The corporate environment of organizations in the 21st century are expected to be very demanding, flexible, and competition driven as discussed by Drucker (2001). The organizations will have a very hard time sustaining their competitive advantages under these conditions. Therefore, individual organizations must collaborate with other organizations for survival and sustainable success (Wilkinson, Mattsson, & Easton, 2000). This translates itself into network organizations that specialize in certain functions of business of activity. Network organizations are defined as a system established by individual organization with designed roles and responsibilities (Achrol, 1997). Network organizations are established by the need of organizations to interact with each other for the purpose of establishing links and improving performance and business processes of individual organizations.
Key Terms in this Chapter
Virtual Organization: A virtual organization is an organization or a productive entity that does not have a central geographical location and exists solely through information technology tools.
Smart Organization: An organization that is has strong principles, respects the environmental and safety concerns of the public and has a focused activity by aligning the activities of its constituents.
Adaptive Organization: An organization in which the goods or services demand and supply are matched and synchronized at all times by optimizing the use of its resources and using only those it needs and paying only for what it uses, yet ensuring that the supply is adequate to meet demand.
Network Organizations: An interconnected system formed by members whose roles and responsibilities are determined.
Globalization: Dissolution of national borders, process of transformation of world societies becoming a unique interactive society.
Input-Output Relationships: The relationships among the individual organizations to show the nature of transfer of knowledge, material and information.
Clusters: A geographically bounded concentration of similar, related or complementary businesses, with active channels for business transactions, communications and dialogue that share specialized infrastructure, common technology, specialized labor pool, and other related services, and that are faced with common opportunities and threats.
Organization: A structure formed by individual entities who come together to realize an overall, common goal or objective.