Issue

Vol 38 No 1 (2023): January

Date Log

Submitted
May 12, 2022
Accepted
Dec 23, 2022
Published
Jan 24, 2023
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Copyright

Upon acceptance of an article, authors transfer copyright to the JIEB as part of a journal publishing agreement, but authors still have the right to share their article for personal use, internal institutional use, and for any use permitted under the CC BY-SA license

Open Access

Articles are freely available to the public without any subscription with permitted reuse. For open access articles, permitted third party (re)use is defined by the following Creative Commons user licenses: Creative Commons Attribution (CC BY-SA).

The Effect of Tournament Horizon, Faultline and Group Performance Relationships under Decentralized System

https://doi.org/10.22146/jieb.v38i1.4532
Frida Fanani Rohma
frida.frohma@trunojoyo.ac.id
Universitas Trunojoyo Madura
Indah Shofiyah
Universitas Ahmad Dahlan
Abdus Salam Junaedi
Universitas Trunojoyo Madura

Corresponding Author(s) : Frida Fanani Rohma

frida.frohma@trunojoyo.ac.id

Journal of Indonesian Economy and Business, Vol 38 No 1 (2023): January

Abstract

Introduction/Main Objectives: This research integrates the self-categorization and contagion theories to analyze faultlines due to a decentralization system. Besides, this research investigates the inducement of tournament incentives as a control mechanism to mitigate the harmful effects of a faultline on group performance. Background Problems: Fiscal decentralization has a crucial role as it stimulates economic growth, enhances the quality of decision-making and escalates performance. However, decentralization by one local government, which consists of various local government departments, may trigger a faultline. This research argues that patterned diversity convenes faultlines that split up a group into antagonistic sub-groups following the attributes affecting the aggregate group performance. Novelty: This research provides a new insight, in that decentralization appears to be a double-edged sword. It can elevate the quality of local decision-making, and trigger faultlines between local government departments at other times, affecting the local government’s aggregate performance. Research Methods: This research uses a laboratory experimental method with a 2×3 between-subjects factorial design. The research design uses the dyad analysis level. Finding/Results: The results found that the induction of a tournament scheme with the use of a cumulative ordinal scale for determining group performance encourages the social cognitive activation of individuals, thus encouraging cognitive orientation to optimize compensation and minimize categorization and antagonism. Conclusion: A tournament incentive scheme can be induced as a management control mechanism and to encourage the sub-groups to be winners. This resolution is expected to mitigate antagonistic behavior due to faultlines and enhance the optimization of aggregate performance

