DB Forum 3 Module 6 12-3-2020.docx - DB FORUM 3 MODULE 6 1...

DB FORUM 3 MODULE 6 1
Types of Network Organizations and their impact on the
environmental process.
Valerie Soh
School of Business, Liberty University
Author Note
Valerie Soh
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Valerie Soh
Email: [email protected]

DB FORUM 3 MODULE 6 2
Introduction
The world today has been influenced by technological developments which have greatly
changed the way businesses operate. Several organizations are now connected through the
creation of informal networks. The networks established do not depend on a particular structure
but are more focused on completing the 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. Their structure and joint ownership are essential
to achieve an integration of assets. Intercommunication between network organizations is
efficient and flexible (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 a 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.
A 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

DB FORUM 3 MODULE 6 3
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 a
loose association of assets and business in one company and are subject 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 to the
firm. With the internal network, the market prices influence how the units determine to increase
or reduce their prices to gain a competitive edge in the market. Dynamic network organizations
are involved in a lot of outsourcing. With a dynamic network organization, the integrator