ORGANIZATIONAL RESTRUCTURING AND SOCIAL NETWORK CHANGES: IMPLICATIONS ON WORK SATISFACTION AND SATISFACTION WITH CHANGES GRACE LEE CHAU CHIN (BBA (Hons), MSc (Management), NUS) A THESIS SUBMITTED FOR THE DEGREE OF DOCTORATE OF PHILOSOPHY (MANAGEMENT) DEPARTMENT OF MANAGEMENT AND ORGANISATION SCHOOL OF BUSINESS NATIONAL UNIVERSITY OF SINGAPORE 2004 Acknowledgements This is dedicated to my beloved grandmother who did not live to see the completion of this academic endeavor, but whose life and example provided the impetus and motivation for me to prod on and finish the journey. This endeavor would not have been possible without the encouragement and cheer of family and friends. To Kelvin, my husband, whose unstinting and unwavering support gave me the confidence to finish this monumental task. To Bryan, Brandon and Beverly, whose winning smiles and shining faces never fail to cheer me up after a long day. To Usa and Yuen Kay, my cheerleaders, intellectual partners and friends. The race may not have been completed without you both. To Associate Professor Albert Teo for supervising the thesis amidst his very heavy commitments and Associate Professor Quek Ser Aik for selflessly giving of his time to guide me in the statistical analysis. To God be the ultimate glory for all the precious lessons that I have learnt about myself, my own limitations and most of all, His bountiful grace and faithfulness in sustaining me in this academic journey. Grace Lee April 2004 ii TABLE OF CONTENTS Acknowledge ments …………………………………………………… ii Table of Contents……………………………………………………… iii Summary ……………………………………………………………… . vi List of Tables ……………………………………………………….… viii List of Figures ………………………………………………………… x Table of Contents CHAPTER ONE: 1.1 1.2 1.3 1.4 2.2 2.3 2.4 2.5 A Social Network Analysis of Organizations Research Questions Aims and Contributions Outline of Dissertation CHAPTER TWO: 2.1 INTRODUCTION 10 LITERATURE REVIEW 11 The Social Network Structure 2.1.1 Network Centrality 2.1.2 Network Structural Perspective of Social Capital 2.1.3 Structural Holes 2.1.4 Types of Network 2.1.4.1 Trust Network 2.1.4.2 Advice Network Organizational Restructuring Work Satisfaction Employees’ Satisfaction with Organizational Changes Work Performance 11 14 16 19 21 25 28 29 33 36 39 CHAPTER THREE: HYPOTHESES DEVELOPMENT 42 3.1 3.2 3.3 3.4 3.5 3.6 3.7 42 45 47 51 56 61 63 Trust Networks following Organizational Restructuring Advice Networks following Organizational Restructuring Structural Context and Work Satisfaction Network Turnover and Satisfaction with Changes Minor Hypotheses Control Variables The Research Model iii CHAPTER FOUR: METHODS AND MEASURES 65 4.1 4.2 4.3 66 70 71 71 72 74 75 75 76 78 80 80 82 84 84 85 4.4 4.5 4.6 4.7 Research Setting Respondents and Response Rates Sociometric Measures 4.3.1 Pre-restructuring data collection (Phase 1: baseline) 4.3.2 Phase data collection (3 months after restructuring) 4.3.3 Phase data collection (9 months after restructuring) Dependent Variables 4.4.1 Work Satisfaction and Satisfaction with Changes 4.4.2 Work Performance Ratings 4.4.3 Peer Assessment Ratings Network Measures 4.5.1 Network Centrality Measures 4.5.2 Structural Holes 4.5.3 Network Turnover Coding of Control Variables Data Analysis CHAPTER FIVE: 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Sample Characteristics Network Measures and Control Variables Network Changes after Restructuring 5.3.1 Changes in Trust Networks after Restructuring 5.3.2 Analysis of Changes in the Trust Networks after Restructuring 5.3.3 Changes in Advice Networks after Restructuring 5.3.4 Analysis of Changes in the Advice Networks after Restructuring Changes in Network Positions Multiple Regressions Network Determinants of Work Satisfaction 5.6.1 Satisfaction with Working in the Organization 5.6.2 Satisfaction with Job 5.6.3 Satisfaction with Immediate Supervisors 5.6.4 Satisfaction with Colleagues 5.6.5 Satisfaction with Changes in the Organization Impact of Network Turnover Network Determinants of Work Performance 5.8.1 Advice Network Centrality and Work Performance 5.8.2 Structural Holes and Work Performance CHAPTER SIX: 6.1 6.2 6.3 6.4 6.5 ANALYSES AND RESULTS DISCUSSIONS AND CONCLUSIONS Changes in Social Networks after Restructuring Network Variables, Work Satisfaction and Satisfaction with Changes Minor Hypotheses: Network Variables and Work Performance Limitations of the Study Implications iv 87 87 88 95 95 98 104 107 110 113 114 114 118 120 123 125 128 129 129 132 138 138 141 143 145 146 6.6 6.7 Theoretical Contributions Future Directions 148 150 References Appendices Appendix Appendix