NETWORKED ORGANISATIONS

Organisation layouts aim to describe management dependencies between all functional units in any corporation. In this section we are describing different organisational layout models to introduce networked organisations.

The hierarchical model

Traditional organisation charts describe the functional layout using a hierarchy model. In a hierarchic model, one department or unit is described as the "manager" of the depending units. Those units, at its turn, are also composed of other smaller units. The resulting graph has a "pyramidal" shape, were units at the top rule all dependent ones. Each individual in the organisation has a single, very well defined "command chain".

This organisational layout is strongly inspired by the army, were a relative large number of individuals are expected to perform in a very similar way following some higher authority command. The model was adopted in the XIX century by most industrial and trade organisations originated in the industrialisation age.

Grid organisations

While the hierarchical model works quite well in simple, small organisations, or in larger organisations with a small set of functions, they don't take into consideration that functional dependencies may vary according to the particular dimension considered. As an example, a single business unit may depend on a "country manager" leadership from a market perspective, but at the some time it depends on the "financial management" from functional perspective. This organisation layout is often referred as a grid-shaped organisation. Grid organisations became very popular in the '80s and '90s of the XX century, as transnational corporations developed under increased globalisation conditions had to address new organisational needs.

Nevertheless, grid organisations have been often criticised as they require unit managers to report to multiple leaders: A typical sales department, for example, may have to report at the same time to the local country management, to the headquarters marketing manager and to the human resources managers. Those multiple dependencies generate permanent "management schizophrenia", lost of focus, and rise continued conflicts of interests, as managers to be reported may have different priorities and goals, and the dependant unit must follow funcional leaderships which may not necessarily be fully aligned.

Grid organisations also nurture the creation of information and management silos, each one focused on its own set of goals. This organisation approach may often create miss alignment between short and long term goals and create all kind of zero sum competition between company leaders, as it rewards internal competition over cooperation.

Networked organisations

Instead of describing a particular organisation as the successive split of resources into smaller hierarchic-dependent units, network organisations approach the issue all the way around: They try to describe each unit as a team with a specific profile and mission, and describe relations between teams in terms of team roles. The resulting diagram, usualy represented as a circle-shaped diagram of relations describes the final organisation. In such model, the boundaries (i.e. the scope) of the organisation may be continuously changing to adapt to new environment changes

.Here is an example of a relation diagram created by Max de Marzi:

This "organic" approach mimics the own nature of life's evolution, were different cells trend to specialise in a collaborative way, to fulfil specific functional needs: In most species, the brain is regarded as the main central commanding unit. However the CNS (central neuronal system) is not in charge to regulate directly most of the physiological functions, such as body temperature, blood pressure, ventilation or immunity. Instead of this, different organs partner together to support each specific common need in an autonomous way.

Multilevel natural selection theories have recently proved that the classical natural selection theory can be extended beyond the scope of single cells or individuals to describe entire social behaviours. In particular, the multi level selection theory was able to explain certain social behaviours such as altruism, were some individuals may voluntarily accept to put their live into danger to support the social group they belong to. While altruistic behaviour could not be explained by the traditional natural selection theory, were each individual would struggle to survive over other members competing for the same resources, the multilevel theory proved that natural selection would rather benefit those social groups that would be better prepared to compete with others as a whole. As a result, those societies developing individual behaviours that would benefit the entire group would have more chances to preserve their genetic heritage over other communities, making possible that under certain conditions, collective goals would prevail over individual ones.

Networked organisations adapt much better to environamental changes, as individual units can replace other similar ones in case of default, can split to provide increase differentiation or perform spontaneous changes to fulfil new needs. In those organisations, the units with higher responsibilities serve as strategic framework for the whole group, rather than as a central commander of every single individual. In the majority of networked organisations, the election of the members in charge os such "guidance" is not regarded to its authority, but to its inspirational vision, and quite often are elected by majority consensus on the individual units or their representatives.

