The concept of virtual organizations seems to be difficult to overlook at first sight because of all specific characteristics observable in practice. Littmann/Jansen (Oszillodox, 2000) have therefore emphasized on different forms of the virtualization of organizations and distinguish between intra-organizational, extra-organizational, inter-organizational as well as customer- and product-orientated virtualization. This approach may provide a sharper distinction in the grade of the virtualization of one or of a network of several organizations including the question whether such multi-firm networks constitute a new organizational form itself. Some scientists do not agree in that, considering inter-organizational virtualization only to recombine already known elements of markets and hierarchies. However, recent literature pronounces the revolutionary potential with respect to innovation that is possible to achieve for networked companies. For instance Raymond E. Miles, Grant Miles and Charles C. Snow (2005) developed an exemplary model of “Collaborative Entrepreneurship”, describing how a fictional, large community of networked firms uses continuous innovation to create economic wealth. This contradiction in qualitative terms does not surprise much considering the varied, existing ideologies in literature regarding virtual organizations, reaching from critical skepticism to exaggerated euphoria.

But what does this mean in regard to Open Innovation? Henry Chesbrough and David J. Teece examined a few years ago the virtuosity of virtuality in terms of the innovativeness of a company being one of its major competencies in order to create value. They argue that while autonomous innovations can be handled by virtualization, systemic innovations need to be developed internally in order to prevent a company from loosing its core competencies. Astonishingly they observed mostly large companies to be innovative, having the scale and scope to coordinate complementary innovations to their current capabilities. According to the paradox of organizational size, small companies should actually be more flexible and therefore presumably hold more potential for innovation than large companies, but they seem to lack sufficient resources for research & development at the same time. For small companies, according to Chesbrough/Teece, innovating externally by inter-organizational virtualization might therefore mainly be an option for autonomous innovation – otherwise being open to others could be a reckless risk and could not lead to the desired results of such cooperation.