Decentralized Environment’s Impact on Employee Performance : A study on how a decentralized environment in the operating &amp; service department impacts employee performance within an organization.

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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

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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 Question:

How does an operating and service department’s decentralized environment 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.

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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

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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 personal

characteristics with potential members. (Reimer et al., 2017) Furthermore, having team members

put together in order for them to self-identify can result in a common purpose that eventually

enhances team initiative. (Turner et al., 2019) Teamwork is essential for an interdependent team.

Additionally, teams allow removal of hierarchy levels and absorption of administrative tasks

previously executed by specialists while evading the huge costs of employing people whose

exclusive job is to control and watch over other employees do their work within the firm. (Hagen

et al, 2005)

Approaches commonly associated with decentralization are often correlated with performance

(Kuhlmann et al., 2011). A paper by Ebinger & Richter (2015), the authors summarized research

done by Kuhlmann et al. (2011). The summary established the three Es categories that are

essential for performance effects for a decentralized environment. Economy, Efficiency &

Effectiveness are elements that can be used as a help, for managers as an evaluating tool for

performance analysis. According to Albdour and Altarawneh (2014), employee performance is

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of the organization. A decentralized environment can give employees more opportunities for

decision-making, which means the employees are more involved within the corporation.

Employee performance became a hot topic in the literature and research field due to the

competitiveness in achieving greater performance (Ojo, 2009). Employee performance is defined

as the output and accomplishments of an employee, which are acknowledged by the organization

or system in which he works (Robbins, 2004). According to a previous study by Shah et al.,

(2011) concludes that combining abilities, opportunities and motivation will eventually result in

performance. Having motivated employees helps the corporation to survive and thrive. These

employees are more motivated to work and the performance of employees will be stronger. To

be more effective, managers need to understand their employees and how to motivate them.

(Lindner, James R, 1998).

1.2 Case Company

The case company for this thesis is the organization Siemens in Finspång. Siemens Industrial

Turbomachinery AB is a multinational corporation that has subsidiaries in countries all over the

world. Siemens Industrial Turbomachinery AB is located in about 40 cities around Sweden with

over 4,200 employees worldwide. Siemens AB has over 385,000 employees working in over 200

countries. Siemens Industrial Turbomachinery AB which manufactures and services gas turbines

all over the world. Today the organization is a global powerhouse with a focus on electrification,

automation and digitalization. They are currently a leading supplier of systems for power

generation and transmission along with a medical diagnosis. Furthermore, they are one of the

world’s largest producers of energy-efficient and resource-saving technologies. (Siemens, 2020) Alongside their innovations and world-leading production, Siemens is also a great case company

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for study since Siemens is working on improvements in working methods and to have a strong

will for the internal collaborations to work. (Siemens, 2020) To build an understanding of how to

deliver a good job and to make good decisions, it is important to have a smooth procedure of

who is doing what and why they are doing that, also continue working on building stronger

relationships. Furthermore, Siemens Industrial Turbomachinery AB in Finspång is working with

a decentralized environment where the employees have more room for decision-making and

having more control instead of a centralized environment where managers are in control

(Siemens, 2020).

1.3 Problem Background

According to the State of the Global Workforce report, 67% are “not engaged” in the workplace, 18% of the employees are actively disengaged and 15% consider themselves highly engaged in

their current workplace (Harter, 2017). Employee performance and engagement has become an

essential organizational requirement for multinational corporations to gain a competitive

advantage (Anitha, 2014). There are ways to measure performance using financial measures that

have been criticized because they encourage short-term views, which causes frustration from the

management also resistance, lacked strategic focus and the ability to provide data about quality,

and failed to provide information about customer requirements and the quality of competitors’ performance (Shahin et al., 2014).

This thesis will explore how a decentralized environment affects employee motivation and

performance because we as the authors of this study can see the problems of having a too

controlled and strict environment can have a negative impact on employee motivation and

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As authors of this paper, we hope that this study will generate a great deal of descriptive

information regarding the decentralized environment, motivation and performance, which act as

a supplement to the knowledge gained from the theoretical sources.

Multinational corporations today grow more and more every year, which can lead to control

problems because of the decision-making processes that have to be done. Business relationships

are important as they form a basis for the firm’s competence development (Forsgren, 2017). For managers to achieve their goals, leaders need to have authority, power and influence over their

followers (Jooste, 2004). It is, therefore, more important for managers to listen to their

employees that may have more knowledge about a decision that a manager cannot decide

because employee involvement increases organizational effectiveness because of better decision

making, better problem solving, less absenteeism, and lower turnover (Lawler, 1988).

From a previous study by Rangus and Slavec (2017), the study partly states that decentralization

and employee involvement positively influence a corporation's performance. The study partly

states that decentralization and employee involvement positively influence corporations

performance (Rangus and Slavec, 2017). According to Griffin (2003), organizational

performance refers to the ability of organizations to meet the needs of stakeholders and their own

needs of surviving (Griffin, 2003). According to the study by Rangus and Slavec (2017), there is

a direct positive relationship between decentralization and employee involvement and

motivation.

Motivation has been mentioned in the decentralized environment, which raises questions (in

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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.

1.4 Purpose of the Study

This section will highlight the purpose of conducting such a study and its contributing factors to the academic world, researchers, and empirical findings.

The purpose of this study is to research how decentralization is an important driver to employee

performance by evaluating employees' involvement and motivation within the corporation

through a qualitative approach; with a focus on understanding how a decentralized environment

has an impact on the employees’ performance within an operating & service department.

