Rewiring the intrafirm network under downsizing: The role of tie loss on discretionary tie formation

Abstract

Drawing on the literature on structural embeddedness and self-determination, I assess the impact of the sudden loss of discretionary maintained ties on the aptitude to establish new discretionary ties. I propose that an individual's relational and global structural embeddedness predict the creation of new discretionary ties. The results, based on a natural event study observing a voluntary network for ideation over time at a leading information technology service provider, confirm these hypotheses, indicating the relevance of local structural as well as global structural embeddedness as a foundation for voluntary future tie activation. The sudden loss of established discretionary ties reinforces this effect. The presented findings are relevant to the literature on network evolution and organizational change, as they identify the role of sudden tie loss as an exogenous trigger for an individual's inclination towards discretionary new tie formation.