Keywords

decentralization faultline performance self-categorization tournament
Rohma, F. F., Shofiyah, I., & Junaedi, A. S. (2023). The Effect of Tournament Horizon, Faultline and Group Performance Relationships under Decentralized System. Journal of Indonesian Economy and Business, 38(1), 62-80. https://doi.org/10.22146/jieb.v38i1.4532
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX
References
  1. Alawattage, C., Hopper, T., Wickramasinghe, D., Putu, S., Mimba, H., Van Helden, J., & Tillema, S. (2007). Public sector performance measurement in developing countries: A literature review and research agenda. Journal of Accounting & Organizational Change, 3(3), 192–208. https://doi.org/10.1108/18325910710820265
  2. Adi, M. P. H., & Sukmawati, A. (2020). The effect of levers of control and leadership style on creativity. Journal of Indonesian Economy and Business 35(3), 236-256.
  3. Ambos, T. C., Ambos, B., Eich, K. J., & Puck, J. (2016). Imbalance and isolation: How team configurations affect global knowledge sharing. Journal of International Manage¬ment, 22(4), 316–332. https://doi.org/10.1016/j.intman.2016.03.005
  4. Bahargam, S., Golshan, B., Lappas, T., & Terzi, E. (2019). A team-formation algorithm for faultline minimization. Expert Systems with Applications, 119, 441–455. https://doi.org/10.1016/j.eswa.2018.10.046
  5. Baiman, S. (1990). Agency research in managerial accounting: A second look. Accounting, Organizations, and Society, 15, 341 – 371.
  6. Berger, L., Klassen, K. J., Libby, T., & Webb, A. (2013). Complacency and giving up across repeated tournaments: Evidence from the field. Journal of Management Accounting Research, 25(1), 143–167. https://doi.org/10.2308/jmar-50435
  7. Berinsky, A. J., G. A. Huber, & Lenz, G. S. (2012). Evaluating Online Labor Markets for Experimental Research: Amazon.com’s Mechanical Turk. Political Analysis, 20(3), 351–368.
  8. Bezrukova, K., Jehn, K. A., Zanutto, E. L., & Thatcher, S. M. B. (2009). Do workgroup faultlines help or hurt? A moderated model of faultlines, team identification, and group performance. Organization Science, 20(1), 35–50. https://doi.org/10.1287/orsc.1080.0379
  9. Bonner, S. E., & Sprinkle, G. B. (2002). The effects of monetary incentives on effort and task performance: Theories, evidence, and a framework for research. Accounting, Orga¬ni¬zations, and Society, 27(4), 303 –345.
  10. Carnegie, G. D., & West, B. P. (2005). Making accounting accountable in the public sector. Critical Perspectives on Accounting, 16(7), 905–928. https://doi.org/10.1016/j.cpa.2004.01.002
  11. Casas-Arce, P., & Martínez-Jerez, F. A. (2009). Relative performance compensation, contests, and dynamic incentives. Management Science, 55(8), 1306–1320. https://doi.org/10.1287/mnsc.1090.1021
  12. Chen, C. C., Schwartz, Z., & Jady Yu, X. (2015). On the “students as surrogates” research conundrum: Insights from statistical reasoning in revenue management. Journal of Revenue and Pricing Management, 14(4), 262–275. https://doi.org/10.1057/rpm.2015.16
  13. Choi, J. N., & Sy, T. (2010). Group-level organizational citizenship behavior: Effects of demographic faultlines and conflict in small workgroups. Journal of Organiza¬tional Behavior, 31(7), 1032–1054. https://doi.org/10.1002/job.661
  14. Choi, J., Newman, A. H., & Tafkov, I. D. (2016). A marathon, a series of sprints, or both? Tournament horizon and dynamic task complexity in multi-period settings. Accounting Review, 91(5), 1391–1410. https://doi.org/10.2308/accr-51358
  15. Deustch, M. (1949). A theory of cooperation and competition upon group process. Human Relations 2(2), 129-152.
  16. Deutsch, M. (1949). A theory of co-operation and competition. Human Relations, 2(2), 129–152. https://doi.org/10.1177/001872674900200204
  17. Eisenhardt, K. M. (1989). Agency theory: An Assesment dan review. Academy of Management Review 14, 57-74.
  18. Faravelli, M., Friesen, L., & Gangadharan, L. (2015). Selection, tournaments, and dishonesty. Journal of Economic Behavior and Organization, 110, 160–175. https://doi.org/10.1016/j.jebo.2014.10.019
  19. Fessler, N. J. (2003). Experimental evidence on the links among monetary incentives, task attractiveness, and task performance. Journal of Management Accounting Research, 15(1), 161–176. https://doi.org/10.2308/jmar.2003.15.1.161
  20. Fornatella, A. and H., & Rossieta. (2014). Pengaruh Desentralisasi Fiskal Dan Kinerja Terhadap Akuntabilitas Pelaporan Keuangan Pemerintah Daerah Di Indonesia. Simposiun Nasional Akuntansi 17.
  21. Ghobadi, S., Campbell, J., & Clegg, S. (2017). Pair programming teams and high quality knowledge sharing: A comparative study of coopetitive reward structures. Information Systems Frontiers 19, 397-409.
