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Managerial issues in a networked organization

Managerial issues in a networked organization

A networked organization controls and coordinates its interactions to establish a single large entity. It uses digital technology and trained experts to create this networked environment. There are three types of networked organizations, internal, stable and dynamic. The internal networked organization has divided units that act as profit centers. Stable networked organizations consist of a middle company. It outsources errands to others. A dynamic networked organization outsources duties to other companies. It is a network integrator.

There are several issues that managers in networked organizations face. With innovations and technology growing rapidly, there is a need to keep updating the company’s technology and programming. This is expensive. Also, managers need to keep updating themselves on how to use new technologies. This is done by consistently attending classes, it is inconveniencing and time-consuming. Managers have to keep the information systems protected from virus attacks. They handle very sensitive and crucial data that is essential to the company. With the increase of cybercrimes and security threats, managers have to step up their efforts of securing the data.

Networked organizations mostly offer customer service and product development. Software and electronic businesses are the most networked organizations. Panasonic and Honda Companies from Japan, together with 3M from the United States are examples of networked organizations. Most international organizations are networked organizations.

Apart from security threats and high expenses incurred in updating technologies, managing distributed firms, with branches across the globe and in a country is also an issue. Managers need to build an information system that is responsive and adaptive. It should be protected and maintained regularly to avoid any technical hitches.

Information system infrastructure plays a vital role in enhancing coordination in an organization. It enables the management to interact with the customers and the suppliers. It also integrates stores and processes data before distributing to various staff working in a company. The data is crucial for effective decision making. This information system infrastructures need to be handled with a lot of care. It is the responsibility of the manager to protect them from any risks. With the increasing amounts of data, these technologies need to be expanded to handle all the data.

A networked organization extensively seeks collaboration between the employees and the customers to gain a competitive advantage in the market. Increase in the amount of data, the constant development of technology and the high expenses incurred in updating information systems. Together with security threats such as cybercrimes, are some of the issues managers face in a networked organization.


Möller, K.K. and Halinen, A., 1999. Business relationships and networks:: Managerial challenge of the network era. Industrial marketing management28(5), pp.413-427.

Colombo, M.G., Laursen, K., Magnusson, M. and Rossi‐Lamastra, C., 2012. Introduction: Small business and networked innovation: Organizational and managerial challenges. Journal of Small Business Management50(2), pp.181-190.

Wilson, F., 1995. Managerial control strategies within the networked organization. Information Technology & People8(3), pp.57-72.

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