Managing Organizational Networks: Defining the Core Available to Purchase

Organizational networks have become increasingly common in business in recent years. These networks are managed by a “core organization”. However, little is known about the reasons for a firm becoming a core, and its role in the network′s value adding chain. Identifies three ways for an organization to become a core: by contracting work to potential network members, by spinning off essential and auxilliary activities from within the organization itself, and by becoming an umbrella and linking organization for network members. Looks at a variety of roles which the core may have in the network′s value‐adding chain, including: the user of member organizations′ goods and services, the provider of goods and services for the network members, or in some cases both, and the link between the providers and users in the chain. Discusses the advantages for the core and the other network members of these types of relationship, and also the notion that the role of the core may change over time. Concludes with a detailed definition of the role of the core in the network and its motivation for taking on this position.