Abstract
Purpose
Research on strategic decision making has over‐emphasized the importance of cognitive conflict because of its potential benefits. Recent research documented that, apart from the benefits, cognitive conflict leads to affective conflict. Taking information processing perspective, the present study seeks to argue that the benefits of cognitive conflict can be stimulated by the cognition‐based trust, while the interplay between cognitive conflict and affective conflict can be influenced by affect‐based trust. The present study therefore aims to demonstrate the divergent roles of the perceived trustworthiness as potential moderators in strategic decision‐making teams.
Design/methodology/approach
Using structured survey instrument, multi‐informant data was collected from CEOs and senior executives of 109 US hospitals. After performing confirmatory factor analysis of the measures used, the data was analyzed using hierarchical regression techniques to analyze divergent roles of cognition‐ and affect‐based trust as moderators in the relationship between conflict and decision outcomes.
Findings
Results showed that cognition‐based trust is the key to fortify the benefits of cognitive conflict while affect‐based trust is the panacea for the ills of cognitive conflict.
Research limitations/implications
The sample consisted of hospitals in healthcare industry only. Self‐report measures may have some inherent social desirability bias.
Practical implications
This study contributes to both practicing managers as well as to strategic management literature. This study suggests that trust between the executives involved in strategic decision‐making process plays an important role in enhancing decision quality. It is therefore suggested that CEOs and administrators engage the executives who have both cognition‐ and affect‐based trust with each other to have successful decision outcomes.
Originality/value
Though the sample in the present study focuses only on healthcare industry, to the extent strategic decision‐making process is similar in other industries, the findings can be generalizable across other industries.