 Students, we just talked about three types of integrated and fluid type of organizational structures that was the heterarchy, the transnational, and the network organization. In this topic, we are going to specifically discuss the type of organizational structure which is the network organization. You can see in this diagram that the network organization is a network of various different centers and nodal units. What is a nodal unit? A nodal unit is a center of politically connected smaller systems in a particular area or in a particular product division. For example, if you are working in the Volkswagen Corporation, one of the nodal units would be the European market. They would have plants and they would have headquarters in various different countries in UK, in France, in Germany, but the European unit would be considered nodal unit. Another unit would be considered the American market, which has got a different type of structure, a different type of culture, a different type of dynamics. But that is not subordinate to the corporate headquarters. It exists almost at the same level and has got the same kind of decision-making authority when it comes to corporate decisions. All right, so the dimensions of a network organization, they are that decision-making authority is delegated to appropriate units and levels. As I just said, if we are talking about the Volkswagen Corporation, then the nodal unit which is looking after the European affairs would be given the authority, the decision-making authority, what they need to be doing in Europe. If they are operating in the North Americas, they will have the authority to operate in that particular domain. And key functions are dispersed geographically across units in different countries. So in a network organization, you don't keep corporate headquarters very strong. You don't keep your key functions of, let's say, finance or marketing or R&D or human resource management centralized in the corporate headquarters. You give it to the units which are operating geographically and you give them the authority. You give them the autonomy to take the decisions according to a well-defined corporate strategy and mission. There are fewer organizational levels. Obviously if you have removed the centralized aspect, so obviously if people don't have to report to the corporate headquarters, the layer of organizational management would be removed. So now if you have given the authority to take HR decisions regarding your company that are related to, let's say, Pakistan and the HR manager does not have to report to an HR corporate manager in the headquarters, that means that level of organization is removed from the organization structure. Then there are less formal procedures and the organization is less bureaucratic. You don't have to follow particular rules and particular set of policies and you're not told, okay, you can't do this because the rule says that. No, if something is appropriate, if something sounds logical, if something strikes the right chord, if it appears to be logical, you don't have to follow that bureaucratic system. You're given a go if you are logical. And then work responsibility and authority are differentiated across the networked subsidiaries. So if a particular kind of structure, a subsidiary working in Pakistan needs different kind of work, responsibility and authority structures, that type of structure is allowed to be created, designed and administered over there. It's not necessary that you need to have replicas of your company in various different countries. The organization which is working in a particular country, it allows them to adjust and trench and get adjusted to the culture of that particular country. By doing this, the networked organization has got the ability to package Slack resources. Now what are Slack resources? They are pools of capital production or human resources beyond local utility. For example, if you have raw material which is available beyond local utility, if you have human resources available which are beyond local utility, if you have market which can absorb products which are beyond your local production levels, that is all surplus which if you are not networked and integrated, you will not be able to get that opportunity. For example, if you have extra human resources, extra knowledge, knowledge workers available in your particular domain, what you do is that you transfer them, you send them to other countries where there is a shortage of that kind of human resource or if you have got inputs and materials, if you have got raw materials available which is more than your local production, then you can export them, send them to another type, another production facility somewhere else in the world, so that make, if you are integrated, if you are globally integrated and locally responsive, then you will be able to utilize these Slack resources and that will stimulate three types of innovation processes, local to local innovation process, local to global innovation process and global to global innovation process which means that at times you will be able to create something innovative locally which is served which is utilized locally, at times you will be able to create or innovate something locally that will be utilized globally and you will be able to create, at times you will be able to create something innovative which is a global innovation and applicable and utilizable in a global context. So that makes a network organization a lot more responsive, a lot more integrated, and a lot more efficient as well as effective.