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How Network Organizational Forms are Transforming the Modern Workforce

In recent years, the business landscape has seen a significant shift towards network organizational forms, especially with the rise of "e-lancers" – freelancers who operate online. This evolution has been propelled by the increasing reliance on the internet for professional networking and employment opportunities. In the U.S., a third of the workforce is now composed of freelancers, highlighting a trend that is reshaping how businesses operate.

These freelancers represent a new type of temporary company, providing specialized services for specific projects and moving on once the work is completed. This approach allows companies to be more flexible and agile, adapting quickly to changing market demands without the overhead of permanent staff. The online marketplace has facilitated this shift, enabling businesses to hire talent from a global pool without the need for traditional employment contracts.

A notable aspect of this trend is the outsourcing of the entire supply chain, from production to shipping. Companies can now focus on their core competencies while leveraging the expertise of freelancers for other tasks. This strategy not only reduces costs but also enhances efficiency and scalability.

Many multinational corporations (MNCs) are increasingly relying on electronic freelancers, or "e-lancers," to perform key tasks. This reliance on e-lancers is becoming a strategic move for MNCs, allowing them to tap into a diverse talent pool and stay competitive in a fast-paced market. The outsourcing function is being delivered online, making the process seamless and efficient.

This new structure of network organizations is akin to a modern version of the matrix design, where resources are shared across projects and teams. It promotes a high level of cooperation and collaboration among participating organizations, fostering innovation and driving growth.

In conclusion, the emergence of network organizational forms is transforming the way businesses operate. The rise of e-lancers and the outsourcing of key functions are enabling companies to become more flexible, efficient, and competitive. This trend is likely to continue as technology advances and the global workforce becomes increasingly interconnected. As businesses navigate this new landscape, the ability to effectively manage and integrate these networked resources will be crucial to their success.

Source: Luthans, F., & Doh, J. P. (2021). International management: Culture, strategy, and behavior (9th ed.). McGraw-Hill Education


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