The third phase of renewal involves the formation of relation­ships with other organizations. Although inter organizational relationships are often present in the traditional organization, companies are expanding these relationships with suppliers, customers, and even competitors. These new organization forms are called networks since they involve several collaborative arrangements. Benetton displays several characteristics of the network organization. Networks are more likely to be launched by entrepreneurs, since the traditional vertically integrated, hierarchically organized company finds difficulty in shifting to the network paradigm. Transformation means fewer people on the corporate payroll, different management challenges, drastic cultural changes, and complex collaborative relationships with other organizations. Nevertheless, traditional companies like General Electric are successfully transforming themselves to more flexible and adaptive network forms