This paper reviews some virtual organizations and the costs and benefits of being in a virtual organization. Particular emphasis is given to those costs and benefits deriving from the information technology and processes required to facilitate communication and transaction processing in virtual organizations. Using analytic models, this paper analyzes two problems faced by companies joining virtual organizations and by virtual organizations: • Under what circumstances should a firm join a virtual organization and when should they do extensive information search regarding joining that virtual organization? • Is it possible to chose a set of standards that are optimal for each company and the virtual organization? Arrow’s impossibility theorem is used to find that there is no standard that meets the optimal needs of the virtual organization and each individual company in the virtual organization.
O'Leary, Daniel, "Virtual Organizations: Two Choice Problems" (1998). ICIS 1998 Proceedings. 13.