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Network logic beliefs, explanations and values – a common context of meaning, also known as culture, which is continually sustained by further communications. Through this culture individuals acquire identities as members of the social network, and in this way the network generates its own boundary. It is not a physical boundary but a boundary of expectations, of confidentiality and loyalty, which is continually maintained and renegotiated by the network of communications. Culture, then, arises from a network of communications among individuals; and as it emerges, it produces constraints on their actions. In other words, the rules of behaviour that constrain the actions of individuals are produced and continually reinforced by their own network of communications. The social network also produces a shared body of knowledge – including information, ideas and skills – that shapes the culture’s distinctive way of life in addition to its values and beliefs. Moreover, the culture’s values and beliefs also affect its body of knowledge. They are part of the lens through which we see the world. Living networks in human organisations In recent years it has become very popular in management circles to use metaphors like ‘the living company’, trying to understand a business organisation as a living, self-organising system. 8 It is therefore instructive to apply our network approach to the analysis of human organisations. Living social systems, as we have seen, are self-generating networks of communications. This means that a human organisation will be a living system only if it is organised as a network or contains smaller networks within its boundaries, and only if these networks are selfgenerating. Organisational theorists today speak of ‘communities of practice’ when they refer to these self-generating social networks. 9 In our daily activities, most of us belong to several communities of practice – at work, in schools, in sports and hobbies, or in civic life. Some of them may have explicit names and formal structures, others may be so informal that they are not even identified as communities. 30 Demos
Living networks Whatever their status, communities of practice are an integral part of our lives. As far as human organisations are concerned, we can now see that they have a dual nature. On the one hand, they are social institutions designed for specific purposes, such as making money for their shareholders, or managing the distribution of political power. On the other hand, organisations are communities of people who interact with one another to build relationships, help each other, and make their daily activities meaningful at a personal level. This dual nature as legal and economic entities as well as communities of people derives from the fact that various communities of practice invariably arise and develop within the organisation’s formal structures. These are informal networks – alliances and friendships, informal channels of communication, and other webs of relationships – which continually grow, change and adapt to new situations. Within every organisation there is a cluster of interconnected communities of practice. The more people are engaged in these informal networks, and the more developed and sophisticated the networks are, the better will the organisation be able to learn, respond creatively to new circumstances, change and evolve. In other words, the organisation’s aliveness resides in its communities of practice. In order to maximise a company’s creative potential and learning capabilities it is crucial for managers and business leaders to understand the interplay between the organisation’s formal, designed structures and its informal, self-generating networks. 10 The formal structures are sets of rules and regulations that define relationships between people and tasks, and determine the distribution of power. Boundaries are established by contractual agreements that delineate well-defined subsystems (departments) and functions. The formal structures are depicted in the organisation’s official documents – the organisational charts, bylaws, manuals and budgets that describe the organisation’s formal policies, strategies and procedures. The informal structures, by contrast, are fluid and fluctuating networks of communications. These communications include non- Demos 31
Page 1: Network Logic Who governs in an int
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Page 8 and 9: Network logic 10. Your friendship n
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Networks, knowledge and innovation
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Network logic Finally, in the refor
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Network logic honestly. If it is no
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women’s networking movement. This
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Old boys and new girls practices. I
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Power does not reside in institutio
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