Page 76 - Managing Change in Organizations

CarnCh03v3.qxd 3/30/07 4:11 PM Page 59

The network organization

Figure 3.8 The network organization

5 Integrated levels: multi-level, not flat, because to survive networks need a ten-
dency to action. Thus hierarchy remains a feature of this organizational form
but not a documentary feature.
Clearly, therefore, the literature on strategic alliances has much to tell us about
how these forms of organization can be sustained and we will return to that in a
later chapter. For now suffice it to say that the key principle missing in the above
is reciprocity.
Following Williamson (1975), the network is an organizational form through

which resource allocation decisions are made, not simply through hierarchy but
more extensively through market mechanisms. A network will only continue if
each ‘member’ believes that the net result is of advantage and that all ‘members’
contribute positively. Increasingly the issue of relative contribution is crucial to
the longer-term cohesion of our organizations.
In fact regardless of the use of hierarchical, matrix, cluster or network organ-
ization models, the concept of value added provides the psychological and
organizational ‘glue’ from which to create cohesion. I will develop this view in
a later chapter, but in essence here two sets of principles may operate.
Organizationally the work of each of us is aided through understanding and
seeking to maximize the value of work of others whose input is needed for our
work. This supply chain management is based on a process view of organiza-
tion. Ultimately cohesion arises out of a shared sense of purpose. This is
achieved from the perception that each contributes to the achievement of
those purposes, i.e. that we all will the ends and will the means. We know that

59