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Goal Consensus, Subordinates’ Prior Performances, and Supervisors’ Resource Allocation Preferences

1. Introduction

Firms make use of scarce firm-specific resources to maintain production and a
competitive advantage (Schlapp, Oraiopoulos, and Mak, 2015; Cheng and Kesner, 1997).

Despite the undeniably important process of allocating scarce resources, there has been
a paucity of empirical research examining the factors that shape supervisors’ resource
allocation choices (Pfeffer and Salancik, 1974; He, Chen, and Zhang, 2004). To determine
the precise dynamics of resource allocation decisions, it is important to recognize how

individuals handle these decision situations (De Cremer, 2003). In particular, resource
allocation decisions take place in organizations regularly, and organizations rely on
managers to carry out such decisions to maintain their competitive advantage (Ulrich and
Lake, 1991). It is, therefore, critical to identify the factors, obstacles, and problems that

influence supervisors’ resource allocation preferences.
This study investigates the factors that influence a supervisor’s resource allocation
preferences. Specifically, we analyze whether these preferences are affected by the level
of goal consensus between supervisors and their subordinates and subordinates’ prior

performance. We further examine whether subordinates’ prior performance acts as a
moderator and affects the relationship between goal consensus and supervisors’ resource
allocation preferences. To complete this study, we collect field-based archival and survey
data from a major realty company in Taiwan, and examine the associations between the

degree of supervisor–subordinate consensus in prioritizing goals, subordinates’ prior
performance, and supervisors’ resource allocation preferences for advertising funding and
deploying senior salespersons.
In this study, we operationalize supervisor–subordinate goal consensus by measuring

how consistently the company’s goals are prioritized by both regional and branch
managers. The hierarchical structure of the company includes a chain of command that
flows from a regional manager to several branch managers in their region. Therefore,
1
we view one region as a group, survey the regional and branch managers about their
perceived priorities among the company’s goals, and calculate the goal-consensus score

1 This case company has a presence in 33 regions and there are at least two branch offices within each
region. The classification of different regions is based on the company’s catalog.

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