Section Twodesign, manufacturing, and distribution being performed by the
specialist in each area.^86
There are differences between network organizations in
their degree of permanence and externality. They can even
operate internally within giant companies, such as General
Motors. In the case of internal networks, efficiencies are sought
through the use of market-priced transactions between network
components. For external networks, at one end of the spectrum
are dynamic net-works that have lead companies that basically
act as brokers, outsourcing virtually all activities to a changing
set of companies. Lewis Galoob toys, with only 100 employees,
provides an example of such a network that outsources
manufacturing, design, development, distribution, and collec-
tion of accounts receivable. At the other end of the external
spectrum are stable networks in which one company remains
as the central core as an investor and outsources to
subsidiaries and other independent companies. BMW provides
an example of the latter. As a result of computer, satellite, and
telecommunications technology, company components of the
network that per-form outsourced activities may be located
throughout the world.^87
One strategic implication of network organizations is that
lead firms will have needs for employees who have the
entrepreneurial skills required for the broker activities of