RAND_MR1382

observing that the network may be a distinct form of organization, one that is now
coming into its own. For many social network analysts, the network is the mother of all
forms, and the world amounts to a network of networks.
Organizational Network Analysis 15
Organizational network analysts—or, since this phrase is not widely used, analysts who
use network perspectives for studying organizational forms—utilize many of the
methods and measures developed for social network analysis. But their approach is quite
different—many of them view the network as a distinct form of organization, one that is
gaining strength as a result of advances in communications. Also, many of them think
that network forms of organization have advantages over other (e.g., hierarchical)
forms, such as flexibility, adaptability, and speed of response. For social network
analysts, almost any set of nodes (actors) that have ties amounts to a network. But for
organizational analysts, that is not quite enough. They might ask, for example, whether
the actors recognize that they are participating in a particular network, and whether
they are committed to operating as a network.
This literature arises mainly in the fields of organizational and economic sociology, and
in business schools. There are various accounts as to who, in recent decades, first called
attention to the emergence of networked organizational designs. But most accounts
credit an early business-oriented analysis (Burns and Stalker, 1961) that distinguished
between mechanistic (hierarchical, bureaucratic) and organic (networked, though still
stratified) management systems. The organic form was deemed more suited to dealing
with rapidly changing conditions and unforeseen contingencies, because it has “a
network structure of control, authority, and communication” along with a “lateral
rather than vertical direction of communication” (p. 121).
Nonetheless, and despite other insightful efforts to call attention to network forms of
organization (e.g., Perrow, 1979; Miles and Snow, 1986), decades passed before a
school of thinking began to cohere.
One seminal paper in particular (Powell, 1990) looked beyond informal social networks
to argue that formal organizational networks were gaining strength, especially in the
business world, as a distinct design—distinct in particular from the “hierarchies and
markets” that economic transaction theorists, some other organizational economists,
and economic sociologists were accustomed to emphasizing.
[T]he familiar market-hierarchy continuum does not do justice to the notion of network forms of organization….
[S]uch an arrangement is neither a market transaction nor a hierarchical governance structure, but a separate,
different mode of exchange, one with its own logic, a network (Powell, 1990, pp. 296, 301).
But this new thinking remained focused mostly on innovative approaches to economic
organization and business competition. 16 Moreover, definitional issues remained (and