||New form of organization
During the past decades, globalization, outsourcing and information technology have enabled many organizations such as
Dell and Hewlett Packard, to successfully operate solid collaborative supply networks in which each specialized business
partner focuses on only a few key strategic activities (Scott, 1993). This inter-organizational supply network can be
acknowledged as a new form of organization. However, with the complicated interactions among the players, the network
structure fits neither "market" nor "hierarchy" categories (Powell, 1990).
It is not clear what kind of performance impacts different supply
network structures could have on firms, and little is known about
the coordination conditions and trade-offs that may exist among the
players. From a system's point of view, a complex network structure
can be decomposed into individual component firms (Zhang and Dilts,
2004). Traditionally, companies in a supply network concentrate on
the inputs and outputs of the processes, with little concern for the
internal management working of other individual players. Therefore,
the choice of internal management control structure is known to impact
local firm performance (Mintzberg, 1979).
In the 21st century, there have been a few changes in business environment
that have contributed to the development of supply chain networks.
First, as an outcome of globalization and proliferation of multi-national
companies, joint ventures, strategic alliances and business partnerships
were found to be significant success factors, following the earlier
"Just-In-Time", "Lean Management" and "Agile
Manufacturing" practices.Second, technological changes, particularly
the dramatic fall in information communication costs, a paramount
component of transaction costs, has led to changes in coordination
among the members of the supply chain network (Coase, 1998).
Many researchers have recognized these kinds of supply network
structure as a new organization form, using terms such as "Keiretsu",
"Extended Enterprise", "Virtual Corporation",
Global Production Network", and "Next Generation Manufacturing
System".In general, such a structure can be defined as "a
group of semi-independent organizations, each with their capabilities,
which collaborate in ever-changing constellations to serve one or
more markets in order to achieve some business goal specific to
that collaboration" (Akkermans, 2001).