The study aimed at establishing the effect of structure on organizational performance. Organization today are becoming more automated and complex, hence, the need to maintain and improve performance by structuring and restructuring based on changing strategy. The study was conducted using the survey approach. The geographical scope of study is Starline Nigeria Limited Aba. Two sources of data were utilized in the study: the included primary and secondary sources. The primary source was the administration of copies of designed questionnaire to a total of eighty (80) respondents that made up the sample for the study. Out of the eighty copies administered, seventy three (73) were completed and returned. Simple percentage (%) was used in analysis of data. Findings revealed that decentralization enhanced better and more informed decision making in technical and service firms in Nigeria; that task routine affected staff productivity both positively and negatively; and that a significant positive relationship existed between narrow span of control and efficiency in organizations are encouraged to adopt lesser layer in organizational hierarchy. Fewer layers enable a high level of integration of organizational members, quick response and applying too rigid rules. Managers and business owners should ensure that span of control is kept at a level that can be effectively handled by the individual manager. That is, the ability of the manager should be properly considered.

CHAPTER ONE

INTRODUCTION

1.1BACKGROUND OF THE STUDY

The business environment today is so dynamic that the decision to structure and re-structure has become paramount. Stephen and Timothy (2012) posit that structural decisions like the reconfiguration of any organization are arguably the most fundamental ones a leader has to make. This according to them is because organizational structure defines how job tasks are formally divided, grouped, and coordinated. Similarly, Nelson and Quick (2011) posit that the organization”s structure gives it the form to fulfill its functions in the environment. Acknowledging the views of these authors on the indispensability of structural decisions and the ongoing debate on the interrelationships between strategy, structure and performance, one would want to agree with Joris, Brand, Marco and Zoetermeer (2002) that the outcome of the organizational design process is unmistakably an important determinant of the performance of firms.

Historically, organizational structure developed from the ancient times of hunters to industrial structures and today”s post-industrial structures. Away from history to today”s world of business, one reoccurring and widely asked question is; how does the structure of an organization affect its performance? The difficulty in answering this question hinges on the fact that the relationship between organizational structure and performance has received little attention over the past few years, especially in regards to firms with less than 100 employees. McShane and Glinow (2005) however, answer this question partly by positing that structure includes two fundamental elements: the division of labor into distinct tasks and its coordination so that employees are able to accomplish common goals.

Child (2005) posits that the purpose of structure is to contribute to the successful implementation of objectives by allocating people and resources to necessary tasks and design responsibility and authority for their control and coordination. The foregoing assertion underscores the position that the structure of an organization affects not only productivity and economic efficiency but also the morale and job satisfaction of the work force. Hall (1977) suggested that structure has two basic functions, each of which is likely to affect individual behaviour and organizational performance. First, structures are designed to minimize or at least regulate the influence of individual variations on the organization and structure set the stage in which power is exercised, decisions made and the organization”s activities carried out. Van de Ven (1976) highlighted the importance of structure both at the organization and subunit levels for the performance.

It also establish relationship between characteristics of organizations and stipulate the conditions under which these relations hold, thereby providing the material that needs to be explained by theoretical principles and important guides for driving these principles of the organization. Behind every great company, division, or team is a great organizational structure. The structure of a firm is tailored to a company”s, divisions, or team”s goals and one that helps employees understand how they fit into the bigger picture (Ezigbo, 2011). Without the proper structure in place, an organization may fail to function efficiently, or even collapse (this have been one of the major reasons for most corporate failure). Poor organizational design and structure results in a bewildering morass of contradictions: confusion within roles, a lack of coordination among functions, failure to share ideas, and slow decision-making, bring managers unnecessary complexity, stress, and conflict. Thus, a link exists between structure and corporate failure.

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 sine qua non to continuous existence of every organization. Designing structure that fits company needs is a major challenge because appropriate structure determines performance of organization. However, every structure has its advantages and disadvantages; structure is depended on the type of organization.

1.2 STATEMENT OF THE PROBLEM

In recent times, business organizations in an attempt to adopt the best type of structure with the aim of attaining maximum performance have faced a lot of problems. Also many organizational flaws can be related to an inappropriate structure chosen in order to reach a desired goal. An appropriate structure is contingent upon both the type of work to be performed as well as the environment in which the organization conducts business (Bolman and Deal, 1997). Different structures provide different strengths and weaknesses to the work to be performed and it is therefore important to find a structure suitable for the desired outcome on stability and predictability (Mintzberg, 1983).

