If you accept, in the words of Thomas Friedman, that “the world is flat,” how do you need to reshape your organization, management, and thinking for this new terrain? This chapter offers strategies and insights on the capability for “network orchestration” that is essential in designing and managing networks that are centrally controlled. While most management education is focused on competition at the firm level, competition today is increasingly “network against network.” This changes the way we approach strategy, supply chains, building competencies, and managing enterprises. The authors examine the strategies used by successful networked companies in diverse industries. Effective network orchestration requires balancing control with empowerment of customers, suppliers, and entrepreneurial managers; and building value more from integration than specialization. While the traditional focus of core competencies has been at the firm level, the rise of networked organizations means that companies need to take a broader view. Success is based less on the competencies that the organization owns than those that it can connect to. This means that core competencies in network orchestration and learning may become increasingly important because these meta-competencies allow organizations to assemble and flexibly reconfigure the competencies needed to fulfill a customer-driven value chain.
New Paperback Edition Networks and the Enterprise: Breakthrough Thinking and Actionable Strategies “This book presents an amazing collection of insights on underlying forces and ways to thrive in our post-Coaseian age—an age in which the centralized firm is changing into an agile and resilient network of participants. A must read for a world where unpredictability reigns supreme.” —John Seely Brown, Independent Co-Chair of the Deloitte Center for Edge Innovation, and Senior Fellow at the Annenberg Center for Communication at the University of Southern California “I couldn’t wait to get my hands on this research...I have already begun to put the ideas into practice in designing next-generation open innovation networks...the diversity of ideas and perspectives is truly amazing and will be a terrific resource to anyone seeking to move to new business models based on the power of networks for innovation, marketing, and creating and leveraging big ideas. Job well done!” —Larry Huston, Creator of the “Connect and Develop” program for Procter & Gamble, and Managing Director of 4iNNO, a major Open Innovation consulting practice “In our borderless world, every manager needs to understand the strategic implications of networks. For the first time, The Network Challenge brings together thought leaders from many fields—a team of experts as broad as the network challenge itself.” —Kenichi Ohmae, author of more than 100 books, including the seminal work, The Mind of the Strategist, advisor on global strategy to foreign governments and scores of multinational corporations, selected by The Economist as one of five management gurus in the world. Networks define modern business. Networks introduce new risks (as seen by the rapid spread of contagion in global financial markets) and opportunities (as seen in the rapid rise of network-based businesses). While managers typically view business through the lens of a single firm, this book challenges readers to take a broader view of their enterprises and opportunities. This book’s 28 original essays include CK Prahalad on networks as the new locus of competitive advantage Russell E. Palmer on leadership in a networked global environment Dawn Iacobucci and James M. Salter II on the business implications of social networking Franklin Allen and Ana Babus on contagion in financial markets Steven O. Kimbrough on artificial intelligence, evolutionary computation, and networks Satish Nambisan and Mohan Sawhney on tapping the “global brain” for innovation Manuel E. Sosa on coordination networks in product development Christophe Van den Bulte and Stefan Wuyts on customer networks Christoph Zott and Raphael Amit on using business models to drive network-based strategies Yoram (Jerry) Wind, Victor Fung, and William Fung on network orchestration Valery Yakubovich and Ryan Burg on network-based HR strategy Howard Kunreuther on risk management strategies for an interdependent world Paul R. Kleindorfer and Ilias D. Visvikis on integrating financial and physical networks in global logistics Witold J. Henisz on network-based political and social risk management Boaz Ganor on terrorism networks And much more...
Zott and Amit explore the role of business models in creating value through networks. They review earlier, firm-centric views of value creation, including Porter’s value chain, the resource-based view, and the transaction costs approach. They point out that business models go well beyond classic views of network theory (e.g., topography and structure) and include notions of purpose, acceptance, fairness, coherence, and viability. Based on their earlier framework for e-business models, they explore the role of four major interlinked value drivers: efficiency, complementarities, lock-in, and novelty. They argue that the focal firm’s business model acts as both an engine for value-creation and an invaluable construct for understanding the firm’s role in relation to other business model participants in the networks in which it is embedded.