This study will focus on understanding how a decentralized environment within a corporation

has an impact on employee performance; not only to understand the impact but to explore the

key factors of employee performance. This study is focusing on decentralization because the

authors cannot find much correlation between decentralization and employee performance in

current researches. The aim of this study is to understand how a decentralized environment has

an impact on employee performance.

1.5 Research Question

How does an operating and service department’s decentralized environment impact employee performance?

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2. Literature Review

This chapter describes the concepts of employee performance, motivation and decentralization by explaining how they have been defined in the past and through a presentation of the existing related theories. When reading this paper, there should be a feeling of unbiased arguments about the subject, to give the reader the possibility to draw their own assumptions regarding the paper which enhances the dependability of the study (Bryman & Bell, 2011), p.213).

2.1 Victor Vroom's Expectancy Theory

Employees will be motivated when they believe that effort will lead to performance. According

to Deci (1992), “People are said to engage in behaviors because they expect those behaviors to lead to their goals”. This theory, referred to as valence-instrumentality expectancy or expectancy theory Vroom (1995), could be used to promote engagement and recognition that is conscious

and planned for the employees. “Whenever an individual chooses between alternatives that involve uncertain outcomes, it seems clear that his behavior is affected not only by his

preferences among these outcomes but also by the degree to which he believes that these

outcomes to be probable” (Vroom, 1995, p. 20).

Vroom’s Expectancy Theory tries to explain the motivating behavior as goal-oriented. He argues that people tend to act in a hedonistic way (Vroom, 1964) preferring the actions that will bring

the highest subjective utility. The study will partly discuss how the expectancy theory argues the

strength of a tendency to act in a certain way depending on the expectations that the act will be

followed by a given outcome and on the attractiveness of that outcome to the individual

(Robbins, 1993). The theory states that choices people make among different alternative courses

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beliefs and attitudes (Pinder, 1984). The theory was expressed as motivation is determined by

three factors: expectancy, instrumentality and valence. M= E×I×V

The theory indicates only the conceptual determinants of motivation and how they are related

and does not provide specific suggestions on what motivates organizational members (Luthans,

1989). The study will investigate if a decentralized workplace setting of employees motivation

increases the likelihood that they would engage in a certain course of action will increase as well

(Robbins, 1993). It is, therefore, important for corporations to establish a linkage between an

increase in effort and higher performance. ‘Expectancy theory holds that people are motivated to

behave in ways that produce desired combinations of expected outcomes’ (Kreitner and Kinicki, 1998, p. 227).

According to Smith and Rupp (2003), “expectancy theory provides a general framework for assessing, interpreting, and evaluating employee behavior” (p.109). Pinder (1984) states that if a

person judges that he can achieve an outcome, then he will be more motivated to try; the higher

the expectancy, then the more likely a person will exert energy to accomplish the outcome and

perform stronger, which most likely favors the corporation. For example, a person that does not

know how to draw will have a very low expectancy of being able to make a good drawing. In

contrast a person who has drawing skills might have a high expectancy of success after being

given legitimate feedback that he or she has great potential (Pinder, 1984).

2.2 The Porter-Lawler Model

The Lawler Model from 1968 argues similar points as Vroom’s theory, (1964) but

Porter-Lawler (1968) goes beyond the limited concept of motivational force to performance as a whole.

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motivation process is explained with nine variables. The fundamental aspect of the Porter and

Lawler model is about the relation between performance and satisfaction. This study will see

how Porter and Lawler’s model have refined, revised, and expanded on Vroom’s expectancy theory, from a mathematical explanation to a more diagrammatic explanation (J, Newstrom and

K, Davis 1995). According to Porter and Lawler, the model is more dynamic over time than

Vroom’s theory because firstly, to the extent that performance does result in reward, the perceived effort-reward probability is increased. Secondly, when satisfaction is accomplished

after receiving a reward, it tends to influence the future value of that reward. The nature of this

effect varies with the particular reward (Miner, J B. 2005). The Porter-Lawler model illustrates

the different aspects of work motivation and the relationship between performance and

satisfaction. The model states that actual performance in a job is primarily determined by the

effort spent. In the Porter-Lawler model, performance is the responsible factor that leads to

intrinsic as well as extrinsic rewards. The satisfaction of the employee depends upon the fairness

of the reward. Employees may not work fully if they do not have value for rewards following

efforts (Miner, J B. 2005).

Porter and Lawler classified the rewards intrinsic and extrinsic forms. Here intrinsic rewards are

the feel-good factors, reputation and the status given by the employer for the achievement.

Extrinsic rewards are increment in the salary, perks and the promotion in recognition of the

deeds (Mohanty, S 2018). According to Mohanty (2018), the Porter and Lawler model

overemphasizes the impact of motivation as the main driver of productivity and that the model is

more for managers to use. The author’s study will see how motivation is a strong factor in keeping the workforce active and enthusiastic but corporations have to look for talented

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success of corporations do not come only from the rewards they give, rather complete and

effective management provides much better results (Mohanty, S 2018).

