THE ROLE OF INFORMAL AND FORMAL NETWORKS: HOW PROFESSIONALS CAN BE INNOVATIVE IN A CONSTRAINED FISCAL ENVIRONMENT

Abstract

One way of circumventing issues associated with constricted resources is to use organisational social resources embedded within both formal and informal social networks to provide increased support for proactive and innovative employee behaviour. Social exchange theorists argue that informal working relationships with non-line management provides an additional power source alongside traditional management relationships to foster proactive and innovative behaviour even when resources are scarce. About 272 Australian engineers, asset managers and technical employees were surveyed from public and private sector organisations, and data was examined using structural equation modelling. The findings depict that formal and informal leader–employee, organisational–employee relationships explained almost 53% of resource adequacy and resource adequacy explained 60.5% of the proactive engineering asset management organisational culture and 28.1% of innovative behaviour. This paper contributes insight into another hierarchical workplace relationship that employees can use to gain access to resources, and be proactive and innovative in the workplace.