Network organization

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The network organization is a form of organizational structure in business organization theory. It is a way of distributing competencies and responsibilities in an organization . The network organization can be described as “an organization with relatively autonomous members who are linked to one another by common goals and who work together in a coordinated manner”. The members of the network organization can be individuals, groups or institutions .

If companies organize themselves in this way, one speaks of company networks . This term describes a form of organization of economic activities aimed at achieving competitive advantages , which is characterized by stable, cooperative relationships between mostly dependent but legally independent companies .

features

The network organization is a multi-line system with a high degree of decentralization. The high degree of decentralization arises from the fact that each position can be subordinate to several authorities. The breakdown of tasks in this form of organization can be either object-oriented, i.e. structured according to target objects, or performance-oriented, i.e. structured according to functional areas. Important prerequisites for the functioning of networks are the formulation of clear goals and the communication of these goals. Because of the high degree of decentralization, coordination of the activities set by the organization is also necessary. It is crucial that the members involved pursue an overarching, common goal.

to form

Network organizations can be used both to coordinate internal company activities and to regulate cross-company relationships. Depending on this, a distinction is made between internal and external networks:

Internal networks

Internal or intra-organizational networks are made up of members of an organization who are closely related to one another, both horizontally and vertically. Internal networks are mainly characterized by collegial relationships between peers and collaborative partners. They are primarily based on personal contacts. Such networks supplement or superimpose the existing organizational structure and are therefore assigned to the secondary organization .

External networks

External or inter-organizational networks, on the other hand, consist of several legally and economically independent companies. The entire process of developing, manufacturing and marketing products and services can be the subject of such cooperation. The cooperation can, however, also relate to just one or a few functions, so that the cooperating companies continue to compete with one another in other functional areas. This is intended to achieve synergy effects or competitive advantages that would not be possible without cooperation due to a lack of resources. A wealth of different criteria can be used to typify the various forms of interorganizational networks. Examples of differentiation criteria are: the type of interdependence (whether complementary or commensalistic), the degree of relationship (direct or indirect exchange), the direction of the relationship (horizontal or vertical - following from different environments or a value chain) and the spatial distribution of the networked organizations (regional, international or global). If the network partners jointly pursue an overarching strategy, they are also referred to as strategic networks . These differ from other networks mainly in that they are organized hierarchically and strategic leadership is taken over by one or more cooperation partners (e.g. market decisions are mainly made by a company, example: Hollow Organization ).

A cooperative network, on the other hand, does not reveal a uniform strategy. Examples are a rationalization community resp. called a purpose-limited rationalization cartel .

The different characteristics of the external networks include a. Joint ventures and corporate cartels . More recent variations are subcontracting , virtual organization and franchising .

A distinction must also be made between dynamic and stable networks.

It is not uncommon for company networks to be implemented online today. So-called B2B networks (business-to-business networks) offer closed or semi-open user groups a wide range of opportunities to pursue their economic interests.

An example of such a network is the Open Business Network.

Regional networks

A characteristic of regional networks is their common social milieu, which expresses itself in a similar understanding of cooperation, communication and dealing with conflicts. A condition for the efficiency or an advantage of these networks is the merging of society and companies in the region. Within the networks there is an intensive exchange of material goods, but above all of information and knowledge ( know-how ). However, this does not mean that cooperation takes place at all levels. The competition that naturally exists, however, does not relate to the price of goods or services, but rather concerns areas that make up a company's own "distinct competence", such as B. Research and Design. Cooperation mainly takes place in highly standardized processes such as bookkeeping and employee training. Here, the companies can reduce transaction costs within the network as they would otherwise within an organization. This makes it possible to balance the apparent incompatibility of competition and cooperation within the network.

advantages

The network organization can achieve synergy effects and competitive advantages . Due to the network organization, the participants have a position that would not be achievable without cooperation. Further advantages are improved access to know-how and information, as this can be shared among network partners. Networks also have improved flexibility.

disadvantage

On the other hand, the increased coordination and communication effort, which is necessary due to the coordination between several participants, can be disadvantageous. If there is insufficient coordination between the network partners, multiple executions of certain activities and multiple entries of information can occur - this is associated with time delays and unnecessary use of resources. Building trust in future network partners can also be difficult.

application areas

The network organization is particularly used in companies with a high degree of specialization, in small and medium-sized enterprises and in international companies. The reason for this is that, on the one hand, small and medium-sized enterprises become more competitive thanks to the network organization and access to external resources, and on the other hand, international companies can act more flexibly. The network organization can - generally speaking - be used well wherever adaptability is important.

See also

literature

Web links

Individual evidence

  1. ↑ see literature : Manfred Schulte – Zurhausen: Organization . 2005, p. 286.