The European Dream Read Online Free PDF Page A

will happen. With my guys [referring to embedded ties], if something goes wrong, I know we’ll be able to work it out. I know his business and he knows mine. 7
    Networks also facilitate the exchange of vital industry information that would not necessarily be available to a firm operating as an autonomous agent in an adversarial market. Uzzi reports on one manufacturer who “passes on critical information about next season’s hot sellers only to his close (network) ties; thus giving them an advantage in meeting future demands.” 8
    In a global economy where competition is stiff and the difference between success and failure often hinges on subtle variations in the quality of goods and services, networks often enjoy an advantage over individual market players. One clothing manufacturer said,
    If we have a factory that is used to making our stuff, they know how it’s supposed to look. They know a particular style. It is not always easy to make a garment just from the pattern, especially if we rushed the pattern. But a factory that we have a relationship with will see the problem when the garment starts to go together. They will know how to work the fabric to make it look the way we intended. 9
    A sense of indebtedness is at the heart of the network model. It’s the feeling that “we’re all in this thing together” and need to go the extra mile to support others in the network, in good times as well as bad. One CEO explained what indebtedness means in his own firm’s relationships with its network partners.
    I tell them [subcontractors] that in two weeks I won’t have much work. You better start to find other work. [At other times] . . . when they are not so busy we try to find work . . . for our key contractors. We will put a dress into work . . . to keep the contractor going . . . where we put work depends on [who] needs to work [to survive]. 10
    What’s ultimately driving the shift to a network model is time scarcity. Organizational theorists Candace Jones and Stephen Borgatti of Boston College and William Hesterly of Utah’s David Eccles School of Business observe that the old economic model that relies on sequential market exchanges between clients, suppliers, and distributors to coordinate complex tasks and get new products to end users is just too slow and outdated. Networks that coordinate the expertise of all the players in the commercial mix, from suppliers upstream to distributors and even end users downstream, in a single team approach, have the clear edge in reducing the lead time in getting new products and services out the door. Certainly that has been the case in the semiconductor, computer, film, and fashion fields, where product life cycles are often measured in weeks and months rather than years. Networks are also better positioned to reduce costs in competitive markets like the auto industry. 11
    Networks spawn greater creativity and innovation for the simple reason that they have a larger pool of the best minds to draw from. Walter W. Powell says that when one compares the advantages and disadvantages of the various business models, it becomes clear that
    passing information up or down a corporate hierarchy or purchasing information in the marketplace is merely a way of processing information or acquiring a commodity. In either case the flow of information is controlled. No new meanings or interpretations are generated. In contrast, networks provide a context for learning by doing. As information passes through a network, it is both freer and richer; new connections and new meanings are generated, debated, and evaluated. 12
    When commercial transactions were fewer, when the lead time for a new product introduction was longer, and when there was still plenty of untapped and unexploited consumer market potential, market exchanges and hierarchical ways of organizing business made sense. Giant, vertically configured companies with hierarchically controlled management could produce standardized