Managing Network Organizations in the Knowledge Economy: Learning from Success and Failure.

The current economy has brought the network model of organization to the forefront of management theory and practice. The network model is 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 and volatile environment. This chapter challenges both the logic and the themes based upon it. Using Enron as a case study, the chapter seeks to enrich the logic, to broaden the themes, and to finally arrive at a more realistic picture of the network enterprise. This is made possible by extending the unit of analysis beyond the production firm, to include, among others, subsidiaries, banks, investors, auditors, and government agencies. The managerial implications of these shifts will be discussed.