2.3 Herzberg’s Two-Factor Theory of Motivation

The two-factor theory, also known as a motivator-hygiene theory authored by Fredrick Hertzberg

& Snyderman in 1959, suggests that there are two sets of factors that distinguish the cause of

satisfaction and dissatisfaction (Herzberg et al., 1959). Hence, the factors can be broken down

into intrinsic “motivators” that work as personal growth and satisfaction motivation that comes from the work placement. Meanwhile, “hygiene factors” or extrinsic factors function as work conditions, relationships with associates, salary, or other types of benefits beyond the employee's

reach. Hygiene factors work as a necessity in order to prevent dissatisfaction and do not

contribute to any increased grade of motivation. Even though it could seem like the factors are

the opposites, they are partitioned due to their diverse set of needs. Satisfaction depends on

motivators meanwhile, dissatisfaction is the prime result of hygiene factors. Herzberg argued that

motivators are intrinsic to the job while hygiene factors are extrinsic. Therefore, an extrinsic

dissatisfaction can cause dissatisfaction to the job if the requirements are not met, even when

intrinsic factors are fulfilled satisfactorily (Herzberg et al., 1959, as cited in Alshmemri et al.,

2017). Figure 1 illustrates the above-mentioned statement where the job satisfaction is influenced

by the motivational factors which this paper will be more focused on rather than the job

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FIGURE 1: Herzberg’s two-factor theory

According to Herzberg (1966), an appropriate type of management and use of motivator and

hygiene factors improves efficiency & job satisfaction. Herzberg suggested that motivation and

hygiene are two separate factors because of their “initial causes” therefore, it is not possible to make them opposites rather count them as influencers since the “initial causes” need to be

examined. Above all, it needs to be realized that opposites of both job satisfaction and job

dissatisfaction are no job satisfaction/no job dissatisfaction (Herzberg, 1966).

Although, Herzberg’s theory got its praised attention, it has also faced a negative backlash by

Schneider & Locke (1971). Herzberg’s theory fails to mention the importance of recognizing

considerable individual differences that are confused because of the classification system, for

events that state “what happened” & for agents “who made it happen”. This questions the individual differences since individuals tend to have distinctive demands that could influence

motivator and hygiene factors therefore the two-factor theory lacks the support in individual

differences. On the other hand, other recent studies done by Bassett-Jones and Lloyd (2005) &

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position as a leading theory in determining the impact on employee motivation despite being

half-century old.

2.4 Employee Performance

Shermerhorn (2000) states in Phiphadkusolkul and Archaree’s (2012) article that environment and individual factors such as marital problems and education affect employee job performance.

Phiphadkusolkul and Archaree (2012) believe that there are other factors relating to the

employees’ performance, such as motivation and productivity, which they state can be improved by creating a work environment that maximizes these factors.

Extra benefit programs, training programs, weekly group talks, informal meetings, hygiene

conditions, orientation, and game competition are typically programs that are on a trial period for

about one year and if they show positive results, they will become a part of the company policy.

These programs cause changes in the employees’ attitudes towards their work in a more positive way. They also help develop a sense of responsibility for the work the employee is assigned, the

employee shows more attention to quality control and is able to work independently to solve

problems that occur instead of causing problems for their supervisors. (Phiphadkusolkul and

Archaree, 2012)

In order for employees to perform better, organizations have to provide them with benefits. If the

employees feel that the organization is concerned about them and make them feel valuable they

will do their best to reach the company’s goal. Furthermore, the employer or managers have to recognize opportunities to motivate their employees. If the leaders are doing a good job they will

be able to create a motivational climate that will impact the employees’ willingness to do a better job and do their best to reach the organization’s goal. (Phiphadkusolkul and Archaree, 2012) In

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other words, in order for the employee performance to increase, the first thing the leaders have to

do is to motivate and satisfy the employees.

Motivation has been described as a psychological process that gives individuals behavior

purpose and direction, which managers have to understand in order to motivate the employees to

perform in a way the company wants. (Phiphadkusolkul and Archaree, 2012) Alpander (1982)

states in Phiphadkusolkul and Archaree (2012) article that:

“Motivation is effort and desire that influence how vigorously an individual will use one’s ability on the job’’ (Phiphadkusolkul and Archaree, 2012)

If the employee's motivation is lacking or low, they will probably not be satisfied with their

work. Hence they will not have a high employee job performance. (Phiphadkusolkul and

Archaree, 2012)

Sutermeister and Robert (1971) say that several authors state that satisfaction contributes to

improved performance and productivity but also that other authors implies that outstanding

performance leads to better satisfaction of needs. The chances of motivating good employee

performance are higher if the employees' egoistic needs are well satisfied regularly or if the

employee feels that their work leads to such satisfaction within the future (Sutermeister and

Robert, 1971). Good employee performance is necessary for the organization since an

organization’s success depends on its employees’ creativity, innovation and commitment (Ramlall, 2008)

2.5 Fiedler's Contingency Theory of Leadership

Fred E. Fiedler states that the leadership contingency model postulates that the effectiveness of a

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“(1) the motivation system of the leader, and (2) the favorableness of the situation; that is, the degree to which the situation itself gives the leader power and influence.” (Fiedler, 1972)

The leadership contingency model theory has consistency with anecdotal evidence that leaders

perform well under different conditions. In order to determine which condition is best suited for

leaders, it is necessary to classify different types of leaders and situations first (Fiedler, 1972).

