Recently, the everemerging network organizations have been playing an active role for enterprises to cope with turbulent market circumstances Especially the industrial clusters, extolled as the impetus of district economic development for their extensive radiation, are becoming the concerns and cultivation from local governments But due to its unique features, there also exists malfunction of network as a kind of governance mode Although scholars have treated the malady of outsourcing and high failure rate of strategy alliance, they failed to focus on the network failure of industrial clusters, a more complex network organization This paper analyzes network features of industrial clusters comparing with that of outsourcing and strategy alliance from dimensions of object definitude, structures level and body diversification, then puts forward the representation of industrial clusters’ network failure such as dilemma of network scale, social relationship and supporting institutions In the end, this paper furthers to discuss the enlightenments of malfunction to clusters’ development policy