management o f Global M arketing Relat ionships 265


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F i g u r e 1P h y s i c a l v s. V i r t u a l V a l u e C h a i n

P h y s i c a l ValueChainInbound ~Logistics Operations Logi~cs / Sales&Marketing S e r v i c e

VirtualValueChainGathering Organizing Selecting Synthesizing~ Di~fibufin8~

m a r k e t o p p o r t u n i t ie s . T h e i n t e r o r g a n i -z a t i o n a l r e l a t i o n s h i p s i n t h e v i r t u a lm o d e l c a n p r o v i d e a d d i t i o n a l v a l u e t op a r t i c i p a t i n g f i r m s . T h e y a l s o c r e a t es om e in te r depend enc ie s and p r ov ide anoppor tun i ty f o r coope r a t ion be tween them a r k e t i n g f u n c t i o n s i n t h e s e o r g a n i z a -t i on s . E c o n o m i c i n c e n t i v e s i n c l u d e t heo p p o r t u n i t y t o sh a r e c o s t s a n d r is k swh i le s ha r ing r e s ou r ce s l ike ly to gene r -a te va luable output . This model is of tenf ound in co - loca ted , s p in - o f f s i tua t ions ,where mult ip le f i rms share resources tod e v e l o p n e w p r o d u c t s o r p r o c e s s e s ,w o r k i n g i n c l o s e c o o r d i n a t i o n . T h ew o r k i s o f t e n h i g h l y s y n c h r o n i z e d i nthe de s ign and dev e lopm en t s tages. Th es h a r e d p a r t n e r s h i p m o d e l i s e v i d e n t i nthe coa le s c ing o f expe r t i s e and s ha r ingo f ri s k s a m o n g I B M , S u n , a n d H e w l e t tP a c k a r d o n t h e d e v e l o p m e n t o f th eI n te r ne t p r og r am m ing language J AVA .

M O D E L I h C o r e / S a t e l l it eThe s econd m od e l r e f le c t s a co r e g lo -

b a l o r g a n i z a t io n m a i n t a i n i n g r e l a ti o n -s h i p s w i t h s a t e l l i t e m a r k e t i n go r g a n i z a t i o n s . T h e c o r e g l o b a l o r g a n i -z a t i o n c a l l s o n a d v e r t i s i n g a g e n c i e s ,who lesa le r s , r e ta ile r s and the l ike , f roma v a r i e t y o f o r g a n i z a t i o n s t o r e s p o n dm o r e e f f e c t i v e l y to m a r k e t o p p o r t u n i -t i e s ( A n d e r s o n & N a r u s , 1 9 9 0 ; H a r r i -g a n , 1 9 8 8 ). I n m a n y c a s e s t h e s e a r eo r g a n i z a t i o n s b a s e d a r o u n d s i m i l a rindus t r ie s loca ted in d i f f e r en t coun t r i e se a c h p r o v i d i n g m a r k e t i n g c o m p e t e n c yor expe r t i se . I n th i s m ode l , a co r e f i r mpr ov ides the im pe tus to f o r m the g loba ln e t w o r k o f o r g a n i z a t i o n s ( S n o w ,M i le s , & Co lem an , 1992) and th is f i rmt y p i c a l l y d e f i n e s t h e w o r k s y n c h r o n i c -i t y, c a l l i n g o n s a t e l li t e f i r m m a r k e t i n gcapabi l i t ies as needed.

266 Journalof W orldBusiness 33(3) / 1998


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T h e s e o r g a n i z a t i o n s d o n o t n e e d t obe c o - loc a te d a nd f r e que n t ly a r e loc a te din d i f f e r e n t c oun t r i e s . The g loba l r e la -t i o n a l c u lt u r e c a n b e e i t h e r c o n v e r g e n tor d ivergent , bu t the core f i rm(s) p lay ad o m i n a n t r o l e i n e s t a b l i s h i n g t h e c u l -ture. Co re f i rms typica l ly take an ac t iver o l e i n c o o r d i n a t i n g a c t i v i t i e s , p r o v i d -i n g e c o n o m i c a d v a n t a g e s . E x a m p l e s o ft h is a re n u m e r o u s , i n c l u d i n g m o s ti n d u s tr i es w h e r e t h e c o r e c o m p a n y h a sl e v e r a g e a n d t r a n s f e r- p r i c i n g a n d r i s k /c os t s ha r ing be c om e ke y i s s ue s, inc lud -i n g g o v e r n m e n t a l d e f e n s e c o n t r a c t o rsa n d s o m e c o n s u l t a n c y c o m p a n i e s . A na l t e r n a t i v e c o r e / s a t e l l i t e m o d e l i s t h ep r o d u c t i o n a n d s a l e o f c o n s u m e r p r o d -u c ts t h r o u g h l o o s e l y c o u p l e d m a n u f a c -t u r e r s , d i s t r i b u t o r s , a n d r e t a i l e r s i nd i f f e r e n t c oun t r i e s . Fo r d a nd i t s g loba ls upp l ie r s ha ve f o r m e d th i s type o f v i r -t u a l r e l a t i o n s h i p , a s t h e y s h a r e n e wp r o d u c t d e v e l o p m e n t i de a s f o r n e w c a rd e v e l o p m e n t , a s w a s e v i d e n c e d i n t h ed e v e l o p m e n t o f th e " A s i a F o r d ." T h i sc o - de ve lo pm e n t r e duc e s c yc le tim e a ndl o w e r s d e v e l o p m e n t c os ts . A n o t h e re xa m ple o f th i s type o f v i r tua l r e la tion -s h ip i s u s e d by g loba l in f o r m a t ion o r ga -n i z a t i o n , R e u t e r s , w h i c h u t i l i z e s t h ism ode l in s o f twa r e de ve lopm e n t , b r ing -ing in s a te l l i t e pa r tne r s a s r e qu i r e d f o rs pe c i f i c p r o je c t s . Th i s p r ov ide s a "be s tb r e e d " a p p r o a c h t o p a r tn e r s a n d m a i n -t a in s R e u t e r s f i r m l y i n c o n t r o l o fpro jec t spec if ica t ions .M O D E L I II : V i r t ua l V a l ue C ha i n

