Measuring the Degree of Virtualization

Based on the concepts of Virtual Corporation and Gradual Virtualization, we develop an instrument to measure the degree of virtualization (DV) of organizations. Virtual corporations are networks of independent companies, who cooperate to satisfy customer needs by combining their distinct core competencies. Hence, an instrument to measure the DV of a network has to integrate characteristics of collaborating firms as well as the characteristics of their relationships. For our analysis we define eight factors determining gradual virtualization, which are aggregated into one final index. We tested our instrument empirically with data of German and Austrian consulting companies. An exploratory factor analysis as well as Cronbach`s alpha coefficients confirm high validity and reliability of our instrument and support our theoretical model.