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Organizations nowadays are under immense external pressure due to advancements in information technology, making it precarious. It also inserts extra pressure to keep the employees motivated and productive. Therefore, while information technology benefits the organization, it also challenges the organization and employees more. In order to meet these challenges, many organizations have begun to flatten their organizational structures and decentralized their management approaches. This study collected 336 valid questionnaires from 20 service companies. The reliability and validity of the questionnaire were tested. In addition, the exploratory factor analysis and confirmatory factor analysis. Relevant analysis and empirical analysis were also carried out using hierarchical regression. The study finds that (1) Goal-setting participation positively affects employees' proactive behavior. (2) Perceived insider status plays a mediating role between goal-setting participation and employee proactive behavior. (3) The power distance positively modifies the goal-setting participation in the relationship of employee's perceived insider status. (4) Power distance positively moderates perceived insider status in the relationship of goal-setting participation on employee proactive behavior through perceived insider status. This research applies goal-setting theory and social cognition theory to build a theoretical framework for the influence mechanism of goal-setting participation on employee's proactive behavior. Expands the application scope of fundamental theoretical research and improve understanding of the relationship between goal-setting participation and employee's proactive behavior. The research conclusions help organizations understand the formation mechanism of employees' proactive behaviors, strengthen the focus on goal-setting participation, and optimize the relationship between leaders and employees. [ABSTRACT FROM AUTHOR]