The network organization is a form of the organizational structure in the economical organization teachings. It is a possibility of distributing competencies and responsibilities in an organization. The network organization can be described as organization with relatively autonomous members, that are connected by common goals on a long-term basis and coordinated co-operate. The members of the network organization can be individuals, groups or institutions.

Characteristics

The network organization is a multi-line system with high degree at Dezentralisierung.Der high degrees at decentralization develops by the fact that each place can be subordinated to several instances. The subdivision of functions can with this organization form either object-oriented, i.e. structures after target objects, or perform-orients, i.e. structures after functional areas, to be. Important conditions for functioning networks are the formulation of clear goals and communication of these goals. Because of the high decentralization also the tuning of the activities set from the organization is necessary. It is crucial that the members involved pursue a superordinate, common goal.

Forms

Network organizations can be used both for the tuning by enterprise-internal activities and for the adjustment by enterprise-spreading relations. Depending upon that between internal and external networks one differentiates:

Internal networks

Internal or intraorganisationale networks consist of members of an organization, that stand to each other in intensive both horizontal and vertical relations. Internal networks are particularly characterized by collegial relations between of equal standing specialists and partnership co-operation. They are based primarily on personal contacts. Such networks supplement or overlay the existing organisational structure and are therefore the secondary organization to be assigned.

External networks

External or interorganisationale networks, on the other side, consist of several legally and economically independent enterprises. The subject of such co-operation can be the entire process of the development, the production and marketing of products and services. Co-operation can refer however also to only or few functions, so that the cooperating enterprises stand further to each other concerning other functional areas in the competition. Thus synergies or competition advantages are to be achieved, which would not be possible without co-operation due to missing resources. They can be divided according to the place of the activity or according to the co-operation direction. Examples of a partitioning after the place of the activity are regional, national or global co-operation. If external networks are partitioned after the co-operation direction, it is differentiated whether the co-operating enterprises originate from different surrounding fields or whether they follow each other in the creation of value chain. If the network partners pursue a superordinate strategy together, then also of strategic networks one speaks. These differ from other networks above all by the fact that of one or more co-operation partners the strategic guidance is taken over here (e.g. market decisions are met mainly by an enterprise, example: Hollow Organization).

Among different developments of the external networks rank the virtual organization, the Franchising, the Subcontracting and Joint venture.

Advantages

Synergies and competition advantages can be obtained by the network organization. The involved ones have a position, which would not be attainable without co-operation by the network organization. Further advantages are the improved entrance to know-how and information, since these can be divided under network partners. Networks exhibit the moreover one an improved flexibility.

Disadvantages

Unfavorably the increased co-ordination and communication expenditure, which are necessary by the tuning between several involved ones, can be on the other side. During unsatisfactory tuning between the network partners it can come to multiple remarks of certain activities and repeated versions of information - this is connected with and not necessary resources employment. The creation of confidence to future network partner can become likewise difficult.

Areas of application

The network organization particularly finds with enterprises with high specialization, with small and medium-sized enterprises and with internationally active enterprises application. The reason for it is that on the one hand small and medium-sized enterprises attain more competitive ability by the network organization, on the other hand one can internationally active enterprises thereby more flexibly act. The network organization can be well used - generally spoken - everywhere, where adaptability is important.

Literature

• Hans Corsten: Enterprise networks. Forms of enterprise-spreading co-operation. Oldenbourg, Munich/Vienna 2001, ISBN 3-486-25733-1
• Sydow (Hrsg): Management of network organizations. Gabler, Wiesbaden 2003, ISBN 3-409-31488-1
• Alfred Kieser, Peter Walgenbach: Organization. Poeschel publishing house, Stuttgart 2003, ISBN 3-7910-2242-3
• George Organization - bases of modern organization organization

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