The Influence of Organizational Structure on Intrinsic versus Extrinsic Motivation

Author(s): J. Daniel Sherman and Howard L. Smith

Source: The Academy of Management Journal, Vol. 27, No. 4 (Dec., 1984), pp. 877-885
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/255885
Accessed: 24-06-2017 10:07 UTC

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?Academy of Management Journal

1984, Vol. 27, No. 4, 877-885.

THE INFLUENCE OF ORGANIZATIONAL STRUCTURE

ON INTRINSIC VERSUS EXTRINSIC MOTIVATION

J. DANIEL SHERMAN
University of Alabama in Huntsville
HOWARD L. SMITH
Medical College of Virginia

Research on intrinsic motivation has demonstrated that extrinsic rewards

can have a negative effect on intrinsic motivation under certain conditions
(Calder & Staw, 1975; Daniel & Esser, 1980; deCharms, 1968; Deci, 1971,
1972, 1975a, 1975b; Greene & Lepper, 1974; Pinder, 1976; Ross, 1975; Staw,
Calder, Hess, & Sandelands, 1980). According to Deci's cognitive evalua-
tion theory, there are two processes by which extrinsic rewards can affect
intrinsic motivation. The first occurs if there is a change in the perceived
locus of causality. Hence, when a person is intrinsically motivated, the locus
of causality is within themselves (deCharms, 1968). However, when exter-
nal rewards are made contingent on behavior and the individual begins to
perceive that he or she is engaging in the activity for these rewards, then

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878 Academy of Management Journal December

the perceived locus of causality shifts from wi

trinsic reward, resulting in decreased intrin
1975b). The second process is based on the as
trinsically motivated to perform activities that
mining and competent (Deci, 1975b; White, 1
back can negatively affect intrinsic motivation
ings of competence or self-determination (Deci, 1975b).
It should be noted that extrinsic factors have a negative effect on intrin-
sic motivation only under certain conditions. For example, Deci, Cascio,
and Krusell (1975) have suggested that contingent rewards and even non-
contingent rewards will have a negative impact on intrinsic motivation only
if a shift in the perceived locus of causality occurs or if there are decreased
feelings of self-determination or competence. Furthermore, the effect is likely
to occur only if the rewards are salient (Ross, 1975), the task is interesting
(Daniel & Esser, 1980), and the reward is situationally inappropriate (Staw
et al., 1980).
Most of the early research on intrinsic motivation focused on the effects
of extrinsic monetary rewards, but more recent studies have demonstrated
that external constraints, in general, may negatively affect intrinsic motiva-
tion. For example, Lepper and Greene (1975) found that the act of monitoring
individuals' behavior resulted in decreased intrinsic motivation. Similarly,
in an investigation on goal setting, Mossholder (1980) found that external-
ly mediated goal setting could have a negative impact on intrinsic motiva-
tion, but this effect is contingent on the type of task. In an experiment that
manipulated autonomy or self-determination (i.e., the level of procedural
specification), Zuckerman, Porac, Lathin, Smith, and Deci (1978) found
that greater external constraints in the form of procedural specification
negatively affected the level of intrinsic motivation. Similarly, Fisher (1978)
reported that subjects who were placed under greater constraints and had
less personal control over performance also had lower intrinsic motivation.
Finally, Amabile, DeJong, and Lepper (1976) demonstrated that when ex-
ternal constraints take the form of deadlines, a decrement in subsequent
intrinsic interest in the task results.
These studies suggest that although past research typically has focused
on the effects of tangible rewards on intrinsic motivation, extrinsic factors
do not necessarily need to be tangible in order to result in decreases in in-
trinsic motivation. It is the general perception of external constraints that
can cause decreased feelings of self-determination and result in reduced in-
trinsic motivation.
Most previous research on intrinsic motivation has focused on the ef-
fects of extrinsic rewards and micro level constraints, but there has not been
research investigating the effects of the macro level structural variables that
ostensibly are primary external constraints in any organization. Hence, it
is hypothesized that the structural characteristics of the organization itself
may have a very strong negative impact on levels of intrinsic motivation if the
organization approaches the mechanistic end of the structural continuum.

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 1984 Sherman and Smith 879

Based on Deci's (1975a, 197

because greater levels of ce
so on reduce flexibility an
decreased perceptions of s
of only minor importance
of critical importance in v
extrinsic incentives are scar
voluntary activity that is p
Thus, it is the objective of
ganizational structure influe
tary organization.

