To Agree or Not Agree? Consensus and Performance in New Ventures
28 Pages Posted: 9 May 2011
Date Written: May 4, 2011
It is an intuitively appealing notion that enhanced firm performance is associated with agreement by top managers on a fundamental set of strategic goals and on methods to accomplish those goals. Whereas previous studies have for the most part examined this relationship in larger companies competing in stable industries, the study reported here provides findings from newer entrepreneurial ventures in dynamic industries. Several important findings emerge from this study. First, managers’ assessment of better performance is not related to agreement on a primary set of strategic goals and means. Instead, perceived better performance is significantly and positively related to disagreement on secondary sets of strategic goals and means. Second, powerful individuals in top management teams have an important impact on the nature of the consensus-performance relationship. In new ventures the influence of the CEO’s perspective and behaviors in forging agreement cannot be overlooked. Third, these results are evident during the earlier life cycle stages of a venture’s development, and in dynamically changing competitive environments.
Keywords: consensus, top management, new venture
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