T h e f i n a l t h r e e m o d e l s a r e b a s e d o nthe va lue o r g loba l s upp ly c ha in m ode l .Th e f i r s t o f the three is a coordin a ted se to f t r a n s a ct i o n s a m o n g c o m p a n i e s s e rv -ing a n e nd c us tom e r in a num be r o f di f -268 Journal of World Business / 33(3) / 1998

f e r e n t c o u n t r i e s w i t h i n f o r m a t i o nt e c h n o l o g y s u p p o r t i n g t h e d e v e l o p -m e n t o f the e nd p r oduc t o r s e r v ic e. Th i sm od e l i s u t i l i z e d on bo th a p r o je c t bas i s,a s i n l a r g e c o n s t r u c t i o n p r o j e c t s i nd e v e l o p i n g c o u n t r i e s , a n d o n a m o r ep e r m a n e n t b as i s, a s w i t h W a l M a r t a n din te rna t io na l suppl ie r s.

T h e w o r k i s s y n c h r o n i z e d a c r o s sa d j o i n i n g v i r t u al o r g a n i z a t i o n a l m e m -b e r f i rm s t o g e n e r a t e t h e e n d p r o d u c t .Es s e n t i a l ly , goods o r s e r v ic e s a r e s o lda t e a c h t ra ns a c t ion po in t in a num be r o fc o u n t r i e s . L o c a t i o n c a n be r e m o t ea c r oss m a n y m e m be r s o f the c ha in , bu to f te n thos e a d jo in ing f i r m s a r e c lo s e lyloc a te d e ve n w he n the s upp l ie r s ha ve toput in fac i l i t ies in a num ber o f d i f fe rentc o u n t r i e s . I n t h e c a s e o f i n t e r n a t i o n a lc o n s t r u c t i o n p r o j e c ts , t h e g e n e r a l c o n -t rac tor of ten dr ives cu l ture , and in man yc a s e s t h e u s e o f c o n t r a c t u a l r e q u i r e -m e n t s i s a s u r r o g a t e f o r e s t a b l i s h i n gi n t e r - f i rm c u l t u r a l r e l a t i o n s h i p s . R e l a -t i o n s h i p s h a v e o f t e n b e e n w e l l e s t ab -l ished , but on a pro jec t-by-p ro jec t bas is ,t h e v i rt u a l m o d e l p r o v i d e s a d d i t i o n a ls u p p o r t f o r t h e r e l a t i o n s h i p b e t w e e ns ubc on t r a c to r s f r om d i f f e r e n t c oun t r ie sw h o d o n o t h a v e a c o m m o n b o a r d o r aj o i n t w o r k i n g r e l a t io n s h i p . W h e n t h iso c c u r s, t h e r e l a t i o n s h i p i s c o o r d i n a t e db y t h e g e n e r a l c o n t r a c t o r w h o e s t a b -l i s he s the v i r tua l c u l tu r a l r e la t ions h ip .Pa r t i c ipa n t s a n t i c ipa te e c onom ic inc e n -t i ve s t h r o u g h i m p r o v e d c o o r d i n a t io n , as m o o t h i n g o f d e m a n d , a n d o p p o r t u n i -t i e s t o i n c r e a s e g l o b a l m a r k e t a c c e s s .B e n e t t o n , t h e F r e n c h s p o r t s w e a r m a r -k e t e r , u t i l i z e s a g l o b a l v i r t u a l v a l u ec h a i n i n c o o r d i n a t i n g t h e p r o d u c t i o na n d s h i p m e n t s o f g a r m e n t s a n d m a t e r i-a l s o f i t s v i r tua l g loba l p r oduc t ion a nd


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c ha nn e l o f d i s t r ibu t ion s ys tem . T he v i r -tua l va lue c ha in pa s s e s th r ough a num -b e r o f s u p p l i e r s g e n e r a t i n g t e x t i l e s ,d e s i g n i n g a n d m a n u f a c t u r i n g c l o t h i n g ,a n d p r o v i d i n g d i s t r i b u t i o n s e r v i c e s t ore ta i l ing es tab l ishments .M O D E L I V : I n t e g r a t e d F i r m

T h e f o u r t h m o d e l t a k e s a m o r e i n t e -g r a te d v ie w o f the g loba l s upp ly c ha in .T h i s v e r t i c a l i n t e g r a t i o n r e s u l t s i na u t o n o m o u s u n i t s u t il i z i n g t e c h n o l o g yto c oo r d ina te e f f o r t s be twe e n f unc t ionsand countr ies a t the same t ime . A groupo f c o m p a n i e s c o n d u c t r e l a t e d b us i-ne s s e s a s pa r t s o f a ve r t i c a l s e t o f p r o -c e s s e s t o p r o d u c e a g o o d o r s e r v i c e .T h i s c o n c e p t i n c o r p o r a te s a c o n t i n u i n gs e t o f g l o b a l s t r a te g i c m a r k e t i n g r e l a -t i o n s h i p s ( A n d e r s o n , H a k a s s o n , &Johnso n, 1994).

