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Purpose -To investigate and illustrate the idea of using a cybernetic modelling technique for the diagnosis and design of virtual enterprises (VEs). Design/methodology/approach -The proposed framework is based on the VSM principles and its equivalent problem structuring methodology schema for the design of the information and communication systems together with the coordination structure necessary for a VE to become more efficient and flexible. Findings -We have investigated the role of VEs as a new organizational structure viewed from the perspective of cybernetics. In particular, the systemic approach followed was used to formulate a generic four-step architecture for the effective diagnosis and design of VEs, based on the theoretical principles of Stafford Beer's viable systems model (VSM). Research limitations/implications -There is considerable scope for further investigation on organizational structures and implications in the creation of effective VEs for many more management field locations, both within the industrial and in other areas of the business world. Practical implications -A generic and easily applicable conceptual framework for managers who wish to commit themselves to the necessary re-shaping of the organization they are running, forming new organizational structures based on autonomy and flexibility rather than hierarchy and rigidness. Originality/value -This paper fulfils an identified need to oversee the full spectrum of VEs and offers a comprehensive and unambiguously defined conceptual framework for their diagnosis and design based on the principles of Beer's VSM.

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