What is a Networked Organization?

Definition: networked organization

The networked organization is one that connects together by informal networks and the demands of the task, rather than a formal organizational structure. The network organization prioritizes its “soft structure” of relationships, networks, teams, groups and communities rather than reporting lines.

"Networked organizations"

In reality, even the most flexible organizations do have some reporting relationships, so a pure networked organization rarely exists. It is more a statement of intent to get things done flexibly rather than to rely on structure.

In this respect, the networked organization is very similar to a matrix . The key challenges of multiple stakeholders, influence without authority, competing goals and accountability without control mean that the skills required to be successful in a network organization or a matrix are very similar.

(Note: disambiguation – although technology is an enabler, ‘networked’ does not refer to computer networks


1. Organization structure: How does it influence attitudes and performance? Cummings, L. L.; Berger, Chris J. Organizational Dynamics, Vol 5(2), (Autumn) 1976, 34-49

(Review by Kevan Hall: Organization structures, attitudes and performance)

2. Bower, Joseph L. “Building the Velcro Organization: Creating Value Through Integration and Maintaining Organization-Wide Efficiency.” Ivey Business Journal (Online) (November/December 2003).

(Review by Kevan Hall: Building the Velcro Organization)


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