Network governance

Network governance involves a select, persistent, and structured set of autonomous firms (as well as nonprofit agencies) engaged in creating products or services based on implicit and open-ended contracts adapt to environmental contingencies and to coordinate and safeguard ex-changes. These contracts are socially—not legally—binding. As such, governance networks distinguish themselves from the hierarchical control of the state and the competitive regulation of the market in at least three ways: As a concept, Network Governance explains increased efficiency and reduced agency problems for organizations existing in highly turbulent environments. On the one hand, the efficiency is enhanced through distributed knowledge acquisition and decentralised problem solving; on the other, the effectiveness is improved through the emergence of collective solutions to global problems in different self-regulated sectors of activity. Due to the rapid pace of modern society and competitive pressures from globalization, transnational network governance has gained prominence. Network governance first depends on the comprehension of the short and long term global business risks. It’s based on the definition of the IT key objectives and their influence on the network. It includes the negotiation of the satisfaction criteria for the business lines and integrates processes for the measurement and improvement of the global efficiency and end user satisfaction. Beyond that, it allows the constitution and piloting of internal teams and external partners as well as the setting up of a control system enabling to validate the performance of the whole. Finally, it ensures permanent communication at all the various management levels. In the public sector, network governance is not universally accepted as a positive development by all public administration scholars. Some doubt its ability to adequately perform as a democratic governance structure while others view it as phenomenon that promotes efficient and effective delivery of public goods and services. Examining managed networks in health care, Ferlie and colleagues suggest that networks may be the 'least bad' form of governance addressing wicked problems, such as providing health care for the increasing number of older people. Provan and Kenis categorize network governance forms along two different dimensions: