Structuring interaction inside firms: formal boundaries and tie formation

Lynch, Susan (2006) Structuring interaction inside firms: formal boundaries and tie formation. Doctoral thesis, University of London: London Business School.

Abstract

Despite wide acceptance that internal networks are important for organizational and individual outcomes, we know little about how intraorganizational relationships evolve or how a firm's interaction patterns can be influenced by managerial action. This paper asks: How does formal group assignment influence the pattern of relationships inside firms? I explore this question in parts. First, I consider the direct effects of formal structuring. I draw on sociological mechanisms to consider how relationships are influenced by current and past assignment to formal groups, by the size of those groups, and by the nested or cross-functional nature of the broader organizational design. Second, I draw from the existing literature and consider how formal structure and two well established aspects of informal structure - gender homophily and structural embeddedness - jointly influence relationship formation and maintenance. Third, I consider how changes in formal structure affect the formation of new ties. I argue that formal influence will, in the case of certain disruptive structural changes, compete with the influence of the informal organization. I test my arguments with longitudinal qualitative and quantitative survey and archival data on formal structures and patterns of informal relationships formed between employees in a 271-person multinational customer services organization of a financial services provider