Iqbal, Anwar and Halder (2015) write in another article that the Fiedler leadership contingency

model theory is presenting that Fiedler proposes that effective employee performance depends on

the correct match between a leader's skills to lead and the behavior and the competence of the

employee. This theory is based on the fact that leaders should adopt the style which is best suited

to the situation and instantly excite the employee's performance. They continue by stating that an

effective leader is responsible for providing guidance and sharing knowledge to the employees to

guide them towards better performance and make them experts in their areas to maintain the

quality. (Iqbal et al, 2015)

There are different ways multinational firms can coordinate and control their corporations, and

headquarters has always been interested in finding ways to control and monitor subsidiaries in an

effective and efficient manner (Bartlett, C. A., & Ghoshal, S., 1989). In this study, the authors

will see and understand how through a decentralized and relaxed atmosphere gives employees

more freedom and flexibility to participate in decision-making and implementation processes

(Dodgson et al., 2006). More freedom and flexibility can result in more creative ideas and

innovations via employee involvement, where employees can share knowledge and ideas through

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By having a decentralized environment within your corporation, top, middle and lower managers

can make quicker decisions that lead to more committed and empowered performance.

According to Knies (2012), Thomas & Duckerley (1999), middle and lower managers who are

more committed, empowered, and flexible have more likely higher levels of intrinsic motivation.

This will benefit organizational performance (Knies, 2012; Thomas & Dunkerley, 1999). The

study will investigate if having a more decentralized environment, the CEO has to be willing to

transfer some of their managerial decision-making to middle and lower management to enlarge

organizational autonomy or result control.

From this previous study by Wynen, J, Verhoest, K & Rubecksen, K (2014) results indicate that

reducing the power of top-level managers and empowering middle and lower management

decreases the likelihood that lower hierarchical levels within the corporation will be given more

autonomy because to much control can result in passivity and lack of initiative (Wynen, J,

Verhoest, K & Rubecksen, K, 2014). From another previous study by Chang and Harrington

(2000), their results show that under decentralization, each store can, in the long-run, more

effectively tailor its practices to its market and thereby this organizational form eventually

outperforms a more centralized organization which the authors has in mind during the study

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2.6 Literature Analysis

This section will highlight the connection between the concepts found in the literature review to emphasize the importance of this study.

This study will research and understand the gap between decentralization and employee

performance to see how a decentralized environment has an impact on employee performance.

Victor Vroom’s Expectancy Theory (1964) offered an expectancy approach to the understanding

of motivation. Thus the Vroom’s theory is built around the concepts of value, expectancy and force. Vroom’s theory argued that employees are consciously and rationally selecting different job-related behaviors that they believe would yield the most desirable reward (Steers et al.,

2004). The Porter and Lawler Model (1968) goes beyond Vroom’s theory, where the model refined, revised, and expanded on Vroom’s expectancy theory with more fundamental variables of motivation. These two concepts still go hand in hand because Porter and Lawler’s model goes more in-depth of Vroom’s theory so they are connected and the main idea behind them is

motivation and employee performance.

A previous study by William, A (2010) states that the majority of the respondents would wish to

be free to make decisions so they would have more responsibilities instead of instructions from

the hierarchy. This study will investigate how a more decentralized environment will let

employees make more decisions and how that affects employee performance. Therefore these

concepts of performance, motivation and decentralization can answer the study’s research question.

Another previous study by Dalfol & Åström (2013) suggested further motivational research

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uninteresting, which means that the managers must uncover alternative solutions to enhancing

the workers level of motivation. The study also argues that motivation is a constantly changing

phenomenon, which means that managers should consistently evaluate the motivational

orientation of the production worker (Dalfol & Åström, 2013).

Evans (1968, 1970) studied the relationship between the behavior of leaders and employees’

expectations that effort leads to rewards, and he also studied the resulting impact on employee

performance ratings. Evans found that when employees viewed leaders as being supportive, there

was a positive relationship between leader behavior and employee performance ratings.

According to Evans (1970), there is a connection between leadership and employee performance.

Leaders willing to be open and let employees be more part of the corporation by making

decisions will have a positive outcome on employee performance and motivation (Evans, 1970).

Leaders have an important role in influencing their employees effectiveness by communicating

priorities, supporting and facilitating performance (Yukl, 1994). According to Yukl (1994), it is

hard for leaders to do the right thing all the time and think to do the right thing at the right time.

One challenge with leadership and employee performance in determining where and how to best

focus leadership efforts (Singh, 2000). Leaders must learn to effectively balance and adapt to the

situations to create the most value (Yukl 1994). The results from a previous study by (Douthitt,

2001) suggest that leaders who successfully create a fair environment are likely to have

employees with better performance and with lower turnover. The study did find a positive

relationship between perceived fairness and performance. The study suggests that leaders need to

be concerned with how they behave towards their employees and how employees perceive that

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The determinants of discontent are linked to the relation between the individual and the

ambience or setting in which the person is doing the work (House and Wigdor, 1967). According

to Alpander (1982), desire and effort is the motivation that drives an individual’s vigor in order

to perform well on the job. This is the way managers tend to recognize motivation in their

employees. It is well known that there is a positive correlation between the two factors, i.e., job

satisfaction and motivation, since they have a tremendous impact on the performance of an

employee and the organization (Singh et al., 2011).

Furthermore, according to Robbins (1997), job satisfaction is described as a pleasurable state of

emotion resulting from the evaluation of one's employment, an effective reaction to one's job,

and an attitude towards one's job. This will have an impact on employee performance.

