Abstract

Virtual enterprises are formed in response to turbulent market conditions and are influenced by factors such as the changing relationship between customers and suppliers, the spread of agile supply chains and shorter product life cycles. Research suggests that successful virtual co-operation and supply chain agility are best achieved when the core capabilities of the partners are complementary. This paper examines the relationship between virtual enterprises in supply chains and provides further insights into the factors affecting agility. A hypothetical model is developed to examine the factors and a structural equation model tests the hypotheses, based on survey data from virtual enterprises in Mongolia. The model uses a simulation based on exploratory factor analysis, confirmatory factor analysis and path analysis. The results provide empirical evidence of the ability of the model to predict benefits arising from the formation of the virtual enterprise.

Highlights

  • The business environment today is typified by rapid and unpredictable changes due to political and economic factors [1], disruptive interventions from new entrants to markets and innovative business models [2] and developments that represent a ‘step change’ in enabling technologies [3]

  • To survive in turbulent and unstable market conditions, SMEs may seek to increase their competitiveness by collaborating to form a virtual enterprise as a supply chain

  • This study investigated the influence of enterprise capability and information and communication technologies (ICT) adoption on affiliation, and examined causal relationships affecting supply chain agility

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Summary

Introduction

The business environment today is typified by rapid and unpredictable changes due to political and economic factors [1], disruptive interventions from new entrants to markets and innovative business models [2] and developments that represent a ‘step change’ in enabling technologies [3]. By combining to form virtual enterprises and aligning themselves in agile supply chains, many companies are able to develop very flexible logistics systems and supply chain networks, supported by web and mobile technologies that as individual small and medium-sized enterprises (SME) the would not be able to afford [5]. This emerging collaborative strategy is geared to exploiting the temporary windows of opportunities offered by volatile global markets and to sharing risks and optimizing resources based on complementary core competencies and despite geographic locations [6]

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