Strategic consensus and performance: the role of strategy type and market-related dynamism

This paper examines the link between consensus among senior managers and performance at the SBU level and considers factors which may moderate the strength of this relationship. Using data from a cross-national study in three industry sectors, the authors find that consensus increases the performance of the SBU in the case of a differentiation strategy but not in the case of a low-cost strategy. Additionally, the relationship between consensus on a differentiation strategy and performance is negatively influenced by dynamism of the market. This research thus clarifies and extends prior consensus research by indicating the conditions under which consensus positively affects performance. For managers, our results indicate that investing managerial time in obtaining consensus is more important for a differentiation than for a low-cost strategy and is particularly important when using a differentiation strategy in a stable environment.