"Negotiated Order in Organizations in the Network Form"


Annaleena Parhankangas, David Ing, David Hawk, Gosia Dane and Marianne Kosits


Through the 20th century, the industrial age roots of hierarchical top-down planning and command-and-control supervision have been relatively constant foundations in management thinking. At the turn of the millennium, many futurists and leading thinkers had declared that these static forms of business governance would give way to more dynamic network-form, knowledge-based businesses. Since only a limited history has been collected on these new organizational forms to date, descriptions of how these businesses are governed differently have generally been more speculative than grounded.

Since much of the success in business will shift from autonomous enterprises to inter-organizational relations, a renewed examination of negotiated order is now due. The growing need for negotiated order is presented in contrast to prevailing systems of legal order where incremental mandates, pre-established rules and fixed procedures ensured efficiency in placid environments. Industrial age businesses are presented as systems reaching their limits, following the perspective of Andras Angyal. Ideals in systems of negotiated order include the situated coordination of interests, flexible definition of initiatives and freedom of action amongst interested parties.

Attention is drawn primarily towards governance of the Linux community. In this example, architecture emerged from an amorphous group, and design and operational principles are collectively negotiated. The dynamism in purposes and directions is matched by continually-evolving inter-organizational alliances, and the voluntary assumption of responsibilities that benefit not only the individual contributor, but all parties. In addition to the Linux example, three more other businesses demonstrating features of negotiated order are discussed.

Negotiated order offers a platform for parties to innovatively deal with complex problems in the mess of inefficiencies, ineffectiveness and/or loss of legitimacies within and between organizations.

[click here for the draft as a Microsoft Word document]


Annaleena Parhankangas, David Ing, David Hawk, Gosia Dane and Marianne Kosits, "Negotiated Order in Organizations in the Network Form", Proceedings of the 3rd International Conference on Systems Thinking in Management at the University of Pennsylvania, Philadelphia, May 19-21, 2004 (in review).

[click here for the 2004 ICSTM meeting]

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