In th is type o f g loba l v i r tua l re la t ion-s h ip , the c om pa n ie s a g r e e to f unc t ion a sa s i n g l e v e r t i c a l l y i n t e g r a t e d f i r mt h r o u g h o u t t h e w o r l d . T h i s n e t w o r k o fc o m p a n i e s i s f r e q u e n t l y l o c a t e d i n d i f -f e r e n t c o u n t r i e s p a r t i c i p a t i n g a c r o s s am a r ke t ing va lue c ha in to d e l ive r a p r od -uc t o r s e r v ic e to a n u l t im a te c ons um e r ,g e n e r a t i n g a v i r t u a l v a l u e c h a i n ( B e n -j a m i n & W i g a n d , 1 9 9 5 ) . T h e c o n t a c tbe twe e n c om pa n ie s a c r os s the s pe c i f i cprodu c t ion ac t iv i t ies is more fu l ly coor -d i n a t e d t h a n i n t h e p r i o r m o d e l s . C u l -t u re a n d w o r k s y n c h r o n i c i t y ar e m o r ei m p o r t a n t d i m e n s i o n s , a n d i n m a n yc a s es , o n e o f th e r e l a t i o n s h i p m e m b e ro p e r a t i o n s p r o v i d e s a u n i q u e g e o -g r a p h i c l o c a t i o n f o r t h e n e e d s o f t h ei n t e g r a t e d v a l u e c h a i n ( e .g . , s u p p l i e r sl o c a t i n g i n t h e s a m e c o u n t r i e s a s m a r -k e t i n g m e m b e r s o f th e v a l u e c h a i n ).Ex i s t ing m a r ke t ing r e la t ions h ips a m ong

t h e o r g a n i z a t i o n s f o l l o w i n g t h i s m o d e la re t y p i c a l l y w e l l d e v e l o p e d , w h i c hl e a d s p a r t i c ip a n t s t o i d e n t i f y t h e v a l u eo f im pr ove d c oo r d ina t ion , inc lud ing thee c o n o m i c l e v e r a g e o f e c o n o m i e s o fs c a le a nd m a r k e t a c c e s s to a num be r o ff o r e ign m a r ke ts . Th i s m ode l m igh t a l s obe e x te nde d to inc lude va lue c ons te l l a -t ions (Nor m a nn & Ra m ir e z , 1993) wi thf i rm s s u p p l y i n g e a c h o f t h e c o m p a n i e sin the va lue c ha in . M a n y o f the Kor e a nc h a e b o l a re e x a m p l e s o f t h i s g l o b a lm o d e l o f v i r tu a l o r g a n i z a t i o n s . T h i sm o d e l i s u t i l i z e d b y K o n e E l e v a t o r s , aF i n n i s h e l e v a t o r m a n u f a c t u r e r, t o i n t e-g r a te t h e w o r k o f i t s a f f i l i a t e d c o m p a -n i e s t h r o u g h o u t t h e w o r l d . T h i sp r ov ide s s ha r ing o f m a r ke t in f o r m a t ion ,de s ign s pe c i f i c a t ions , a nd c oo r d ina t iono f m a nuf a c tu r ing to m a in ta in a c om pe t -i t ive a dva n ta ge a t bo th loc a l m a r ke t a ndgloba l sys tem leve ls .M O D E L V : E l e c t r o n i c M a r k e t

T h e f i n a l g l o b a l v i r t u a l m a r k e t i n gr e la t iona l m o de l i s tha t o f a n e le c t r on icm a r ke t , w i th the t e c h no lo gy i t s e l f s e rv -i n g a s a k e y c o m p o n e n t i n c re a t i n g th em a r k e t a m o n g t h e v i r t u al g l o b a l m a r -ke t ing o r g a n iz a t iona l pa r tne r s . I nd iv id -u a l f ir m s o p e r a t e w i t h i n t h e e l e c t r o n i cm a r ke t u s ing the t e c hn o logy a s a n in te r -m e d ia r y to in te r a c t wi th e nd c us tom e r s .The e s ta b l i s hm e n t o f a n e le c t r on ic m a r -ke t ( Ba kos , 1991) a l lows f i r m s to c om -p e t e i n g l o b a l m a r k e t s w h i l e a l l o w i n gc u s t o m e r s t o s e l e c t f r o m a v a r i e t y o fpo te n t i a l p r ov ide r s . I n s om e c a s e s , thee l e c t r o n i c m a r k e t i s o p e n a n d o t h e rm a r k e t i n g r e l a t i o n s h i p m e m b e r s s e rv ea s i n t e r m e d i a r i e s . A n e x a m p l e o f anope n m a r ke t is the wine m a r ke t a nd d ig -i t a l n e w s p a p e r s o n t h e W o r l d W i d e

Virtual Management of Glob al Mark eting Relationships 26 9


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W e b , w i t h m u l t i p l e v e n d o r s c o m p e t i n gf o r wor ldw ide bus ine s s.

