Classification of Networks

When the connections between firms take on a growing importance and intensity, a new economic reality known as a “network” is formed. With the formation of the network attention shifts to cooperative relationships when considering the nature of relational interconnections. The enterprise network is an organizational system that coordinates businesses, turning them into a single system of economic action. In this sense it is a form of organization that is distinct from the market, which coordinates nodes without connecting them, and also distinct from the hierarchy, which connects all nodes to one central system through systems of rules that apply to everyone. The network, however, consents to govern macro-processes, avoiding a stiffening of the structure. For this reason, it is important to consider the network as the third principle of organization compared to the hierarchy and the market, for some authors, to be able to understand in depth the nature of the new organizational forms and trends (Rullani, 1990).