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Centralization in Decentralization: A case study of centralized goal-settings effect on employee motivation in a multiunit organization
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
2013 (English)Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

With this study we aim to create an understanding about motivational effect of using centralized goal-setting in multiunit organizations. Multiunit organizations are often decentralized in their structure, allowing units and their employees to have control over their day-to-day activities and decisions. At the same time, the organization requires control in order to create uniformity. A way to impose control is by using performance targets for the units and its employees. The employees are used to being self-directed in their work, and we have researched how this central form of control will affect their motivation.


In order to illustrate this, we have conducted a qualitative case study at different units in a banking and insurance company in Sweden. Goal-setting has increased in this industry, and at the same time, employees have the mandate to make decisions about their daily work at a local level. We therefore argue that using a multiunit company in this industry will illustrate the motivational effect of centrally assigned goals. We have conducted ten semi-structured interviews with sales employees and with two managers of Organization X. Our research approach to this study is of an abductive character, as our process has been back and forth between existing theory and findings from our research.


The mainly intrinsically motivated employees in this case expressed an understanding of the assigned goals. However, they had difficulties being committed to the goals because they felt that the goals were set too far away from their local market. Sales employees in this type of organizational structure are used to have the mandate to control their day-to-day work activities, and therefore it becomes frustrating for them to partly be controlled in terms of sales targets. Centralized assigned goals have a negative effect on motivation for most of the employees, who have trouble accepting and feeling committed to the goals. However, the assigned goals can temporarily trigger motivation to sell certain products, for example through a competition. We argue that the distribution of the centrally assigned goals have to be well communicated and explained to the employees, and that organizations give room for local adjustment of the centrally assigned goals.


Place, publisher, year, edition, pages
Keyword [en]
Motivation, Multiunit organizations, Goal-Setting, centralization, decentralization
National Category
Business Administration
URN: urn:nbn:se:umu:diva-76833OAI: diva2:637088
Educational program
International Business Program
Social and Behavioural Science, Law
Available from: 2013-08-26 Created: 2013-07-16 Last updated: 2013-08-26Bibliographically approved

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