Ex is t ing r e la t ions h ips be tween coun-t r ies a re less typ ica l in th is model . Par -t i c ip a n t s h a v e e c o n o m i c i n c e n t i v e s o fi n c r e a s e d f o r e i g n m a r k e t a c c es s a n dpo ten t i a l f o r com pe l l ing cos t s av ings ininven to r y , phys ica l loca t ion , and d i s t ri -b u t i o n c o s t s . E x a m p l e s i n c l u d e a m a -z o n . c o m c o n n e c t i n g w i t h b o o k d e a l e r sa n d e n d c u s t o m e r s w o r l d w i d e , o r v i r -t u a l b a n k i n g e s t a b l i sh m e n t s c o o r d i n a t -ing the l end ing f unc t ions and e lec t r on icpaym en ts am ong on - l ine r e ta i l e r s , pay -m en t au tho r ize r s and the end cons um erin a num ber o f coun t ri e s . I n add i t ion tob o o k s t o r e s s u c h a s A m a z o n a n d b a n k s ,e l e c t r o n i c m a r k e t s h a v e e s t a b l i s h e dwor ldw ide capab i l i t ie s f o r auc t ion ing o fgoods a s d ive r s e a s f u r n i tu r e and com -pu te rs to h ig h end an t iques and pe r s ona lserv ices (e .g ., EBA Y on- l ine auc t ion) .

VIRTUAL MANAGEMENT OF G LOBALRELATIONSHIPS

M ar ke t ing r e la tions h ips and the m an-agem en t o f r e la t ions h ips can be cha r ac -t e r i z e d a s " v i r t u a l " a s a s i g n i f i c a n ta m o u n t o f a c t i v i t y b e tw e e n r e l at i o n -s h ip pa r tne r s occu r s ou t s ide the i r o r ga -n i z a t i o n a l d o m a i n s a n d t h e r e f o r e ,o c c u r s i n n o n f a c e - t o - f a c e c o n t e x t s .G i v e n t h e d i f f i c u l t y o f m a n a g i n g t h ee n t i r e d o m a i n o f p o t e n t i a l g l o b a l m a r -k e t i n g r e l a t i o n s h i p s i n t h i s v i r t u a lm o d e , a ba s ic p h i l o s o p h y o f g lo b a li n t e ro r g a n i za t i o n a l m a n a g e m e n t s h o u l db e d e v e l o p e d . T h i s m a n a g e m e n t o r ie n -ta t ion , m or e than l ike ly , wi l l have to gob e y o n d t h e c o m m a n d a n d c o n t r o lm o d e l t h a t is f r e q u e n t l y u s e d w i t h i n270 Journal of World Business / 33(3) / 1998

or gan iza t ions and f ocus on coope r a t ionas the bas is for the in te rac t ion .

T h e c o o r d i n a ti o n a m o n g m a r k e t in gp a r t n e r s i n a v i r t u a l r e l a t i o n s h i pbecom es a c r i ti c a l d im ens ion in ach iev -i n g t h e d e s i r e d r e s u l t s o f i n c r e a s e dva lue - added to the g loba l r e la t iona l ne t -w o r k ( V e n k a t r a m a n , 1 9 9 5 ) . M o r e v i r -t u a l r e l a t i o n s h i p s m u s t d e v e l o p am e c h a n i s m f o r s t r u c t u r i n g a n d c o o r d i -n a t in g w o r k / e m p l o y e e s w h i l e a t t hes a m e t i m e b e i n g e x c e p t i o n a l l y fl e x i b lea n d o p e n t o c h a n g e w h i l e a l l e v i a t i n gm a n a g e r s a n d e m p l o y e e s a n x i e t y t h a tr e s u l t s f r o m l a c k o f f o r m a l s t r u c t u r e( A l l c o r n & D i a m o n d , 1 9 9 7; A l l c o r n ,1997) . These v ir tua l re la t ionships /orga-n i z a t i o n s w i l l d e v e l o p a c u lt u r e a n di d e n t i t y o f t h e ir o w n a p a r t a n d d i s t i n c tf r o m t h a t o f t h e t w o p a r e n t o r g a n i z a -t ions (Al lcom , 1997) . W ha t i s needed i sa d e c i s i o n p r o c e s s t h a t c a n b e u s e d t od e t e r m i n e t h e v i r t u a l m a n a g e m e n trequirements assoc ia ted with the d if fe r -en t v i r tua l m ode l s . I n o r de r to m anagethes e g loba l o r gan iza t ions v i r tua l ly , ana s s e s s m e n t o f t h e " d e g r e e o f v i r t u a l -ne s s " be tw een g loba l pa r tne rs i s nece s -sary.

The e s tab l i s hm en t o f v i r tua l m anage -m e n t h a s b e e n c h a r a c t e r i z e d a s e f f e c -t i v e ly c o a l e s c i n g k e y " p l a y e r s " f r o min tem a l and ex tem a l s ou r ce s and f rom ava r ie ty o f o r gan iza t ions to cap i t a li z e ona m ar ke t oppor tun i ty ( Dav idow & M al -one , 1993). The app r op r ia te in f r a s tr uc -t u re f o r v i r t u a ll y m a n a g i n g m a r k e t in gr e l a t i o n s h i p s w i l l b e d e p e n d e n t o n t h egeogr aph ica l d i s t ance , wor k - cy c le s yn -c h r o n i c i t y , a n d c u l t u r a l d i f f e r e n c e sb e t w e e n r e l a t i o n a l p ar t n e rs ( G r a y &I gba r ia , 1996 ; Pa lm er & Spe ie r , f o r th -c o m i n g ) . F r e q u e n t c o n t a c t a n d " h a n d -


