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RESPOND TO THIS DISCUSSION 2 IN 150 WORDS

Network organizations are those that is of a legal entity or independent company or a subsidiary business unit. These organizations can be an internal business unit acting as separate profit centers or a stable company that has outsourced its work to others or a dynamic network integrator that outsources heavily to other companies

Let’s take two organization that are having their business running on the concept of network organization.

1.      KPMG: A Big4 consulting firm that has its partnered teams across the globe

2.      Microsoft: Microsoft is an US based organization has its business unit worldwide but a lot more of its IT support work has been outsourced to companies like Wipro, Infosys, TCS etc.

If we see both the organization, KPMG works on the concept of a large company having separate units as profit centers. All the counties have KPMG partners residing and delivering consulting projects. Such organization benefit from the independence each country head has over the governance. End of a financial year, the Firm should benefit from the royalty or franchise. Each partner firm under the umbrella of KPMG brand has different businesses that again works independently. They set their own targets, projects, book profits and in the end the defined profit margin is shared with the larger/ head office.

Now consider Microsoft, it’s a single organization developing its chain of business across the world. Its P&L is defined or instructed from US. All the geographies are its satellite functions, just nearer to the business but has no control on the revenue as that’s been set /defined in the beginning of the year from HO. Hence, they are all contributing to a single business. But a lot much work is being outsourced to 3rd party. And those have their independent structure of billing and sales and nowhere related to Microsoft business growth etc. So, these two-network organization, has different way of addressing the governance, sharing the business and deliverables. Managing KPMG is easier due to the independent governing structure. Accountability is mostly in the P&Ls. But companies like Microsoft has to manage all the BU’s, their targets and also supervise for their success. Hence such organization needs a lot more involvement. From the above articles we find there exists many differences but end of the day, it’s how the management runs the show matters.

 Article Reference:

1.The top three network Management challenges by allied Telesis Team.Retrieved from

https://www.alliedtelesis.com/sites/default/files/top_3_net_mgmt_challenges_reva.pdf

2., Włodzimierz, Hittmár, Štefan .(2015).Management of Network Organizations