Strategic decision-making: The effects of cooperative conflict management, agreement-seeking behavior and competence-based trust on decision outcomes

CITATION

Parayitam, S., & Papenhausen, C. (2018). Strategic decision-making: The effects of cooperative conflict management, agreement-seeking behavior and competence-based trust on decision outcomes. Management Research Review, 41(1), 2–28.

For library access / research help in a similar topic: anyangoceline19@gmail.com 

ABSTRACT
Purpose – This paper aims to investigate the effect of cooperative conflict management on agreementseeking
behavior, agreement-seeking behavior on decision outcomes, moderating role of competence-based
trust on the relationship between agreement-seeking behavior and decision outcomes, and mediating role of
agreement-seeking behavior between cooperative conflict management and decision outcomes.
Design/methodology/approach – Using a structured survey instrument, this paper gathered data from
348 students enrolled in a strategic management capstone course that features strategic decision-making in a
simulated business strategy game. The data from 94 teams were collected from the student population using a
carefully administered instrument. The data were aggregated after running the inter-rater agreement test and
the analyzed to test the hypotheses.
Findings – The results from the hierarchical regression of the complex moderated mediation model reveal
that cooperative conflict management is positively related to agreement-seeking behavior, and agreementseeking
behavior mediates the relationship between cooperative conflict management and decision outcomes.
The results also suggest that competence-based trust acts as a moderator in the relationship between
agreement-seeking behavior and decision quality; agreement-seeking behavior and team effectiveness, and
agreement-seeking behavior and decision commitment. Results also support mediation of agreement-seeking
behavior between cooperative conflict management and decision outcomes.
Research limitations/implications – The present research is based on self-report measures, and
hence, the limitations of social desirability bias and common method bias are inherent. However, adequate
care is taken to minimize these limitations. The research has implications for the strategic decision-making
process literature.
Practical implications – In addition to the strategic management literature, this study contributes to
practicing managers. The study suggests that competence-based trust plays a vital role in decision
effectiveness. Administrators need to select the members in the decision-making process who have
competence-based trust on one another and engage in agreement-seeking behavior.
Social implications – The findings from the study help in creating a fruitful social environment in
organizations.
Originality/value – This study provides new insights about the previously unknown effects of
cooperative conflict management and agreement-seeking behavior in strategic decision-making process



REFERENCES
Aiken, L. and West, S. (1991), Multiple Regression: Testing and Interpreting Interactions, Sage,
Newbury Park, CA.

Alper, S., Tjosvold, D. and Law, S.A. (2000), “Conflict management, efficacy, and performance in selfmanaging
work teams”, Personnel Psychology, Vol. 53 No. 3, pp. 625-642.

Amason, A.C. (1996), “Distinguishing the effects of functional and dysfunctional conflict on strategic
decision making: resolving a paradox for top management teams”, Academy of Management
Journal, Vol. 39 No. 1, pp. 123-148.

Biemann, T., Cole, M.S. and Voelpel, S. (2012), “Within-group agreement: on the use (and misuse) of
rWG and rWG(J) in leadership research and some best practice guidelines”, The Leadership
Quarterly, Vol. 23 No. 1, pp. 66-80.

Bliese, P.D. (2000), “Within-group agreement, non-independence, and reliability: implications for data
aggregation and analysis”, in Klein, K.J. and Kozlowski, S.W.J. (Eds), Multilevel Theory, Research
and Methods in Organizations: Foundations, Extensions and New Directions, Jossey-Bass,
San Francisco, CA, pp. 349-381.

Browne, M.W. and Cudeck, R. (1993), “Alternative ways of assessing model fit”, in Bollen, K.A. and Long,
J.S. (Eds), Testing of Structural EquationModels, Sage, Newbury Park, CA, pp. 136-162.

Carlson, D.S. and Kacmar, K.M. (2000), “Work-family conflict in the organization: do life role values
make a difference?”, Journal of Management, Vol. 26 No. 5, pp. 1031-1054.

