Network Structure OperationNetwork Structure Operation  Operates with a “central core”  This core is linked through IT “networks” of relationships  Such as outside contractors and suppliers of service Core

Past modelPast model  Companies would own everything  Clustered/complex businesses  Accounting, packaging, design, distribution, etc. Core: design, packaging, accounting, shipping research Core: design, packaging, accounting, shipping research

The New ApproachThe New Approach  Outsourcing:  Essential Components in the “Core”  “Outsourcing” Contract Services  Accounting in India, Design in Mexico, Distribution in Nigeria

Example

Benefits  Cost Efficient  Very lean and streamlined  Wider, more diverse experience and knowledge  Less fulltime employees, more specialized staff  New technology makes it easier than ever before.

Disadvantages  The possibility of complicating things even more  “Domino effect of failure”  Aggression nature of outsourcing

Conclusion  Works well and is Efficient  Must be strategically directed and controlled