Strategic networks—The organization of the future

The organization of international business has moved from an uncontrolled chaos to diversified conglomerates, to focused business units. However, the most successful organizations today (ABB or NEC for example) are moving beyond this form of organization, reorganizing themselves into a collection of units with core competencies and creating a network of strategically structured business cells. A similar movement can be observed among smaller firms, already focused on their competencies, building strategic networks. The corporate world has in effect come full circle with one difference—the organization of tomorrow will move to the stage of controlled chaos. These evolving ‘network’ organizations' will be described in this article. After defining the strategic network, cases will be used to document the controlled (or co-ordinated) networks as well as the uncontrolled ones and their significance in the development of an industry. An example of a ‘server’ or a network co-ordinator will be discussed in detail. Finally we will discuss the options for European business.