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holding " can o ccur in re la t ionships withlow geographic dis tance faci l i ta t ing r ichre la tionships . These market ing re la t ion-sh ips can be m anaged d i f f e r en t ly fromthose w here high r ichness is des i red yetp a r t n e r s a r e g e o g r a p h i c a l l y d i s p a ra t e( G r a y & I g b a r i a , 1 9 9 6 ). S i m i l a r l y , ah igh degree o f work cy c le synchron ic -i ty i m p l i e s h i g h i n t e r d e p e n d e n c e a n dl o w a m b i g u i t y re g a r d i n g w o r k a c t i v i-t i e s . I n c o n t r a s t , l o w s y n c h r o n i c i t yinvolves inc r eased amb igu i ty re su l t ingi n a d d i t io n a l t im e a n d c o m m u n i c a t i o nb e t w e e n p a r t n e r s ( B a r r y & B a t e m a n ,1992). F in al ly , the cul tura l dime nsion sa s s e s s t h e d e g r e e t o w h i c h r e l a t i o n a lp a r t n e r s s h a r e v a l u e s a n d b e l i e f s(Schein, 1990). The greater the culturalconvergen ce, the eas ier i t is to d eveloptrus t , mutual unders tanding, and fos tera r ich relationship .

Seven s teps addres s ing v i r tua l man-agement o f g loba l marke t ing r e la t ion-ships are presented in this section. Ea chof the steps w ill be disc ussed separatelyto h igh l ig h t the i r impor tance in deve l -o p i n g a v i r t u a l m a n a g e m e n t p h i lo s o -phy to global m arket ing re la t ionships.STEP ONE : D e v e l o p m e n t o f R e la -t i o n a l C h a r a c t e r i s t i c s /C r i t e r i a

The f i r s t s tep in deve lop ing a g loba lv i r tu a l m a n a g e m e n t o r i e n ta t io n i s toi d e n t i f y t h e c h a r a c t e r i s t i c s o f t h edom ain(s) of the potential relationships.As the d om ain ( i .e . , in ternal , organiza-t ion- to -organ iza t ion , o rgan iza t ion- to -individua l) chang es the degree o f vir tu-a lness between par tners a lso can chan gebased upon the geographica l d i s tance ,work-cyc le synchron ic i ty , and cu l tu r ebe tween the foca l o rgan iza t ion and ther e l a t io n a l p a r t n e r ( P a l m e r & S p e i e r,

for thcomin g) . I f re la t ional par tners arew o r k i n g i n t h e s a m e l o c a t i o n , a t t h es a m e t im e , a n d h a v e c o n v e r g e n t c u l -tu re , the ma nage me nt sys tem does no th a v e to b e m o d i f i e d to a c c o m m o d a t et h e v i r t u a l n a t u r e o f t h e r e l a t i o n s h i p( G r a y & I g b a r i a , 1 9 9 6 ). W h e r e a s t h eneed for a sophis t ica ted vir tual manag e-ment ph i losophy i s im pera t ive when there la t ionship par tners w ork in geographi-c a l l y d i s p a r a t e l o c a t i o n s , a t d i f f e r e n tt imes , and have diss im ilar cul tures . Themore diss im ilar the context of the re la-t ionsh ip the more v i r tua l the manage-m e n t s y s t e m m u s t b e c o m e toaccomm odate the com plexi t ies of thesediverse market ing re la t ionships . As thedom ain of the r e la t ionsh ip changes thed e g r e e o f v i r t u a l n e s s o f t h e m a n a g e -m e n t w i l l a l s o h a v e t o b e m o d i f i e d .E a c h d o m a i n a n d d i m e n s i o n o f th edomain impac t s the degree o f v i r tua l -n e s s o f t h e m a n a g e m e n t p h i l o s o p h y( K r a u t , E g i d o & G a l e g h e r , 1 9 9 0 ;Schein, 1990; Bar ry & B ateman, 1990).S T E P T W O : I d e n t i f i c a t i o n o f A l t e r n a -t iv e R e l a t i o n a l P a r t n e r s

W h i l e th e d o m a i n o f r e la t i o n s h i p sm ay be broad, organizat ions ma y s t ra te-g i c a l l y d e c i d e t o f o c u s o n o n e s e t o fmarket ing re la t ional oppor tuni t ies overo t h e r s . F o r e x a m p l e , d e v e l o p i n g a norgan iza t ion- to -organ iza t ion r e la t ion-sh ip may be deem ed mos t impor tan t toga in a g loba l compe t i t ive advantage inthe market place. Therefore, rather thanexam in ing a l l po ten t ia l r e la t iona l pa r t-ners in the ful l dom ain of re la t ionships ,one dom ain may be assessed to ident i fykey m arketing partners. In this pha se ofg l o b a l v i r t u a l m a n a g e m e n t , o n e m u s tident i fy the s ignif icant character is t ics of

Virtual M anagement o f Global M arketing R elationships 271


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potent ial relat ional partners. These vari-a b l e s w i l l v a r y b y t h e d o m a i n o f t h erelat ionship a nd the refore a set of selec-t ion cr i ter ia needs to be es tabl i shed foreach potent ial relat ional configurat ion.

