Organizational restructuring as a catalyst for cross-unit ties

Despite the potentially significant economic value associated with cross-unit ties, many organizations struggle to foster effective informal collaboration across business units. Theory suggests that entrenched formal structures and social psychological preferences undermine the development of these important connections as informal ties tend to form within units rather than across units. As such, organizational restructuring may be a potent way to increase cross-unit ties. We develop a dialectic theory to explain how formal structural change interacts with individuals’ attitudes toward specific groups to explain changes in an individual’s cross-unit ties. We test our theory by measuring the cross-unit ties of senior leaders at a Fortune 200 agribusiness before and after a major restructuring. Our results show that certain changes to the formal structure enable the formation of new cross-unit ties, whereas other structure changes inhibit them. Additionally, individuals who identify with broad super-ordinate groups are more likely to form cross-unit ties, but only when involved in certain structure changes. This study has practical implications for managers planning a major change to the formal structure and theoretical implications for scholars, suggesting that understanding network change during periods of disruption can benefit from dialectic models that integrate top down theories of structural influence with bottom up theories of agency.