Decentralized Environment's Impact on Employee Performance
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Decentralized Environment’s Impact on Employee Performance: A study on how a decentralized environment in the operating & service department impacts employee performance within an organization. Almohtasib, Tarik Bergström, Nathalie Nguyen, Vincent School of Business, Society & Engineering Course: Bachelor Thesis in Business Administration Supervisor: David Freund Course code: FOA230 Date: 2020-06-08 15 cr 1 ABSTRACT Date: 2020-06-08 Level: Bachelor thesis in Business Administration, 15 cr Institution: School of Business, Society and Engineering, Mälardalen University Authors: Tarik Almohtasib Nathalie Bergström Vincent Nguyen (96/09/18) (97/01/17) (98/04/26) Title: Decentralized Environment’s Impact on Employee Performance: A study on how a decentralized environment in the operating & service department impacts employee performance within an organization. Tutor: David Freund Keywords: Employee Performance, Decentralized Environment, Organizational Culture, Job Satisfaction, Motivation, Decision-Making Research How does an operating and service department’s decentralized environment Question: impact employee performance? Purpose: The purpose of this study is to investigate how a decentralized environment affects and influences employee performance within their workplace; with a focus on understanding whether a decentralized environment has a significant impact on the employees’ performance or not. Method: The exploration of this study includes the collection of primary data. The primary data collected for this study was gathered through qualitative interviews with open-ended questions through a Snowball sampling. Conclusion: Decentralization among other factors mentioned in this paper leads to motivation and satisfaction which the respondents agreed upon leads to an increase in their performance. 2 Table of Contents 1. Introduction ............................................................................................................................ 5 1.1 Background ........................................................................................................................ 5 1.2 Case Company .................................................................................................................... 7 1.3 Problem Background ............................................................................................................ 8 1.4 Purpose of the Study ...........................................................................................................10 1.5 Research Question ..............................................................................................................10 2. Literature Review ..................................................................................................................11 2.1 Victor Vroom's Expectancy Theory ......................................................................................11 2.2 The Porter-Lawler Model ....................................................................................................12 2.3 Herzberg’s Two-Factor Theory of Motivation ........................................................................14 2.4 Employee Performance .......................................................................................................16 2.5 Fiedler's Contingency Theory of Leadership ..........................................................................17 2.6 Literature Analysis .............................................................................................................20 2.7 Conceptual Framework .......................................................................................................22 3. Methodology ..........................................................................................................................24 3.1 Scientific Approach ............................................................................................................24 3.2 Data Collection ..................................................................................................................25 3.2.1 Primary Data ................................................................................................................25 3.2.2 Selection of the Respondents .........................................................................................25 3.2.3 Qualitative Interviews ...................................................................................................26 3.3 Methodology Criticism ........................................................................................................29 3.3.1 Criticism of the Sources & Reliability .............................................................................30 3.3.2 Limitation ....................................................................................................................32 3.4 Method of Analysis .............................................................................................................32 4. Empirical Findings .................................................................................................................35 4.1 Managers responsibility .......................................................................................................35 4.2 Findings from Employees ....................................................................................................38 4.3 Role of Decentralization ......................................................................................................40 5. Analysis .................................................................................................................................42 5.1 The Decentralized Environment ...........................................................................................42 5.2 Motivation .........................................................................................................................46 3 5.3 Job Satisfaction ..................................................................................................................50 5.4 Employee Performance .......................................................................................................53 5.5 Further Discussion ..............................................................................................................56 6. Conclusion .............................................................................................................................58 7. Further Research ...................................................................................................................60 References .................................................................................................................................61 Appendix 1 ................................................................................................................................89 Appendix 2 ................................................................................................................................92 4 1. Introduction 1.1 Background The following section will include a brief overview of the importance of conducting this study, the background information, and presentation of themes and theories that will be introduced in this study. For the past decades, there has been an increasing emphasis on the importance of employees and that they are an asset for the organization both internal and external (Bailey et al., 2016). In the present time, it is known that employees expect to be engaged in the organizational working, that is, their role should contribute and affect the business in a greater sense (Deeb et al., 2019). Abdalla Hagen, Macil Wilkie and Mahmoud Haj (2005) states that in another article that it is now more often accepted that human resources create an important source of competitive advantage for the organization. They further state that the importance of human resources creates an increased interest in finding and adopting progressive management practices that would improve the organization’s performance (Hagen et al., 2005). Motivation has been mentioned in the decentralized environment, which raises questions (in terms of connections) in the field of employee performance (Fiedler, 1972). Therefore it is necessary to address those questions and develop further knowledge in this field of study. Thus, it can be concluded that a decentralized environment can be one of these management practices Hagen et al., (2005) discuss in their article. There has been an ongoing engagement in determining the most efficient style of decision making that fits organizations. Each organization has to determine the most fitting style that fits 5 their work environment. (Long & Hinkes, 2015) As this thesis focuses on decentralization there must be a definition to it, according to (Seeds & Khade, 2008, p. 99) decentralized decision making can be defined as, “The degree to which decision-making authority is pushed down to lower levels of the firm”. Decentralized organizations based on teams are highly successful when it comes to having people within the organization who feel accountable and responsible for the operation and success of the enterprise and not merely a few people in senior management positions. This enhanced sense of responsibility excites more initiative and effort on the parts where everyone is involved. (Hagen et al, 2005) Furthermore, it is said that people tend to associate themselves with the choice of the team since they try to accentuate their