Cognitive consensuality and organizational performance: A systematic assessment.

Abstract

Grounded in schema theory, cognitive consensuality refers to the extent to which the individual schemas of organization members are shared. Current research reports conflicting theoretical and empirical relationships between cognitive consensuality and organizational performance. While researchers interested in strategy, culture, and vision often assume or argue a positive consensuality-performance relationship, researchers studying cognitive psychology, groupthink, and organizational adaptation propose a negative consensuality-performance relationship. Empirically, both positive and negative consensuality-performance relationships have been found. This dissertation examines five research issues that may integrate and resolve the contradictory relationships found between cognitive consensuality and performance: (1) the functional form of the consensuality-performance relationship (curvilinear vs. linear); (2) the tradeoffs of performance outcomes (organizational competitiveness vs. innovativeness); (3) the moderating effects of environmental dynamism; (4) the domains of consensuality (strategy, culture, and vision); (5) and the scope of consensuality (top management team consensuality vs. organizational consensuality). A national database with more than 10,000 respondents in 1,200 businesses was used to systematically assess the five research issues. Consensuality-performance relationships are found to be both important and interesting. Results indicated that the eight consensuality measures included in the dissertation accounted for 12% to 19% of variances in predicting organizational competitiveness and innovativeness in both low and high volatility environments. Tradeoffs between the two performance outcomes were observed and consensuality-performance relationships were significantly different in examining the two performance outcomes. Environmental volatility was found to moderate the consensuality-performance relationship by influencing the significance of individual consensuality measures. The three domains of consensuality on business strategy, culture, and vision were all significant in predicting at least one of the two performance outcomes. Both the content and the extent of consensuality measures were found to have important effects on organizational performance. No major difference was found, however, between top management team consensuality and organizational consensuality in predicting organizational performance. Most consensuality-performance relationships were found to be linear instead of curvilinear. This dissertation contributes to research in shared cognition in two ways: (1) conceptually, it differentiates the extent and the content of shared cognition; (2) empirically, it examines relationships between the extent of shared cognition and organizational performance.