Eric Fong
Associate Professor, University of Alabama in Huntsville, USA.
Yeqing Bao
Associate Professor, University of Alabama in Huntsville, USA.
Kevin Zheng Zhou
Associate Professor, The University of Hong Kong, China.The Role of Employee Involvement in the
Relationship between Strategic Consensus and
Firm Performance
The macro/Strategy and micro/Organizational Behavior
disciplines largely ignore each other’s theory and research despite
management academics calls to bridge the gap between the disciplines.
Using a sample of 3,960 employees from 180 Chinese manufacturing
firms from nine major cities in China, the current study examines the
role of employee involvement, an employee attitude construct
traditionally studied in the Organizational Behavior literature, in the
relationship between strategic consensus and firm performance, a
relationship traditionally studied in the Strategy literature. Our results
show that the inclusion of non-supervisory employees’ understanding
of strategy plays an important role in the relationship between strategic
consensus and firm financial performance. Moreover, employee
involvement mediates the relationship between strategic consensus and
firm performance. In essence, a shared understanding of strategy
across organizational levels influences firm financial performance
through employee involvement. Additionally, organizational structure
moderates the relationship between consensus and involvement such
that firms with formalized structures, those firms with more rules,
policies, and procedures as well as more interaction, have a stronger
relationship between consensus and involvement. Our results suggest
that Strategy researchers should consider the mediating effects of micro
constructs on the relationship between strategic-level decisions and
firm performance. Similarly, Organizational Behavior researchers may
attempt to understand the influence of strategic decisions on
individuals (e.g., employee attitudes) in the firm.