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Characteristics of the Network Organization

management, business, organization, networks, network organization, administration, planning, directing, controlling, staffing

A number of management researchers have turned to examining organizations as networks of dynamic relationships. This view offers a mechanism to enable managers to analyze the processes of interaction unfolding in their organizations and to think about the real complexity of organizational life. The dynamic perspective may also provide easier solutions to problems. It is sometimes easier for managers to change one or a few network patterns in the interest of increased efficiency or improved attitudes than to shift entire departments around, as one would have to do in manipulating organizational charts.

Analysis of the static structural elements tends to focus on the organization as a whole, to take a long-range view. A good deal more is added in network research. One can look more closely at individuals or subunits making up various networks and translate organizational issues of centralization into individual issues of centrality. One can specify in terms of interactions the various roles people play in networks. And one can move relatively easily from thinking about organizations as totalities to thinking about various individuals in those organizations.

A network is a set of linkages among a defined set of people in which the character of the linkages is specified. Thus, a network may be built around job requirements or how best to get things done. It may be structured by social interactions or how people interact informally.
Network observations began in laboratory research studies in the
1950s but were not done in real organizations. Groups of three, four, or five persons were studied to discover how variously imposed structures influenced problem solving and member attitudes. Structure was varied by imposing rules about who could talk to whom. The findings from these studies were consistent: for simple problems, centralized networks, in which information about the problem is sent to just one person, produced solutions faster with fewer errors than did decentralized networks, in which information was sent to everyone.

However, when problems were complex,decentralized networks were superior. Unfortunately, findings from laboratory investigations such as these do not always generalize to people at work.

For many years the results of these small-group network studies were
presented in management textbooks as the gospel about how to engage in
efficient problem solving. The research exhausted itself, however, and a number of years passed before interest was renewed in organizations as net works of relationships. One reason for the stagnated research was that larger organizational networks could not be studied. Yet these reflected the complex interrelationships found in reality. Complex networks were ignored until the 1970s because reducing data from them to understandable forms required high-speed computers that were not readily accessible. Today a number of computer programs are available for describing networks.

One kind of network of interest to managers is the grapevine. Grapevines are naturally occurring net works that are familiar to all members of organizations. Efficient and fast, grapevines are an avenue for managers both to obtain information about what's going on in their organizations and to send out important information. Political leaders understand the value of pretesting their constituents' acceptance of new programs and plans by leaking them to large-scale networks. Grapevines offer informal ways for managers to move information for any of a variety of purposes.

Various networks coexist in organizations and are used for purposes other than moving information. The three types, aside from the grapevine, are task networks, authority networks, and social networks. All the types overlap and serve different organizational functions. One set of high- technology military organizations over a six-month period found that task networks developed more quickly and became stable sooner than other kinds of networks. These were closely followed by the development of social networks. Authority networks were much slower to develop and never reached the level of maturity of the other two kinds. These findings are somewhat surprising, particularly for military organizations. They suggest that managers should pay close attention, in particular, to the development of task networks, implementing change where these networks appear to be dysfunctional to the goals of the organization.

A number of network properties have been identified. Although it is not difficult to infer some of the consequences of these properties for organizations, little research relating them to organizational performance has been done. These network properties follow:

 Connectedness, or the extent to which people in networks are interconnected
 Centrality, or the degree to which network relations follow the formal organizational hierarchy
 Reciprocity, or the degree to which there is two-way communication
 Vertical differentiation, or the degree to which different organizational levels are represented in the network
 Horizontal differentiation, or the degree to which different job areas are represented in the network

Within a network are clusters that are more richly interconnected than the rest of the network. Coalitions and cliques are two types of clusters. Coalitions are temporary alliances among people for some distinct purpose, such as control over an activity. Coalitions often form in times of unusual or non-routine demand, perhaps when firms develop new products or when the environment appears threatening. A joint venture is a coalition, as is the formation of a cartel such as OPEC. Cliques are permanent clusters, often involving friendships, in which all members are directly linked and may or may not exchange information about things other than friendship. Coalitions and cliques can both be used to maximize the power of some group in an organization.

While managers should be sensitive to the development of coalitions and cliques in their organizations, helping them to develop or to deteriorate depending on the circumstances, they also need to be aware of how networks within organizations are tied to the outside. This issue has surfaced in the sociological literature under the rubric of the strength of weak ties.

The strength of a tie between two individuals within a network or in two different networks is defined by the amount of time, emotional intensity, intimacy, and reciprocal services that characterize the tie. The stronger the tie between any two individuals, the larger the proportion of people in a group to whom they will both be tied by either a strong or a weak tie. Strong ties produce dense networks, weak ties less dense networks. Strong ties are likely to create closed systems, impenetrable to outside information. Strongly tied groups cannot obtain or disseminate information, co-opt their environments, or develop coalitions with outsiders.

If organizations are to reach their goals, they must be permeable and sensitive to outside conditions, however. Thus, some persons in any given cluster need to have weak ties with persons in other clusters. These weak ties afford opportunities for the flow of information, ideas, innovations, and resources across groups, making them enormously important for diffusion in and across organizations. The importance of weak ties might suggest to a manager that he needs to develop them where they are nonexistent and that removing them by transferring or firing people or by changing their jobs may actually harm the organization. Alternatively, strong internal ties have been related to low internal conflict.

Thus far, the strength of weak ties has been investigated only in friendship networks, but the results offer insight to managers. One example of the function of weak ties is demonstrated in finding a job. It has long been known that American blue-collar workers find new jobs more frequently through personal contact than through any other method. This appears to be true, too, for professional, technical, and managerial positions. One investigation asked a sample of such workers where they obtained information that helped them get new jobs. The researchers concluded that the vast majority of people who found new jobs through personal contacts used weak ties (they had been in touch with those contacts occasionally or rarely). Because those with whom we have weak ties move in different circles, they have different information than we do, making them valuable job contacts.
Published: 2007-04-17
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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