Value‐creating networks: organizational issues and challenges

Abstract

PurposeThe purpose of this paper is to provide examples of evaluating value‐creating networks and to address the organizational issues and challenges of a network orientation.Design/methodology/approachValue network analysis was first developed in 1993 and was adapted in 1997 for intangible asset management. It has been applied from shopfloor work groups to business webs and economic regions. It draws from a theory base of living systems, knowledge management, complexity theory, and intangible asset management.FindingsThe paper provides an overview of a value network analysis method and examples and insights from its practical application.Research limitations/implicationsThe paper does not provide a detailed comparative analysis with social network analysis, but rather looks forward to where interest in social networks may evolve into continuing concentration on value‐creating networks.Practical implicationsValue network analysis provides an opportunity to overcome the “split” in business management practices, where human interactions and relationships reside in one world of models and practices, and business processes and transactions reside in another. The engineering approaches of the last two decades have focused on driving out variation, with the unanticipated consequence of stifling organizational agility and innovation. The more human‐centric orientation of the value network perspective brings these two worlds together in a powerful, simple, and pragmatic way to model business activities.Originality/valueThe paper augments and expands the growing application of social or organizational network analysis by pointing to a next generation of analysis and analytics that can support organizational effectiveness. The value network analysis method fills a gap between network theory and practical application for managers, executives, analysts, and researchers.