Network Organizations Essay

2826 Words Feb 22nd, 2012 12 Pages
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1. Introduction 2. Definition of Network Organisations 3. Reasons For Networks a. Advantages 4. Three Types of Networks 5. Three Types of Managers 6. Examples of Networks a. Dell b. GM c. BMW 7. The Future of Networks a. Cisco Telepresence 8. John’s Personal Experience 9. Conclusion

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By Team Four – Informal Definition By Miles, Snow & Coleman, “Managing 21st Century Network Organisations” – Formal Definition
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“…multilevel hierarchies have given way to clusters of business units coordinated by market mechanisms rather than by layers of middle-management planners and schedulers.” “…linked competitive success to doing fewer things better, with less.”
Dynamics, Snow C., Miles R & Coleman H. Managing 21st Century Network
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Concentration on Core Business
• Gets rid of minimally productive assets • Requires less planning and coordination; accelerates product innovations to keep pace with marketplace changes • Better control of outcomes - not interested in the processes, only the outcome Cost Control • Accelerates innovation and reduces overall cycle time • Reduces supervisory and administrative expenses, lowers effective wages through use of offshore workers, and eliminates payment for non-productive time as well as worker benefits • Shifts the risks of overcapitalization and unstable demand from the core firm to the overseas contractor

Access to State-of-the-Art Technology
• Can access new technology without owning • Become ‘placeless’…does not matter where software is written, balance sheet is reconciled or call centres are located

Flexibility
• Enables firms to respond to new challenges in volatile markets • External suppliers can be used as buffers to absorb production fluctuations • Labour headcount can be adjusted quickly
Clott, C. Perspectives on Global Outsourcing and the Changing Nature of Work, Business and Society Review, 109:2, pp. 153- 7 170

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• Arises to capture entrepreneurial and market benefits without having the company engage in outsourcing • Internal network firms own most of the assets associated with a particular business • Outsourced units constantly seek

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