Real Thoughts On The Virtual Corporation

Your article appeared at an especially appropriate time. ("The Virtual Corporation," Cover Story, Feb. 8). Within weeks the International Standards Organization is expected to register a draft international manufacturing and information standard (ISO10303--STEP) that will be a key enabling technology for the "virtual company."

The ability to describe and exchange--in digital computerized format--all useful information about a given product will facilitate the flow of product in-formation between a company and its corporate partners, suppliers, subcontractors, and customers. The efforts of the U. S. in product-data-exchange development amount to over 50% of worldwide activity in the field. If this leadership continues, U. S. manufacturers will be major players in a new information-technology-driven global marketplace.

William Conroy

National Institute of Standards

and Technology

Gaithersburg, Md.

I have just finished reading, with some chagrin, what BUSINESS WEEK defines as the virtual corporation. It bears little if any resemblance to what William H. Davidow wrote about in his book The Virtual Corporation or the business developed at Ross Operating Valve Co. aimed at producing virtual products.

I'm sure that good joint ventures, where companies utilize each other's key strengths, can and will continue to happen if we put aside our antiquated antitrust laws. But this process is hardly new or revolutionary.

What Ross is producing for its customers is virtual products--the advanced systems for integrating manufacturing, engineering, and marketing into one holistic function. We have replaced mass-produced products and hierarchical organizations with virtual products and flat organizations which:

-- Produce customized products for and to customers' specifications.

-- Take 10% of the time to produce the old mass-produced standard product.

-- Do all of the above for a fraction of the cost of the old system.

Much of our economy's problem is the thousands of mass-production manufacturing systems in this country and the terrible legacy of management against worker, government against business, and customer against supplier. We and the British are the only advanced industrial nations still clinging to this old destructive system. The virtual-products concept offers a way to leap over our Japanese and German competitors, but not if no one understands it.

Henry F. Duignan

Chief Operating Officer

Ross Operating Valve Co.

Troy, Mich.

Is the virtual corporation a fad or a vision? The answer depends on whether we set out to acquire the necessary new capabilities to effect new fundamental regimes. Just like the recent successes and failures with reengineering and total quality management, to name only two, virtual corporations must be rooted in, driven by, or at least substantiated through new, visionary information technology in order to really become a vision of the future.

Work has begun on the information technology needed to breed the concept into life. One example of ongoing research is the industry-sponsored (Alcoa, DEC, GE, GM, and IBM) Adaptive Integrated Manufacturing Enterprise Program at Rensselaer Polytechnic Institute.

Cheng Hsu

Associate Professor

Rensselaer Polytechnic Institute

Troy, N. Y.

Not again! New buzz words that transmit the wrong idea. Let's face it, Intel Chairman Andrew Grove has it right. He says: "It's a business buzz phrase that's meaningless. It's appetizing, but you get nothing out of it."

The only thing that makes a difference is each company concentrating its efforts on the things it does well and not wasting its time and effort on going into businesses where it doesn't do well.

Making up a bunch of loosely cross-linked companies will create a feeding frenzy among make-work lawyers and tie up the alliances for years to come.

John W. Mitchell

Staunton, Va.

The same executives that have, in the past, become enamored by and enthusiastic supporters of the latest management consulting fad are embracing the concept of the virtual corporation. Yet they have a relatively poor record of staying power once their initial enthusiastic blush has faded. Staying power is precisely what is needed if virtuality is to achieve widespread reality.

John Canter


The virtual corporation is nothing more than the project management organization. Project management features the form used successfully in the construction industry since before the pyramids.

Fred Blanchard

Bethlehem, N. H.

Employers could use the forthcoming family leave law as an opportunity to move beyond the outdated industrial requirements that employees begin and end work at one time in one location. In this age of the virtual corporation, businesses can identify jobs that modern technology can do at home and at different times. Then, when workers apply for family leave, they could apply for these positions as well. The company would get its work done, employees would continue to earn income, child-care problems would vanish, and reduced commuting would reduce oil imports.

LuAnne Feik

West Chester, Pa.

Your article would lead one to believe the virtual corporation is a new concept. The aerospace industry has been doing this for over 30 years.

Charles Swink

Henderson, Nev.