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Title Page
Abstract
The study examines the relationship between organizational structure and corporate effectiveness. The survey research method was employed. The study was designed to focus on selected commercial banks in Port Harcourt, Rivers State. The population of the study comprises one hundred and twenty (120) respondents selected from five commercial Banks. The Taro Yemen’s formula was used to determine the sample size. Data collection was done using a structured questionnaire which involved a self-design questionnaire on organizational structure and corporate effectiveness. The chi-square statistical tool was employed, this test was used due to the nature of the questionnaire designed for the hypothesis testing. Findings amongst others revealed that the number of layers in the organization’s hierarchy leads to corporate effectiveness and Flow of Authority leads to corporate effectiveness. Based on the finding of the study, we recommended that the policies of the organizational structure should be flexible so that when there is change in the structure of the organization, the organization will still be effective and with the aid of organization structure in multinational firms, managers and executive will concentrate on their core competence of producing goods and services.
Table of Contents
Title Page i
Cover Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Abstract vii
Table of Contents viii
List of Tables x
List of Figures xi
CHAPTER 1 1
INTRODUCTION 1
1.1 Background to the Study 1
1.2 Statement of the problem 2
1.3 Objectives of the Study 3
1.4 Research questions 3
1.5 Statement of Hypotheses 4
1.6 Significance of the study 4
1.7 Scope/Limitations of the study 4
1.9 Operational Definition of Terms 5
CHAPTER 2 7
LITERATURE REVIEW 7
2.1 Conceptual Framework 7
2.1.1 Concept of Organizational Structure 8
2.1.2 Dimensions of Organizational Structure 13
2.1.3 Corporate effectiveness 15
2.1.4 Measures of Corporate Effectiveness 17
2.1.5 Organizational Structure and Corporate Effectiveness 21
2.2 Theoretical framework 22
2.2.1 Agency Theory 22
2.2.2 Stakeholder theory 23
2.2.3 Stewardship Theory 24
2.4 Empirical review 24
CHAPTER 3 27
RESEARCH METHODOLOGY 27
3.0 Introduction 27
3.1 Research Design 27
3.2 Population of the Study 27
3.3 Sample Size Determination 28
3.4 Sampling Techniques 29
3.5 Source and Method of Data Collection 30
3.6 Methods of Data Collection 30
3.7 Questionnaire Design 31
3.8 Data Analytical Techniques 31
3.9 Reliability and Validity 32
CHAPTER 4 34
DATA PRESENTATION AND ANALYSIS 34
4.1 Data Collection and Presentation 34
4.2 Data Analysis: Question on Demographic Data Error! Bookmark not defined.
4.3 Hypotheses Testing Error! Bookmark not defined.
4.3 Discussion of Findings 35
CHAPTER 5 44
SUMMARY, CONCLUSION AND RECOMMENDATIONS 44
5.1 Summary 44
5.2 Conclusion 44
5.3 Recommendations 45
Reference 46
Appendix I 51
APPENDIX II 52
List of Tables
Table 4.1: Questionnaire Administration and Retrieval 34
Table 4.2: showing the age of respondents Error! Bookmark not defined.
Table 4.3: Showing the Gender/Sex of Respondents Error! Bookmark not defined.
Table 4.4: Showing the Educational Qualification of the Respondents Error! Bookmark not defined.
Table 4.5: Showing the Marital Status of Respondents Error! Bookmark not defined.
Table 4.6: Number of Layers in the Organization’s Hierarchy and Performance of Banks in Rivers state………………………………………….Error! Bookmark not defined.
Table 4.7: Flow of Authority and Performance of Banks in Rivers state? Error! Bookmark not defined.
Table 4.8: Nature of Technology and the Performance of Banking Firms in Rivers state. Error! Bookmark not defined.
List of Figures
Fig 2.1: A Conceptual framework showing the relationship between Organizational Structure and Corporate Effectiveness 7
CHAPTER 1
INTRODUCTION
1.1 Background to the Study
There is hardly any organization that does not have profit and growth as its main objectives. The growth of a firm is principally measured on the percentage of market share captured and client served. By deciding how to approach the markets and Customers, employees are place into different strategic positions to execute the strategies and pursue objectives established by the organization. The placement of organizational members into strategic positions of responsibility with authority with a view to achieving organizational objectives is structuring, hence organizational structure is a continuous existence of every organization.
Designing structure that fits company needs is a major challenge because appropriate structure determines performance of organization. Empirical evidence by Weir (1995) in his effort to establish the relationship between organizational structure and corporate performance concludes that firms that adopted appropriate structure yield higher profits than those that do not while Williams (1997) confirms a positive relationship between organizational structure and strategic planning. However, every structure has its advantages and disadvantages organizational structure is depended on the type of organization.
