The Networked Firm: AI, Coordination, and the Emergence of Temporary Organizations

Artificial intelligence is usually discussed as a technology that changes the execution of work. This paper explores a different possibility: AI may also change the economics of organizing work. Building on research concerning the theory of the firm, transaction costs, network organizations, temporary organizations, electronic markets, and peer production, the paper examines whether AI can reduce the interpretive and administrative costs involved in assembling independent people, capabilities, and resources around a shared objective. The paper introduces the Networked Firm: a temporary, objective-driven economic organization assembled from independent people, capabilities, and resources, governed through explicit Contribution Agreements, supported by AI-assisted coordination, and connected to a persistent network of collaboration evidence and value exchange. It proposes semantic coordination cost as a working concept for the cost of transforming an incomplete human objective into a shared, executable representation that allows multiple independent participants to coordinate their contributions. The proposed operating model follows the sequence Objective → Capability → Evidence → Formation → Contribution Agreement → Execution → Outcome → Memory. The paper does not argue that AI will eliminate conventional firms. Instead, it presents a comparative and testable hypothesis: where AI reduces the cost of external coordination sufficiently relative to internal hierarchy, temporary capability networks may become viable for forms of work that previously favoured permanent organizations. Version 1.0 is released as a conceptual working paper intended to invite theoretical critique, empirical testing, discussion, and further development.