A network of independent firms linked by information technology to share skills and access markets is known as what?

• A. Virtual Corporation
• B. Work Groups
• C. Span of Control
• D. Specialization

Answer: (A)

This item focuses on how independent firms can coordinate through information technology to share capabilities and reach markets, effectively functioning as a single, flexible network rather than a single integrated company. When firms link up this way, each remains autonomous but relies on IT to align skills, processes, and activities, allowing them to access customers and opportunities they couldn’t as standalone entities. That arrangement is what people call a virtual corporation — a networked ecosystem that coordinates via technology to compete and innovate with shared strengths.

Work groups describe internal teams within one organization, not a network of separate firms. Span of control is about how many direct reports a manager has, a purely internal management concept. Specialization refers to dividing labor by tasks or skills, not to inter-firm networks. So the term that best captures a network of independent firms connected by IT to share skills and access markets is the virtual corporation.