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 employee empowerment, inability of managers to identify the best form of structure that should follow strategies adopted by their individual organizations, 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.

1.3 OBJECTIVES OF THE STUDY

The general objective of this study focused on organizational structure and performance. The specific objectives include:

1.         To establish whether decentralization improves effective decision making.

2.         To ascertain the relationship between narrow span of control and organizational productivity.

3.         To determine the effect of organizational formalization on the profitability.

4.         To establish the effect of number of layers in the organizational hierarchy on the market expansion and market share.

1.4 RESEARCH QUESTIONS

The following research questions were formulated to guide the study, these research questions are based on the objectives of the study.

1.         Do decentralization improves effective decision making?

2.         What is the relationship between narrow span of control and organizational productivity?

3.         What are the effects of organizational formalization on the profitability?

4.         What are the effects of number of layers in the organizational hierarchy on the market expansion and market share?

1.5 SIGNIFICANCE OF THE STUDY

This study will be very useful and beneficial to the Nigeria government, Nigeria organizations, organizational customers and further researchers.

To the Nigeria government: This study will enable the government to make and implemented policies that can enhance effective organizational structure and customer service in the organization. When this is done, the organization will achieve high profitability and growth and they will help the government to reduce unemployment.

To the Nigeria organizations: This study will make the organization to understand the benefits having a good organizational structure that can encourage customer service. In this case, any organization who does not have a good structure will see the need to develop one and banks will also adhere to their structural division in performing functions.

To the organizational customers: This study will be very beneficial and significant to them. This is true because when the organization staff adheres to their structure, it will help to promote customer satisfaction, customer loyalty, customer patronage and positive customer service in the organization.

To Further Researchers: This study will enable them to understand what have been covered and what remain to be covered on the subject matter. In this case, the study will add value to existing literature on the subject matter.

1.6 SCOPE OF THE STUDY

The subject scope e of this study focused on organizational structure and performance. Geographically, the study is delimited to Starline Nigeria Ltd, Aba Abia State. The content scope covers whether decentralization improves effective decision making, the relationship between narrow span of control and organizational productivity, the effect of organizational formalization on the profitability, and the effect of number of layers in the organizational hierarchy on the market expansion and market share.

1.7  LIMITATIONS OF THE STUDY

The researcher also encountered the following limitations while carrying out the research. They are;

?          Financial Constraint: The researcher as a student does not have any regular income. She depends on others to attend to her academic financial problems including research problems. These problems made to only choose Owerri, Imo State.

?          Time Constraint: The time limit for executing this project is too short to compare to the work expected from the researcher. This is because it is not easy combining research projects with other academic exercises and programmes (i.e. lectures, assignments and degree exams etc). This made the work too demanding for the researcher.

?          Materials Constraint: The researcher and the project materials within the disposal of the researcher for this project is too infinitesimal to compare to the work to be done. Based on that, the research had to move from one library to another in search of textbooks, journals

?          periodicals and project of previous studies that are relevant for the study. It was too exorbitant.

1.8   OPERATIONAL DEFINITION OF TERMS

Organization: An organization is an institution established to produce goods or offer services so as to make profits. Is a union of people under a manager or head people in a group working for the achievement of a common goal.

Organizational Structure: Organizational structure refers to the arrangement of task, interrelations of various departments and levels of authorities to achieve co-operation of efforts, delegation of authority and effective communication along the scalar chain of command.

Job Performance: This is the level of workers input in doing their work in organization. Performance could be average or low. If it is low, it affects organizational productivity negativity, if it is high, it will make productivity high also.

Organizational Growth: This is the level of organizational performance, productivity, profitability and stability. An organization that is growing therefore has the above variable positively.

Productivity: Is the capacity or a situation where an individual or organization produces maximum result with reasonable human, financial and material resources to achieve set organizational objectives.

Profitability: This is the level of income and/or gain an organization is able to make at specific business period. When a business organization is attracting new customers, establishing more business network or branches and offering the right product/services to its customers, there is likely to be high level of profitability and growth.

Market expansion: Market Expansion in business means acquisition of new customers, retaining old customers, establishing more branches, growth and development of a particular firm. When there is market expansion, it entails that the organization is actually opening more branches, achieving customer satisfaction and making more profits.