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Good day tutor,
Q1
When we have an organisation that outsources some parts of its production process, can we safely assume it resembles a modular organisation?Q2
I do not understand the implications of being a virtual organisation. Is it common for virtual organisations to collaborate with competitors? The answer for Webfilms (December 2016) stated that “relationships have to be developed with competitors and Webfilms may need to make compromises”. Why is this necessary?Q3
The definition of virtual organisation structure also identifies that it operates through a series of linked IT systems, partnerships and collaborative agreements.
What are linked IT systems? Are they talking about the internal IT systems of Webfilms?What are collaborative agreements? Are they any kind of agreements the company enters into with any businesses?
Q1 – an ACCA article for F1 says:
A hollow organisation is one which relies heavily on outsourcing, enabling it to maintain low staffing levels while capitalising on the competences of partner organisations.
The most common application of this model is where an organisation identifies those competences that are core and must be retained. These are then kept in-house, while all non-core operations are contracted out.
A modular organisation extends the hollow concept by breaking down production processes into modules. Production is outsourced, but each external organisation is responsible for only one element of the process. For example, in producing the Dreamliner aircraft, Boeing enters into contracts with many suppliers, each of which is responsible for one component or assembly. The outputs of these suppliers can then be integrated (modular).
Thankfully, the question explains what the examiner means by these terms. So I think you are right. The question suggests that in a hollow structure, non-core activities are outsourced. Outsourcing production is outsourcing a core activity, so we are dealing with modular here.
Q2 A good example might be the OneWorld alliance between British Airways, American Airlines and more. OneWorld is virtual, but within that the various airlines have to cooperate/compromise on flight times, lounge access, fares etc. The relationships here include ensuring that there is overall a range of films without too much duplication.
Q3 Again, if I book a BA flight I might find I am actually on an AA flight. Their booking systems are linked to make the process invisible. In Webfilms, I would want to view a film using one interface. Behind the scenes, it could come from any supplier.
A collaborative agreement is just an agreement to cooperate according to a set of rules. Not quite the same as a buyer/supplier relationship.
Thank you for your comprehensive reply.
I am still a little unsure on collaborative agreements. I read this from the web films question:
“For example, agreements would be needed with providers of previously screened programmes, with advertisers and with local technical support services for broadband provision.”
Could you kindly explain how these can benefit the company?
Eg, the right to show repeats of previously screened programmes. You need to work out how much, how often, when etc. Advertisers will know that a repeat probably attracts a lower audience so you have to agree rates. If rolling out a service in a country/town you need to make sure that the ADSL speeds are ok, so agreement and coordination is needed there too.
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