A Study On Organizational Transformation In The Network Economy

The coming of the Network Economy has changed the traditional disciplines in the Industry Economy. New technologies, products and market structures have major effects on the firm's operations, production, and management. Therefore, firms, which act as the accommodator to the environment, must transform their organizational forms accordingly. This transformation could be divided into internal transformation and external transformation. Internal transformation involves the changes of strategy, structure and culture, and external transformation mainly deals with the changes of the relationship among firms.This paper studies the aforementioned issues in depth by employing the theories of Transaction Costs and Core Competencies. Emphasis is placed on the internal transformation, with a comprehensive analytical framework elicited. The framework is then applied to study the practical issues faced by the station-owned enterprises in terms of organizational transformation in the Network Economy. As a concluding remark, the paper suggests that the aim of the station-owned enterprises' transformation is to establish flexible and mixed business conglomerates.