This study develops a research framework that examines relationships among various structural dimensions and employees performance of Banks in Rivers State. Four aspects of organizational structure are considered: The number of layers in hierarchy of the organization, the flow of authority, that exist in the organization and the nature of technology (appropriate) adopted by the organization. The employee’s performance is represented by Supervisor’s rating, Quality and quantity, Goal accomplishment, Efficient and effective, Dependable and enthusiastic, Ability and capability. Given the importance of structure to the performance survival, and sustainability of banks and contributions of employees effectiveness to the banks, this research therefore deems it necessary to investigate whether appropriate structure is a critical success factor for success of banks in Rivers State and the extent it has helped in the performance of its employees.
1.2 Statement of the problem
There is a growing recognition of the importance of organizational structure in aligning the success and financial performance of any organization. Organizational structure of commercially owned State corporations must therefore be aligned to achieve organizational goals and objectives. Individual work needs to be coordinated and managed. Organizations therefore can function within a number of different structures, each possessing distinct advantages and disadvantages (DPM, 2002).
Various empirical studies indicate that better organizational structure guarantee the payback to the customers and limit the risk of the investment. The association between quality of organizational structure and firms’ profitability is a main focus in governance studies, but one cannot predict much on the direction due to contrasting views on the results, Jensen and Meckling (1976). Klapper and Love (2003) used return on assets as measure for performance found evidence that firms with better governance have higher operating performance. A well-functioning organizational structure is an indication of the overall effectiveness of operational system. Organizational structure has been largely criticized for the decline in service provision and financial performance (Uadiale, 2010). The essence of this study is to determine whether adopting appropriate structure is one of the critical success factors that supports those firms that are performing well in the sector and the extent to which appropriate structure has help the performance of its employee. However, studies have established that efficient and effective performance depend on the designing and adoption of a fitting structure by the organization, in other words, there is no effective and efficient organization if the structure of the organization does not support the employee who work within the system that provide the key element to determine its success.
1.3 Objectives of the Study
The main thrust of this study was to assess the effect of organizational structure on employee performance of banking firms in Rivers state. Drawn from the above broad objective are the following specific objectives to:
1. Establish the effect of number of layers in the organizational hierarchy on the performance of banking firms in Nigeria.
2. Determine the effect of flow of authority on the performance of banks in Rivers state.
3. Investigate the nature of technology on the performance of banking firms in Rivers state.
1.4 Research questions The following research questions were posed to guide the study, thus;
1. To what extent does the number of layers in the organization’s hierarchy affect the performance of banks in Rivers state?
2. To what extent does flow of authority affect the performance of banks in Rivers state?
3. To what extent does the nature of technology affect the performance of banking firms in Rivers state?
1.5 Statement of Hypotheses
H01: There is no significant relationship between the effect of organization structure and corporate effectiveness.
H02: There is no significant relationship between the effects of organization structure and productivity in the organization.
H03: There is no significant relationship between the effect of organizational structure and the flow of authority in the organization.
1.6 Significance of the study
The findings of this study will provide the necessary information to commercial banks in Rivers State and enhance its endeavor to meet both current and long-term demands.
The study will provide information that will help the top level management to assert whether organizational structure is a necessary management tool and the benefits therein. The management would therefore identify how various aspects of organizational structures practices affect the operations of the commercial banks in Rivers state as well as to determine the extent to which this and other factors affect operations of banks in Rivers state.
1.7 Scope/Limitations of the study
This research work organization structure and corporate effectiveness (A survey of commercial banks in Rivers State) is centered on Rivers State and a sample of few banks in the state.
The research faced various challenges when conducting the research and most particularly during the process of data collection.
1. Cost/financial constraint: Non availability of enough funds to finance the project became a thorn in the flesh. As the needed cash was not there. Most of the financial requirements needed for this work at the actual time also became a problem.
2. Time: Time allocated for this study was limited. This was experienced during data collection and time limitation made it impractical to include more than one correspondent for each cooperation in the study. The fact that the commercial state corporations ordinarily do not want to give information due to client confidentiality, some respondents felt that the information they were requested was confidential and hence they did not respond.
3. Material constraint: Difficulty in location of material related to this study.
Despite all the limitations above, the researcher was able to put available resources together to ensure that this project was successfully carried out to reality.
Time allocated for the study was limited. This was experienced during data collection and time limitation made it impractical to include more than one respondent for each corporation in the study.
1.9 Operational Definition of Terms
Assert: To state, declare or affirm solemnly and formally through, in an organization.
Commercial: An item or idea that is commerce oriented in a firm/organization.
Corporate Effectiveness: This refers to the extent to which an organization has been achieving desired results with respect to profitability, market shares and sales growth.
Hierarchy: This is the organization of people at different ranks in an administrative body/organization.
Organizational Structure: Organizational structure describes the allocation of authority and responsibility and how rules and regulations are executed by workers in an organization.
Sustainability: Is the ability to survive without human interference in an organization.
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