Appendix Appendix 151 168 171 175 178 v Summary While organizational scholars have acknowledged the importance of understanding how employee attitude, reactions and morale are impacted following organizational restructuring (Mishra and Spreitzer, 1998), there has been little attention paid to the mediating effects of social network structure in explaining employee outcomes. This study seeks to fill this gap in the literature by examining how changes in employees’ network centrality and structural holes induced by organizational restructuring impacted employees’ work satisfaction, satisfaction with changes and work performance. Network centrality and structural holes of employees’ advice and trust networks were tracked at three points in time: before, three months after, and nine months after organizational restructuring. Results indicated that survivors’ trust network centrality was significantly lower nine months after organizational restructuring when compared to pre-restructuring levels. In contrast, advice network centrality and structural holes in survivors’ advice networks were significantly higher after restructuring compared to pre-restructuring levels. Work satisfaction comprising four dimensions of employee satisfaction with respect to: working in organization, job, immediate supervisor and colleagues, were tracked over three separate points in time: before restructuring, three months and nine months after. Advice betweenness centrality and structural holes in survivors’ advice networks were found to be positively associated with satisfaction with working in the organization three months after restructuring. Results indicated that advice network centrality and effective size of advice networks had no strong associations with satisfaction with immediate supervisor and colleagues. vi Additionally, employee satisfaction with changes in the organizational restructuring was tracked at two points in time: three months and nine months after restructuring. Individuals with higher advice network centrality and whose networks were richer in structural holes were more satisfied with changes in the organization three months post-restructuring. However, the relationship between the network variables and satisfaction with changes were not apparent nine months after restructuring. Finally, the effects of trust and advice network turnover on satisfaction with changes relating to the organizational restructuring were examined. The findings showed that advice network turnover had a negative impact on satisfaction with organizational changes. The findings also provided empirical support for the contribution of network variables to work performance. Specifically, advice network centrality and structural holes were associated with higher work performance ratings by supervisors in the post-restructured context respectively. Keywords: Organizational Change, Organizational Restructuring, Social Networks, Turnover, Work Performance, Work Satisfaction vii List of Tables Table 2.1: Table 4.1: Table 4.2: Table 4.3: Table 5.1: Table 5.2: Table 5.3: Table 5.4: Table 5.5: Table 5.6: Table 5.7: Table 5.8: Table 5.9: Table 5.10: Table 5.11: Table 5.12: Table 5.13: Table 5.14: Table 5.15: Table 5.16: Table 5.17: Examples of types of networks in previous studies Response rates for all Phases Key Performance Criteria Performance Rating Guide Zero-order Correlations for Pre-restructuring data (baseline, Phase 1) Zero-order Correlations for Post-restructuring data, three months after restructuring (Phase 2) Zero-order Correlations for Post-restructuring data, nine months after restructuring (Phase 3) Paired Samples T-Tests (Trust Network Measures) Paired Samples T-Tests (Advice Network Measures) Regression Analyses of Advice Network Measures on Satisfaction with working in the organization before restructuring (Phase 1) Regression Analyses of Advice Network Measures on Satisfaction with working in the organization months after restructuring (Phase 2) Regression Analyses of Advice Network Measures on Satisfaction with working in the organization months after restructuring (Phase 3) Regression Analyses of Advice Network Measures on Satisfaction with Job in the organization before restructuring (Phase 1) Regression Analyses of Advice Network Measures on Satisfaction with Job months after restructuring (Phase 2) Regression Analyses of Advice Network Measures on Satisfaction with Job months after restructuring (Phase 3) Regression Analyses of Advice Network Measures on Satisfaction with Immediate Supervisors in the organization before restructuring (Phase 1) Regression