ORGANIZATIONAL STRUCTURE AND FIRM’S PRODUCTIVITY IN DEPOSIT MONEY BANKS IN PORT HARCOURT

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Abstract

The study examined the relationship between organizational structures on employee performance in multinational firms in Rivers State. The survey research design was adopted since the study was to ascertain the relationship between organizational structure and employee performance selected multinational firms. The population of the study was made up of staff of the selected multinational firms. The sample size of the study was 120. The instrument used for data collection was interview and questionnaire method which are seen as being more effective and stable for a research of this nature. The study shows that there is relationship between organizational structure and employee performance. Based on the findings of the study the policies of the organizational should be related flexible so that when there is change in the structure of the organization, the organization will still be effective, with the aid of organization structure in Ken Saro-Wiwa Polytechnic managers and executive will concentrates on their core competence of producing goods and services and a well planed organizational should be encouraged because of the enormous benefit associated with it, like cost saving, reduction in personnel cost and also as a means of enhancing efficiency and increasing productivity. 

Table of Contents

Title Page    i

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 of the Study  1

1.2 Statement of Problems      3

1.3Objectives of Study  4

1.4 Research Question   5

1.5 Research Hypotheses        5

1.6 Significance of the Study   6

1.7 Scope and Limitation of the Study       6

1.8 Definition of Terms 7

CHAPTER 2        8

REVIEW OF RELATED LITERATURE   8

2.1 Conceptual Framework     8

2.1.1 Concept of Organizational Structure 8

2.1.2 Dimensions of Organizational Structure     12

2.1.3 Concept of Firms Productivity 16

2.2.3 Measures of Organizational Productivity    17

2.1.5 Organizational Structure and Firms Productivity 20

2.2 Theoretical Framework     23

2.2.1 Contingent Theory (Burns and Stalker, 1961)      23

2.2.2 Classical Organization Theory 23

2.3 Empirical Framework       24

CHAPTER 3        26

RESEARCH METHODOLOGY      26

3.1 Research Design      26

3.2 Population of the Study    27

3.3 Sample Size Determination         27

3.4 Sampling Techniques        28

3.5 Source and Method of Data Collection 29

3.6 Methods of Data Collection        29

3.7 Questionnaire Design        31

3.6     Data Analytical Techniques    31

3.7 Reliability and Validity     32

CHAPTER 4        33

DATA PRESENTATION AND ANALYSIS       33

4.1 Data Collection and Presentation         33

Table 4.1: Questionnaire Administration and Retrieval 33

4.2 Data Analysis 34

Table 4.2: showing the age of respondents 34

Table 4.3: Showing the Gender/Sex of Respondents     34

Table 4.4: Showing the Educational Qualification of the Respondents      35

Table 4.5: Showing the Marital Status of Respondents 35

Table 4.6: Complexity and firm’s productivity.  36

Table 4.7: Formalization and firm’s productivity.         37

Table 4.8: Centralization and Firm’s Productivity.       37

4.3 Hypotheses Testing 38

4.3 Discussion of Findings      41

CHAPTER 5        44

SUMMARY, CONCLUSION AND RECOMMENDATIONS         44

5.1 Summary       44

5.2 Conclusion     44

5.3 Recommendations   44

REFERENCES    46

Appendix I 51

Appendix II          52

List of Tables

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: Complexity and firm’s productivity.  Error! Bookmark not defined.

Table 4.7: Formalization and firm’s productivity.         Error! Bookmark not defined.

Table 4.8: Centralization and Firm’s Productivity.       Error! Bookmark not defined.

Table 4.1: Questionnaire Administration and Retrieval Error! Bookmark not defined.

List of Figures

Fig. 2.1: A Conceptual Framework on Organizational Structure and Firms Productivity       8

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Productivity is critical for the long-term competitiveness and profitability of organizations. Studies have shown that emotional intelligence is positively related to organizational productivity and organizational performance as well (Parkes et al., 2008). More specifically, emotional intelligence has been shown to have positive outcomes, such as low turnover intention, improvement of performance, and job satisfaction (Garrard-Leiva et al., 2012). Organizational structure is one construct that can trigger firm’s productivity in an organization today.

Firms have organizational structures that show the relationship between the company’s employees and the responsibilities of said employees. Each firm’s organizational structure is different and depends on its specific needs.

Sablynski (2003) defined organizational structure as “how job task formally divided, grouped and coordinated”. According to Dalton (1980), “organizational structure may be considered the anatomy of the organization, providing a foundation within which organizations function”. Dalton categorized the organizational structure into traditional hierarchical organization and high performance organization. Traditional hierarchical organization is any long, complex administrative structure with job specialization and complex rules based on the principle of hierarchical authority, job specialization and formal rules (Machinsky, 1990). High performance organization is called organic organization that is designed to bring out the best in people and create an exceptional capacity to deliver high results (Dalton, 2000). Organic organization refers to a dynamic, loosely controlled, organization capable of modulating size and activities based on changing external and internal demands (Ledbetter, 2003). Organizational structure can be viewed as the way responsibility and power are allocated inside the organization and work procedures are carried out by organizational members (Teixeria et al., 2012). Daft (1998) mentioned eight dimensions of organizational et al. (2009) corporate effectiveness captures organizational performance plus the myriad internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation, such as corporate social responsibility.

In every productive situation, organizational structures have to be designed for the sole purpose of achieving group goal. Indeed in recent time some firms fails due to poor designing of their organization structure. Interestingly a well design organization structure is a framework of formal relation that has been establish through the process of organizing.

