Networks and Networked Organizations

The Dynamics of Networks

A networked world operates differently than one built on hierarchies and fragmentation. The Internet is a wonderful example of a network. The Internet has a basic structure within which individuals and organizations can create and operate. That structure is one of nodes, each of which is a center for a web of connections. Each of these nodes is linked with other nodes. This structure is simple, yet it allows for great flexibility and has permitted the evolution of the World Wide Web, the graphical informationexchange service that, with e-mail, is the way that most people make use of the Internet. Individuals who are connected to the Web can initiate change from anywhere within the system: They may set up a new website, for example, or they may enter topical chat rooms or initiate conversations on new topics. The ease with which new websites can be created is evident from the fact that in the United States alone their numbers grew from 50 in 1992 to 50 billion by 2000.

The Internet is highly dynamic: Websites, users, and content are constantly changing, and the opportunities for individual initiative and creation are endless. It is active participants who shape the system, gradually and in an ongoing manner, based on their own knowledge and interests.

The dynamics in networked organizations are different from the dynamics in fragmented, hierarchical organizations in that they are linked both formally and informally by many different connections and directions. Unlike a traditional hierarchy, which has vertical linkages and tends to limit connections across departments or the larger organization, a networked organization often has ways to communicate across the entire organization (mass e-mail messages) and allows many formal and informal directions of communication and relationships often disregarding formal position. While networked organizations retain certain hierarchical aspects, they significantly increase hierarchy-challenging links among network members. A networked world blurs organizational boundaries, creates connections, and influences the way we work.

A number of rules and observations apply when examining networked organizations. First, networks can only be understood from the perspective of the whole system. Rather than trying to analyze each connection in the web of connections that make up the network, it is more useful to step back and examine the whole system from a distance of time or space.

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