Method

Sample. The sample of voluntary organizations utilized in this investiga-

tion consisted of 44 conservative Protestant churches from six denomina-
tions. These included conservative Baptist, Presbyterian, Methodist, Brethren,
Lutheran, Nazarene, and independent churches. In selecting the sample, the
general system of belief was controlled by means of administering a
7-statement doctrinal inventory to the leadership (i.e., pastor) of each church.
Only churches whose leadership expressed a conservative Protestant doc-
trine were selected. This sampling procedure allowed a relatively homoge-
neous sample to be drawn in terms of doctrine.
Procedure. Questionnaires were administered to ministers and to 25 ran-
domly selected members from the membership rolls of each congregation.
Questionnaires were distributed by mail with self-addressed, stamped return
envelopes. Of the 1,100 questionnaires mailed out to members, 543 were
returned: thus a response rate of 49 percent was obtained. Responses were
obtained in all cases from the leadership; however, missing data were prob-
lematic in several cases. Calculations to determine the minimal sample size
for each organization were conducted in order to insure that all estimates
were within ? 5 percent accuracy. On completion of the data collection, only
two organizations were eliminated because of an inadequate number of re-
spondents. Thus, the usable sample included 42 churches.
Measures. Six structural variables were measured in this investigation.
These included standardization, formalization, integration, centralization,
levels of hierarchy, and organizational size. Standardization was operation-
alized by a 5-item instrument developed by Sherman (1981) which assessed
the level of standardization in the meetings and administration of the church.
Specific items questioned the degree to which services or meetings were
planned according to standard patterns, the degree to which liturgy was uti-
lized, and the degree to which procedures for conducting church activities
were governed by standardized procedures as opposed to being developed
spontaneously. For this scale, a coefficient alpha of .77 was obtained.
The second structural variable, formalization, was operationalized by
means of a 4-item instrument (Sherman, 1981) which assessed the degree

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880 Academy of Management Journal December

to which written records were kept (i.e., atte

written formal policies and rules had been deve
operations of the organization, and the form
clergy and other participants wearing robes). A
obtained for this scale.
The third structural variable, integration, was measured by determining
the level of communication occurring between members in the system (Tichy,
Thshman, & Fombrun, 1979). This was operationalized specifically by ask-
ing the sampled individuals to estimate the total number of minutes in a
sample 3-day period that they spent communicating with other members
in a task or church related manner.
Centralization was measured by asking the leadership (i.e., pastors) if their
church utilized (1) a congregational system in which they assumed the cen-
tral leadership role, or (2) a representative system in which a group of elders
assumed the leadership responsibility but the pastor still exercised greater
authority, or (3) a representative system in which a group of elders assumed
leadership responsibility with the pastor having no greater authority than
any other elder.
The fifth structural variable, levels of hierarchy, was measured by deter-
mining the number of hierarchical levels including regional and national
denominational levels of authority. Organizational size, the final structural
variable, was measured by consulting the church records to obtain an assess-
ment of the current number of members.
The two dependent variables, intrinsic motivation and extrinsic motiva-
tion, were measured by means of the instrument developed specifically for
church settings by Allport (1959, 1963) and later refined by Feagin (1964)
(also see Dittes, 1969, and Hood, 1971). This instrument has been widely
used in both the sociological and psychological literatures on religion. Ac-
cording to Allport and Ross (1967), for those people who are high in ex-
trinsic religious motivation, religiosity is utilitarian, self-serving, and self-
protecting. In contrast, Allport and Ross maintain that those who are high
in intrinsic religious motivation regard their Christian faith as a supreme
value in its own right.
The two scales based on Feagin's (1964) factor analyses are each com-
posed of six items. A coefficient alpha (computed at the individual level)
of .65 was obtained for extrinsic motivation (e.g., "One reason for my be-
ing a church member is that such membership helps to establish a person
in the community," and "What religion offers me most is comfort when
sorrows and misfortune strike"). For intrinsic motivation a coefficient alpha
of .60 was obtained (e.g., "It is important to me to spend periods of time
in private religious thought and meditation," and "The prayers I say when
I am alone carry as much meaning and personal emotion as those said by
me during services"). Although these coefficient alphas were somewhat lower
than values obtained in other investigations, the lack of homogeneity may
be attributable to the different aspects of church-related activity referred
to in the items. Furthermore, it should be noted that these scales are similar

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 1984 Sherman and Smith 881

to other instruments used i

ity is an end in itself or w
However, these scales differ
they apply (i.e., the church
task).
The means, standard devia
in the study are presented in Table 1.

