on are only a partial description of the network firm. Companies that own and operate networks do much more than manage operations. They perform a host of marketing activities and related management tasks. Network firms, such as telephone companies, perform retail merchant activities. They engage in marketing and sales to provide services to final customers. They operate internal processes that correspond to wholesale merchant activities, aggregating information necessary to Networks in Telecommunications Business management Service management Network management Element management Network elements Figure 5.6. The five layers of the telecommunications management network (TMN). providing retail services and interacting with internal manufacturing of network services. The marketing and coordination functions performed by a network firm are summarized by the telecommunications management network (TMN) concept developed by the International Telecommunications Union, articulated in ITU-T Recommendation M.3000 (1994), and depicted in Figure 5.6. At the highest level is the business management of the company that operates the network; this includes management strategy and budgeting and is referred to as the business-management layer. Next, the service-management layer interacts with customers, for sales and ser- vice, and with service providers, for procurement. Then, the network-management layer coordinates the interaction of all network elements to create a functioning net- work through configuration of the network structure and operations management. The element-management layer is responsible for handling individual network ele- ments, including maintenance and gathering of data on activities and performance for use by network managers. Finally, the network-element layer includes the full range of physical equipment and managed information that form the network facilities. The TMN concept of hierarchical layers is a good illustration of the complex connections between organizational tasks in a network. At the service