Network Organization

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Definition Network Organization? Meaning.

Nowadays, knowledge workers create, share and leverage information through collaborating with colleagues in various flexible, international, multi-disciplinary and cross-functional teams. Organizations are increasingly viewed as part of these inter-organizational relationships.

The current business climate is characterized by profound and frequent changes and increasing complexity due to globalization, sudden increases in information and communication capabilities, and other forces.

Rapid developments of ICT are enabling, supporting and even driving the sudden change from the industrial to the information age and network economy.

A Network Organization is a pattern of social relations over a set of persons, positions, groups, or organizations. This type of "organization" is well adapted to unstable conditions, when problems and requirements for action arise which cannot be broken down and distributed among specialists' roles within a hierarchy.

Interactions run laterally as much as vertically. Communication between people of different ranks tends to resemble lateral consultation rather than vertical command and omniscience can no longer be imputed to the head of the concern. Such "organizations" are using social mechanisms for coordination and control.

Compared to the vertically integrated company, a networked company is characterized by greater Organizational Agility and adaptability. It has more flexible relations with external third parties such as customers, suppliers, outsourcing firms, and regulators.

100% networked organizations are still relatively rare. Especially for large organizations. But in many if not all business and public organizations we can see Hybrid Forms of Organizations being deployed with both mechanistic and organic elements.

Also called: Virtual Business / Organization or Network-centric Organization.

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Compare with: Chaordic Organization  |  Organization Chart  |  Hierarchical Organization  |  Matrix Organization  |  Relational Capital

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