Table 1
Means, Standard Deviations, and Correlations
Among Study Variablesa

Variable X S.D. 1 2 3 4 5 6 7 8

1. Intrinsic motivation 26.34 1.13 -

2. Extrinsic motivation 15.63 2.32 -.45 -
3. Integration 107.38 69.11 .34 -.28 -
4. Centralization 2.31 .78 -.26 .57 -.23 -
5. Hierarchy 2.95 .97 -.37 .69 -.24 .43 -
6. Standardization 10.36 3.88 -.32 .11 -.18 .11 .41 -
7. Formalization 7.95 2.52 -.45 .54 -.30 .37 .75 .53 -
8. Organizational size 363.76 317.32 -.45 .22 -.26 .47 .12 -.01 .28 -
aFor a sample size of n= 42, r .26 is significant at p< .05.

Data Analysis. The nature of this investigation necessitated the collec-

tion of data at two levels of analysis in order to examine the influence of
structure (organizational level) on intrinsic motivation (individual level). All
of the structural variables (with the exception of integration) were measured
at the macro level of analysis from information obtained from the leader-
ship of each organization. The dependent variables (intrinsic and extrinsic
motivation) were measured at the micro level of analysis from responses
obtained from individual members. Theoretically, integration should be con-
sidered a macro level structural variable. However, although intrinsic and
extrinsic motivation clearly are individual level constructs, because the data
analysis must be conducted at one level of analysis, it was determined that
the three variables that were measured at the individual level should be ag-
gregated for each organization. Then stepwise multiple regression could be
employed to ascertain the degree of variation explained by structural variables
in intrinsic and extrinsic motivation. In addition, the relative contributions
of the various structural variables could be assessed. Furthermore, using
this procedure, the hypothesis could be tested: as organizational structure
approaches the mechanistic end of the structural continuum, intrinsic motiva-
tion decreases.
Before progressing with the data analysis, however, it was important to
establish the appropriateness of aggregation empirically. Roberts, Hulin,
and Rousseau (1978) and James (1982) stipulate that before aggregating a
construct whose unit on which theory is based is the individual, small within-
organization variance relative to between-organization variance must be dem-
onstrated. Roberts et al. (1978) recommend the use of analysis of variance

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882 Academy of Management Journal December

to compare within-organization variance with

to determine if aggregation is appropriate. H
ducted for each of the three aggregated variab
the results of the analysis of variance yielde
sic motivation, F= 2.99 (p < .01) was obtained
results yielded F= 2.54 (p < .01).

Results

The results of the regression analyses are presented in Table 2. Formaliza-

tion was eliminated from the analyses because of its stronger interrelation-
ship with other structural variables. This was done in the interest of avoiding
problems with multicollinearity. Hence, standardization, centralization, in-
tegration, hierarchy, and size were included as structural predictor variables.

Table 2
Regression of Intrinsic and Extrinsic Motivation
on the Organizational Structure Variables

Intrinsic Motivation Extrinsic Motivation

Structural Variables Beta F Beta F

Organizational size -.45 7.72*** .01 .00

Standardization -.29 4.08** -.17 2.03
Hierarchy -.23 1.99 .67 25.44***
Integration .15 1.04 .02 .02
Centralization .11 .42 .25 3.17*
R2 =.41; df= 5,32; R2=.61; df=5,32;
F=4.44; p<.01 F=9.80; p<.001

*p<.05; **p< .Ol; ***p<.001

The results indicated that the structural variables explained a relatively

large amount of variance in both intrinsic and extrinsic motivation. For the
first analysis, 41 percent of the variation in intrinsic motivation was explained
by the structural variables. In the second analysis, 61 percent of the varia-
tion in extrinsic motivation was explained by the structural variables.
The results of these regressions and the Pearson product-moment corre-
lations reported in Tible 1 generally support the hypothesis that as struc-
ture becomes increasingly mechanistic, intrinsic motivation decreases. For
the bivariate correlations all six structural variables were statistically sig-
nificant, and their values were consistent with the hypothesis. Centraliza-
tion, hierarchy, standardization, and formalization exhibited negative cor-
relations with intrinsic motivation. Integration, for which lower values would
be indicative of a mechanistic structure (Tichy et al., 1979), exhibited a posi-
tive relationship with intrinsic motivation. Although increased organiza-
tional size cannot be considered characteristic of either organic or mecha-
nistic structures, it was found to be negatively related to intrinsic motiva-
tion. Furthermore, it was determined that size was related to mechanistic
structure for three of the five structural dimensions. Hence, it appears that