  22. Gratton, L., Voigt, A., & Erickson, T. (2011). Bridging faultlines in diverse teams. IEEE Engineering Management Review, 39(1), 80–90. https://doi.org/10.1109/EMR.2011.5729976
  23. Haesebrouck, K., Van den Abbeele, A. G. H. L., & Williamson, M. G. (2015). The effects of knowledge sharing on helping behavior: Implications for reward system design. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2648298
  24. Hall, J. L. (2013). Managing teams with diverse compositions: Implication for managers from research on the faultline model. SAM Advanced Management Journal 78: 4-12.
  25. Hannan, R. L., Krishnan, R., & Newman, A. H. (2008). The effects of disseminating relative performance feedback in tournament and individual performance compensation plans. Accounting Review, 83(4), 893–913. https://doi.org/10.2308/accr.2008.83.4.893
  26. Hogg, M. A., & Reid, S. A. (2006). Social identity, self-categorization, and the com-munication of group norms. Commu-nication Theory, 16(1), 7–30. https://doi.org/10.1111/j.1468-2885.2006.00003.x
  27. Hogg, M. A., & Terry, D. J. (2000). Social identity and self-categorization processes in organizational contexts. The Academy of Management Review, 25(1), 121. https://doi.org/10.2307/259266
  28. Homan, A. C., van Knippenberg, D., Van Kleef, G. A., & De Dreu, C. K. W. (2007). Bridging faultlines by valuing diversity: Diversity beliefs, information elaboration, and performance in diverse work groups. Journal of Applied Psychology, 92(5), 1189–1199. https://doi.org/10.1037/0021-9010.92.5.1189
  29. Hvide, H. K. (2002). Tournament rewards and risk taking. Journal of Labor Economics, 20(4), 877–898. https://doi.org/10.1086/342041
  30. Ilyana, S., & Sholihin, M. (2021). The effect of incentives and leadership styles on creative performance. Journal of Indonesian Economy and Business (JIEB), 36(1), 14-30.
  31. Islami, I. N., & Nahartyo, E. (2019). Do leadership styles moderate the relationship of organizational commitment and bud¬getary slack? An experimental approach. Journal of Indonesian Economy and Business, 34(2), 150.
  32. Jehn, K. A., & Bezrukova, K. (2010). The faultline activation process and the effects of activated faultlines on coalition formation, conflict, and group outcomes. Organizational Behavior and Human Decision Processes, 112(1), 24–42. https://doi.org/10.1016/j.obhdp.2009.11.008
  33. Jensen, M. C., & Meckling, W. H. (1976). Theory of firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics 3(4), 305-360.
  34. Johnson, D. W., & Johnson, R. T. (2005). New development in social interdependence theory. Genetic, Social, dan General Psychology Monographs 131(4): 285-358.
  35. Knippenberg, D. V., De Dreu, C. K. W., & Homan, A. C. (2004). Workgroup diversity and group performance: An integrative model and research agenda. Journal of Applied Psychology, 89(6), 1008–1022. https://doi.org/10.1037/0021-9010.89.6.1008
  36. Kong, D., Kong, G., Liu, S., & Zhu, L. (2022). Does competition cause government decentralization? The case of state-owned enterprises. Journal of Comparative Economics.
  37. Kurniawan, D. T., Kusnayain, Y. I., Aulisaina, F. I., & Hakim, M. A. R. (2021). Exploring the Existence of Innovative Work Behavior among Government Employee: Have Been There?. Journal of Indonesian Economy and Business, 36(3), 272-282.
  38. Kusufi, M. S., Rohma, F. F., & Muhammad, E. (2020). Pengaruh Horizon Skema Turnamen dan Frekuensi Publikasi Informasi Relatif terhadap Kinerja Karyawan. Jurnal Kajian Akuntansi, 4(1), 1-12.
  39. Lapierre, L. M., & Allen, T. D. (2006). Work-supportive family, family-supportive supervision, use of organizational benefits, and problem-focused coping: Implications for work-family conflict and employee well-being. Journal of Occupational Health Psychology, 11(2), 169–181. https://doi.org/10.1037/1076-8998.11.2.169
  40. Lau, D. C., & Murnighan, J. K. (1998). Demographic diversity and faultlines: The compositional dynamics of organizational groups. The Academy of Management Review, 23(2), 325. https://doi.org/10.2307/259377
  41. Lauring, J., & Selmer, J. (2012). Knowledge sharing in diverse organisations. Human Resource Management Journal, 22(1), 89–105. https://doi.org/10.1111/j.1748-8583.2010.00158.x
  42. Lazear, E. P., & Rosen, S. (1981). Rank-order tournaments as optimum labor contracts. Journal of Political Economy, 89(5), 841–864. https://doi.org/10.1086/261010
  43. Luft, J. (2016). Cooperation and competition among employees: Experimental evidence on the role of management control systems. Management Accounting Research, 31, 75–85. https://doi.org/10.1016/j.mar.2016.02.006