2.7 Conceptual Framework

By looking at all the theories provided in the literature review and the theoretical framework, the

authors have created a figure that shows the understanding of the authors. It is believed that

within a decentralized working environment, the employees get more motivated since they have

been trained and gained the freedom to be creative within the work. As Thomas & Dunkerley,

(1999) stated, top, middle and lower managers can make quicker decisions within a decentralized

environment, leading to a more committed and empowered performance. They further say that

middle and lower managers are more committed, empowered and flexible and have a higher

level of intrinsic motivation. These managers then create a motivational environment for their

workers.

Which leads to the fact that, if the workers are motivated they become happier with their work.

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however, Herzberg lifts this up a bit more than the others. While having their job satisfaction

raised they will be more motivated they will also feel that the organization cares for them, which

leads them to the fact that they want to work harder in order to reach the company’s goal. This process can be viewed in the figure below.

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3. Methodology

This section will highlight the process of completing this study so as the design of the study and data collection. This section will define the steps of the research and explore the process behind the work from reliability and trustworthiness. Methodological criticism will as well be elaborated under this section. Deciding what type of methodology to be used while investigating the chosen topic will guide the authors in the right direction towards attaining the aim of the research (Bryman & Bell 2015).

3.1 Scientific Approach

To answer the research question of this paper, a qualitative investigation was conducted in order

to see how a decentralized environment within a corporation impacts employee performance. A

qualitative method rather focuses on words than numbers and collects less but more detailed

answers to get a deeper understanding in comparison to the quantitative method as it is easier to

grasp experiences and understand more in-depth information in a qualitative method. (Bryman

and Bell 2011) A qualitative approach is more suitable for this paper than a quantitative

approach since it is based on an inductive approach. Thus, a comparison between theories and

interviews will be made in order to find out the best conclusion for the research question

(Bryman and Bell 2011). Furthermore, since this thesis was based on a Snowball sampling

method, where we worked very closely to the theoretical sampling, qualitative research is a

better fit than quantitative research. (Bryman & Bell, 2011) In addition, the authors of this thesis

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Since there is limited research about decentralization and employee performance has been done,

an inductive approach seems like the best choice for this study. An inductive approach is mainly

used in qualitative methods and emphasizes the consideration between theory and research when

the emphasis is placed on the used theories (Bryman & Bell 2011). However, in this study,

several theories about performance, motivation and decentralization are used as the building

block to help the authors throughout the paper.

3.2 Data Collection

3.2.1 Primary Data

The only data used in this paper is primary data, collected through interviews and peer-reviewed

articles. (Bryman and Bell, 2011) The authors of this paper found peer-reviewed articles through

the Mälardalen University database. With these articles found, the authors created the interview

questions for the semi-structured interviews held, see Appendix 2.

3.2.2 Selection of the Respondents

The company chosen for this study is Siemens AB in Finspång, where the interviews have been

conducted continuously with improving employee performance and motivation since this thesis

investigates how a decentralized environment impacts employee performance. After talking to

the managers of the operating and service department, the manager and the authors agreed to

conduct interviews with the managers’ department.

The selection of respondents was conducted through a Snowball sampling which is a form of

convenience sampling method where one of the authors of this study had been in contact with the

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(2011) states in their book regarding snowball sampling, the authors of this study engaged in

contact with the vice president of the service department which is relevant to our topic. The vice

president further contacted four suitable managers and ten employees within his department to be

part of our research. The employees were able to state different reasons for their motivations and

the ways their managers could help them and the fact that they come from a workplace with a

decentralized environment makes them relevant for this study. The selection of respondents is

also based only on the department of choice and on whoever has the time to spare us for an

interview.

3.2.3 Qualitative Interviews

For this thesis, the most suitable data collection method for this thesis is qualitative interviews,

where the authors hold individual interviews via the communication platform Microsoft Teams

with the selected participants and focus on the personal and subjective perceptions to collect the

information from the interviews. Having qualitative interviews gives the interviewer a deeper

and detailed understanding than questionnaires. In addition, having a more personalized

approach, as according to Esposito, Bratanic and Keller (2007), is crucial for mutual

understanding. This choice of method allows the authors to get a deeper understanding of how

decentralization affects employees motivation to perform better and to draw conclusions from

the answers (Bryman & Bell, 2011). With having one-by-one interviews, the participant can feel

more comfortable discussing various subjects that the participant may not want to discuss in a

focus group. The interviewer’s role is to ask questions that explore why concepts are important to the respondents and how they are related (Bryman & Bell 2011).

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Bryman & Bell, (2011) stated that the role of the interviewer is to ask questions that explore why

concepts are important to the respondents and how they are related which is why the interview

questions were written to cover the theories used in this study of the decentralized environment,

employee performance and motivation. Therefore, the research is conducted with an open

mindset, where it is susceptible to new information throughout the study. New information is

developed and gathered from the responses of the respondents.

The questions were operationalized to fit the relevant theories needed for the investigation of this

paper. Under Appendix 2, the operationalization table for the paper's qualitative interviews can

be found in order to see how the questions were motivated to fit the chosen theories. This paper

had 14 interviews, four of which were conducted by managers and ten of them on different

employees within the service department.

It was important to make the participant feel that the interview was a pleasant and smooth

experience. Therefore the first few questions were standard questions to get the interview going

and to have a good start to later ask the more open-ended questions for discussion. The order in

which the questions are asked can vary from interview to interview and the interviewer also has

the ability to ask further questions in response to what is seen as meaningful replies by the

informant (Bryman & Bell, 2015, p. 213).

