A network switch acts as a crucial device in computer networks, facilitating communication between different devices like computers, printers, and servers. It operates at the data link layer of the OSI model, directing data packets to the appropriate devices based on their MAC addresses. By creating a switched network, switches enhance network performance by reducing collisions and ensuring that data is sent only to the intended recipient. This leads to improved efficiency and speed in data transfer, making switches essential for maintaining optimal performance in local area networks (LANs).