INVESTIGATING THE IMPACT OF ORGANIZATIONAL STRUCTURE ON EMPLOYEES PERFORMANCE: CASE STUDY CDC
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The aim of this study was to examine the impact of organisational structure on the performance of employees in the Cameroon Development Corporation (CDC). This was done with specific intention to identify the impact of clearly defined hierarchy on employees’ performance and to investigate the impact of job design on organization performance CDC Head office Bota Limbe. This used a survey design and data was collected through the issue of 30 questionnaires to the employees of this organisation. Using correlation, the results of the study indicated the success of any business is highly and closely linked to the organisational structure put in place in the institution. For large corporations like CDC to achieve their organizational goals and objectives, individual works need to be coordinated and managed and the structure is a valuable tool in achieving coordination, as it specifies reporting relationships, delineates formal communication channels and prescribes how separate actions of individuals are linked together. The study also found out that this matrix structure has a negative impact as the two-boss system is susceptible to power struggles because functional supervisors and team leaders compete with one another to exercise authority. It can be recommended that the management should put these bosses such that one is also answerable to another such that when conflicting issues arise the main boss can take the final decision.
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 controlsand coordinates employees and keeps them motivated to go for organizational objectives ( AndrjzA,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 workof AlfredChandler (1962, 2003), who traced the historical development of such large American corporations likeDuPont, Sears, and General Motors. He concluded from his study that an organization’s strategy tends to influence its structure. Hesuggests 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 termorganizational 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.
- 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 oftasks, 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.
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:
- What is the relationship between a clearly stated hierarchy and organizational performance?
- 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;
- To identify the impact of clearly defined hierarchy on employees’ performance.
- To investigate the impact of job design on organization performance.
- To provide the necessary recommendation.