Toward IT support for coordination in network organizations

A critical issue facing managers of information technology (IT) today is how to respond to the emergence and growth of the network organization that is virtually formed by separate firms, each retaining its own authority in major budgeting and pricing matters, to function as integral parts of a greater organization. What can and should be done from an IT standpoint to support and exploit this new organization form? What needs and opportunities exist for new kinds of computer-based systems devised specifically to facilitate management and coordination in network organizations? A prerequisite for answering these questions in a systematic, definitive way is clear understanding of the variables and constructs involved in coordinating such organizations. An empirically supported model of coordination in network organizations is introduced. Our model development takes a 'reputation'-oriented framework of coordination within network organizations as a starting point. The model posits that participating firms' reputation strongly influence coordination decisions in networks, affecting each firms' initiation into the organization, selection for task execution, and termination from the network.