The participant that has been interviewed for this thesis received a copy of the questions before

the interview took place, to give them time to read through the questions and think about how to

answer. This gives the participants time to understand the question and therefore giving the

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participants a day to prepare was beneficial to the authors because the data collected needed to be

thoroughly prepared. The interview questions are developed with a connection to the research

questions and the relevant theories and concepts used in order to ensure the gathering of relevant

data for a rich analysis and conclusion. The gathering of primary data captures a deeper

understanding of how decentralization influences employee performance and motivation within

Swedish premises.

The data collection was conducted through semi-structured interviews with open-ended

questions via the communication platform Microsoft Teams because of the COVID-19 crisis,

which appeared during the writing process and made physical interviews impossible. The reason

for semi-structured interviews was because it is more flexible than a structured interview

(Bryman & Bell, 2011). The data collected through the interviews are to be analyzed with the

theories in hand, in order to reach a conclusion. Furthermore, the interviews held were all

anonymous so that the employees can feel free to answer; however, they want without having to

fear that the managers know what they said.

The questions for the interviews are going to be based on the theoretical framework of this paper

with the research question in mind. These questions served as a base for the interviews to create

a more discussion section than a structured interview. This is also a reason the authors chose to

have semi-structured interviews rather than structured interviews. Below a table of the interviews

is presented. Furthermore, the interviews were, with the acceptance from the respondent,

recorded in order for the authors to transcribe and analyze it. The table below shows how long

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Respondent Employee position Length of the

interview in minutes

Date of the interview

Manager A Vice President of the Service Department

38 min

07-05-2020

Manager B Head of Logistics 17 min 12-05-2020

Manager C Director of Supply Chain of Service 28 min 12-05-2020 Manager D Head of Project Manage Office Working 34 min 13-05-2020

Employee A Supply Chain Developer 25 min 11-05-2020

Employee B Logistics Employee 32 min 11-05-2020

Employee C Strategic Purchaser 18 min 15-05-2020

Employee D Business Developer 31 min 11-05-2020

Employee E Senior Technical Advisor 23 min 12-05-2020

Employee F Demand Planning Professional 22 min 13-05-2020

Employee G Project Manager 24 min 13-05-2020

Employee H Project Manager 17 min 14-05-2020

Employee I Specialist in Repair 6 min 12-05-2020

Employee J Application Engineer 15 min 12-05-2020

FIGURE 3: Table of the interviews (made by the authors of this thesis)

3.3 Methodology Criticism

The fact that this paper is based on only one department in a Swedish company means that this

study will not be able to generalize the answer. The conclusion will only convey a Swedish

perspective and not be representative of the other subsidiaries of this multinational enterprise.

However, doing it in only one department creates an opportunity for the authors to get a more

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Qualitative research is often unstructured and reliant upon the researcher’s ingenuity; it is almost

impossible to conduct a true replication since there are hardly any standard models or procedures

to be followed. (Bryman & Bell 2011). It was, therefore, important as the authors of this paper to

have a structured interview model still with open-ended questions for deeper discussions. As

authors of this paper, the questions were designed through the concepts and theories discussed as

it would explore why these concepts are important to the respondents and how they are related.

A disadvantage with the interviews was that we could not see the body language and expression

of the respondents since we conducted the interviews through Microsoft Teams without using

webcams. Sometimes it can be good to see the respondents’ and the interviewers' expressions to really understand what they mean. Another disadvantage with interviews is that you never really

know what the respondents chose to say and what to hide, you can’t know if they want to hide some factors or lie about something, especially when you cannot see their facial expression or

body language. This could not give the paper a false conclusion which the authors do not know

about. However, this is countered by looking at the overall view of all the respondents together

and analyzing the bigger picture and not from an individual perspective.

3.3.1 Criticism of the Sources & Reliability

An important factor for a scientific paper is how credible it is, and in order for a study to be

credible, it is important that the sources used are credible otherwise, the paper will lose its

credibility. For this study, only sources from the MDH database were used, as mentioned above.

The authors are fully aware that the use of old peer-reviewed articles from the year 1800-1900

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through all these years. However, the data collected from the old sources have also been

mentioned in more recent articles making the authors keep the old sources. Therefore, the articles

used for the framework are deemed, by the authors, relatable and acceptable to use for this paper.

The methodology for this paper has been described in a manner that enables the reader to

replicate the study. In order to further increase the reliability of this paper, all the interview

questions will be presented in Appendix 2.

According to Throne (2000), he characterized data analysis as the most complex phase of

qualitative research. As authors of this paper, it is important to be transparent when conducting

the data analysis because if the readers are not clear about how the authors analyzed their data

evaluating the trustworthiness of the research process is difficult. Trustworthiness is important to

the authors of this paper because it is one-way researchers can persuade themselves and readers

that their research findings are worthy of attention (Lincoln & Guba, 1985).

The interview questions were also chosen to be given out beforehand to the respondent in order

for them to come up with as detailed answers as possible. The authors of this study know that

this has an impact on the credibility and trustworthiness of the paper since the answers could be

biased and fixed. However, the answers could also be more thoroughly thought out and detailed,

giving the interviewer a deeper understanding of what's going on. It was important for the

authors of this paper that the respondents felt comfortable before, during and after the interview.

All interviews gave a last word question at the end to give everyone the opportunity to give one

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3.3.2 Limitation

This study has potential limitations that could have influenced the findings and conclusions.

