Local Area Network (LAN) - Meaning & Definition

Published by MBA Skool Team, Last Updated: May 24, 2015

What is Local Area Network (LAN)?

A Local Area Network (LAN) is a type of computer network that covers a small geographic area e.g. a building or a home. LAN however can be connected to other LAN’s spanning greater distances through radio waves or telephone lines. This network which comprises more than one LAN is called a Wide Area Network (WAN).

Mostly the LAN connects computers and workstations. Every individual computer in a LAN is called a node has its own central processing unit. The nodes can access devices and data anywhere in its LAN. This implies that the users can share devices like printers, storage area and information (communicate via email or chat) in a LAN. The data is transmitted very fast, but there is a limit to the number of workstations that can be connected to a single LAN. Ethernet and Wi-Fi are the most common type of LAN and is used in PCs.

There are different kinds of LANs, depending on certain characteristics:

• Topology: Refers to the geometric arrangement of devices (e.g. ring, straight line) in a network.


• Protocols: The rules/specifications for transmitting data which also determine whether the network uses a client/server architecture or a peer to peer one.


• Media: The medium of connecting devices, for e.g. coaxial cables, twisted-pair wire, fiber optic cables or radio waves (without any media).



The smallest of LAN consists of two computers, while a bigger one can comprise thousands of PCs. Most LANs enable devices to communicate over Internet Protocol (IP) via support built-in to each device's network operating system. The term LAN party implies a gaming event consisting of multiple players wherein each participant bring their own systems and build a local network. A simple LAN mostly consist of switches which can be connected to a cable modem or a router for accessing the internet. Complex LANs are the ones which uses redundant links along with switches to prevent loops.

Apart from switches a LAN can also include firewalls, load balancers, routers and sensors.


Hence, this concludes the definition of Local Area Network (LAN) along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

Continue Reading:

Share this Page on:
Facebook ShareTweetShare on Linkedin