Chen, G., Liu, C.H. and Tjosvold, D. (2004), “Conflict management for effective top management teams
and innovation in China”, Journal of Management Studies, Vol. 42, pp. 277-300.

Daft, R.L., Bettenhausen, K.R. and Tyler, B.B. (1993), “Implications of top managers’ communication
choices for strategic decisions”, in Huber, G.P. and Glick, W.H. (Eds), Organizational Change and
Redesign: Ideas and Insights for Improving Performance, Oxford, New York, NY.

De Dreu, C. and Weingart, L. (2003), “Task versus relationship conflict, team performance, and team
member satisfaction: a Meta-analysis”, Journal of Applied Psychology, Vol. 88 No. 4, pp. 741-749.

De Dreu, C.K.W. and Van de Vliert, E. (1997), Using Conflict in Organizations, Sage, London.

Deutsch, M. (1960), “The effect of motivational orientation upon trust and suspicion”, Human Relations,
Vol. 13 No. 2, pp. 123-140.

Deutsch, M. (1973), The Resolution of Conflict, Yale University Press, New Haven, CT.

Diehl, M. and Stroebe, W. (1987), “Productivity loss in brainstorming groups: toward the solution of a
riddle”, Journal of Personality and Social Psychology, Vol. 53 No. 3, pp. 497-509.

Dooley, R.S. and Fryxell, G.E. (1999), “Attaining decision quality and commitment from dissent: the
moderating effects of loyalty and competence in strategic decision-making teams”, Academy of
Management Journal, Vol. 42 No. 4, pp. 389-402.

Dooley, R.S., Fryxell, G.E. and Judge, W.Q. (2000), “Belaboring the non-so-obvious: consensus,
commitment, and strategy implementation speed and success”, Journal of Management, Vol. 26
No. 6, pp. 1237-1257.

Eisenhardt, K. and Bourgeois, L.J. (1988), “Politics of strategic decision making in high-velocity
environments: toward a midrange theory”, Academy of Management Journal, Vol. 31 No. 4,
pp. 737-770.

Eisenhardt, K.M. (1989), “Making fast strategic decisions in high-velocity environments”, Academy of
Management Journal, Vol. 32 No. 3, pp. 543-576.

Eisenhardt, K.M. and Zbaracki, K.M. (1992), “Strategic decision making”, Strategic Management
Journal, Vol. 13 No. 1, pp. 17-37.

Elangovan, A.R. and Xie, J.L. (1999), “Effects of perceived power of supervisor on subordinate stress
and motivation: the moderating role of subordinate characteristics”, Journal of Organizational
Behavior, Vol. 20 No. 3, pp. 359-373

Finkelstein, S. and Hambrick, D.C. (1996), Strategic Leadership: Top Management Executives and Their
Effects on Organizations,West, St. Paul, MN.

Fornell, C. and Larcker, D. (1981), “Evaluating structural equation models with unobservable variables
and measurement error”, Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.

Galbraith, J. (1973), Designing Complex Organizations, Addison-Wesley, Reading,MA.

Gero, A. (1985), “Conflict avoidance in consensual decision processes”, Small Group Behavior, Vol. 16
No. 4, pp. 487-499.

Good, D. (1988), “Individuals, interpersonal relations, and trust”, in Gambetta, D.G. (Ed.), Trust, Basil
Blackwell, New York, NY, pp. 131-185.

Hambrick, D.C. (1994), “Top management groups: a conceptual integration and reconsideration of the
team label”, in Staw, B.M. and Cummings, L.L. (Eds), Research in Organizational Behavior,
Vol. 16, pp. 171-213.

Hambrick, D.C. and Mason, P.A. (1984), “Upper echelons: the organization as a reflection of its top
managers”, The Academy of Management Review, Vol. 9 No. 2, pp. 193-206.

Hite, J. (2005), “Evolutionary processes and paths of relationally embedded network ties in emerging
entrepreneurial firms”, Entrepreneurship Theory and Practice, Vol. 29 No. 1, pp. 113-144.