Analyses of Advice Network Measures on Satisfaction with Immediate Supervisors months after restructuring (Phase 2) Regression Analyses of Advice Network Measures on Satisfaction with Immediate Supervisors months after restructuring (Phase 3) Regression Analyses of Advice Network Measures on Satisfaction with Colleagues before restructuring (Phase 1) Regression Analyses of Advice Network Measures on Satisfaction with Colleagues months after restructuring (Phase 2) Regression Analyses of Advice Network Measures on Satisfaction with Colleagues months after restructuring (Phase 3) viii 25 70 77 78 89 91 93 111 112 115 116 118 119 119 120 121 122 122 123 124 124 Table 5.18: Table 5.19: Table 5.20: Table 5.21: Table 5.22: Table 5.23: Table 5.24: Table 5.31: Regression Analyses of Advice Network Measures on Satisfaction with Changes months after restructuring (Phase 2) Regression Analyses of Advice Network Measures on Satisfaction with Changes months after restructuring (Phase 3) Regression Models for Network Turnover Rate on Satisfaction with Changes Regression Analyses of Advice Centrality Measures on Work Performance Ratings by Supervisors Regression Analyses of Advice Centrality Measures on Peer Performance Ratings Regression Analyses of Effective Size of Advice Networks on Work Performance Ratings by Supervisors Regression Analyses of Effective Size of Advice Network on Peer Performance Ratings Summary of Results ix 126 127 128 130 132 133 135 135 List of Figures Figure 1: Concepts of centrality (adapted from Krackhardt, 1990) 15 Figure 2: Optimizing structural holes (adapted from Burt, 1992) 20 Figure 3: Possible effects of turnover of friend on stayer (adapted from Krackhardt and Porter, 1985) Figure 4: Turnover in networks (adapted from Krackhardt and Porter, 1985) 53 Figure 5: Four scenarios depicting degrees of impact from leavers (extracted from Krackhardt and Porter, 1984, p. 247) Figure 6: Research Model 55 Figure 7: Trust networks before organizational restructuring (baseline, Phase 1) 96 Figure 8: Trust networks three months after organizational restructuring (Phase 2) 97 Figure 9: Trust networks nine months after organizational restructuring (Phase 3) 98 Figure 10: Percentage of ties in the trust networks of all respondents within Work Groups across All Phases Figure 11: Advice networks before organizational restructuring (baseline, Phase 1) 99 Figure 12: Advice networks three months after organizational restructuring (Phase 2) 105 Figure 13: Advice networks nine months after organizational restructuring (Phase 3) 106 Figure 14: Percentage of ties in the advice networks of all respondents within Work Groups across All Phases 107 x 54 63 104 Mowday, R.T. 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When did you join the organization (date/month/year)? 5. What is your gender? Male Female 168 6. What is your total length of service in SATA? 7. What is your age? 8. What is your highest educational qualification? Secondary ‘O’ Levels ’A’ Levels or Diploma University Degree 169 Please mark you choice with a cross, for example: Example: 1. The organization is highly regarded by its employees. To a very little extent To a very little extent To a little extent To a little extent To some extent To a great extent To some extent To a very great extent To a great extent To a very great extent WORK SATISFACTION: 1. Are you satisfied with working in this organization? 2. Are you satisfied with your job? 3. Are you satisfied with your immediate supervisor? 4. Are you satisfied with your colleagues? 5. I get adequate information about what is going on in other departments. 6. I am satisfied with my chances of getting ahead in the organization in the future. Access to Information, Resources and Career Development Opportunities: 170 Appendix MINI EMPLOYEE SURVEY (Phase – December 2001) 1. Where are you presently located? SUC (Uttaram) SJC (Jurong) SKC (Kreta Ayer) SWC (Woodlands) 2. In which department you work in? Laboratory Nursing Diagnostics Customer Service 3. What is your designation? 4. When did you join the organization (date/month/year)? 5. What is your gender? Male Female 171 6. What is your total length of service in SATA? 7. What is your age? 8. What is your highest educational qualification? Secondary ‘O’ Levels ’A’ Levels or Diploma University Degree 172 Please mark you choice with a cross, for example: Example: 1. The organization is highly regarded by its employees. To a very little extent To a very little extent To a little extent To some extent To a great extent To a little extent To some extent To a great extent To a very great extent To a very great extent WORK SATISFACTION: 1. Are you satisfied with working in this organization? 