Competency Rallying Processes in Virtual Organizations

Firms face an environment changing at an increasingly rapid pace. Unfortunately, the speed at which organizations can adapt their strategies and competencies to exploit such opportunities remains limited. In this paper we weave together an external perspective on market-facing with an internal perspective on competency development and marshalling to describe the organizational activities necessary for firms to cooperate within a virtual organization. We argue that firms can address their individual limitations through a systematic process that we call “competence rallying,” with which they can access market opportunities and additional needed competencies. Specifically, we present a local process theory of how one network of firms reliably engineers and delivers manufacturing projects using an interorganizational process that works to meet short-term market opportunities. Our theory is grounded in the experiences of the Virtuelle Fabrik project, an organized network for regional cooperation in the manufacturing industry around the Bodensee in Europe. The success of manufacturing projects in a 1 The Virtuelle Fabrik project was started by the Institute for Technology Management, University of St. Gallen. Financial support was provided by The Swiss Commission for Scientific Research (KwF) and the Virtuelle Fabrik partner companies. The Virtuelle Fabrik project team included Günter Schuh, Bernhard Katzy, Kai Millarg, Thomas Zehnder, Stefan Eisen, and Åsa Göransson, as well as managers from the partner firms. The authors thank all of the participants in the Virtuelle Fabrik for their contributions and in particular, for the many discussions that led to the concepts discussed in this paper. The authors take sole responsibility for the work presented here. This paper has benefited greatly from discussion with Paul van Fenema, Steven Sawyer, Ping Zhang, Robert Heckman, Barbara Kwasnik, and Gisela von Dran. 68 Katzy and Crowston virtual organization is predicated on specific organizational activities in four phases of the competence rallying process: 1) identification and development of competencies, 2) identification and facing of market opportunities, 3) marshalling of competencies, and 4) a short-term cooperative effort.