Chapter 11: Organizational Structure and Controls 369included 473 companies housed in multiple business units. This demonstrates the chal-
lenge a firm of this size and complexity faces when determining the optimal structure to
match with individual strategies being used as a foundation for hopefully outperform rivals
in regions and countries throughout the world.^94 )11-3g Matches between Cooperative Strategies and Network Structures
As discussed in Chapter 9, a network strategy exists when partners form several alliances
in order to improve the performance of the alliance network itself through cooperative
endeavors.^95 The greater levels of environmental complexity and uncertainty facing com-
panies in today’s competitive environment are causing more firms to use cooperative
strategies such as strategic alliances.^96 Firms can form cooperative relationships with
many of their stakeholders, including customers, suppliers, and competitors. When a
firm becomes involved with combinations of cooperative relationships, it is part of a
strategic network, or what others call an alliance constellation or portfolio.^97
A strategic network is a group of firms that has been formed to create value by
participating in multiple cooperative arrangements. An effective strategic network
facilitates discovering opportunities beyond those identified by individual network
participants. A strategic network can be a source of competitive advantage for its mem-
bers when its operations create value that is difficult for competitors to duplicate and that
network members can’t create by themselves.^98 Strategic networks are used to implement
business-level, corporate-level, and international cooperative strategies.
The typical strategic network is a loose federation of partners participating in the
network’s operations on a flexible basis. At the core or center of the strategic network,
the strategic center firm is the one around which the network’s cooperative relationships
revolve (see Figure 11.11).
Figure 11.11 A Strategic NetworkStrategic
Center
Firm