1. The concept of network organization was pioneered by studies on industrial districts as alternatives to mass production. See, for instance, M. Piore and C. Sabel, “The Second Industrial Divide: Possibilities for Prosperity” (New York: Basic Books, 1984). As networks emerged, they became a fashionable topic in management literature, generating a wave of multidisciplinary studies and vigorous theoretical debate. For a detailed discussion of the network organization, see: N. Nohria and
R. Eccles, eds., “Networks and Organizations” (Boston: Harvard Business School Press, 1992); W.W. Powell and L. Smith-Doerr, “Network and Economic Life,” in “The Handbook of Economic Sociology,” eds. N.J. Smelser and R. Swedberg (Princeton, New Jersey: Princeton University Press, 1994), 368–402; and A. Grandori and G. Soda, “Inter-firms Networks: Antecedents, Mechanisms and Forms,” Organisation Studies 16 (March–April 1995): 183–214.
For different versions of the Benetton story, see S. Signorelli and J. Heskett, “Benetton,” Harvard Business School case no. 9-685-014 (Boston: Harvard Business School Publishing Corp., 1989); P. Dubini, “United Colors of Benetton,” in “Corporate Transformation,” ed. A. Sinatra (Norwell, Massachusetts: Kluwer Academic Publishers, 1991), 415–446; and B. Harrison, “Lean and Mean: The New Landscape of Corporate Power in the Age of Flexibility” (New York: Basic Books, 1994).
2. Our study is based on original fieldwork. We conducted research at Benetton headquarters from March 2000 to September 2000, adopting a quasi-ethnographic approach. We had two research assistants working full-time at Benetton for three months. The research was carried out in three stages. Phase 1 (March 2000 to May 2000): database construction and off-site research and data gathering. Phase 2 (May 2000 to September 2000): direct observation and interviews with managers (approximately 200 hours). Phase 3 (September–December 2000): data analysis and elaboration, case-study writing and discussion with Benetton managers.
3. Other industries that are trying a similar strategy include branded food products and eyewear. Luxottica is a particularly interesting case. Based in northeastern Italy, it is the world leader in eyewear (it recently bought Ray-Ban, LensCrafters, managed-vision-care company First American Health Concepts and Sunglass Hut). It is fully vertically integrated, it produces in-house and in Italy almost all of its product, and its U.S. distribution and sales flow through its own large retail network.
4. V. Ranadivé and S. McNealy, “The Power of Now: How Winning Companies Sense and Respond to Change Using Real-Time Technology” (New York: McGraw Hill, 1999).
5. Flash collections are introduced several times during each retailing season to update the articles offered to customers and to help the company respond better to fast-changing market trends. Benetton expects flash collections eventually to comprise 35% to 40% of its total products.
6. At the moment, the foreign contribution to Benetton’s production is limited to 30%, but it is expected to increase.
7. Playlife is Benetton’s general-purpose brand for sportswear collections; the Killer Loop brand targets a young, extrovert market.
8. Benetton has come close to the make-to-order ideal with its Blade Express Formula, which makes it unnecessary to produce on the basis of forecasts anymore and avoids the need for warehousing.
9. Two works that discuss that assumption are W.W. Powell, “Neither Market Nor Hierarchy: Network Forms of Organization,” in “Research in Organizational Behavior” (New York: JAI Press, 1990), 295–336; and M. Van Alstyne, “The State of Network Organization: A Survey in Three Frameworks,” Journal of Organizational Computing and Electronic Commerce 7 (spring and summer 1997): 83–151.
10. For more thoughts on the subject, see V. Perrone, “The Co-Evolution of Contexts and Forms: The N-Form,” in “Advances in Organizational Behaviour: A Festschrift To Honor Derek Pugh,” ed. P. Clark (Aldershot, United Kingdom: Ashgate, 1998).