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Abstract
The study examined the relationship between organizational structures on firm’s effectiveness in Indomie manufacturing company in Port Harcourt. The survey research design was adopted since the study was to ascertain the relationship between organizational structure and firm’s effectiveness 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 110. 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 firm’s effectiveness. 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 Indomie manufacturing company in Port Harcourt.c 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
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 of the Study 1
1.2 Statement of Problem 4
1.3 Objectives of Study 6
1.4 Research Questions 6
1.5 Significance of the Study 7
1.6 Scope of the Study 7
1.8 Definition of Terms 8
CHAPTER 2 10
REVIEW OF RELATED LITERATURE 10
2.2 Theoretical Framework 10
2.1.1 Contingent Theory (Burns and Stalker, 1961) 10
2.2.2 Classical Organization Theory 10
2.2 Conceptual Framework 11
2.1.1 Concept of Organizational Structure 12
2.1.2 Dimensions of Organizational Structure 17
2.1.3 Concept of Firms Effectiveness 21
2.1.4 Measures of Firms Effectiveness 23
2.1.5 Organizational Structure and Firm’s Effectiveness 25
2.3 Empirical Framework 28
CHAPTER 3 31
RESEARCH METHODOLOGY 31
3.1 RESEARCH DESIGN 31
3.2 SAMPLING TECHNIQUES 31
3.3 POPULATION OF THE STUDY 32
3.4 SAMPLE SIZE: 32
3.5 METHOD OF DATA COLLECTION 33
CHAPTER 4 35
DATA PRESENTATION AND ANALYSIS 35
4.1 DATA COLLECTION AND PRESENTATION 35
4.2 DATA ANALYSIS 36
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 45
References 46
APPENDIX I 47
APPENDIX II 48
List of Tables
Table 4.1: QUESTIONNAIRE ADMINISTRATION AND RETRIEVAL 35
Table 4.2: show age bracket of respondents 36
Table 4.3: show sex of respondents 36
Table 4.4: Academic qualification 37
Table 4.5: Marital status 38
Table 4.6: Complexity and firm’s effectiveness of Indomie manufacturing company in Port Harcourt. 38
Table 4.7: Response showing if formalization influences firm’s effectiveness of Indomie manufacturing company in Port Harcourt. 39
Table 4.8: Response showing if centralization associates with firm’s effectiveness of Indomie manufacturing company in Port Harcourt. 40
Table 4.9: Response showing if organizational culture moderate the relationship between organizational structure and firm’s effectiveness. 41
List of Figures
Fig. 2.1: A Conceptual Framework on Organizational Structure and Firm’s effectiveness 11
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
Firm’s effectiveness is derived from the word job effectiveness that means real work produced by firm’s within a specific time period. Effectiveness is a comparison between the works of the real compared to the standard set by the company. Effectiveness is the quantity and quality of produced or services rendered by a person in doing the job. Effectiveness is the work of behavior. Effectiveness is the relationship between work and behavior. Organizational structure is one construct that can trigger firm’s effectiveness in an organization today.
Firms have organizational structures that show the relationship between the company’s firm’s and the responsibilities of said firms. Each 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 effectiveness 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 effectiveness 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 effectiveness plus the myriad internal effectiveness 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.
Tamunomiebi (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 organo-gram.
The organizational structure affects organization efficiency in terms of productivity and efficiency delivery which help to drive effectiveness 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 effectiveness services as well as the cost saving. From the foregoing therefore, the study seeks to examine the relationship between organizational structure and firm’s effectiveness of Indomie manufacturing company in Port Harcourt.
1.2 Statement of Problem
The Indomie Manufacturing firm is faced with in-effectiveness. Evidences from the subsector confirm that quite a number of brewing firms are performing very poorly, in some cases, they goes into liquidation, while few others are performing excellently well using all known effectiveness indicators, for instance, Nigerian firms have been paying dividend to its shareholders consistently for the past twenty years. Besides payment of dividend, almost all other effectiveness indicators have been on the positive trend. However, the excellent effectiveness of few of them are still worrisome as some manufacturing firms went under within the last twenty years.
These problems encountered by business organizations in choosing suitable forms of structure are complexities associated with the recent shift from authoritarian to decentralized structures stressing firm’s empowerment, inability of managers to identify the best form of structure that should follow strategies adopted by their individual organizations, inability of employee’s 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 sector and the extent to which appropriate structure has help the effectiveness of its employee’s. However, studies have established that efficient and effective effectiveness 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 effectiveness of Indomie manufacturing in Port Harcourt.
1.3 Objectives of Study
The main objective of the study is to examine the relationship between organizational structures and firm’s effectiveness of Indomie manufacturing in Port Harcourt. The specific objectives are as follows:
i. To examine the relationship between complexity and firm’s effectiveness of Indomie manufacturing company in Port Harcourt.
ii. To examine the relationship between formalization and firm’s effectiveness of Indomie manufacturing company in Port Harcourt.
iii. To examine the relationship between centralization and firm’s effectiveness of Indomie manufacturing company in Port Harcourt.
1.4 Research Questions
With the above objectives in focus, the study seeks to find answers to the following questions:
i. Does complexity associate with firm’s effectiveness of Indomie manufacturing company in Port Harcourt?
ii. To what extent does formalization influence firm’s effectiveness of Indomie manufacturing company in Port Harcourt?
iii. To what extent does centralization associate with firm’s effectiveness of Indomie manufacturing company in Port Harcourt?
1.5 Significance of the Study
Considering the function of organization especially that in Indomie manufacturing company 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 effectiveness.
1.6 Scope of the Study
The scope of this study is delimited into the followings:
Content Scope: The specific areas of firm’s effectiveness the study investigated include; Adaptability, Competitiveness and Innovation. 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 effectiveness.
Unit of Analysis: This is a macro study because it is interested in ascertaining the effectiveness of an organization in this direction. Hence, it is a micro level study.
1.7 Limitation of the 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
Efficiency: This is the process of doing something well with no cost.
Firm’s Effectiveness: Firm’s job effectiveness is derived from the word job effectiveness that means real work produced an firm’s within a specific time period.
Productivity: This refers to the rate at which a worker, material, machine is put into production input and amount of goods or services.
Organizational 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.
Complexity
It characterises the behaviour of a system or model whose components interact in multiple ways and follow local rules, meaning there is no reasonable higher instruction to define the various possible interactions.
Formalization
It is the process of creating a formalized structure and includes the maintenance of that formal structure over time. Formalization of an organizational structure is commonly initiated in an attempt to rationalize the decision-making process.
Centralization
It is the process by which the activities of an organization, particularly those regarding planning and decision-making, framing strategy and policies become concentrated within a particular geographical location group. This moves the important decision-making and planning powers within the center of the organisation.