Impact of organizational decentralization degree on job satisfaction and job performance: a hierarchical linear model analysis for construction projects

Abstract

PurposeModern construction projects are increasingly complex and rely heavily on multi-discipline collaboration, and this leads to a more and more decentralized project-based structure widely adopted in the construction industry. While job satisfaction (JS) and job performance (JP) have been heavily studied previously, few considered the impact of organizational structure and none investigated the relationship between the organizational decentralization degree with JS and JP. This research aims to fill this research gap and investigate the impacts of organizational decentralization degree on JS and JP and facilitate a better project management practice for large-scale construction projects.Design/methodology/approachThis research firstly establishes four hypotheses based on the literature review on general project-based organizations, then the hypotheses are tested by a survey covering 25 large complex construction projects in China. A hierarchical linear model analysis was carried out to analyze the survey data and to study the relationships between organizational decentralization degree, job satisfaction and job performance.FindingsAnalysis results show that projects' employees' JS and JP are positively correlated with the construction project organizations' decentralization degree, respectively. The decentralization degree has a higher impact on JS than on JP. Employees' JP is positively correlated with their JS, and a higher decentralization degree leads to a more significant positive impact that JS puts on JP.Originality/valueThe findings are new evidence of how construction organization structure and its decentralization degree can affect project employees' JS and JP. This research provides valuable guidance for the industry's management practice and is particularly important for large, complex and highly decentralized construction projects.

Exploring the Role of HRM in Facilitating Collaboration and Knowledge Sharing in Decentralized Organizational Structures

“…Furthermore, decentralized organizational decision structures influence role clarity, which positively affects job satisfaction (Hansen & Høst, 2012). The degree of organizational decentralization has been linked to increased job satisfaction and job performance (Sun et al, 2021). Decentralized structures have also been associated with balanced power distribution among collaborating organizations, which can prevent conflicts and promote agreements (Nuhoff-Isakhanyan et al, 2017).…”

“…Additionally, Sun et al (2021) explore how the degree of decentralization within construction projects impacts employees' job satisfaction and performance, indicating a positive correlation between decentralization and its effect on job satisfaction and performance. Furthermore, Wohlstetter et al (2003) suggest that decentralization, along with active collaboration among stakeholders, is crucial for improving schools and urban school reform efforts.…”

“…Furthermore, the degree of decentralization within an organization can affect job satisfaction and performance, which in turn can influence knowledge sharing practices (Sun et al, 2021;. (Sun et al, 2021; evaluated the importance of organizational structure from centralized and decentralized viewpoints in five aspects.…”

“…Moreover, a decentralized organizational structure can positively impact job satisfaction and performance (Sun et al, 2021). It allows for greater authority at lower levels, enabling direct contact with stakeholders such as community residents, which can enhance operational effectiveness (Lee & Jang, 2012).…”

Decentralization and Managerial Performance: A Mediated Budget Participation on the Village Government in West Halmahera Regency

“…Budgetary participation has received attention in finance and accounting in recent decades. The results reveal that budgetary participation can be influenced by decentralization (Riyadi, 2007) and affect managerial performance (Indriani et al, 2020), and managerial performance can also be influenced by decentralization (Sun et al, 2021). The involvement of managers or subordinates in decentralized organizations in budgeting will have an impact on their high success, satisfaction and performance (Amir et al 2020;Mulyanah & Puspanita, 2021).…”