Although this paper was thoroughly prepared and conducted, there is an awareness of the

limitations of it that needs to be considered. The first limitation the authors recognized was the

current COVID-19 crisis that affected the whole study process. This affected the data collection

as the interviews were supposed to be in-person at the company but instead were instead

conducted via Microsoft Teams. The authors of this study adapted the new guidelines for

conducting interviews. The authors could see the limitations with conducting the interviews via

digital channels instead of in-person because the digital channels used could have technical

difficulties and misunderstandings that would delay the interview. Having an interview would

also not have the same feeling and effect if the interview was conducted in-person because the

authors and the participant could meet in real-life, which would have a more authentic setting.

The authors of this study also recognize the problem with the definition of employee

performance, it is a very complex word to define and measure and will therefore only be

measured by the authors through the interviews and having the answers reflect the measurements

of the employee performance.

3.4 Method of Analysis

As to being able to answer the research question, we had to establish a scientific approach that

could be a base for our thesis. According to Saunders (2012), having a qualitative method means

having an opportunity to "probe" the answers, also there is more control over who answers the

questions since, in this thesis, there are certain types of interview questions based on if the

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interviewed rather than completing a questionnaire, according to Saunders (2012). This can

benefit the discussion and build a deeper analysis of this thesis. The primary purpose for analysis

of the data collection is to use the obtained data and turn it into useful information (Bryman &

Bell, 2015). During the data collection, we have gathered, transcribed, reviewed and later

analyzed all data collected. As for data analysis we chose to use the explorative-type method

approach, since it designates areas of the market, consumer and behavioral research. In this

approach, there is no intent in providing a solution to the ongoing research problem; rather, it is

about investigating the research question (Saunders, 2012). Data analysis is a definitive approach

since it helped us create patterns, comparisons, relationships and conclusions. As for patterns we

chose to use work-based methods that involve keywords and repetitive words and/or phrases.

This is crucial since it is a definitive way of determining relevant information in secondary

sources. The sources’ relevant information was analyzed and later decided if it would be part of

the theoretical framework since it holds main grounds for the interview questions that are crucial

for collecting primary data.

When we had established relationships, patterns, etc., we had to analyze the data from several

sources with a qualitative data analyzation method such as a narrative analysis in order to

identify various trends in the data. This type of method is often used as a qualitative approach in

qualitative research (Bryman and Bell, 2015). The process of conducting data through qualitative

measures does not follow linear steps; rather it is an open-ended way of doing research (Bryman

and Bell, 2015). Moreover, when conducting research it is important to focus on facts and

statements that are true to nature, meaning we followed an epistemological approach that

concerns the question of what knowledge is and what kind of acceptable limits it has in a

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According to Ghauri and Grønhaug (2010), implementation of theories can be managed either

before or after gathering the data. Ghauri and Grønhaug (2010) state that in order to have a

forthright study that corresponds with the research purpose, the theories must adjust based on the

scope of the thesis. Thus, for this study, it was decided to identify relevant theories, and

concepts, and later collect primary data. The theories that have been used came from a

realization in need of understanding concepts of decentralization, motivation, job satisfaction and

employee performance.

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4. Empirical Findings

The following section will present a summarized version of the findings. The structure of this section will be divided into three parts that will be a summary of the findings from the managers, the employees perspective and a connection between decentralization and employee performance. The extensive summary of interview answers is provided in Appendix 1. Furthermore, the quotes in this section are referenced from the interviews that were conducted.

4.1 Managers responsibility

Looking at all the interviews with the managers, all of the managers agreed that it is the culture,

the autonomy, the freedom and the responsibility the employees have that makes the workplace

and that's what motivates the employees. They also agreed that it is their responsibility to coach

the employees in the right direction if they are going down the wrong path. One of the

respondent stated:

“One of the important topics a manager should have is to create an atmosphere to establish the culture in the team and have meetings with the employees to coach them into the right direction and motivate

them.” (Manager A)

And another respondent discussed how important it is as a manager to be present for the

employees:

“as a manager you need to be present, coaching, creating team spirit and environment so they dare to try new things, if they are afraid to fail you will never win and have a strong team, work a lot with team

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Both respondents talked for all of the managers, all four of them believed that they have the

responsibility to help the employees with their motivation and work tasks. While Manager B

states the above-mentioned quote another manager believes that it's their responsibility to coach

them towards the organization's goals. It appears that all four managers agreed on how much

responsibility and freedom the employees have and that it is the managers’ responsibility to

encourage and coach the employees.

In order for the flat organization to benefit from culture, they should create a flexible and

transparent one. Respondents stated:

“I help my employees get motivated by giving them support, coach them, understand them and understand the overall picture and communicate rather well with them in order to keep the direction and

be transparent.” (Manager D).

In another statement Manager C mentioned that the organization does annual surveys to measure

the employee motivation and the results are rather positive, much to do with the employees'

understanding of their work tasks and that shows direct effort as well as being in a flat

organization that is broad, communicable and direct in decision making. Manager D also stated

that it is important to always give constructive feedback to the employees on their works.

However, she then mentioned that creating a climate where feedback is normal and positive is

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“It is important that each and every person understands their own targets, and that we have regular follow-ups where each person can present a plan, and the manager can coach and give feedback, support them

and support development.” (Manager A)

While Manager B talks a lot about team spirit and creates an environment where the employees

dare to try out new things while the manager stays supportive and present for them.

