Organizational structure refers to the distinct form of organizing and managing the activities of a business. While the most common type of organizational structure is the hierarchical type, which features a pyramid or layered structure, in contemporary organizations, the trend is towards the use of other, less rigid forms. For example, networks, where all the members/actors have a certain degree of autonomy, are replacing the traditional hierarchical structure in many companies.
A network structure is a system of direct and indirect links between the members of an organization. As distinct from other organizational structures, it does not adhere to a rigid hierarchy, nor does it presuppose a standard flow of authority. The simplest definition of a network is a set of actors who are connected among themselves. In networks, external actors also feature, who are not strictly connected to the original members.
Network organizations create a vibrant working environment, which makes them preferable to other forms in many cases. They provide members with the freedom and confidence to explore, to learn, and to discuss the variety of tasks and the goals of the project.
The point of this structure is to enable network members to use their skills, abilities and expertise to achieve the desired aims of the organization, without relying on the hierarchical structure, thereby reducing bureaucracy. The network also allows for a much wider diversity of topics and perspectives to be explored, and can encourage far more effective collaboration and decision-making.
Advantages of Network Organizations
Speed of decision-making
Network organizations are usually faster decision-makers since decisions can be taken without having to go through many levels of bureaucracy. As the decisions are taken by the actors directly involved, they can be implemented very quickly in response to market demands and changes in technology.
Efficiency
Network organizations are also more efficient, since there is no need to wait for various bureaucratic procedures to be completed before decisions are taken. Because the actors are directly involved in the decision-making process, they can quickly evaluate and address issues as they arise.
Less hierarchical
Finally, network organizations are less hierarchical and allow for individuals to take responsibility for their own actions, as well as to decide their own path and objectives. This reduces the need for hierarchical supervision and gives members more autonomy to innovate and explore.
Disadvantages of Network Organizations
Lack of accountability
Most often, in the absence of strong hierarchies, the lack of accountability in a network organization can lead to low performance due to the difficulty in identifying who should assume responsibility for the projects.
Lack of expertise
Since decisions are often taken without expert input, there is a risk of making decisions without considering the future consequences. This may prevent the organization from taking advantage of the collective knowledge and experience of everyone in the network.
Information overload
Lastly, due to the large number of actors in the network, the free-flowing information may become overwhelming and can lead to confusion and chaos. This can impede the smooth functioning of the organization and may require considerable coordination between its members.
Conclusion
To conclude, while there are certain advantages to the use of a network organization structure, such as its speed and efficiency, there are also serious drawbacks, such as the lack of accountability and expertise. Similarly, there is a risk of information overload. All of these drawbacks must be considered before implementing this type of structure. Ultimately, the success or failure of the organization will ultimately depend on its ability to make decisions responsibly, while also considering the collective knowledge and experience of its members.
