The existence of a business organization is majorly to achieve goals and objectives. The goals and objectives organizations set to achieve determines how the managers allocate tasks to employees. The allocated jobs are usually grouped into departments. Nelson and Quick (2011) opined that departments on organizations can be categorized into various units such as manufacturing, sales, marketing, advertising, and so on. They added that departments are connected to shape the organizational structure. Quangyen and Yezhuang (2013) argued that structure of an organization gives it the shape to carry out its purpose in the business environment. Nelson and Quick (2011) posit that the organization’s structure is meaningless unless it is supported by appropriate systems and a well-conceived culture. Martinelli (2001) argued that the type of organizational structure adopted by a firm will depend on the nature of the particular organization in question. In addition, the form which the organizational structure takes may be represented periodically by an organizational chart.
This chapter gives bearing to other chapters of the research work as it serves as the foundation on which the whole study rest upon. The study therefore set to critically examine the relationship between organizational structure and organizational performance in selected manufacturing firm.
- Background to the Study
Organizations are formed by groups of people with the purpose of achieving effects that one person cannot achieve individually. Better results are created as a consequence of organizational goals. Regarding the purpose of the organization’s founding, they can be described as successful (profitable) or failure (non-profitable) ones. To achieve these goals organizations create inner order and relations among organizational parts that can be described as organizational structure. All organizational parts together with relations and mechanisms of their coordination are important for proper functioning of any organization. Organizations are influenced by many factors which come from their dynamic surrounding or from the organization itself. Due to the static nature of organizational structure, it sometimes cannot meet requirements of efficiency and adoptability. Classics in the field of organization theory represented many schools of influencing factors on organizational structure. Some believed that certain factors, such as size, environment, or technology, determines organizational structure. They argued that these factors imposed economic or other constriants on organizations thatforced them to choose a certain structure over others. Organizational structure is partly affected by the firm’s external environment. Research suggested that firms organized to deal with reliable and stable market may not be as effective in a complex, rapidly changing environment. The more certain the environment is, the more centralized hierarchy the firm’s organizational structure may have, with formalized rules and policies, and procedures organizations that operate with a high degree of environmental uncertainty may decentralize decision-making, relying on formal rules and policies, and flatten their hierarchies. The influence of certain factors on organizational structure is traditionally divided into two main factors. These factors which determine the structure, aims, and activities of the organization, can be grouped into external factors and internal factors. External factors are those from the environments which are not under the control of the organization but which affect its structure and development. These factors include economic factors which define the economic situation where production and processing take place (the market or industry); the socio-economic factors that define the socio-economic context in which organization operates; and political administrative factors which define the legal boundaries and organizational options. Internal factors are those organizational characteristics which create a basis for measuring and comparing organizations. These include mission statement of the organization and organizational instruments.
- Statement of the Problem
For organizations to accomplish set objectives tasks or duties must be properly group to be at per with the authority needed at each identified level, relationship that would enable people to work most effectively must be created through the allocated inter-related function, and these can only be achieved through adequate interactions.
Among numerous problems or challenges faced by firms without proper or definite organizational structure, the following problems posed to be more challenging; the problem of poor line of communication which affects the cordial relationship between the groups created and also restraint the communication of the organization’s mission and vision across board. Another problem is the presence of conflicting responsibilities which affects organization in the area of control and inability to have a unit of command and lastly, the lack of coordination and control.
- Objectives of the Study
The main objective of the study is to examine the relationship between organizational structure and organizational performance in Nestle Nigeria Plc., Agbara, Ogun State as the selected manufacturing firm for the study. The specific objectives for the study are;
- To reveal the relationship that exist between organizational structure and organizational performance.
- To discover how poor line of communication can affect organizational efficiency and effectiveness.
- To examine the extent at which coordination and control helps to achieve organizational objectives.
- Research Questions
To ensure an in-depth research work with a view to providing best solutions to the stated problems, the study made use of the following questions;
- Is there any significant relationship between organizational structure and organizational performance?
- How does poor line of communication affect organizational efficiency and effectiveness?
- Does coordination and control helps to achieve organizational objectives?
- Research Hypotheses
The following are the assumptions used in this study;
Ho1: There is no significant relationship between organizational structure and organizational performance.
Ha1: There is a significant relationship between organizational structure and organizational performance.
Ho2: poor line of communication does not affect organizational efficiency and effectiveness.
Ha2: poor line of communication affects organizational efficiency and effectiveness.
- Scope of the Study
The study in its attempt to examine the relationship between organizational structure and organizational performance is limited to the selected manufacturing firm; Nestle Nigeria Plc., Agbara, Ogun state. The study did not discuss neyond its stated questions and objectives but rather did justice to the aforementioned objectives and variables under study.
- Significance of the Study
The importance of the study cannot be over-emphasized. Therefore the study is of high benefit to;
- Managers or business oriented individuals to educate them on the relevance of organizational structure to organizational performance.
- The researcher because the completion of this study landed him the award of National Diploma in Business Administration for it serves as the requirement for his certification.
- Future researchers, scholars and academicians as a guide and source of information and also for the purpose of continuity.
- Limitations of the Study
In writing this project, the researcher encountered some constraints, which are; time constraint, lack of funds, transportation, lack of adequate information, poor power supply and so on. However, in spite of all these constraints, the researcher was able to come out with reliable and authentic work.
- Operational Definition of Terms
Authority: this is the power to give orders or make decisions or direct someone or people.
Communication: the act or process of passing or sending information to one another for the purpose of creating relationship or decision making.
Control: this is the direction of actions or functions of the employees in an organization to meet the set standard of the organization.
Coordination: this is the combination of people and procedures for a particular purpose.
Effectiveness: this is the ability of an individual or group to produce a result that is wanted or to achieve a set goal.
Efficiency: this is the ability to do something or produce something without wasting materials, time, and energy.
Performance: this is the way an organization or individual meet up to expected or predetermined standard.
Productivity: this is the rate at which goods are produced or work is completed.
Responsibility: this is a duty or task that an individual is required or expected to do.
Structure: this is the way that a group of people and activities are arranged relatively in an organization.
- Historical Background of Nestle Nigeria Plc
Nestle Nigeria Plc., is a part of the Nestle Group, the Nutrition, Health and Wellness company renowned world-wide for its high quality products. Nestle Nigeria Plc., began simple trading operations in Nigeria in 1961 and has today grown into a leading food manufacturing and marketing company in Nigeria.
Globally, Nestle companies are organized into regional groupings to leverage expertise and the size of the company. In the case of Nigeria the company is part of Central and West Africa Region. This region is managed through Nestle Central and West Africa limited which is based in Africa. Nestle Nigeria Plc., was listed on the Nigerian Stock Exchange on April 20, 1979. Nestle Central and West Africa (CWA) limited is the major shareholder of the company. As at December 2012, the number of Nigerian shareholder was more than 30,000.
Nestle Foods was started by Henri Nestle in the mid-eighteenth century, in his bid to find an alternative to breast milk for babies whose mothers could not nurse in order to reduce infant mortality. Consequently, Nestle’s first customer was a premature infant who could tolerate neither milk nor any of the conventional substitutes and had being given up for lost by doctors. The value of the product was recognized after it saved the child’s life. However, this led ti the birth of Nestle in Australia.
Nestle’s products include baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen foods, and snacks.
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