Abstract
The formation of network organizations is underpinned by the development of ICTs (Information Communication Technologies). Such organizations promote the application of an innovation-oriented approach. The monograph depicts theoretical and practical issues arising from our research on the transformation of management structures of various organizations. The research shows that the application of a network management model allows for significant economic effects to be obtained both for the constituent organizations and for the society. Creating a network organization may improve its competitiveness and ensure its higher international ratings. The emergence of network organizations ensues from the evolution of traditional linear structures. The transformation process could take place thanks to substantial progress in ICT development.
TopBackground
The network organization emerge as a result of the transformation of traditional structures organized in a hierarchical way into modern forms relying on the use of ICTs. These are structures that are not affected by functional and geographical constraints as much as classical organizations. Their driving force is an IT network allowing them to cross both geographic and institutional boundaries without much impediment. M. Castells (2007, p. 189) even speaks of a new type of economy (information economy) that is replacing the old-fashioned industrial approach. In the previous type of economy, the competitive advantage was generated by economies of scale, while today’s new economy relies on the economics of networks which involves expanding the reach of the network, whereby the network can significantly increase its value by connecting to other networks (Castells, 2007, p.191). The establishment and operation of network organizations under the new management approach is driven by the desire to find modern and non-standard solutions, the development of knowledge and the support for innovation.
A network organization is defined by P. Colin (2004, p. 268) as one that functions as long as possible in isolation from the traditional structure. In order to implement specific projects and defined goals, such organizations form teams. These teams are inherently impermanent since they are dissolved after project completion and the organization looks for new projects and new resources to support their implementation. The concept of network organization is often identified with the notion of virtual organization, which is also evident in P. Collin’s works, where, nonetheless, the difference is that it is the structure that distinguishes a network organization, whereas a virtual organization is unique due to its operational manner that fully relies on modern ICTs (Collin, 2004, p. 442).
Network organizations are ones that are formed as a result of a merger of different, often independent, units (Figure 1) This connection may be temporary, often confined to the completion of a defined, specific task. Collaborative relationships among organizations can be varied and may involve both material and non-material organizational resources (Zott & Amit, 2010; Niemczyk, Stańczyk-Hugiet, & Jasiński, 2012; Kisielnicki & Sobolewska, 2019). The primary goal behind the formation of such structures is to achieve synergies – faster or more efficient attainment of defined goals by pooling resources. Hence, a particular emphasis on informational connections can be seen in network structures.
Key Terms in this Chapter
Open Innovation: An innovation that results from the exchange of knowledge and cooperation between organizationally independent units: enterprises, universities, or public institutions. Open innovation is based on the assumption that in modern market conditions it is no longer sufficient to introduce real innovations, relying only on the resources owned by the organization. Creating innovative solutions requires organizations to use a wider pool of resources, often those that do not belong directly to the organization.
Network node: A component of the network. It is a person or organization undertaking a cooperation relationship within a network structure Innovation - is a series of activities leading to the production of new or improved products, technological processes, or organizational systems.
Communication Structure: In an organization is a set of elements of a given system with various types of relationships established between them – relationships. In the case of organizations with traditional structures, it is often a consequence of its formal structure. For a network organization, it takes a more flexible form because it is the result of achieving the objectives pursued by network nodes.
Innovation: A series of activities leading to the production of new or improved products, technological processes or organizational systems.
Network Organization: Organized, polycentric structures in which traditional hierarchy-based coordination has been replaced by strengthening horizontal links. These are temporary structures created to achieve specific goals.