Complex products, such as airplanes and automobiles, are designed by networks of design teams working on different components, often across organizations. The challenge in managing these networks is to decompose the project into manageable pieces but then coordinate the entire network to produce the best overall design. In this chapter, Manuel Sosa offers insights on this challenge. He examines the design structure matrix (DSM) as a project management tool for planning complex development efforts and discusses the engineering and managerial implications of considering complex products as networks of interconnected subsystems and components. In particular, he considers the impact of modularity on interactions among subcomponents. Finally, he examines organizational communications, overlaying product interfaces with communications interfaces of development teams to understand where communication links may be missing or unnecessary. The discussion offers insights on any complex design and coordination challenge, where networks of individuals or teams work together to contribute to a larger whole.
Although networks in key business areas such as communications, supply chains, R&D, and sales are designed to improve the flow of information, people, or goods, they can also be used to improve the “peripheral vision” of the organization. In this chapter, the authors examine how networks can be used by organizations to scan, sense, and adapt to new and important signals from the organization’s strategic environment beyond its core focus. The first part of the chapter emphasizes the importance of peripheral vision in helping organizations not being blindsided by threats while seeing new opportunities sooner. The authors examine some key obstacles to using networks to better mine the periphery for early insight. They then explore how extended networks can help the organization be a responsive open system adapting faster to changes in the environment. They examine to what extent network constructs such as centrality, hierarchy, self-healing, distributed intelligence, multihoming, and latency can be used to improve organizational networks for scanning the periphery. The last section explores some of the leadership challenges associated with using networks to detect weak signals sooner.
From oil companies seeking rights to drill to consumer products firms attempting to forestall a consumer boycott, organizations often seek to influence political or social policy to achieve their own objectives. But to exert this influence, they need to understand the structure of political and social networks. In this chapter, Witold Henisz examines how information about the structure of political and social networks can be integrated into data acquisition and analysis, as well as strategy implementation. Although sophisticated companies have long relied on an informal understanding of networks of informants to gather information about social and political actors at home and abroad, the analysis of the information and design of an influence strategy has too often occurred without reference to that structure. As Henisz points out, a more rigorous approach to analysis is transforming political and social risk management from art to quasi-formal science. This chapter outlines the past, present, and future frontiers of political and social risk management with particular attention to using an understanding of the network structure of diverse actors in perceiving, analyzing, and influencing the political and social environment.
This book provides a comprehensive introduction to the underlying theory, design techniques and analytical results of wireless communication networks, focusing on the core principles of wireless network design. It elaborates the network utility maximization (NUM) theory with applications in resource allocation of wireless networks, with a central aim of design and the QoS guarantee. It presents and discusses state-of-the-art developments in resource allocation and performance optimization in wireless communication networks. It provides an overview of the general background including the basic wireless communication networks and the relevant protocols, architectures, methods and algorithms.
Social networks and word-of-mouth marketing are increasingly important, yet few current practices are based on a deep understanding of how the structure of networks can affect customer behavior and marketing outcomes. This chapter offers some critical observations on current word-of-mouth marketing practices and identifies four key questions that managers need to ask themselves before engaging in campaigns designed to leverage customer networks: Can we be confident that interpersonal influence or social contagion is really important? Why exactly would social contagion occur? Should we target key influentials? Can we identify and target those influentials? The answers to these questions cannot be taken for granted.
Complexity theory offers valuable insights into the interactions of complex systems such as networked enterprises. Complexity theory addresses the “network effects” that result from interactions between many individual actors. This chapter examines the implications of this theory for business, and how these effects influence key management areas such as making sense, strategy, and organization. The author explores issues such as fads and crowds, using information and technology, and the use of agent-based simulations. Finally, he explores the shifts in management thinking, and business education, needed to utilize complexity theory--a shift in mental models that may be crucial to success in a networked world.
Most companies realize the need to “look outside” for innovation. However, few have a clear understanding about how they can make such a shift toward network-centric innovation--an innovation strategy that is centered on external networks and communities. Managers need more than anecdotal success stories about externally focused innovation, and they need more specific guidance than the “one size fits all” prescriptions of open innovation. The authors argue that every firm needs to find its own roadmap for tapping the “Global Brain”--the creative potential of the world outside its four walls. There are many different approaches and opportunities for network-centric innovation, based on the nature of the innovation space and the nature of network governance. In this chapter, the authors present a framework for structuring the landscape of network-centric innovation. They describe four models of network-centric innovation--Orchestra, Creative Bazaar, Jam Central, and MOD Station--and outline how companies can select, prepare for, and pursue the approach that best fits their particular business and innovation context.