When it comes to acting against demotivation and setting up measurements that benefit

employees, the managers claim that they have the responsibility of helping the employees on the

right path when motivation declines. One respondent reasoned that it is in his responsibility to

notice his employees signals and act upon them by stating,

“always give feedback as that is the most important thing because everybody would like to be seen everybody likes to have a kind of response that they did a great job and these small and tiny things that I

think is basics and of course if you get more and more difficult motivation problems that is something else behind but I mean it's these small tiny things that makes good relationship with the employee and

increase the motivation.” (Manager A).

Another response from Manager D pointing out the same concern for the employees by stating:

“you need to be aware as a manager on what has an impact on people's motivation and efficiency.” (Manager D).

When an employee loses motivation the managers have to step in and help the employee, the

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present, to talk with the employee and coach him or her back on the right track. Another

common factor was to try to understand the reason behind the unmotivating factor and help the

employee solve it. The managers also believe that they should every now and then commend the

employees in order to prevent any demotivational factors. Furthermore, if the employees are not

motivated they will not be able to perform.

4.2 Findings from Employees

When it comes to personal motivation, the ten employees agreed that they are aware of the

company’s goal and that they were happy and satisfied with their current work. The majority of the respondents thought that the goals were clear, but there were one or two who disagreed; they

believed that it was quite hard for newly employed people to understand it due to either too much

information or too much complexity. The employees stated several different factors that

triggered their motivation and satisfaction for their work. Still the most common factors were the

freedom and responsibility they have with their tasks, their colleagues, environment and

recognition. Some of the respondents also stated that they get motivated while working towards

their goal, which was somewhat the company’s goal and to satisfy customers. There were also some respondents who were motivated by getting feedback from the manager, and one

respondent who wished for more feedback from the managers in order for him to feel more

motivated. For instance, one respondent said:

“on this department it's very motivating to meet a lot of new, different people.” and “And then it's also motivates me to help the customers when they need help and I can give them help and then I like you

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The employees got to answer the question if satisfaction makes one work better than motivation

or if satisfaction increases the motivation to work, the majority of the employees could not

choose either of them. It appeared that for the respondents, the motivation and satisfaction were

dependable on each other and that you cannot have the one without the other one. One

respondent stated:

“I would say both it is combined, if you are not satisfied makes the motivation to go down, and vice versa, I think it is both that is needed in order to feel that this is a good place to work, you need the motivation to go somewhere and I think that the goals we are having in the department is really important but also to have the possibility to feel satisfaction if not reaching the goals then you get unmotivated, feels

like running but never coming to the end.” (Employee B)

As Employee B stated, the majority of the respondents claimed that the motivation would go

down if you did not have satisfaction and that the other way around. This also gave the

interviewers the view that in order for the employee performance to be high, the employee has to

be both motivated and satisfied with their work. Just like the managers, the employees also

thought that the managers have to help get them motivated by recognition, for instance.

Further, into the interviews, the interviewer asked the respondents about the environment and

culture. They have a culture where the people are willing to help each other and the majority of

the respondents are quite satisfied with the environment Siemens has created for them. For

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“we work as a team and support each other and I would say the manager too in this case, for me at least it is very motivating to feel the trust from them and also the support they give back and the clarity,

possibility to discuss goals so we know which direction to work on.” (Employee B)

As Employee B stated,, the environment at Siemens is quite friendly. They work as a team and

another respondent said that they often teach each other new things, whether it is about

knowledge, life or work and this is motivating and creates a good atmosphere within the work.

But on the other hand, some respondents disagreed with this. For example, one respondent said

that Siemens had created an environment where they do not necessarily work hard. He also

believed that Siemens could include strict management in order for the employee performance to

increase. Nevertheless, the employees within the service department are motivated and satisfied

with their work and they all believe that their motivation and satisfaction is the main reason for

their performances.

4.3 Role of Decentralization

Looking back at the interviews, all of the managers stated, the employees have a high degree of

freedom and responsibility when it comes to their work tasks and that this is among other factors

what motivates the employees. One of the managers stated, she believes in a decentralized

environment where people can take action in relation to changes, she stated:

“In general I think its important with a decentralize workplace where people can take decisions and it motivates them with freedom and knowledge’’ (manager D)

Furthermore, while looking at the vice president’s answer, he too believes in a decentralized workplace where he stated:

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“I strongly believe in a kind a distributed responsibility and more target oriented or I mean guiding people with target instead of control.’’ (manager A)

Manager A strongly believes in a decentralized environment because he as a vice president tries

to create a culture where the employees always strive for improvement.. Manager A encourages

the employees to come up with ideas of improving their work.

In addition, the interviews with the employees seem to agree with what the managers stated. For

example, one respondent stated:

“I would say that I'm quite satisfied and happy with it and I think one of the big reasons for that is because as part of the organization that i'm working with my managers we have a lot of sort of personal

responsibility in what we do and also freedom with that.” (Employee F)

It seems like the employees agree with the managers when it comes to the employees having a

lot of autonomy within their work which is a cause by having a decentralized environment. One

of the respondents was asked the question whether they have a lot of freedom to solve problems

on their own or not and he stated:

Yes, I have and that’s for Siemens service that’s one of the top thing that we have. That we have a lot of space to like to develop both ourselves and the business. (Employee D)

Which also supports what the managers’ state, Siemens service department is a department which truly engages in a decentralized environment where the employees have a lot of autonomy

which the employees see as a motivating factor. Furthermore, the employees all agree that this

Decentralized Environment’s Impact on Employee Performance : A study on how a decentralized environment in the operating &amp;amp; service department impacts employee performance within an organization.