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 1984 Sherman and Smith 883

in the case of churches great

anistic structure; however, t
from these data.
In the stepwise regression analysis for intrinsic motivation, organizational
size (p < .001) and standardization (p < .01) were found to have the greatest
negative impact on intrinsic motivation. Although the coefficient for cen-
tralization was not significant, its value was positive. Because the bivariate
correlation between centralization and intrinsic motivation was -.26,
(p<.05), it is suggested that this result may be attributed to some minor
multicollinearity resulting from the imperfect independence among the pre-
dictor variables.
When the Allport and Ross (1967) indicator of extrinsic motivation was
utilized as the dependent variable, the results, in general, were consistently
opposite of those for intrinsic motivation. The Pearson product-moment
correlations were significant (p < .05) for four of the six structural variables.
Furthermore, the values of the correlations were consistent with the hypoth-
esis in all cases, indicating that the level of extrinsic motivation was posi-
tively associated with mechanistic structure. Furthermore, in the regression
analysis (Table 2), the variables that explained the greatest variance in ex-
trinsic motivation were hierarchy (p < .001) and centralization (p < .05), in-
dicating that in churches, these two characteristics of mechanistic structure
have the strongest impact on extrinsic motivation.

Discussion

The findings of this investigation further extend knowledge in this area

of research by demonstrating the influence of organizational structure on
intrinsic motivation. These results reinforce recent findings that have shown
that external constraints, in general, can have a negative impact on intrin-
sic motivation (Amabile et al., 1976; Fisher, 1978; Lepper & Greene, 1975;
Mossholder, 1980; Zuckerman et al., 1978). According to Deci (1975b), these
results can be interpreted based on the process whereby the general percep-
tion of external constraints causes decreased feelings of self-determination,
which then result in reduced intrinsic motivation. In the case of organiza-
tional structure, as the organization approaches the mechanistic end of the
structural continuum, a decrease in perceptions of self-determination osten-
sibly will result, based on the reduction in autonomy, freedom, and the in-
crease in formal rules and standardized procedures.
One potential implication of these findings is the possibility that if mech-
anistic structure undermines intrinsic motivation, this may subsequently and
inadvertently result in the need for greater controls, formalization, and cen-
tralization. Hence, a mechanistic organizational structure may breed the
need for a more extremely mechanistic system because of the reduction in
intrinsically motivated behavior. In a sense, one might conclude that the
findings from this area of research isolate one more determinant of the gen-
eral phenomenon of bureaucracy breeding greater bureaucracy.

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884 Academy of Management Journal December

Perhaps the most important implication of these findings stems from the
fact that in voluntary organizations, where extrinsic incentives are more
scarce, there is a greater dependence on the intrinsically motivated activity
of the participants (Staw, 1976, 1977). Any factor, such as organizational
structure, that may potentially undermine this intrinsic motivation must be
carefully considered. Therefore, in the interest of increasing voluntary ac-
tivity in the context of a church, it is important that the organization develop
a more organic as opposed to mechanistic structure. Greater decentraliza-
tion of authority and decision making, with a decreased emphasis on bu-
reaucratic formalization and standardized procedures, should positively affect
intrinsically motivated voluntary activity.

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J. Daniel Sherman is Assistant Professor of Management at the

University of Alabama, Huntsville.

Howard L. Smith isAssociate Professor of Health Care Manage-

ment at the Medical College of Virginia.

@Academy of Management Journal

1984, Vol. 27, No. 4, 885-892.

THE MODERATING ROLE OF WORK CONTEXT

IN JOB DESIGN RESEARCH:
A TEST OF COMPETING MODELS

GERALD R. FERRIS
Texas A&M University
DAVID C GILMORE
University of North Carolina at Charlotte

The job characteristics approach to job design has argued and pr

evidence to support the belief that enriched or complex jobs are a
with increased satisfaction, internal work motivation, and other imp
organizational outcomes (Hackman & Oldham, 1975, 1976). But the
relationship between job complexity and work outcomes has been
as overly simplistic and incomplete, and much recent research reflects

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