According to Hart as quoted by Baridam, (1995). A well design organizational structure is a kind of skeletal framework that delineates the level of authority and responsibility; define information channel and establishers of primary control point within the organization.

Tamunebi (1996) sees organization structure as a framework of role responsibilities that is created for co-ordination of the activities of people and units that work towards the achievement of responsibility is accomplish. The structure of organizational structure eliminates the chaos. Frustration, function and inability to pull in the same direction that would have arisen due to lack of an organogram.

The organizational structure affects organization efficiency in terms of productivity and efficiency delivery which help to drive performance improvement in workers’ productivity. The organizational structure has proactively designs and develops and develops strategies on different programmes for all levels and each as monitors compensation benefits, leaning, recruitment or recruiting talent management correspondents with a centre of expertise, several element of this model may be organized as a shared service and self-service component or the entire model may be efficiently working closely with clients to help define the optimal organization strategies and the organizational structure that will lower transactional cost while providing more efficient and effective productivity in terms of increase in skill both in production and services.

In the largest renewal of organizational structure contact will provide firm with higher level of work force management and performance services as well as the cost saving. From the foregoing therefore, the study seeks to examine the relationship between organizational structure and firm’s productivity of selected Commercial Banks in Rivers State.

1.2 Statement of Problems

The commercial banks are faced with mixed performance. Evidences from the subsector confirm that quite a number of commercial banks are performing very poorly, in some cases, they goes into liquidation, while few others are performing excellently well using all known performance indicators, for instance, Nigeria commercial banks have been paying dividend to its shareholders consistently for the past twenty years. Besides payment of dividend, almost all other productivity indicators have been on the positive trend. However, the excellent productivity of few of them is still worrisome as some commercial banks went under within the last twenty years.

These problems encountered by business organizations in choosing suitable form of structures are complexities associated with the recent shift from authoritarian to decentralized structures stressing employee empowerment, inability of managers to identify the best form of structure that should follow strategies adopted by their individual firms, inability of employees to adapt to existing and changing structures, and the difficulty in maintaining a stable structure as a result of the ever changing business environment.

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 banking sector and the extent to which appropriate structure has help the performance of its employee. However, studies have established that efficient and effective productivity depend on the designing and adoption of a fitting structure by the organization, in other words, no effective and efficient organization if the structure of the organization does not support the people who work within the system that provide the key element to determine its success. Therefore this study is determined to examine the relationship between organizational structure and firm’s productivity of selected commercial banks in Rivers State.

1.3Objectives of Study

The main objective of the study is to examine the relationship between organizational structures on employee performance in Multinational firms in Rivers State. The specific objectives are as follows:

i.        To examine the relationship between complexity and firm’s productivity of selected commercial banks in Rivers State.

ii.       To examine the relationship between formalization and firm’s productivity of selected commercial banks in Rivers State.

iii.      To examine the relationship between centralization and firm’s productivity of selected commercial banks in Rivers State.

1.4 Research Question

With the above objectives in focus, the study seeks to find answers to the following questions:

i.        Does complexity associate with firm’s productivity of selected commercial banks in Rivers State?

ii.       To what extent does formalization influence firm’s productivity of selected commercial banks in Rivers State?

iii.      To what extent does centralization associate with firm’s productivity of selected commercial banks in Rivers State?

1.5 Research Hypotheses

The following research hypotheses were formulated to guide the study;

HO1: There is no significant relationship between complexity and firm’s productivity of selected commercial banks in Rivers State.

HO2: There is no significant relationship between formalization and firm’s productivity of selected commercial banks in Rivers State.

HO3: There is no significant relationship between centralization and firm’s productivity of selected commercial banks in Rivers State.

1.6 Significance of the Study

Considering the function of organization especially that in commercial banks which requires the relevance of structure in the provision of conductive environment in which organization cannot be over emphasized. This research project on completion will highlight the important of structuring as it will help managers to determine the impact of structure on organization this work will also identify the basic concept on which structuring relies, regardless of the type and composition as well as contribute to the body of existing knowledge in management science, especially in the realizing of organizing and how it is influence organization efficiency and productivity.

1.7 Scope and Limitation of the Study

The scope of this study is delimited into the followings:

Content Scope: The specific areas of firms productivity the study investigated include; profitability, efficiency and effectiveness.  Whereas, the areas of organizational structure include complexity, formalization and centralization.

Geographical scope: This study covers an examination of strategic contributions of organizational structure and firm’s productivity with reference to some selected Commercial Banks in Port Harcourt.

Unit of Analysis: This is a macro study because it is interested in ascertaining the firm’s productivity in this direction. Hence, it is a micro level study.

The major limitation of the study is the short time frame the research lasted, coupled with the tight academic time table, which prevented a very comprehensive study. The fund available to the researcher was also limited and therefore the study was limited to a small portion of the survey population.

1.8 Definition of Terms

Centralization: It is the concentration of decision-making authority at the upper levels of an organization.

Complexity: It refers to the number of occupational specialities included in an organisation and the length of training required of each.

Efficiency: This is the process of doing something well with no cost.

Firm’s Productivity: This refers to the rate at which a worker, material, machine is put into production input and amount of goods or services.

Firms Productivity: It is critical for the long-term competitiveness and profitability of organizations.

Formalization: it is the degree to which jobs are standardized.

Profitability: It is the state of yielding financial profit or gain. It is often measured by price to earnings ratio.

Structure: This can be defined as a social unit that is constructed or reconstructed to seek specific goods through division of labour and specialization.

This refer to the state of being well organized or planned with all part linked together.

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