Managing 21st century network organizations

• Published in: Organizational dynamics Vol. 20; no. 3; pp. 5 - 20
• Main Authors: Snow, Charles C., Miles, Raymond E., Coleman, Henry J.
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 1992; Elsevier Science Ltd
• Subjects: 21st century; Characteristics; Competition; Costs; Demographics; Design; Distribution channels; Employees; Global economy; Globalization; Innovations; Manycountries; Older workers; Organizational change; Organizational structure; Outsourcing; Strategic business units; Success; Technological change; United States > US
• ISSN: 0090-2616; 1873-3530
• DOI: 10.1016/0090-2616(92)90021-E

A new form of organization - delayered, downsized, and operating through a network of market-sensitive business units - is changing the global business environment. These market-guided entities are called network organizations, and their displacement of centrally managed hierarchies has been relentless and painful to the million or so managers whose positions have been abolished. Three types of network structures have become prominent: internal, stable, and dynamic. An internal network typically arises to capture entrepreneurial and market benefits without having the company engage in much outsourcing. The stable network typically employs partial outsourcing and is a way of injecting flexibility into the overall value chain. In faster paced or discontinuous competitive environments, some firms have pushed the network form to the apparent limits of its capabilities. Global competition in the 21st century will force every firm to become, to some extent, a network designer, operator, and caretaker.