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Beyond the unbundled corporation

A new business model may forever change the way companies compete.

Is the new "networked organization" already a thing of the past? We don’t think so. According to recent McKinsey findings reported in this issue’s cover article, "The future of the networked company," collaborative networks of suppliers, distributors, subcontractors, and customers have created far more value than their industry peers over the past half-decade and have held up more robustly in the recent market downturn. The authors—Remo Häcki and Julian Lighton—go on to explain the economic and managerial logic behind establishing networks for the exchange of information about inventory, production, demand, and so forth through common software platforms and protocols.

Such networks stand on the shoulders of two earlier but still prevalent models of organization: simple outsourcing schemes and unbundled corporations. "The false promise of mass customization," by Mani Agrawal, T. V. Kumaresh, and Glenn Mercer, notes that original-equipment manufacturers rely on separate parts and subassembly manufacturers, which "push" products through the supply chain—products that the market can accept or reject but has almost no direct hand in developing.

This is unfortunate, since auto companies are also in the business of managing relationships with customers and dreaming up new products. Because manufacturing, product innovation, and customer...

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