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Implications of digital networks for corporate structure and management: building global competitive advantages
by Florian Ross, H. Martin Shane
International Journal of Networking and Virtual Organisations (IJNVO), Vol. 2, No. 2, 2004
Abstract: Digital networks can be a technological basis for supporting and building personal networks within a company. They serve as tools for better communication by breaking distance and time barriers. On the one hand, a company can derive advantages such as organisational learning, greater responsiveness and higher efficiency. On the other hand, a company could face problems like information overload, system breakdown or unsatisfied employees due to intensive task-prestructuring or electronic monitoring. The implementation of a digital network will cause a flattening of the organisation since the corporate network can partly conduct the tasks of mid-level managers. Employees further down the organisational chart have to be empowered to make more decentralised decisions, so top management can focus on the strategy process and leadership. Employees will work together in cross-functional teams that will be responsible for business processes and projects. The success of a digital network depends heavily on the involvement and commitment of employees in terms of its design and implementation. Management has to ensure that employees have sufficient knowledge and motivation to use the digital network. A company has to assess in advance if its culture provides the values to freely share information. If this e-culture is not found in a company, the implementation of a digital network will fail.

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