2. Are you satisfied with your job? 3. Are you satisfied with your immediate supervisor? 4. Are you satisfied with your colleagues? BEFORE RESTRUCTURING: For the next few minutes, can you reflect back on the time before the organizational restructuring took place: Can you provide the names of colleagues of whom you will approach if you have a work-related problem or when you want advice on a technical problem? Can you tell me the names of colleagues who are very good friends of yours, people whom you trusted and have confided in when you had personal and private matters of concern? CURRENTLY: Can you provide the names of colleagues of whom you will approach if you have a work-related problem or when you want advice on a technical problem? Can you tell me the names of colleagues who are very good friends of yours, people whom you trusted and have confided in when you had personal and private matters of concern? 173 Not at all Rarely Sometimes Often Always 1. Provide professional good customer service 2. Sensitive to customers needs and exceeds their expectations 12. Communicate well 13. Always punctual 14. Show initiative 15. Work under pressure Colleagues Name: 3. Provide accurate and timely services 4. Make continuous improvement to work processes 5. Work well in a team 6. Maintain a high standard in work 7. Understand job and department policies 8. To keep to schedule 9. Contribute new ideas 10. Organize work well 11. Accept responsibility THANK YOU FOR YOUR PARTICIPATION IN THIS SURVEY!!! 174 Appendix MINI EMPLOYEE SURVEY (Phase 3: June 2002) 1. Where are you presently located? SUC (Uttaram) SJC (Jurong) SKC (Kreta Ayer) SWC (Woodlands) 2. In which department you work in? Laboratory Nursing Diagnostics Customer Service 3. What is your designation? 4. When did you join the organization (date/month/year)? 5. What is your gender? Male Female 175 6. What is your total length of service in SATA? 7. What is your age? 8. What is your highest educational qualification? Secondary ‘O’ Levels ’A’ Levels or Diploma University Degree 176 Please mark you choice with a cross, for example: Example: 1. To a very little extent The organization is highly regarded by its employees. To a very little extent To a little extent To some extent To a great extent To a very great extent To a little extent To some extent To a great extent To a very great extent 5. Are you satisfied with the changes that were made in the organizational restructuring? ADVICE AND SUPPORT WORK SATISFACTION 1. Are you satisfied with working in this organization? 2. Are you satisfied with your job? 3. Are you satisfied with your immediate supervisor? 4. Are you satisfied with your colleagues? Can you tell me the names of colleagues that you approached when you have a work-related problem or when you wanted advice on a technical problem? Colleagues that I have approached when I had a workrelated problem or when you wanted advice on a technical problem have left the organization after the restructuring. If yes, they are (please provide names): Can you tell me the names of colleagues who are very good friends of yours, people whom you trusted and have confided in when you had personal and private matters of concern? Colleagues whom I can confide in when I have personal and private matters of concern have left the organization after the restructuring. If yes, they are (please provide names): THANK YOU FOR YOUR PARTICIPATION IN THIS SURVEY!! 177 Appendix Percentage of Ties within Work Groups Percentage of Trust Network Ties within work group for all phases Laboratory Diagnostic Nursing Customer Service Total n 17 13 17 n(n-1)/2 136 78 136 25 72 300 2556 Phase Ties 11 15 12 39 Percent 8.09% 1.28% 11.03% n 18 12 16 4.00% 1.53% 25 71 Phase n(n-1)/2 Ties 153 13 66 120 11 300 2485 17 45 Percent 8.50% 6.06% 9.17% n 14 22 18 5.67% 1.81% 32 86 Phase n(n-1)/2 Ties 91 231 153 496 3655 17 Percent 3.30% 0.87% 5.23% 0.81% 0.47% Percentage of Advice Network Ties within work group for all phases Laboratory Diagnostic Nursing Customer Service Total Note: n 17 13 17 n(n-1)/2 136 78 136 25 72 300 2556 Phase Ties 22 16 47 Percent 16.18% 5.13% 11.76% n 18 12 16 1.67% 1.84% 25 71 Percentage of ties within group = No. of ties within group/n(n-1)/2 177 Phase n(n-1)/2 Ties 153 26 66 120 12 300 2485 10 53 Percent 16.99% 7.58% 10.00% n 14 22 18 3.33% 2.13% 32 86 Phase n(n-1)/2 Ties 91 24 231 11 153 21 496 3655 11 67 Percent 26.37% 4.76% 13.73% 2.22% 1.83% [...]