ABSTRACT
This study examines the importance of consensus in management and
illustrates the relationship between consensus and performance through
empirical research. Furthermore, the study develops two new measures
of consensus among decision makers. The development of the new consensus
measures is depicted with an example of market entry decision when three
or more decision makers are involved. The measures are found to be sensitive
in capturing agreement among executives in 33 major U.S. firms. The
performance of consensus measures were compared with the performance
of Chow's-F as a test of convergent validity. The two measures offer
considerable potential use in depicting the magnitude of consensus on
decision making, comparing the consensus on different variables and
explaining the level of consensus among decision makers in organizations.
Findings in this research indicate that there is positive relationship
between consensus and firm performance suggesting that managerial consensus
may lead to competitive advantage.
