A Network Perspective on Organizational Architecture: Performance Effects of the Interplay of Formal and Informal Organization

The paper takes a network perspective to organizational architecture, conceptualizing it as multiple networks of both formal and informal interactions and argue that their interplay is key to better understand individual organizational member performance. We develop and test the concept of network consistency as the overlap between the informal network of advice and information with formal structures and processes, expressed as networks. We theorize that consistency between formal and informal networks exerts differing effects on performance. We test our theory in a financial services firm, using secondary data to create formal networks, and annual performance evaluations for our dependent variable, along with primary survey data from organizational members to obtain the informal advice and information network. Results support our network approach to organizational architecture.