INTERGROUP strategic consensus and performance: The moderating effect of intergroup leadership

Abstract

Organisational performance is dependent on the effective coordination between the different and more often competing groups that make up most organisations of today. Yet, achieving effective coordination remains an on-going business challenge. Prior work on strategic consensus and social identification suggests that their combination would be positive for intergroup coordination which will then drive organisational performance. Further, work on leadership posits that intergroup leadership is different from ordinary leadership. Intergroup leadership is only effective if it is able to foster intergroup coordination based on collaborative relationships. The underlying argument is that leader’s primary responsibility is to coordinate activities between different organisational groups. Building on strategic management process, social identity, and intergroup leadership theories, the aim of this study was to empirically test the influence of intergroup strategic consensus on organisational performance. Further, the study aimed to test the relationship between intergroup relational identity, intergroup effectiveness, and organisational performance. Data was collected from a sample of multinational pharmaceutical companies in South Africa which resulted in a sample size of 114 respondents with a realised 50.4% response rate. The findings were that there was no statistically significant correlation between organisational identification and intergroup strategic consensus. However, intergroup strategic consensus was partially found to be related to firm performance. Other findings were that intergroup effectiveness directly impacts firm performance. Organisational identification was moderately and positively related to both intergroup relational identity and intergroup effectiveness. Intergroup relational identity was strongly associated with intergroup effectiveness.