Virtual Research Organization: Nature and Forms Jin Hong 1 , Fengli Yang 2 , Xiumei Guo 3 , Dora Marinova 4 and Xiao Jiong Wang 5 1 Management School, University of Science and Technology of China, Hefei, Anhui, China, hongjin@ustc.edu.cn 2 Management School, University of Science and Technology of China, Hefei, Anhui, China, flying@mail.ustc.edu.cn 3 Curtin University Sustainability Policy (CUSP) Institute, Curtin University of Technology, GPO Box U1987, Perth WA 6845, Australia, X.Guo@curtin.edu.au 4 Curtin University Sustainability Policy (CUSP) Institute, Curtin University of Technology, GPO Box U1987, Perth WA 6845, Australia and Southern Cross University, Australia, D.Marinova@curtin.edu.au 5 School of Arts and Humanities, University of Science and Technology of China, Hefei, Anhui, China, wxjiong@mail.ustc.edu.cn In the increasingly fierce market competition, R&D ability is becoming a critical factor for every firm to acquire its competition advantage and achieve market success. In a network economy, many companies adopt virtual R&D organisation which allows them to overcome disadvantages caused by R&D resources decentralization due to multinational operations as well as the research capacity deficiency of a single firm. This paper discusses the nature and characteristics of a Virtual Research Organization (VRO), and particularly analyzes the basic forms and contents of VROs. Two models are examined, namely the one-agent and the multi-agent VROs, and examples from China presented. The main finding of this study shed light and provide a better understanding of the modern R&D organization. 1. Introduction In the network economy, technology progress and new management ways of thinking are rapidly changing the forms and structures of many firms. For example, the rapid development of virtual organisations has been a significant phenomenon and research related to this issue can help better understand the new meaning and trends in enterprises as well as provide a new method for carrying out research. The term “Virtual Organization” first appeared in the literature in 1980s but became an important business model in the 1990s (Lucas and Baroudi, 1994; Kock, 2000). A significant number of studies explored diverse theoretical and applied related aspects. Townsend et al. (1998: 17) predicted that: “Just as the personal computer revolutionized the workplace throughout the 1980s and 1990s, recent developments in information and communication technology are on the verge of creating a new revolution in the coming decade... This new workplace will be unrestrained by geography, time, and organizational boundaries; it will be a virtual workplace, where productivity, flexibility, and collaboration will reach unprecedented new levels.” During the past decade, virtual organization became a buzzword in management studies (Kasper-Fuehrer and Ashkanasy, 2001, 2003; Mowshowitz, 2002). Although only 3% of the managers believed that their organization was a virtual enterprise, 40% of them predicted that their enterprises would be basic or fully mature virtual organizations in the future (Economist Intelligence Unit et al., 2000). The virtual research organization model is an application of the virtual enterprise concept to the field of R&D. Scholars from different disciplines began to give attention to new forms of R&D organization, such as technology alliances, cooperative R&D and research joint ventures (RJV), many of which use the virtual model.