Globalization of Innovation and the Rise of Network Organization

In order to cope with the fierce global competition, more and more multinational corporations thrive to gain and sustain their global competitive advantages through establishing a so-called network organization to facilitate global innovation. However, as a popular notion appearing in multiple theoretical streams, there exist distant and even highly debatable understandings on network organization. This chapter concludes with a three-level framework to facilitate our understanding on network organization. Firstly, a network organization can be an intraorganizational design to cope with firm’s innovation purposes. Such organizational structure is contrast with traditional hierarchical organizational structure, and featured with flexibility, market mechanism, internal trust, etc. Secondly, a network organization refers to various forms of interorganizational designs such as strategic alliances, strategic technological partnerships, value networks, joint ventures, industrial associations, etc. Moreover, some argue that the business context for global innovation is in nature consists of overlapping networks, and under such network perspective, market and traditional hierarchical structure are just extreme forms of network. The main contribution of this chapter is clarifying the debatable concept of network organization, and the final framework serves as a tool to bridge several distinct understandings towards network organization for global innovation.