What are the
advantages and disadvantages of network structures?
ANSWER
The advantages of network structures include: network
structures are lean and streamlined. They help organizations stay
cost-competitive by reducing overhead and increasing operating efficiency.
Network concepts allow organizations to employ outsourcing strategies and
contract out specialized business functions. Within the operating core of a
network structure, furthermore, interesting jobs are created for those who
coordinate the entire system of relationships.
The potential disadvantages of network structures lie
largely with the demands of new management responsibilities. The more complex
the business or mission of the organization, the more complicated it is to
control and coordinate the network of contracts and alliances. If one part of
the network breaks down or fails to deliver, the entire system suffers. Also,
there is the potential to lose control over activities contracted out and to
experience a lack of loyalty among contractors who are used infrequently rather
than on a long-term basis.
Source: Management, 11th Edition &
12th Edition- John R. Schermerhorn
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