Executives’ network change and their promotability during a merger

Abstract

We investigate whether changes to cross-functional or cross-organizational personal networks following a large corporate merger and acquisition improve junior executives’ career outcomes. Previous research on networks and career success has focused on stable organizational environments, finding that large, open networks with many structural holes are most advantageous because of superior information benefits and control power, while closed networks provide redundant information that is unhelpful career-wise. However, we suggest that while dense, closed networks formed within organizational boundaries might be detrimental to executives’ future promotability, closed networks are helpful if they are created across boundaries. These ties help to facilitate knowledge transfer and develop a new superordinate post-merger identity and are ultimately valued by the merging organization. We tested this on junior executives’ email network data collected at two time points (pre-merger and a year later) from the newly-merged organization. Results show that while closed networks with higher constraint in general were detrimental to executive’s promotability pre-merger, they lose their negative effect in the post-merger tumult. Controlling for overall network constraint, increasingly closed networks across functional and legacy organizational boundaries led to managers receiving higher promotability evaluations from top management, whereas increasingly closed networks within one’s functional and legacy organizational boundary did not have a significant impact. Implications are discussed for career and social networks research.