... networks to be examined in this study — trust and advice networks, are described The later sections pertain to the review of literature on research that has been done on organizational restructuring, work performance, work satisfaction and employees’ satisfaction with organizational changes 2.1 THE SOCIAL NETWORK STRUCTURE The social network structure comprises patterned, repeated social interactions... employees’ network centrality and structural holes impacted as a result of changes in the trust and advice network structures? 3 How does organizational restructuring affect employees’ work satisfaction and satisfaction with changes through the network effects of centrality and structural holes respectively? 4 How does network turnover affect employees’ satisfaction with organizational changes? 5 How does organizational. .. longitudinal study following organizational restructuring will provide us with a better understanding of changes in social relations within the work context Restructuring provides a context in which to examine how social networks are affected by formal structural changes Given that social network studies have traditionally focused on intact and stable networks (Shah, 2000), an investigation of how social. .. Types of networks Design Cross-sectional Brass and Burkhardt (1993) Advice communication, support, influence, and friendship networks Communication network Ibarra and Andrews (1993) Advice and friendship networks Cross-sectional Ibarra (1993) Cross-sectional Baldwin, Bedell and Johnson, Advice, friendship and adversarial (1997) networks Shah (2000) Advice and friendship networks Cross-sectional Sparrowe,... following organizational restructuring in a longitudinal study The changes in employees’ network centrality and structural holes induced by organizational restructuring were then examined to determine their effects on employees’ work satisfaction, satisfaction with changes and work performance 1.1 A SOCIAL NETWORK ANALYSIS OF ORGANIZATIONS An organization is made up of social groupings with relatively stable... Instrumental networks include advice relations and other instrumental kinds of relations in organizations like formal communication ties Expressive networks include friendship networks, social support networks and trust networks (Ibarra, 1995; Krackhardt and Stern, 1988) Expressive network relations generally characterized by stronger, more intimate links, tend to connect people who are similar on a variety... important organizational outcomes — instrumental networks and expressive networks (e.g., Brass, 1992; Ibarra and Andrews, 1993) 21 Social network theory distinguishes between the instrumental network relations that arise in the course of work- role performance and expressive network relations that primarily provide friendship and social support (Tichy, Tushman, and Fombrun, 1974; Lincoln and Miller,... 6 organization, which they defined as the networks of relationships that employees form across functions Social interaction patterns within the organization are likely to be more fluid than stable in a context such as in an organizational restructuring Changes to interaction patterns following organizational restructuring will alter the structures of social networks within the organization, affecting... more nonredundant contacts than strong relations in a dense network with redundant contacts The sparse network reaches contacts in separate areas of social activity In comparison, each person in a dense network with strong ties knows what the other person knows and will discover the same opportunities at the same time The dense 18 network is inefficient in that it returns less diverse information for... in structural holes per contact (Burt, 1992) Given two networks of equal size, the one with more non-redundant contacts provides more benefits In Figure 2, network A provides four non-redundant contacts and network B provides the same number The information benefits provided by the additional four relationships in network A are redundant Network B is more efficient than network A because it is maintained . ORGANIZATIONAL RESTRUCTURING AND SOCIAL NETWORK CHANGES: IMPLICATIONS ON WORK SATISFACTION AND SATISFACTION WITH CHANGES GRACE LEE CHAU CHIN (BBA (Hons), MSc (Management),. Trust Networks following Organizational Restructuring 42 3.2 Advice Networks following Organizational Restructuring 45 3.3 Structural Context and Work Satisfaction 47 3.4 Network Turnover and Satisfaction. 6.1 Changes in Social Networks after Restructuring 138 6.2 Network Variables, Work Satisfaction and Satisfaction with Changes 141 6.3 Minor Hypotheses: Network Variables and Work Performance