Hamid R. Ekbia and Rob Kling
The network model of organization plays a central role in recent sociological
accounts of the information economy. This model is also often presented in organization
and ICT literature with an air of enthusiasm that underscores the advantages
of this model as flexible, cooperative, innovative, and knowledge and technology
intensive. Such themes are normally based on a “networking logic”
that assumes the trustful cooperation of large and small production firms in
favor of competitive advantage in a rapidly changing economic environment. We
believe that both the logic and the themes based upon it are too narrow to be
able to explain the complex dimensions of inter-organizational networking. Using
Enron as a case study, our goal in this article is to enrich the above logic
and to develop an extended model of the network enterprise. We argue that this
is only possible by extending the unit of analysis beyond the production firm,
to include, among others, subsidiaries, banks, investors, auditors, and government
agencies. The proposed extended model allows the broadening of many of the aforementioned
themes, making it possible to arrive at a realistic picture of the complexities
of the network enterprise. The managerial advantages of the model are also discussed.