The cr i ter ia to se lect g lobal re la t ion-sh ip pa r tne r s r e f lec t t he dom ain o f there l a t i onsh ip . F or example , when fo rm-i n g o r g a n i z a t i o n - t o - o r g a n i z a ti o n r e la -t i o n s h i p s , a t h r e e s t e p a s s e s s m e n t o fm a c r o - e n v i r o n m e n t , i n d u s t r y le v e lana lys i s, and com pany l eve l cha rac te r -ist ics consistent with competi t ive analy-s i s (Por ter , 1980; 1990) might be mostappropriate (see Figure 3) . The analysism ay s tar t a t any level, but a l l three lev-e l s should be considered. Fur thermore ,

the depth o f analys i s a t each of the threelevels m ay vary acco rding to the impor-t ance o f t ha t l eve l t o t he r e l a t i onsh ip ,t h e d i f f i c u l t y i n o b t a i n i n g a c c u r a t ein format ion , and t he pe rce ived magni -t u d e o f im p o r t a n c e o f th e r e l a t io n a ldecis ion re la t ive to the focal organiza-t ion (Ring & Van de Ven, 1994). Uti l iz-ing this process, the unique at t r ibutes ofthe potent ia l re la t ional par tners can beasses sed and t he d i s t inc t i ve com pe ten-cies of the resul ting re la t ionship can bedetermined (Parkhe, 1993) . The combi-n a t i o n o f c h a r a c t e r i s t i c s f o u n d i n t h er e l a t i o n s h i p d e t e r m i n e s h o w t h e r e l a -t i o n s h i p c a n s t r a t e g i c a l l y o u t p e r f o r mcompet i tors (Vasconcel los e Sa , 1988)

F i g u r e 3I n t e r a c ti v e A s s e s s m e n t P r o c e s s i n S e l e c ti n g R e l a t i o n a l P a r t n e r s

~ ~ M A C R O . ~ ~/ Er4VtP.Or,~MENTAL \t A S S E S S M E N T : }\ (Comparative dvantage / ~ , , .

R E L A TI O N AL / ' E N V I R O N M E N T A L \PARTNER(S) ( AS SES SM EN T:

272 Jo u rn a l o f Wo r ld B u s in e s s / 3 3 (3 ) / 1 9 9 8


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a n d fa c i l i t a t e s t h e d e t e r m i n a t i o n o f ag l o b a l v ir t u al m a n a g e m e n t s t ra t e g y .

S T E P T H R E E : C o m p a r a t i v e A s s e s s -m e n t o f R e l a ti o n a l P a r t n e r sT h i s s t a g e o f g l o b a l v i r tu a l m a n a g e -

m e n t d e v e l o p m e n t f o c u s e s o n t he d i re c tc o m p a r i s o n b e t w e e n p o t e n t i a l m a r k e t -i n g r e l a t i o n s h i p p a r t n e r s o n t h e c r i t e r i ae s t a b l i s h e d i n t h e p r e c e d i n g s t e p . T h eg o a l o f t h i s s t a g e i s t o d e v e l o p a d i s -c r i m i n a t e a n a l y s i s a m o n g t h e p o t e n t i a lr e l a t i o n s h i p p a r t n e r s a n d t o d e t e r m i n ew h e n t h e r e i s a s i g n i f i c a n t d i f f e r e n c eb e t w e e n p o t e n t i a l p a r t n e r s . T h e r e s u l to f t h i s a n a l y s i s m a y b e a r a n k i n g o f t h ep o t e n t i a l c a n d i d a t e s o r a c l a s s i f i c a ti o ns y s t e m t h a t i d e n t i f i e s h i g h l y a t t r a c t i v et o u n a c c e p t a b l e c a n d i d a t e s . I n t h i s s t e p ,t h e d e g r e e o f v i r t u a l n e s s ( l o c a t i o n ,w o r k - c y c l e s y n c h r o n i c i t y , a n d cu l t u re )s h o u l d b e d e t e r m i n e d t o e s t a b l i s h t h em a n a g e m e n t p h i l o s o p h y m o s t a p p r o p r i -a t e f o r th e g l o b a l v i r t u a l m o d e l i n p l a c e .T h e l i n k a g e b e t w e e n t h e v i r t u a l p a r t -n e r s c a n a l s o b e a n a l y z e d t o a s c e r t a i nt h e n e c e s s a r y a c t iv i t ie s f o r m a i n t a i n i n gt h e m a r k e t i n g r e l a t i o n s h i p o v e r t im ea n d th e d e g r e e o f r e l a t i o n a l r i c h n e s sm a y b e c o m e a c r it ic a l d i m e n s i o n i n th eu l t i m a t e s e l e c t io n o f r e l a t io n a l p a r t n e r s .

t i o n s h i p . Mo s t f r e q u e n t l y , r e l a t i o n s h i p sa r e p r o a c t i v e , o f f e n s i v e s t r a t e g i e s ( e . g . ,i n c r e a s i n g e c o n o m i e s o f s c a l e , i n c r e a s -i n g p o w e r r e l a t i v e t o a c o m p e t i t o r ,e x p a n d i n g d i s t r i b u t i o n ) t o i m p r o v ec o m p e t i t i v e p o s i t i o n i n t h e m a r k e t p l a c e .F o l l o w i n g t h is o r i e n t a ti o n , t h e f o c a lo r g a n i z a t i o n i m p l e m e n t s a r e l a ti o n a ls t r a t e g y t o i m p r o v e e f f e c t i v e n e s s a n de f f i c i e n c y i n t h e i r o p e r a ti o n s m a i n t a i n -i n g a r e l a t i v e a d v a n t a g e o v e r c o m p e t i -t ive r iva l s .

