This question has two parts; be sure to answer both. First, distinguish among a hollow structure, a modular structure, and a virtual structure. Second, specify whether each of the following companies has a hollow, modular, or virtual structure.

Question

What will be an ideal response?

Answer 1

(a) Luxury Yachts, Inc., purchases every item that goes into its luxury boats—from the hull to the brass fittings on the doors and cabinets—from suppliers all around the world. It then assembles all of these components into the boats it sells to millionaires and executives.

(b) Mostly Murder Press publishes mystery novels. It has only two people on staff who perform the company's core publishing functions: an editor who acquires the books from authors, and a marketer who serves as a publicist. All other functions, such as typesetting, printing, binding, warehousing, and distribution are outsourced to companies that can perform these services less expensively.

(c) ADamant is a small advertising agency. Its owner lives in Denver, its account executive lives in Florida, its ad designer lives in New York, and its media buyer lives in California. The four members of the ADamant team use Skype, Google Chats, and email all day long to talk with one another and with their clients and prospective customers.

In a hollow structure, often called a network structure, the organization has the central core of key functions and outsources other functions to vendors who can do them cheaper or faster. A company with a hollow structure might retain such important core processes as design or marketing and outsource most other processes, such as warehousing and distribution, thereby seeming to "hollow out" the organization.

In a modular structure, a firm assembles product chunks, or modules, provided by outside contractors. Thus the firm compiles the whole from parts it has sourced elsewhere.

In a virtual structure, an organization whose members are geographically apart work with e-mail and other forms of information technology to appear to customers as a single, unified organization with a real physical location.

(a) Luxury Yachts has a modular structure.

(b) Mostly Murder Press has a hollow structure.

(c) ADamant has a virtual structure.