Huan, L.J. and Yazdanifard, R. (2012), “The difference of conflict management styles and conflict
resolution in workplace”, Business, and Entrepreneurship Journal, Vol. 1 No. 1, pp. 141-155.

Jackson, S., May, K.E. and Whitney, K. (1995), “Understanding the dynamics of diversity in decision
making teams”, in Guzzo, R.A. and Salas, E. (Eds), Team Effectiveness and Decision Making in
Organizations, San Francisco, CA, Jossey-Bass, pp. 204-261.

James, L., Demaree, R. and Wolf, G. (1984), “Estimating within-group interrater reliability with and
without response bias”, Journal of Applied Psychology, Vol. 69 No. 1, pp. 85-98.

Janssen, O., Van de Vliert, E. and Veenstra, C. (1999), “How task and person conflict shape the role of positive
interdependence inmanagement teams”, Journal ofManagement, Vol. 25 No. 2, pp. 117-142.

Jehn, K.A. (1995), “A multimethod examination of the benefits and detriments of intragroup conflict”,
Administrative Science Quarterly, Vol. 40 No. 2, pp. 256-282.

Jehn, K.A. (1997), “Affective and cognitive conflicts in work groups: increasing performance through
value-based intragroup conflict”, in de Dreu, C.K.W. and Van de Vliert, E. (Eds), Using Conflict in
Organizations, Sage, Thousand Oaks, CA, pp. 87-100.

Jehn, K. and Weldon, E. (1992), “A comparative study of managerial attitudes toward conflict in the
United States and the People’s Republic of China: issues of theory and measurement”, Paper
presented at the Academy of Management, Las Vegas, NV.

Jehn, K.A., Gregory, B., Northcraft, G.B. and Neale, M.A. (1999), “Why differences make a difference: a
field study of diversity, conflict, and performance in workgroups”, Administrative Science
Quarterly, Vol. 44 No. 4, pp. 741-763.

Kennedy, P. (1985), A Guide to Econometrics, 2nd ed., MIT Press, CambridgeMA.

Kirkbride, P.S., Tang, S.F.Y. and Westwood, R.I. (1991), “Chinese conflict preferences and negotiating
behavior: cultural and psychological influences”, Organization Studies, Vol. 12 No. 3, pp. 365-386.

Knight, D., Pearce, C.L., Smith, K.G., Olian, J.D., Sims, H.P., Smith, K.A. and Flood, P. (1999), “Top
management team diversity, group process, and strategic consensus”, Strategic Management
Journal, Vol. 20 No. 5, pp. 445-465.

Konrad, A.M. and Linnehan, F. (1995), “Formalized HRM structures: coordinating equal employment
opportunity or concealing organizational practices?”, Academy of Management Journal, Vol. 38
No. 3, pp. 787-820.

Korsgaard, M.A., Brodt, S.E. and Whitener, E.M. (2002), “Trust in the face of conflict: the role of
managerial trustworthy behavior and organizational context”, Journal of Applied Psychology,
Vol. 87 No. 2, pp. 312-319

Langfred, C. (2004), “Too much of a good thing? Negative effects of high trust and individual autonomy
in self-managing teams”, Academy of Management Journal, Vol. 47 No. 3, pp. 385-399.

Larzelere, R. and Huston, T. (1980), “The dyadic trust scale: toward understanding interpersonal trust
in close relationships”, Journal ofMarriage and the Family, Vol. 42 No. 3, pp. 595-604.
Lawrence, B.S. (1997), “The black box of organizational demography”, Organization Science, Vol. 8
No. 1, pp. 1-22.

Lee, H. (2004), “The role of competence-based trust and organizational identification in continuous
improvement”, Journal of Managerial Psychology, Vol. 19 No. 6, pp. 623-639.

Lieberman, J.K. (1981), The Litigious Society, Basic Books, New York, NY.

Lovelace, K., Shapiro, D. and Weingart, L.R. (2001), “Maximizing cross-functional new product team’s
innovativeness and constraint adherence: a conflict communications perspective”, Academy of
Management Journal, Vol. 44 No. 4, pp. 779-793.

McAllister, D.J. (1995), “Affect- and cognition-based trust as foundations for interpersonal cooperation
in organizations”, Academy of Management Journal, Vol. 38 No. 1, pp. 24-59.

Mayer, R.C., Davis, J.H. and Schoorman, F.D. (1995), “An integrative model of organizational trust”,
Academy of Management Review, Vol. 20 No. 3, pp. 709-734.

Miller, C., Burke, L. and Glick, W. (1998), “Cognitive diversity among upper-echelon executives:
Implications for strategic decision processes”, Strategic Management Journal, Vol. 19 No. 1,
pp. 39-58.

Mintzberg, H., Raisinghani, D. and Theoret, A. (1975), “The structure of unstructured decision process”,
Administrative Science Quarterly, Vol. 21 No. 2, pp. 246-275.

Netemeyer, R.G., Johnston, M.W. and Burton, S. (1990), “Analysis of role conflict and role ambiguity in
a structural equation framework”, Journal of Applied Psychology, Vol. 75 No. 2, pp. 148-157.

Olson, B.J., Parayitam, S. and Bao, Y. (2007), “Strategic decision making: the effects of cognitive
diversity, conflict and trust on decision outcomes”, Journal of Management, Vol. 33 No. 2,
pp. 196-222.

Parayitam, S. and Dooley, R.S. (2007), “The relationship between conflict and decision outcomes: the
moderating role of affect-and cognition-based trust in strategic decision making teams”,
International Journal of Conflict Management, Vol. 18 No. 1, pp. 42-73.

Parayitam, S. and Dooley, R.S. (2009), “The interplay between cognitive-and affective conflict and
cognition- and affect-based trust in influencing decision outcomes”, Journal of Business
Research, Vol. 62 No. 8, pp. 789-796.

Parayitam, S. and Dooley, R.S. (2011), “Is too much cognitive conflict in strategic decision-making
teams too bad?”, International Journal of Conflict Management, Vol. 22 No. 4, pp. 342-357.

Parayitam, S. and Papenhausen, C. (2016), “Agreement-seeking behavior, trust, and cognitive diversity
in strategic decision making teams: process conflict as a moderator”, Journal of Advances in
Management Research, Vol. 13 No. 3, pp. 292-315.

Pelled, L.H. (1996), “Demographic diversity, conflict, and work group outcomes: an intervening process
theory”, Organization Science, Vol. 7 No. 6, pp. 615-631.

Pelled, L.H., Eisenhardt, K.M. and Xin, K.P. (1999), “Exploring the black box: an analysis of work group
diversity, conflict, and performance”, Administrative Science Quarterly, Vol. 44 No. 1,
pp. 1-28.

Podsakoff, P., Mackenzie, S., Lee, J. and Podsakoff, N. (2003), “Common method biases in behavioral
research: a critical review of the literature and recommended remedies”, Journal of Applied
Psychology, Vol. 88 No. 5, pp. 879-903.

Polsa, P. and Parayitam, S. (2010), “The effect of competence-based trust between physicians and
administrative executives in healthcare on decision outcomes”, Management Research Review,
Vol. 33 No. 2, pp. 174-191

Richard A. Posthuma, P., Camelo-Ordaz, C., García-Cruz, J. and Sousa-Ginel, E. (2014), “Antecedents of
relationship conflict in top management teams”, International Journal of Conflict Management,
Vol. 25 No. 2, pp. 124-147.

Schaubroack, J., Lam, S.S.K. and Peng, A.C. (2011), “Cognition-based and affect-based trust as
mediators of leader behavior influences on team performance”, Journal of Applied Psychology,
Vol. 96 No. 4, pp. 863-871.

Shaw, M.E. (1981), Group Dynamics: The Psychology of Small Group Behavior, 3rd ed., McGraw-Hill,
New York, NY.

Simons, T.L. and Peterson, R.S. (2000), “Task conflict and relationship conflict in top management
teams: the pivotal role of intragroup trust”, The Journal of Applied Psychology, Vol. 85 No. 1,
pp. 102-111.

Solomon, L. (1960), “The influence of some types of power relationships and game strategies upon the
development of interpersonal trust”, Journal of Abnormal and Social Psychology, Vol. 61 No. 2,
pp. 223-230.

Strickland, L.H. (1958), “Surveillance and trust”, Journal of Personality, Vol. 26 No. 2, pp. 200-215.

Tjosvold, D. (1998), “The cooperative and competitive goal approach to conflict: accomplishments and
challenges”, Applied Psychology: An International Review, Vol. 47 No. 3, pp. 285-313.

Tjosvold, D. (2014), “Reflecting on reviewing: applying conflict management research”, Journal of
Organizational Behavior, Vol. 35 No. 8, pp. 1079-1092.

Tjosvold, D., Law, K.S. and Sun, H. (2006), “Effectiveness of Chinese teams: the role of conflict types
and conflict management approaches”, Management and Organization Review, Vol. 2 No. 2,
pp. 231-252.

Tjosvold, D., Leung, K. and Johnson, D.W. (2006), “Cooperative and competitive conflict in China”, in
Deutsch, M. and Coleman, P.T. (Eds), Handbook of Conflict Resolution: Theory and Practice,
Jossey-Bass, San Francisco, CA, pp. 671-692.

Tjosvold, D., Poon, M. and Yu, Z.Y. (2005), “Team effectiveness in China: cooperative conflict for
relationship building”, Human Relations, Vol. 58 No. 3, pp. 341-367.

Tjosvold, D., Wan, P. and Tang, M.M.L. (2016), “Trust and managing conflict: partners in developing
organizations”, in Elgoibar, P., Euwema, M. and Munduate, L. (Eds), Building Trust and
Constructive Conflict Management in Organizations, Springer, pp. 53-74.

Tjosvold, D., Wong, A.S.H. and Chen, N.Y.F. (2014), “Cooperative and competitive conflict management
in organizations”, in Ashkanasy, N., Jehn, K. and Ayoko, R. (Eds), Handbook of Research in
Conflict Management, Edgar Elgard Publishers, Cheltenham, pp. 33-50.

Van der Vegt, G.S., Emans, B.J.M. and Van de Vliert, E. (2000), “Team members’ affective responses to
patterns of intragroup interdependence and job complexity”, Journal of Management, Vol. 26
No. 4, pp. 633-655.

Wong, A.S.H., Wei, L. and Tjosvold, D. (2014), “Business and regulators partnerships: government
transformational leadership for constructive conflict management”, Asia Pacific Journal of
Management, Vol. 31 No. 2, pp. 497-522.

Bill Wooldridge, B., Steven, W. and Floyd, S.W. (1990), “The strategy process, middle management
involvement, and organizational performance”, Strategic Management Journal, Vol. 11 No. 3,
pp. 231-241.

Xu, J. and Thomas, H.C. (2011), “How can leaders achieve high employee engagement?”, Leadership &
Organization Development Journal, and Organizational Development Journal, Vol. 32 No. 4,
pp. 399-416.

Yang, Y. (2012), “Studies of transformational leadership in consumer service: leadership trust and the
mediating-moderating role of cooperative conflict management”, Psychological Reports, Vol. 110
No. 1, pp. 315-337.

Yang, J.,Mossholder, K.W. and Peng, T.K. (2009), “Supervisory procedural justice effects: the mediating
roles of cognitive and affective trust”, Leadership Quarterly, Vol. 20 No. 2, pp. 143-154.

Zand, D.E. (1972), “Trust and managerial problem solving”, Administrative Science Quarterly, Vol. 17
No. 2, pp. 229-239.