W h i l e o f f e n s i v e m o t i v a t i o n s f o rf o r m i n g r e l a t i o n s h i p s d o m i n a t e th er a t i o n a l e f o r e n t e r i n g r e l a t i o n s h i p s ,t h e r e a r e a n u m b e r o f d e f e n s i v e o r r e a c -t i v e r e a s o n s t o f o r m a r e l a t i o n s h i p . T h ep r i m a r y d e f e n s i v e m o t i v a t i o n i s toa f f e c t a s t r o n g e r c o m p e t i t o r ' s m a r k e tp o s i t i o n o r c o m p e t i t i v e a d v a n t a g e .E x a m p l e s o f d e f e n s i v e s t r a t e g i e si n c l u d e: ( 1 ) r e d u c i n g t h e p o w e r o f o n em e m b e r o f a c h a n n e l - o f - d is t r ib u t i o n b yf o r m i n g a c o a l i t i o n ; ( 2 ) e n t e r i n g a m a r -k e t t h r o u g h a r e l a t i o n s h i p t o t e s t n e wp r o d u c t s t o a v o i d a n e g a t i v e i m p a c t o np r i m a r y m a r k e t s ; a n d ( 3 ) r e d u c i n g g o v -e r n m e n t i n f l u e n c e o n n e w p r o d u c t t e s t -i n g a n d i n t r o d u c t i o n . O v e r a l l , t hed e f e n s i v e m o t i v a ti o n f o r f o r m i n g r e l a-t i o n s h i p s r e c o g n i z e s t h e d i f f i c u l t y o fm e e t i n g t h e b u s i n e s s c h a l l e n g e s i nh y p e r - c o m p e t i t i o n m a r k e t s .

S T E P F O U R : I n i t i a t in g R e l a t i o n s h i pS t r a t e g i e sT h e p r i m a r y o b j e c t i v e o f t h is v i r tu a l

m a n a g e m e n t s t a g e is t o i d e n t i f y t hem o t i v a t i o n f o r f o r m i n g t h e r e l a t i o n s h i p .T h e r e a r e a n u m b e r o f r e a s o n s t h a tc o u l d p r o v i d e t h e i m p e t u s f o r e s t a b l i s h -i n g a l o n g - t e r m g l o b a l m a r k e t i n g r e l a -

S T E P F I V E : M a n a g i n g R e l a t i o n s h i p sO v e r T i m eT h e v i r t u al m a n a g e m e n t o f re l a ti o n -

s h i p s m u s t t a k e i n t o a c c o u n t t h e o r i g i -n a l a s s e s s m e n t o f t h e g l o b a l m a r k e t i n gr e l a t i o n s h i p a n d h o w t h a t r e l a t i o n s h i pm a y c h a n g e o v e r t im e . T h e i n i t i a la s s e s s m e n t o f w h a t w a s n e e d e d t o h a v e

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a s u c c e s s fu l m a r k e t i n g r e l a t i o n s h i pmigh t have been assessed incor rect ly orpe r spec t ives on the goa l s o f the r e la -t i o n s h i p h a v e c h a n g e d o v e r t i m e .D e v e l o p i n g a m a n a g e m e n t a u d it in gp r o c es s c o u l d e n a b l e a s s e s s m e n t o fre la t ionship changes over t ime.

T h e r e l a t i o n s h i p a u d i t i n g p r o c e s sshould inclu de the fol low ing steps : (1)assessing the init ial goal o f the relation-sh ip and the com mitments made dur ingt h e f o r m a t i o n o f t h e r e l a t io n s h i p ; ( 2 )ana lyz ing change in the ex te rna l env i -r o n m e n t t h a t c o u l d i m p a c t t h e v a l u e /b e n e f i t o f t h e r e l a t i o n s h i p ( H a m e l &Pralahad, 1994); (3) evalu ating the con-f i g u r a l a d v a n t a g e o f t h e r e l a t i o n s h i pre la t ive to future com pet i t ive pos i t ion-ing and m arke t oppor tun i ti e s (Douglas& Craig, 1991, 1996) ; (4) determiningthe exp l ic i t cos t o f m ainta ining the re la-t ionship; and (5) determ ining an appro-priate set of exiting strategies. Th e aud itprocess shou ld be per iodic , sys temat ic ,a n d i n d e p e n d e n t l y u n d e r t a k e n t o p r o -v i d e o b j e c t i v e d a t a o n t h e p r e s e n t"value" of the re la t ionship.

S T E P S i x : R esp o n se to R ea ct io n f ro mP o ten t ia l R e la t io n a l P a rtn ers a n dC o m p e t i t o r s

Exis t ing m arket ing re la t ionships cre-ate potential opportunity cost associatedwith the dev elopm ent of future re la t ion-ships . By vir tue of ha ving exis t ing glo-b a l m a r k e t i n g r e l a ti o n s h i p s , p o t e n t i alo t h e r m a r k e t i n g p a r t n e r s m a y b e p r e-c luded f rom en te r ing in to r e la t ionsh ipswith the focal organizat ion. Therefore ,a s s e s s i n g p o t e n t i a l r e l a t i o n s h i p c o n -s t ra ints should be under taken to deter -mine the sus ta inab le compe t i t ive va lue2 7 4 J o u r n a l o f W o r l d B u s i n e s s / 3 3 ( 3 ) / 1 99 8

to ex is t ing re la tionship re la t ive to otherconf igura t ions tha t cou ld be fo rmed int h e m a r k e t p l a c e . S i m i l a r l y , co m p e t i -tors ' reactions to the form ation of a rela-t i o n s h i p s h o u l d b e m o n i t o r e d todetermine the ir s t ra tegic react ion (Day,1990, 1994).STEP SEVEN: Ex it S trateg ies fro mR ela t io n sh ip s