  44. Mäkelä, K., Andersson, U., & Seppälä, T. (2012). Interpersonal similarity and knowledge sharing within multinational organizations. International Business Review, 21(3), 439–451. https://doi.org/10.1016/j.ibusrev.2011.05.003
  45. Marvel, J. D. (2015). Public opinion and public sector performance: Are individuals’ beliefs about performance evidence-based or the product of anti–public sector bias?. Interna¬tional Public Management Journal, 18(2), 209-227.
  46. Meyer, B., & Glenz, A. (2013). Team faultline measures: a computational comparison and a new approach to multiple subgroups. Organizational Research Methods, 16(3), 393–424. https://doi.org/10.1177/1094428113484970
  47. Moisiu, A. (2014). Decentralization and the increased autonomy in local governments. Procedia - Social and Behavioral Sciences, 109, 459–463. https://doi.org/10.1016/j.sbspro.2013.12.490
  48. Muizzuddin, M., Tandelilin, E., Hanafi, M. M., & Setiyono, B. (2021) Does institutional quality matter in the relationship between competition and bank stability? Evidence from Asia. Journal of Indonesian Economy and Business, 36(3), 283-301.
  49. Mutmainah, S. (2020). Incentive system as conflict mitigation in group faultline. Universitas Gadjah Mada.
  50. Naranjo-Gill, D., Cuevas-Rodriguez, G., Lopez-Cabrales, A., & Sanchez, J.M. (2012). The Effects of Incentive Systems dan Cognitive Orientation on Team's Performance. Behavioral Research in Accounting 24(2), 177191.
  51. Patra, P., Kumar, U. D., Nowicki, D. R., & Randall, W. S. (2019). Effective management of performance-based contracts for sustainment dominant systems. International Journal of Production Economics, 208, 369–382. https://doi.org/10.1016/j.ijpe.2018.11.025
  52. Rohma, F. F. (2022). Mitigating The Harmful Effect of Slack: Does Locus of Commitment (Organizational Versus Colleague) Play a Role. International Journal of Business Science & Applied Management, 17(3).
  53. Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill Building Approach (7th ed.). John Wiley & Sons.
  54. Son, N. H. (2022). Human resource management decentralisation in public sector: the case of Viet¬nam. International Journal of Infor¬mation, Business and Management, 14(3), 103-115.
  55. Sumiyana, S., & Sriwidharmanely, S. (2020). Mitigating the harmful effects of techno-stress: inducing chaos theory in an experi-mental setting. Behaviour and Information Technology, 39(10), 1079–1093. https://doi.org/10.1080/0144929X.2019.1641229
  56. Tajfel, H. (1972). Social Categorization." Introduction a la Psychologie Sociale. In 1 (pp. 272–302).
  57. Thatcher, S. M. B., Jehn, K. A., & Zanutto, E. (2003). Cracks in Diversity Research: The effects of diversity faultlines on conflict and performance. Group Decision and Negotia¬tion, 12(3), 217–241. https://doi.org/10.1023/A:1023325406946
  58. Tian, Y., Tuttle, B. M., & Xu, Y. (2016). Using incentives to overcome the negative effects of faultline conflict on individual effort. Behavioral Research in Accounting, 28(1), 67–81. https://doi.org/10.2308/bria-51147
  59. Tong, K. kit, & Leung, K. (2002). Tournament as a motivational strategy: Extension to dynamic situations with uncertain duration. Journal of Economic Psychology, 23(3), 399–420. https://doi.org/10.1016/S0167-4870(02)00083-1
  60. Towry, K. L. (2003). Control in a Teamwork Environment: The Impact of Social Ties on the Effectiveness of Mutual Monitoring Contracts. The Accounting Review 78(4), 1069-1095.
  61. Trapp, I., & Trapp, R. (2019). The psychological effects of centrality bias: an experimental analysis. Journal of Business Economics, 89(2), 155–189. https://doi.org/10.1007/s11573-018-0908-6
  62. Turner, J. C. (1975). Social comparison and social identity: Some prospects for intergroup behaviour. European Journal of Social Psychology, 5(1), 1–34. https://doi.org/10.1002/ejsp.2420050102
  63. Turner, J. C. (1985). Social Categorization dan The Self Concept: A Social Cognitive Theory of Group.o Title. Advances in Group Processes.
  64. Yang, T., Giddings, D. P., Glomb, T. M., & Kammeyer-Mueller, J. D. (2020). Coping with home demands can be contagious: A faultline perspective on the role of in-groups, out-groups, and family supportive supervision. Journal of Vocational Behavior, 118. https://doi.org/10.1016/j.jvb.2020.103376
  65. Zhang, J., Liang, Q., Zhang, Y., & Qu, Y. E. (2017). Team faultline: types, configuration and influence–evidence from China. International Journal of Conflict Management.
Read More
Author biographies is not available.
Download this PDF file
PDF
Statistic
Read Counter : 590 Download : 1207