Abstract
This article discusses the challenges that companies face when trying to create virtual corporations. It describes the competitive environment that created the virtual organization, illustrates the changes with three developmental models, and describes a New Deal employment relationship that replaces lifetime employment and requires changes to work and rewards systems. To creative an effective New Deal, companies must accept that the Old Deal is gone. They also must focus on processes, not functions; develop such virtual relationships as alliances, joint ventures, and partnerships; and send clear messages to employees for a workable policy.
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