Organization Network Analysis

The network analysis in organization is a significant restructuring effort that helps

organizations to condense levels of hierarchy in an organization making the boundaries of
organizational as more functional. In order to take on the road of flexibility and efficiency, the
informal network organized through a structure of formal reporting and work processes in a
prescribed manner help build the coordination in the work. The apparent invisible webs created
in the organization are performance centered and facilitate in the execution of strategy. It has
been proven through research that the network connectivity within the organization have a
significant impact on innovation, learning, performance and benefits due to the tightly-knit
networking in an organization (Hoppe & Reinelt, 2012) The analysis of organization network
help provides the form with a bird-eye view to all the detailed workings of the organization. It is
an extremely important means of making invisible connections of the flow of information and
make obvious all the strategically important divisions of the organization. It can be rendered as a
method of developing the analysis of social network and find out connections between the
entities in the organization. It is only through the network management that organization makes
use of the mathematical analyses to find out the connections and networks in an organization.
The analysts while going through the organization network take a close look at the employees in
an organization and their interpersonal relationships because they are the close sources of
collaboration, knowledge sharing, innovation and effectiveness. The management of organization
network help in revealing the benefits accruing to the organization. The connectivity patterns and
groupings across organization are cross checked to know if there is sufficient connectivity among
people and groups and the extent of cohesiveness in any group.

The tools that are mostly used in the process of analysis and management of network
organization are derived from many other theories like coordination theory, queuing theory,
search theory, parallel theory, modular design, complexity theory and disseminated artificial
intelligence. These tools help in the coordinated form of problem solving technique and breaks
the task into such reasonable chunks that are essential to the processing and distribution. In order
to accomplish these tasks, the organization makes use of already established goals to measure its
margin of safety from the targets already specified by the organization (Bullmore &
Sporns,2012).However, the organization can only achieve the goal of networking by establishing
the goals, breaking down the tasks to distribute among the group members, the communication
of expectation and the detailed view of the target and integration of working by all the units for
the common purpose of achievement.
Both the generalization and specialization of the processor is essential to the process of
managing networks. The variety of range that exists in the job types and the completion of task
does have an influence on the achievement of the specialization of processor at desired level.
There is always an overlap of capabilities that prevent the active working of the processor and
mar the effect of the other type of job under the gigantic load. But the issue with the flexible
processors is that they may come up as costly and it will be difficult to trade off performance
with cost. When the organization is with the hierarchy of special purpose and its dependent upon
the judgment call of the senior processor and provide the whole breakdown structure of the
degradation of a system in the networked organization.
Network Organization Structure is a relatively new concept in the field of Business and
Organizational management. A network organization is one in which the head office is the brain

of the organization and the actual operations might not be at any single location. In fact a
network organization is boundless.
As the term network suggests, a network organization is a set of interconnected units
which are coordinated through one command center. However in order for such an organization
to function effectively, all units must be reliably working in a coherent manner in order to give
the required results.
All units of the network organization must be focused on one objective which is in line
with the objective of the company. For example, in order to reach production goals, manage
costs, and target a larger market, APPLE made certain changes in their organization structure to
incorporate network structure elements in the company. Now the manufacturing of IPhone,
Ipads, Ipods etc is being done in china through a well established network structure of
manufacturing.
Organization Network Analysis (ONA) is the process through which relationships
between the units of an organization are analyzed, issues are identified and improvements are
suggested to improve the operations and management of the organization (Contractor &
DeChurch, 2012).
ONA incorporates the analysis of all the units of organization including various
departments and their relationships, relationships of teams working in those departments,
relationships and interaction of individuals between themselves, with other individuals of the
same department, with those of other departments and with the management of the organization.

Those relationships are compared to the standard operating procedures (SOPs) that have been
perceived and developed in accordance with the strategy defined to achieve the objectives of the
organization (Soda & Zaheer, 2012). ONA, through comparing the actual relationships of the
units of the organization to those SOPs reveal the conflicts of different departments, teams,
individuals and units of the organization and reveals areas of improvement, suggests methods of
removing such conflicts and propose means of better management of the organization.
Types of Organizational Network Analysis:
Following types of ONA can be conducted:
1. Interdepartmental coordination:
All organizations consist of functional units called departments which function together to
achieve the overall objectives of the company. For example the market research, sales,
procurement, manufacturing administrative and logistics departments all need to be coordinated
in order to deliver a product to the end customer.
ONA of interdepartmental relationships reveals how well all the functional units of the
organization are working in order to achieve the objectives of the company. For example if the
manufacturing processes are not well integrated with the market research and sales teams, the
desired products that could be sold to potential customers might not be ready. ONA would
identify the issue and suggest corrective measures.
2. Communication Gap Analysis:

Where there is communication, there is an inherent risk of miscommunication and

misunderstanding. ONA of the communication within individuals, departments and other units of
the organization reveals the areas where such risk is higher or lower, the units responsible for
such communication gap and raises awareness of such gap. This usually brings an immediate
decline in miscommunication. This improves coordination between people and departments and
brings about efficiency and effectiveness in the organization.
3. Top Management and Team Work:
Changes flow from the top. Therefore if an organization truly wants to conduct an ONA, it must
begin from the top management of the organization. It is very often the case that the gap between
departmental coordination begins from the very top due to gap of information flow between top
executives, members of board of directors and department heads( DeNooy, et.al, 2011).The top
management must manage resources to achieve the desired goals of the organization, and not
their individual goals.
ONA of the top management reveals if there are any gaps in understanding and cooperation
between top management executives and department heads, identifies the areas of improvement
and therefore results in a better organization.
4.Organizational Restructuring Analysis:
ONA can be performed to assess the requirements of restructuring an organization. For example
ONA to assess the potential of a local organization to go global, a private company to go public,
a centralized organization structure to go decentralized, entry into new market etc.

A restructuring is always met with resistance from within the organization. ONA analyses the
effects of restructuring, the level of resistance, identifies the areas where more attention is
desired and suggests plans to overcome the resistance and better manage the change. Cross
cultural communication due to going into new markets is one of the largest issues of going global
and requires a proper ONA.
4. Assessing Effectiveness of Organization:
ONA of effectiveness of organizations procedures, teams and departments in general reveals
effectiveness of various components of an organization. For example there is no need for a
manufacturing department for an organization that only does trading of goods and does not
manufacture anything itself.
Data required for ONA
ONA data is most commonly collected through surveys, questionnaires, observation and
interviews. Such data may be electronic, web based, or non electronic. However in order to
analyze the data, electronic analysis is much more efficient.
ONA surveys focus on relationships between departments and organizational
units/teams/individuals.
The cost of communication channel make the Networks costly and less efficient in comparison to
the hierarchies. If the N nodes in the organization are assumed, the pathways for vertical
communication require the N-1 channels and one on each node in the decision tree of hierarchy
(Wilhelm, 2011).Relationships between the employees in the organization may be from many

individuals towards one in case of the subordinates reporting to managers or could be one
towards many when the director of the organization disseminates any strategy. On the other
hand, the network channels of N(N-1)/2 describe the channel network between each and every
node which explain the direct reporting relationships. Moreover, the cost of this employee
networking is dependent upon the cost of information technology which is relatively low so this
networking gives the firm improved opportunities and established advantages thus helping the
person to deal with the information overload. The coordination among the sources of
organization also create a need to communicate effectively which is already evident that the
networks costs are low and their hierarchies are rather flexible. The functional and product
hierarchs both provide the high capacity to specialize in the vertical arrangement of assets which
requires only one firm to reduce the output and produce its processors on its own.

References:
Bullmore, E., & Sporns, O. (2012). The economy of brain network organization.Nature Reviews
Neuroscience, 13(5), 336-349.
Contractor, N. S., DeChurch, L. A., Carson, J., Carter, D. R., & Keegan, B. (2012). The topology
of collective leadership. The Leadership Quarterly, 23(6), 994-1011.
De Nooy, W., Mrvar, A., & Batagelj, V. (2011). Exploratory social network analysis with
Pajek (Vol. 27). Cambridge University Press.
Hoppe, B., & Reinelt, C. (2010). Social network analysis and the evaluation of leadership
networks. The Leadership Quarterly, 21(4), 600-619.
Soda, G., & Zaheer, A. (2012). A network perspective on organizational architecture:
performance effects of the interplay of formal and informal organization. Strategic Management
Journal, 33(6), 751-771.
Wilhelm, M. M. (2011). Managing coopetition through horizontal supply chain relations:
Linking dyadic and network levels of analysis. Journal of Operations Management, 29(7), 663676.