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- 2. Introduction 1. The Notion of Network 2. Define of Network Organizations 3. Functions of Network Forms Of Organizations 4. Disadvantages of Network Organizations 5. Kinds of Network Organizations 6. Virtual Organizations versus Network Organizations 7. Examples of Network Organizations 8. References
- 3. What’s Network? A network is a pattern of social relations over a set of persons, positions, groups, or organizations. A strategic view of networks is that «long term purposeful arrangements among distinct but related for-profit organizations that allow those firms in them to gain or sustain competitive advantage.» The notion of a network implies nodes and links. The nodes can be people, teams or even organizations - networks operate at many levels.
- 4. Define of Network Organization Network organizations are defined by elements of structure, process, and purpose. Structurally, a network organization combines co- specialized, possibly intangible, assets under shared control. We can characterize network structures as long-term agreements among companies, which enable them to obtain and maintain competitive advantages in relation to other companies not belonging to the network. In network structures a managerial center is created for the purpose of a coordination of all cooperating companies on the basis of the contract. The responsibility is divided among all parts of the network.
- 5. Functions of Network Forms Of Organizations Network forms of organization foster learning. If an actor’s partner in a network form of organization possesses considerable legitimacy or status, then the actor may derive legitimacy or status through the affiliation. The network form of organization is the adaptability of this form to unanticipated environmental changes. These organizations can alleviate sources of external constraint or uncertainty by strengthening their relationship with the particular sources of dependence.
- 6. Disadvantages of Network Organizations The coordination problems arising from having different companies perform different parts of the work process would be enormous. There has to be trust between the different groups so that they can share their ideas, something necessary of successful new product development. In general, the more complex the value creation activities necessary to produce, market goods and services, the more problems there are associated with using network structure.
- 7. Kinds of Network Organizations The general network organization framework permits several gradations in type. Network organizations are distinguished between three kinds: internal, stable, and dynamic.
- 11. Virtual Organizations versus Network Organizations Network Organizations All of virtual organizations are network organizations. But All network organizations are not virtual. Network organizations can be long- term or short-term. Separation from network and joining network are in the form of units. Virtual Organizations Virtual organization is a special form of the network organizations. The structure of virtual organizations is temporary. When project is over, virtual network is gone. There is no only one leader firm. Separation from network and joining network can be at many levels.
- 12. Examples of Network Organizations Sun Microsystems: it has been considered highly decentralized organization comprised of independently operating companies. Sun positions information systems as a top priority, trying to achieve faster and better communication. With numerous "SunTeams," members operate across time, space, and organizations to address critical business issues. Sun managers identify key customer issues and then form teams with the critical skills and knowledge needed to address the issue. This team might include sales people, marketing personnel, finance, and operations from various places around the globe; customers and suppliers may become episodic members as necessary.
- 13. Examples of Network Organizations Nike It is a global brand with its Swoosh as the most recognizable logo. Nike utilizes the network structure to outsource manufacturing particularly because the company owns no manufacturing facilities and are keen in moving production when the needs arise. Nike, as a network organization, had dispersed members that is linked using advanced technology. Nike is outsourcing everything except two activities: Marketing and Design. Nike keep them within the company, not only because they do it better than anyone could do, but also outsourced activities are easy target for copycat.
- 14. Examples of Network Organizations Dell Computers (US) Most of the components in a Dell computer are made by other companies while Dell focuses on its strengths--marketing, customer support and integration of these components into the final computer products.
- 15. Examples of Network Organizations REUTER This financial information services company created virtual teams with representatives from 12 companies around the world to work on user interfaces for the company. Facilitated by the signing of nondisclosure agreements, there has been savings in recruitment costs, staff benefits and overhead as a result of this virtual organization approach
- 16. References Koçel, Tamer. İşletme Yöneticiliği. İstanbul: Beta Yayınları, 2010. Boonstra, Jaap. Dynamics of Organizational Change and Learning. The Netherlands: John Wiley and Sons Ltd, 2004. Jones, Gareth R. Organizational Theory, Design, and Change, Text and Cases. Fourth Edition. London, Pearson. Nemiro ,Beyerlein, Bradley, Beyerlein The Handbook of High Performance Virtual Teams: A Toolkit for Collaborating Across Boundaries. John Wiley & Sons, 2008 The State Of Network Organization: A Survey In Three Frameworks, 1997. http://ccs.mit.edu/papers/CCSWP192/ccswp192.html Joel M. Podolny and Karen L. Page, Network Forms Of Organization, Annu. Rev. Sociol. 1998. 24:57-76 Barbe and Alegre. Reshaping the Boundaries of the Firm in an Era of Global Interdependence. Emerald Group Publising Ltd. 2010.
Editor's Notes
- My talk today will deal with Network Organizations
- I have divided my presentation into 8 parts. I’m going to talk about The Notion of Network, Define of Network Organizations, Functions of Network Forms Of Organizations, Disadvantages of Network Organizations, Kinds of Network Organizations, Virtual Organizations versus Network Organizations, Examples of Network Organizations.
- Common examples are distributed geographic teams in large organizations, or small organizations operating as networks to compete against large corporations. The links are the various coordination and "agreement" mechanisms.
- Managerial parts are different than in the organization, which has hierarchical structure. In network structures a managerial center is created for the purpose of a coordination of all cooperating companies on the basis of the contract. The responsibility is divided among all parts of the network. In the network structure, centralized control of operations does not exist (in contrast to hierarchical structure) and the main company only co-ordinates the plans and activities.
- Network forms of organization foster learning because they preserve greater diversity of search routines than hierarchies and they convey richer, more complex information than the market. If an actor’s partner in a network form of organization possesses considerable legitimacy or status, then the actor may derive legitimacy or status through the affiliation.
- Let us now move on to Disadvantages of Network Organizations.
- Internal networks are loose associations of assets and business units contained within a single company and which subject themselves to market forces. Typciall examples of this structure are holdings.
- Stable networks consist of firms engaged in long term relationships with external suppliers who bring expertise into the core company. Participants are typically organized around a single large firm as with Japanese auto manufacturing.
- Dynamic networks are more temporary alliances of firms with key skills usually organized around a lead or brokering firm. Each of the units tends to be independent and collaborates on a specific project or opportunity. In the fashion industry, manufacturers, designers, and retailers frequently use this model. For examples: Joint ventures
- let us turn to point one
- Let us Continue to Examples.
- As the largest and most profitable show manufacturer in the world, Nike’s success relies on the network structure that Nike founder and CEO Philip Knight created, allowing the company to produce and market shoes. Nike is outsourcing everything except two activities. Do you know what are these two? I will help you a little. What makes Nike so popular? Marketing and Design. They keep it within the company, not only because they do it better than anyone could do, but also outsourced activities are easy target for copycat! The network organizational structure that would allow Nike to focus on some functions such as design and leave others like manufacturing to keep costs low and to give the company greater flexibility. So Nike has two important advantages: quick responding to changes in sports shoe fashion and low cost.
- When buying a computer from Dell, the virtual organization includes the Dell customer service rep, assembly line and assembly crew, supply people for various components, the UPS truck and driver who delivers the computer, and people from MasterCard who pay for it. All of the inventory in the system, regardless of location and ownership of the company, can be viewed as a single system. Benefits may include overall lower inventory levels in the whole system and better customer service. For example, Dell tries to keep as little actual inventory on hand as possible.
- before my presentation is over, It is last example.