Informal Networks and Organizational Crises: An Experimental Simulation

This paper argues that organizations with a particular social network structure are more effective than most organizations in responding to crises. Further, it is argued that the effective structure does not occur naturally, but must be designed consciously and carefully. A theory is developed based on well-founded principles of social science, most notably work on formal structure, conflict, friendships, and organizational crises. The paper concludes with an experimental test of one of the four propositions deduced from the theory. Six trials of the experiment found significant support for this proposition.