How can setting up a virtual company help a core company avoid the sec

QUESTION

How can setting up a virtual company help a core company avoid the second stage of organizational decline: undisciplined pursuit of more?

What will be an ideal response?

ANSWER

Answer: It can keep a company from overreaching into areas the company knows little about and instead just align with other companies that have the expertise the core company needs when it needs it.
Explanation: Undisciplined pursuit of more can mean companies are making undisciplined leaps into areas where they cannot be great, taking actions inconsistent with their basic values, or outstripping their resources, leading them to ignore their core business. A virtual organization consists of a company with a central core that is connected by computer network to outside independent firms, which help the core firm achieve its purpose. Any one of the outside companies can be changed when necessary to suit the core company’s current purpose.