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Vol 38 No 1 (2023): January

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