Managing Informal Employee Organizations

A comprehensive analysis of the social underpinnings of workplace organizations and the best methods for channeling the resulting behavior toward particular goals.

Whenever people spend time together, as they do in a workplace, they tend to arrange themselves in groups that greatly influence their actions. These informal employee organizations convey and maintain social status, establish behavioral standards, and support or oppose a variety of organizational norms, values and objectives. Like Robert L. Cross and Andrew Parker in The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations (2004), Shaw shows how these informal networks can powerfully drive their members, even to the point of constituents voting against their own best interests. One such example, among the many Shaw offers, is of factory workers who rejected a management proposal in which “their workday would be reduced without any reduction in wages whatsoever.” Unlike the more academic Martin Kilduff and Wenpin Tsai, in Social Networks and Organizations, Shaw demonstrates his mastery of the material by delving into the nuances of human behaviors mediated by these social networks, including strategic listening, goal setting, developing shared visions, communicating openly and responding to problematic situations with an “action step” approach. Shaw goes on to provide a cogent discussion of the inevitable formation of these social networks in all business organizations. The networks are by nature emotional rather than rational, Shaw says, which allows fear—of loss, of change—to play a decisive role in determining employee responses to any management initiative. As such, Shaw gives full shrift to the power of emotion and advocates steadfast managerial attention to the subtle, perhaps even hidden issues within an organization that govern employee responses to situations, pressures and directives for change. According to Shaw, by means of open communication, management can gradually reduce its employees’ penchant for fear-based reactions and align the interests of the informal employee networks more accurately with those of the formal organization. He also offers a process by which management can win greater support for its goals by working with the networks to elicit their input and create a shared vision so that ultimately, “the combined visions of the participants can be integrated into a single, comprehensive plan for the company.”

A clear-cut, convincing case for managers to appreciate and work with informal employee organizations.