The Problem of Networked Organizations in India: A Case Study

Abstract

We present a potential misalignment that many emerging economies may face with respect to the advent of networked organizations. We argue that although it may seem that networked organizations appear to offer a viable option for the progress of a nation, a deeper analysis suggests otherwise. This will be exemplified through the case of The Engineering Corporation and its presence in India. While The Engineering Corporation does indeed provide employment to the local economy, the host country must determine the right mix of the aspects involved in the collaborative venture. If this care is not taken, there will be little benefit for the host country, thus resulting in a skewed orientation in the relationship. The globalization of work supported by telecommunications technology and the advent of “networked” organizations has produced a potential dilemma in how to balance the interests of the new global company and the long-term national interests of the country supplying the workforce. A networked organization is one that is decentralized and has regional offices that deal with part of the business operation. For instance, an IT center in one location and a sales office in another. Global decentralization is motivated primarily in order to exploit cheap, skilled labor wheresoever it is found in the world.