Degree of Vertical Integration

ballooba

Google's definitions of vertical integration define it as:
'An arrangement in which the same company owns all the different aspects of making, selling, and delivering a product or service.'

For example in the power industry the situation where the power company controls generation, transmission, distribution and sales.

I am writing an essay on a virtual organisation i.e. they outsource their manufacturing sales and customer service functions. Does a virtual organisation have a narrow or broad vertical scope seeing as it does not specifically own these functions?

Any insights greatly appreciated.

Evilution

ballooba wrote:

Google's definitions of vertical integration define it as:
'An arrangement in which the same company owns all the different aspects of making, selling, and delivering a product or service.'

For example in the power industry the situation where the power company controls generation, transmission, distribution and sales.

I am writing an essay on a virtual organisation i.e. they outsource their manufacturing sales and customer service functions. Does a virtual organisation have a narrow or broad vertical scope seeing as it does not specifically own these functions?

Any insights greatly appreciated.

Ok here's something, but not from my academia but from actual work experience. I'd say that it has a narrow vertical scope because its influence over the outsourced companies is minimal at the best of times. Also, with those 3 areas outsourced, it also reduces internal visibility within the organisation - its harder for those 3 areas to then communicate with each other; they may need to go through the virtual company itself. Outsourcing = bad IMHO.