Moreover, the network structure provides Vans two important advantages: quick responding to changes in sports shoe fashion and low cost. Vans makes use of a global IT system that can literally change the instruction it gives each of the suppliers in real time (Jones and George, 2003, p. 232). As such, within a matter of short period its foreign manufacturers are producing new kinds of shoes. Vans’s cost are also low because of Southeast Asian labor are a fraction of that of its US counterparts. With Vans’s ability to outsource and use foreign manufacturers keep the headquarter’s structure flat and flexible. This relatively inexpensive functional structure to organise its activities enabled Vans to obtain talent and resources worldwide.
Although the virtual structure provides high flexibility for Vans to be responsive to market trends and changes, Vans is hindered by the loss of hands-on control of several functions and employees. Considerably a hollow organization, Vans has a weakened organizational culture and employee loyalty. Inherent risks are also evident including relationship management and contract partner failure and/or business exit. True... [continues]
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