Engineering interaction: Structural change, locus of identification, and the formation and maintenance of cross‐unit ties

Cross‐unit ties–relationships that facilitate discretionary information sharing between individuals from different business units–offer a range of organizational benefits. Scholars argue that organizations can promote cross‐unit ties by: (a) formally bringing together individuals from different business units into structural links (e.g., cross‐unit strategic committees) to encourage the formation of new cross unit ties and, (b) transferring individuals across units, which can increase cross‐unit interaction when ties to the prior unit are maintained. This study considers the notion that the success of these formal interventions in fostering cross‐unit interaction is contingent on identification with the local unit relative to identification with the broader organization. Specifically, we propose that structural links are more likely to foster cross‐unit ties when organizational identification is high and unit identification is low. In contrast, lateral transfers are more likely to result in cross‐unit ties when both organizational identification and unit identification are high. We find general support for these propositions in data obtained from a sample of senior leaders of a Fortune 200 agribusiness company before and after a restructuring designed to stimulate cross‐unit information sharing. Our model and results make important contributions to our understanding of the relationship between formal and informal structure and reconcile conflicting views regarding the moderating effect of unit identification on intergroup relations.