In some way, we could say that networked organisations keep themselves together because they are more suitable than its hierarchical counterparts. Typical networked organisations trend to develop around a strong social value framework, also reverend a "corporate culture". Networked individuals may share a common sense of belonging to the organisation. It is not yet clear the way networked teams share the value generated from cooperation. Some researches suspect that shared value distribution within the organisation may be partially explained using game theory priciples.

While hierarchical organisations have historically been nurtured from the army, one could say that to some extend the roots of networked organisations can be find in religious organizations. We can refer to some religious organisation as being the oldest existing network organisations, some of them as old as several hundred years. This extraordinary longevity stand above hierarchical organisations, as most of the existing business organisations are just a few tens of years old, and very few (if any) have been in place for a century or beyond. This unique longevity may be due to the capacity of network organisations to adapt to local and global economic, cultural and social changes over the time.

Clusters and networks

An important part of the recent interest on network organisations raised at the beginning of the XXI century when Prof. Michael Porter and his team from the Harvard Business School described the competitive advantage for small and medium companies when developing in certain business ecosystem. The existence of special synergies in some geographic locations were education, research, manufacturing and logistic of independent organisations would naturally team up together around a certain sector created the concept of clusters.

Clusters are very helpful to explain the success of certain areas in specific sectors. Yet, as internet and globalisation have provide a wider scope of virtual communities and cloud services, the initial concept has expanded to cover global services in the knowledge economy.

The wider availability of highly scalable, low cost on demand services has empowered the chance to source from distant, global providers under cloud based computing. This evolution has fuelled the growth of the crowding economy. This has allowed to small companies to benefit from large economies of scale, reducing the amount if capital required for operation and allowing to focus on the company's core value proposition. This trend has been described as lean management. Lean managed companies source most of their operational needs from on demand services provided by SaaS (software as a service) suppliers. The services contract may include accounting, human resource management, customer retention management, information technology services, and many mote. Of course, information technology services offered in cloud computing mode are in the center of the process. The reduction of telecommunication costs and the improvement of IP video conferencing technology has teared down geographical distance barriers. Knowledge workers of many kinds, including, consultants, computer coders and graphical designers can be easily accessed from global crowdsourcing platforms. 

The health care dilemma

The choice of the right organisational layout is a key issue when addressing integrated health care needs. Health care systems are expected to satisfy health care demand in many different dimensions: 

• Geographically: As most users would expect to be served by those providers closer to their neighbourhood.
• Speciality: On the other hand, centres that specialise themselves in a limited number of interventions are consistently reported to provide better quality and effectiveness that those trying to support a full range of care. Specialisation generates higher skill development, and those centres that focus in certain diseases improve their protocols, have better trained professionals and build much effective care.
• Criticality: Depending on the health condition stage, some units must be ready to provide emergency care on acute episodes (such as injuries and infections) and exacerbation of chronic disease. Some other units must adapt themselves to provide long term follow up of chronic disease. Other care units focus on health management and preventive care, in pre and post surgery habilitation, in palliative care, home hospitalisation or social support for elder people.
• Exploration and tests providers typically provide specific support for special laboratory test. Some other suppliers provide specific home treatments, such as LTOT (Long Term Oxygen Therapy) or homes social care.
• Research and reference centres and professional associations can provide a substantial support to all the system by creating guidelines and providing second opinion support the improve disease management for specific health conditions.

Those multiple dimensions are strongly affected by the raising increase on the medical knowledge growth, the social economic conditions, the evolution of citizen expectations and by extremely fast population ageing changes.

In order to address the complexity of all those interactions, the Linkcare organisational model uses a Networked Organisation approach.

Linkcare's networked layout

The basic organisation unit of Linkcare is a team. A team is an organisational composed by members. Members themselves ca be individual users or other teams. The relation between any team and its members is described in terms of roles.

By adopting this networked layout, Linkcare doesn't necessarily require organisations to become network-oriented: One of the advantages of defining an organisation as a network is that the model can also support hierarchical or grid organisations as a particular case of use of the network. This is extremely important, as the transformation of organisational models require a great deal of change management.