The introduction of new social media and technological tools has allowed a whole range of processes to be carried out virtually. To that end organizational members have gone online, creating their networks in the clouds and teams have begun to coordinate themselves. This raises the question of whether a firm is a necessary element in resource coordination. If everything is in the networks, do we still need the firm, or can we do all coordinating in networks like LinkedIn or Twitter? This dissertation builds on the shared understanding creation framework to shed light on one of the rationales for a firm’s existence in the age of new social media. By applying qualitative methods and collecting data from five firms operating in the network environment, the study acknowledges the complexity of shared understanding creation in the network environment. Building on the results, mechanisms for shared understanding creation are identified and summarized into a comprehensive model. The result of this study is that even in the network environment we still need the firm. First of all, the study provides insights into the emergent mechanisms for shared understanding creation, which enrich and/or substitute mechanisms applicable to a hierarchical view of the organization. Secondly, a comprehensive model for shared understanding creation by firms in the network environment is proposed. Moreover, this research yields that firms are still stable structures for shared understanding creation, which serves as one of the rationales for the firm’s existence. In addition, it is observed that if shared understanding needs to be created in the network, then the opportunities offered by the networks have to be exploited as well. Organizational leaders have to recognize that there is a possibility of having one firm, one organization, one strategy but a common shared understanding of the networks opposed to the scientific management view of one firm, one organization, one strategy, one shared understanding inside one firm. This dissertation contributes to the theory in many ways. First of all, it addresses the research gap of studying shared understanding, by applying the hierarchical view to an organizational setting. To address this gap, a qualitative research done through semi-structured interviews was chosen to closely examine mechanisms and conditions for shared understanding creation. Secondly, key mechanisms that influence and enable shared understanding creation in firms in the network environment are analyzed and a conceptual model of the intersection of all mechanisms identified is proposed. Furthermore, reflections on existing theory on shared understanding applying hierarchical view on organizational setting are provided. Finally, shared understanding creation is proposed as one of the rationales for why firms exist. Practitioners such as corporate senior decision makers and project managers also benefit from this research effort. The results of this dissertation provide them with a checklist on what should be done and what should be avoided when creating shared understanding among all organizational members in the network environment. Secondly, this research provides a set of mechanisms, which senior decision makers and project managers can apply to create shared understanding among all their members. Finally, increasing the awareness that shared understanding is created both inside firms’ boundaries and in professional networks can help senior decision makers to combine the efforts that their firms make to create shared understanding with the efforts of professional networks and other firms in the industry.    «

The introduction of new social media and technological tools has allowed a whole range of processes to be carried out virtually. To that end organizational members have gone online, creating their networks in the clouds and teams have begun to coordinate themselves. This raises the question of whether a firm is a necessary element in resource coordination. If everything is in the networks, do we still need the firm, or can we do all coordinating in networks like LinkedIn or Twitter? This dissert...    »