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Creative friction
Some argue that dissent at the top of organisations about the purpose and identity of the firm helps to foment creative friction about strategic direction, which enables the company to consider more options about its future.
On the other hand, disagreement at the top can decrease employees' sense of belonging and make it hard for leaders to build momentum for projects. It also makes it difficult to decide where to invest the company's money.
Therefore, the benefits of disagreement about identity are outweighed by the costs. A company that is unclear about its identity will find it harder to implement policies. The results of this study into the performance of 113 non-profit professional theatres showed that net income was lower when leaders had different values.
Six of 10 possible linkages supported the thesis that the greater the level of disagreement about identity, the worse the organisational performance. No results suggested that high levels of disagreement about identity improved organisational performance.
Organizational identity and firm performance: what happens when leaders
disagree about "Who we are?"
Zannie Giraud Voss, Daniel M Cable and Glenn B Voss
Organization Science, Vol 17 No 6, November-December 2006
This article was first published on World Business
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