BUSI 735 Forum 3 Module 6.docx - Types of Network...

Types of Network Organizations
The world today has been influenced by technological developments which has greatly
changed the way businesses operate. Several organizations are now connected to one another
through the creation of networks that are informal. The networks established do not depend on a
particular structure but are more focused on completing assigned task. Network organizations
are defined by elements of structure, process, and purpose. Network organizations combine co-
specialized and possibly intangible assets under shared control in their structure and joint
ownership is essential in order to achieve an integration of assets and intercommunication in an
efficient and flexible manner (Kavadarli, 2017
).
The structure of the network organization is very
flexible. When several organizations with a common goal of making profits come together under
a particular network, they develop competitive advantage in the market where they operate. The
structure of a network organization requires joint ownership of the assets, flexibility in
communication amongst the various organizations that belong to the network. Network
organizations can be long-term or short term. Separation or joining a network organization is in
the form of units. The participants in the network organization are assigned different roles
through which they can execute and make decisions that will be beneficial to all members of the
network organization. In a network organization, the purpose is the same for all its participants.
Virtual organization is a form of network organization. The various types of network
organizations and their impact on the environmental process will be discussed further in the
subsequent paragraphs.
Stable network organizations are made up of a centralized organization whose operations
have been outsourced to different firms. In a stable network organization, the suppliers are

granted access to the centralized organization’s computers. The centralized organization has
different contracts that are long term, joint ventures and alliances. Stable networks comprise of
loose association of assets and business in one company and subjected to forces of the market.
Internal network organizations constitute a big firm that considers its production unit as different
profit centers. The units can market their products in the global market and not limited within the
firm. With the internal network, the market prices influence how the units determine to increase
or reduce their prices, in order to gain competitive edge in the market. Dynamic network
organizations are involved in a lot of outsourcing. With a dynamic network organization, the
integrator understands the market better and uses it to its advantage. Dynamic networks
constitute firms that have key skills organized around a brokering firm. Each unit is independent
and collaborates on specific projects or opportunity. Market networks are combination of