Management control – centralisation of ratios, decentralisation of work stress? Online publication date: Wed, 20-Aug-2014
by Matthias Murugiah; Harald Stummer
International Journal of Behavioural and Healthcare Research (IJBHR), Vol. 3, No. 1, 2012
Abstract: Decentralisation takes place to a great extent in many companies, associated with a centralisation of management control. The present article investigates the correlations between the effects of strategic control systems and work stress on employees using a survey from regionalised (German) subsidiaries of a large US MNC. Following a qualitative and a quantitative approach, the correlation between 'profit centre thinking', anxiety and work stress is explored. Employee motivation decreases significantly as the period of employment increases, but contrary to theoretical predictions, the employees reported neither a decrease in solidarity with the company or a pronounced perception of risk with regard to job losses. However, with a high centralised management control in decentralised entities, motivation of employees decreases measurably in profit centres with short-term approaches and horizontal and vertical communications problems. In conclusion, sustainable business approaches will be recommended.
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