Decision model for partnership development in virtual enterprises

A virtual enterprise has been considered as a temporary consortium of companies. Recently, researchers have investigated virtual enterprises from various perspectives, such as business activities and workflows, information exchanges and their standards, organizational behaviours between companies, etc. However, real collaborative activities among companies in a virtual enterprise cannot be done before a partnership is developed among companies. Besides, though partnership is important in virtual enterprises, a decision model for partnership development is seldom studied. This research develops a decision model from a micro view (i.e. from a company's perspective). A company may use the model to specify its current partnership strategy and determine its future partnership strategy with another company. Four factors are considered in the model: the format of the relationship with suppliers, the number of suppliers, the type of service provided by suppliers and the method of service delivery from suppliers. However, a partnership strategy has to be updated based on internal and external changes. This research finds out that six factors are associated with a change on partnership. With those factors, a decision process is developed for a company to update its partnership strategy. The partnership of IBM to Acer is also investigated to illustrate the application of the model. The results validate the applicability of the decision model.