Virtual enterprise formation in the context of a sustainable partner network
| Pages | 1446-1468 |
| Published date | 14 August 2017 |
| DOI | https://doi.org/10.1108/IMDS-07-2016-0274 |
| Date | 14 August 2017 |
| Author | Igor Polyantchikov,Eduard Shevtshenko,Tatjana Karaulova,Taivo Kangilaski,Luis M. Camarinha-Matos |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Virtual enterprise formation in
the context of a sustainable
partner network
Igor Polyantchikov, Eduard Shevtshenko and Tatjana Karaulova
Department of Mechanical and Industrial Engineering,
Tallinn University of Technology, Tallinn, Estonia
Taivo Kangilaski
Department of Software Science, Tallinn University of Technology,
Tallinn, Estonia, and
Luis M. Camarinha-Matos
Department of Electrical Engineering, University of Lisbon, Caparica, Portugal
Abstract
Purpose –Various networked organizational forms already exist in the market today, however, all of them
share the same problem –lack of fast and objective procedures for partners’selection when addressing a
particular project. The purpose of this paper is to solve such problems by offering an alternative to the
existing global market layout, dominated by large corporations.
Design/methodology/approach –This research belongs to the category “fuzzy decision making and
multi-attributive decision making,”since it is using methodologies such as the analytical hierarchy process
(AHP), the fuzzy-AHP approach, and the Technique for Order of Preference by Similarity to Ideal Solution.
Findings –The authors defend that appropriate partner selection is a vital success factor in any
collaboration.
Research limitations/implications –The authors have designed a sustainable partner network solution
for the field of machinery. Nevertheless, the proposed approach is adaptable to other fields also, whereas the
focal player or project owner selects the best partner based on a set of criteria.
Practical implications –The paper includes a feasibility case study for the approval of findings,
where several small and medium enterprises (SMEs) from the field of machining collaborate to achieve a
common goal.
Social implications –The research focuses on production enterprises (especially for SMEs) and
is intended to improve their competitiveness. Small enterprises combining into a network makes it
possible to compete with large corporations and helps to decrease project initiation time and project
realization risks.
Originality/value –The main idea is to collect information about the available resources of SMEs into a new
temporary entity and to utilize those resources for the realization of the tasks of a particularly large project,
while meeting customer expectations. In addition, this work also suggests a calculation tool for faster partner
evaluation (assessment) based on various criteria for each particular project.
Keywords Collaborative network, Partnerefficiency index, Sustainable partner network, Virtual enterprise
Paper type General review
1. Introduction
Major corporations, alliances, and large state-owned companies control today’s global
market. Many of them are so powerful that they even have a lobby in national parliaments
or governments (Bouwen, 2004; Markussen and Svendsen, 2005). This situation
protects business positions in many areas and domains such as the case of Microsoft,
Philip Morris, Lockheed Martin, and AT&T ( Jeffrey et al., 2002) in the global market.
Industrial Management & Data
Systems
Vol. 117 No. 7, 2017
pp. 1446-1468
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-07-2016-0274
Received 25 July 2016
Revised 20 January 2017
Accepted 5 April 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This research was supported by Estonian Ministry of Education and Research by targeted financing
scheme B41, by Department of Mechanical and Industrial Engineering, School of Engineering and by
Department of Software Science School of Information Technologies of Tallinn University of Technology.
Partial support was provided by Portuguese FCT-PEST program UID/EEA/00066/2013 (Impactor project).
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IMDS
117,7
Often “global players”dictate their rules to the market (Hout et al., 1982; Hess, 2014) and
have almost a monopoly in their particular market sector (Williamson, 1972).
On the other hand, more than 99 percent of European businesses are small and medium
enterprises (SMEs) (European Commission’s DG for Enterprise and Industry, 2013).
Therefore, an important research question is the following:
RQ1. Is it possible to create an environment, which combines a significant amount of
SME resources, and directs them towards effectively fulfilling a common goal?
If a successful answer to this question is found, new organizational forms are likely to
emerge, and allow SMEs to compete with multinational corporations and alliances,
leveraging their competitive advantages in the global market (Camarinha-Matos, 2009).
On the other hand, “customers are demanding better reliability and faster delivery”
(Pribytkova et al., 2010). These new organizational forms may act to slow down the price
growth levels by offering services and products directly to consumers.
Various networked organizational forms already exist in the market today, leading to the
possibility of establishing dynamic virtual organizations (Camarinha-Matos et al., 2009). However,
all of them face the same problem –the lack of a fast and objective procedure for selecting
partners for each particular project (Zheng and Possel-Dölken, 2002; Karjust et al., 2010). The goal
of this research is thus to develop a partners’selection tool for the realization of large projects.
The vision is that a partner network (PN) framework will become a valuable tool to help
SMEs staying competitive under fast-changing conditions of the global market. A PN
represents an alliance of independent enterprises, following common collaborative
principles that are based on trust, mutual respect, and sharing of risks and benefits.
A PN can be regarded as a particular case of a Virtual Organizations Breeding Environment
(VBE) (Camarinha-Matos and Afsarmanesh, 2005; Afsarmanesh et al., 2009), which is a kind
of business community composed of organizations that come together to be prepared for
rapidly responding to business opportunities. In such community, members are not the
partners of one particular company –they are all partners together.
In this work, we focus on a special kind of PNs, the sustainable partner network (SPN).
We use the term “sustainable”to reflect “mutually beneficial interactions in which constituents
(internal and external) share knowledge, resources and expertise”(Education Outreach and
Partnership, 2015). SPN is a business- and domain-oriented structure that deals with standardized
business processes. SPN is created according to a common business process template apparent to
all participants. In our context, the SPN definition is used as SMEs’network organization.
The objective of this work is to offer an alternative to the existing global market layout,
which is dominated by large corporations. It is necessary to implement the following tasks
in order to achieve this objective:
•define an environment for consolidation of resources of independent SMEs;
•develop a tool for agile virtual enterprise (VE) formation;
•develop a tool for selection of the best partners for VE; and
•verify the proposed tool by a case study.
The research focuses on production enterprises (especially SMEs), intending to improve
their competitiveness. However, the developed method could also be successfully adopted in
other domains (design, logistic, purchasing, sales, etc.).
2. Literature review
2.1 Comparison to PN alternatives
In current research, authors assume that enterprises operate as part of PN. In relevant
literature different alternatives to PN can be found, e.g. supply chain was described by
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