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AN APPRAISAL OF THE IMPACT OF ORGANIZATIONAL STRUCTURES ON EMPLOYEE PERFORMANCE.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today’s post-industrial structures. As pointed out by Lawrence B. Mohrthe early theorists of organizational structure, Taylor, Fayol, and Weber “saw the importance of structure for effectiveness and efficiency and assumed without the slightest question that whatever structure was needed, people could fashion accordingly. Organizational structure was considered a matter of choice… When in the 1930s, the rebellion began that came to be known as human relations theory, there was still not a denial of the idea of structure as an artifact, but rather an advocacy of the creation of a different sort of structure, one in which the needs, knowledge, and opinions of employees might be given greater recognition.” However, a different view arose in the 1960s, suggesting that the organizational structure is “an externally caused phenomenon, an outcome rather than an artifact.

The definition of an organization has changed during history along with deferent components involve in an organization which have developed. When business leaders and managers set objectives and goals of the organization, the next step would be to design an adequate structure together with the proper and suitable strategies together and make use of them to achieve objectives. Organizational structure is formal system of reporting relationships that controls and coordinates employees and keeps them motivated to go for organizational objectives ( Andrjz A, Hucznski and David A, Buchanan, 2007

An organizational structure is also the factor which determines the allocation of both resources and responsibility in an organization within its deferent departments and individuals. Organizational structure as a path to achieve the organizational vision which can be used as a standard policy, and lastly, to measure the performance of the organization supervisory or junior management in charge with the implementation of policies.

Very early organizational structures were often based either on product or function (Oliveira & Takahashi, 2012). The matrix organization structure crossed these two ways of organizing (Galbraith, 2009; Kuprenas, 2003). Others moved beyond these early approaches and examined the relationship between organizational strategy and structure (Brickley, Smith, Zimmerman, & Willett, 2002).    This approach began with the landmark work of Alfred Chandler (1962, 2003), who traced the historical development of such large    American corporations like DuPont, Sears, and General Motors. He concluded from his study that an organization’s strategy tends to influence its structure.  He  suggests  that  strategy  indirectly determines such variables as the organization’s tasks, technology,  and  environments,  and each  of  these  influences the  structure  of  the organization

The term organizational structure refers to the formal configuration between individuals and groups regarding the allocation of tasks, responsibilities, and authority within the organization (Galbraith,1987; Greenberg,2011).

Organization structures are considered to be the anatomy of the organization that provides a foundation within which organizations function. The structure of organizations affects or models the behaviour of its employees who become products of organizational structures in either a positive or negative manner. Thus, structural deficiencies may affect employee’s behaviour and performance negatively which adversely impacts organizational performance.

1.2 Problem Statement

The problem with the Cameroon Development Cooperation (CDC) is the organizational structure they use and work with. How limited the resources are and even how employees are ranked and how they should work in teams and in what type of relationship they can work with other employees.

When profitability or performance of a business is low, most managers first look at issues like methods of production, manpower, equipment, production cost, and so on. Very few of them perceive the cause of this poor performance to be as a result of the organizational structure. The decision-making process of firms, the span of control, the delegation of tasks, reporting relationships, supervision and follow up, the ease of communication between employees, and even the alignment of offices all depend on the type of organizational structure that the firm decides to choose.

In most developing countries, the study of how employees react towards these structures and how they perform under these structures can show how important it really is for organizations to implement the correct structure for the specific environment the organization is working in. When looking at factors such as the organizational structure itself, employees’ performance and the factors influencing the organizational structures, decentralization and centralization, one can identify if there is any relationship between the structure chosen and the worker’s performance (Clark, 2011). The organizational structure affects worker’s performance through sales volume (turnover), output (quality product) and profitability (how profitable).

The organizational structure of a business is the framework that facilitates communications and efficient work processes. When business problems emerge, signs often exist within the design or components of the organizational structure.  In some cases, these signs can be early indicators of significant problems that need to be addressed. Such business problems that often arise as a result of poor organizational structure the company is using include low productivity, unequal workload (that is unequal distribution of work to workers), unclear lines of communication, lack of teamwork, slow decision-making, and lack of innovation (International Journals of Scientific Research and Publications, Volume 3, Issue 10, October 2013). These problems can have significant repercussions on the success of the business concern.

1.3 Research Questions

The main research question of this study is; what is the relationship between organizational structure and the performance of an organization?

From this main question, the following specific questions are:

  1. What is the relationship between a clearly stated hierarchy and organizational performance?
  2. What recommendations can be made?

1.4 Objective of the Study

The main objective of this study will be to assess the impact of an organizational structure on employee performance.

And the specific objectives are;

  1. To identify the impact of clearly defined hierarchy on employees’ performance.
  2. To investigate the impact of job design on organization performance.
  3. To provide the necessary recommendation.

1.5 Hypothesis of the Study

The hypothesis of this study is stated below:

Ho: Job design has no significant relationship with organizational performance

1.6 Significance of the Study

The importance of this study is looked upon at various levels; notably to managers, employees, the organizations, and to academicians.

 To Managers

This research will help a manager to best evaluate which type of organizational structure best fits its enterprise. The organizational structure was chosen by the manager or decision-maker for the company, should  be  one  that  eases  communication  between  employees,  delegation  of duties,  have  a  good  job  design,  has  a  good  span  of  control,  has  good  employer-employee supervision, encourages  teamwork  and innovation, and that  considers  a good alignment of offices as well.

Again, it aids managers to show concern for their employees, so as to improve the productivity and motivation levels of their employees.

 To the Organization/Company

An organizational structure enables the organization to be able to easily achieve its objectives. Failure to do so may make the company jeopardize its objectives or work less than its optimum capacity.

Furthermore, the organizational structure a company chooses enables the company in question to know-how jobs and tasks are distributed to workers.  As such, the company can have a proper chain of command; clearing knowing “who reports to who”.  In essence, communication is easier at all levels of the organizational hierarchy.

An ideal organizational structure also enables management; especially the human resource (HR) department to know the right number of employees to work in a given department. This accelerates work and prevents delays, thereby respecting datelines. It also helps them to know “which works to transfer to which department”.

A well-structured organization provides a sound basis for effective planning. Since the goals are clearly established and resources clearly identified, both short term, as well as strategic planning, becomes more focused and realistic, and such planning contains the provision to permit changes to be made in the right direction.

An organizational structure facilitates promotions of personnel. Since the organizational

The structure clearly pinpoints the positions of individuals relative to one another; it is easier to know as to which level a person has reached at any given time in the organizational hierarchy. Furthermore, since each job is well described in terms of qualifications and duties, the promotional stages can be more clearly established.

 To Employees

A good organizational structure promotes efficiency and effectiveness within the organization, which results in high performance on the part of employees.

It also prevents conflict among employees, as well as duplication and overlapping of tasks.

This is because an organizational structure requires that duties are clearly defined thereby eliminating duplication of tasks.

Furthermore, it decreases the likelihood of « run-around ». The run-around occurs when we do not know who is responsible for what and we are not sent to the right people in the first instance for getting some work done.

It aids in wage and salary administration. A fair and equitable wage and salary schedule is based upon the premise that the jobs with similar requirements should have similar benefits. An organizational structure can help achieve this, and thus, motivate workers and stimulate their performance.

It encourages creativity. Because of a sense of belonging and high morale that a well-structured organization develops among employees and also because of clear-cut accountability, recognition of skill and appreciation for their contribution towards organizational growth, the employees develop their own initiative and a spirit of innovation and creativity.

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