T h e r e m a y b e a n u m b e r o f re a s o n sfor t e rmina t ing a r e la t ionsh ip : ( 1 ) ther e l a t i o n s h i p d i d n o t r e a c h p r e d e t e r -m i n e d g o a l s . . . w a s n o t s u c ce s s fu l ; ( 2)growing d i f f e rences be tween r e lat iona lp a r t n e r s . . . c h a n g i n g g o a l s ; ( 3 ) b r e a c hof exp l ic i t and /or im pl ic i t r e la t ionsh ipa g r e e m e n t . . . r e l a t i o n a l i n c o m p a t i b i li -t i e s ; ( 4 ) c h a n g e s i n t h e m a r k e t p l a c e(consumer /compet i tor ) tha t makes for -m a t i o n o f a n o t h e r r e l a t i o n s h i p m o r ea t t r a c t i v e . . . h e i g h t e n e d o p p o r t u n i t yc o s t ; ( 5 ) i n t e r n a l p r o b l e m s i n f o c a lorganization that necessitate dissolutiono f r e l a t i o n s h i p . . . c h a n g e i n s t ra te g y,own er sh ip , o r f inan c ia l p rob lem s ; and(6) the or iginal goal( s ) of the par tner -s h ip h a v e b e en m e t . . . s u c c e s s f u l c o m -ple t ion of the intent of the re la t ionship.The mot iva t ion to ex i t the r e la t ionsh ipm a y a l so b e b a s e d o n t h e i n a b i l i t y t om a n a g e t he m a r k e t i n g r e l a t io n s h i pef fect ively and m ay be the sole impetusfor l eav ing r e la t ionsh ips (Holm, Er iks -son, & Johanson, 1997).

T h e r e a r e a n u m b e r o f t e r m i n a t i o ns t r a t e g i e s t h a t n e e d t o b e e v a l u a t e dw h e n e x i t i n g a re l a t i o n s h i p . S e v e r a la l t e rna t ive s tr a teg ies hav e a p roac t iveexi t or ienta t ion, such as terminat ion byacquis i t ion , subs t i tu t ion of new mem-ber (s) , and se l l ing the intan gible r ightso f t h e r e l a t i o n s h i p t o a t h i r d p a r t y .


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H o w e v e r , m a n y t e r m i n a t i n g r e l a t i o n -s h i p s o c c u r i n a n e g a t i v e c o n t e x t . T h eu n p l a n n e d , u n f r i e n d l y d i s s o l u t io n o f am a r k e t i n g r e l a t i o n s h i p c a n h a v e a s i g -n i f i c a n t i m p a c t o n b u s i n e s s e x c h a n g e .Mu t u a l l y d e r i v e d b e n e f i t s f o r p a r t n e r i n go r g a n i z a t i o n s c a n b e d i s r u p t e d d u e t ou n c e r t a i n t y a s s o c i a t e d w i t h t h e d i s s o l u -t i o n o f t h e r e la t i o n s h i p . T r u s t r e l a t iv e t ot h e a b i l i t y t o p e r f o r m a f t e r t h e t e r m i n a -t i o n o f t h e r e la t i o n s h i p b e c o m e s a s i g -n i f i c a n t i s s u e f o r b o t h r e l a t i o n s h i pp a r t n e r s t o a d d r e s s ( B a r n e y & H a n s e n ,1994 ; F lo r in , 1997) .

SUMMARY/CONCLUSIONSA s s e s s i n g a n d i m p l e m e n t i n g v i rt u a l

o r g a n i z a t i o n a l m o d e l s a n d v i r tu a l m a n -a g e m e n t p r o v i d e s a n o r g a n i z a t i o n at e m p l a t e f o r in c r e a s i n g t h e c o n t r o l a n dv i a b i l i ty o f i ts g l o b a l o p e r a t i o n s . E a c hv i r t u a l m o d e l i s l i k e l y t o re q u i r e g r e a t e re m p h a s i s t o c e r t a i n f a c e t s o f t h e v i r t u a lm a n a g e m e n t p r o c e s s a n d l e s s e m p h a s i so n o t h e r s . T h i s e m p h a s i s w i l l b e r e l a t e dt o t h e d e g r e e t o w h i c h e x i s t i n g r e l a t i o n -s h i p s e x i s t a n d t h e p o w e r d i s t r i b u t i o n( e .g . , s h a r e d p a r t n e r s h ip v s . c o r e / s a t e l -l i t e ) b e t w e e n o r g a n i z a t i o n a l p a r t n e r s .

R e l a t i o n s h i p s n e c e s s i t a t e a n i n t e r-o r g a n i z a t i o n a l m a n a g e m e n t p e r s p e c -t i v e a n d o n e t h a t i s c a p a b l e o f d e l i n e a t -i n g t h e d i f fe r e n c e s b e t w e e n t h e v a r i o u st y p e s o f g l o b a l r e l a t i o n s h i p s . B y r e c o g -n i z i n g t h a t t h e r e a r e d i f f e r i n g t y p e s o fr e l at i o n sh i p s a n d t h a t t h e m a n a g e m e n to f t h e s e r e l a t i o n s h i p s n e e d s to b ea d j u s te d o v e r t i m e , m a r k e t e r s c a n b e t te rm a i n t a i n c o n t r o l a n d r e a c h t h e g o a l se s t a b l i s h e d f o r t h e re l a t io n s h i p . M a r k e t -i n g r e l a t i o n s p r o v i d e a g r e a t o p p o r t u -n i ty f o r g l o b a l i z a t i o n o f m a r k e t i n g

s t r a te g i e s . B u t w i t h o u t a m e a n s t o e f f e c -t i v e l y m a n a g e t h e s e r e l a t i o n s , t h e u l t i -m a t e i m p a c t o f t h e s e m a r k e t i n g l i a i s m sw i l l n o t f u l f il l t h e e x p e c t a t i o n s o f t h o s ei n v o l v e d i n t h e r e la t i o n s h i p s .

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