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EFFECT OF ORGANISATIONAL STRUCTURE ON MANAGEMENT EFFECTIVENESS

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 ABSTRACT


This study focused on the effects of organisational structure on management effectiveness of Michael Okpara University of Agriculture Umudike. Too much of government interference and lack of independence contributed to this study. The specific objectives were to: ascertain the effects of centralisation on strategic decision making, examine the effects of specialisation on goal attainment, evaluate the effects of formalisation on problem solving and find out the effects of departmentalisation on resource allocation in Michael Okpara University of Agriculture Umudike. The study adopted survey research design. The population of the study consists of both the academic and non-academic staff of Michael Okpara University of Agriculture Umudike. Multiple Regression analysis were used to analyze the study objectives. Findings revealed that: At 1% level (Sig < .01) of significance, centralisation of structure positively affects strategic decision making, at 1% level (Sig < .01) of significance, specialisation of structure positively affects goal attainment and at 1% level (Sig < .01) of significance, formalisation of structure positively affects problem solving in Michael Okpara University of Agriculture Umudike. The study concluded that the structure of Michael Okpara University of Agriculture Umudike have a significant and positive effect on their management effectiveness. However, the study recommended that: The management of Michael Okpara University of Agriculture Umudike need to relax the structure of the University to an extent and moderate the concentration of power on top management in the University.  There is need to localise authority for decision-making and adopt employees participation in decision making, especially at collages and departmental levels, as these will encourage collective will and team spirit between management and staff in the University and will continually enhance the attainment of strategic decisions in the University.






TABLE OF CONTENTS

Title Page                                                                                                                                i

Declaration                                                                                                                             ii

Certification                                                                                                                           iii

Dedication                                                                                                                              iv

Acknowledgement                                                                                                                  v

Table of Contents                                                                                                                   vi

List of Tables                                                                                                                          x

Abstract                                                                                                                                  xi

 

CHAPTER 1: CHAPTER 1: INTRODUCTION

1.1           Background to the Study                                                                                            1

1.2           Statement of the Problem                                                                                           3

1.3           Objectives of the Study                                                                                              5

1.4           Research Questions                                                                                                    6

1.5           Research Hypotheses                                                                                                  6

1.6           Significance of the Study                                                                                           7

1.7           Scope and of the Study                                                                                               8

1.8            Operational Definition of Terms                                                                               10

CHAPTER 2: REVIEW OF RELATED LITERATURE

2.1           Conceptual Review                                                                                                     14

2.1.1      Organisational structure                                                                                             14

2.1.2      Management effectiveness                                                                                         18

2.1.3      Types of organisational structures                                                                              20

2.1.4      Dimensions of managerial effectiveness                                                                    38

2.1.5      The Design of organisational structure                                                                      39

2.1.6      Centralisation of organisational structure                                                                  41

2.1.7      Centralisation of organisational structure and managerial performance                43

2.1.8      Centralisation of organisational structure and managerial innovation                   47

2.1.9      Specialisation of organisational structure                                                                   49

2.1.10   Formalisation of organisational structure                                                                   54

2.1.11   Formalisation of organisational structure and managerial innovation                   58

2.1.12   Organisational structure of Michal Okpara university of agriculture umudike    59

2.2  Empirical Review                                                                                                                   66

2.3  Conceptual Framework of Organisational Structure and                                          

Management Effectiveness                                                                                        72

 

2.4  Theoretical Review                                                                                                     73

2.4.1      The Contingency theory of organisational structure                                                  73

2.4.2      Mintzberg’s theories on organisational configuration                                               76

2.4.3      Theory of mechanistic and organic systems of organization                                     77

2.4.3.1  Application of theory of mechanistic and organic systems of organization                80

2.5  Summary of Related Literature Reviewed                                                                 81

2.6  Gaps in Literature Review                                                                                          82

CHAPTER 3:     RESEARCH METHODOLOGY

3.1       Research Design.                                                                                                   84

3.2       Population of the Study                                                                                         84

3.3           Sources of Data Collection                                                                                         85

3.3.1      Primary Source of Data                                                                                              85

3.3.2      Secondary Source of Data                                                                                          85

3.4        Sample and Sampling Procedure                                                                          85

3.4.1      Sample Size Determination                                                                                        86

3.5        Validity of the Instruments                                                                                   88

3.6        Reliability of the Instruments                                                                               89

3.7        Methods of Data Analysis                                                                                    90

3.8        Model Specification                                                                                             90

CHAPTER 4:    DATA PRESENTATION AND ANALYSES                                        

4.1           Data Presentation                                                                                                        93

4.2           Effect of Centralisation on Strategic Decision Making in Michael Okpara

University of Agriculture Umudike                                                                           94

4.3           Effect of Specialisation on Goal Attainment in Michael Okpara University of

Agriculture Umudike                                                                                                  97

4.4           Effect of Formalisation on Problem Solving in Michael Okpara University of

4.5           Agriculture Umudike                                                                                                  99

4.6           Effect of Departmentalisation on Resource Allocation in Michael Okpara

University of Agriculture Umudike                                                                           101

4.7           Discussion of Findings                                                                                               103

CHAPTER 5:SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1           Summary of Findings                                                                                                 105

5.2           Conclusion                                                                                                                  105

5.3           Recommendations                                                                                                      106

References                                                                                                            108







LIST OF TABLES


3.1:      Showing the target population and sample size drawn from Michael Okpara

University of Agriculture Umudike.                                                                          88

 

3.2:      Showing Coefficient of Correlation of the Reliability of the Research Instrument.  90

 

4.1:      Showing the number of questionnaire sampled to academic and non-academic

staff of Michael Okpara University of Agriculture Umudike and the number that was returned.                                                93

4.2:      Showing Multiple Regression analysis result on the effect of centralisation on

strategic decision making in Michael Okpara University of Agriculture Umudike. 94

 

4.3:      Showing Multiple Regression analysis result on the effect of specialisation on

goal attainment in Michael Okpara University of Agriculture Umudike.                    97

 

4.4:      Showing Multiple Regression analysis result on the effect of formalisation on

problem solving in Michael Okpara University of Agriculture Umudike.                    99

 

4.5:      Showing Multiple Regression analysis result on the effect of departmentalisation

on resource allocation in Michael Okpara University of Agriculture Umudike. 101

 

 

 



 

 

 

CHAPTER 1

INTRODUCTION


1.1         BACKGROUND TO THE STUDY

  Instituting and sustaining effective organisational structure in Universities are sine qua non to management effectiveness and administrative proficiency. The formation of organisational structures, which make cross-functional knowledge and resource sharing possible, is a critical element for organisations; ensuring strategic decision-making, the resolution of disagreements, and the active and effective coordination of the process of innovation (Olson, Walker, & Ruekert cited in Faruk & Gary, 2016). 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. This assertion underscores the position that the structure of an organisation affects not only performance and economic efficiency, but also the morale and job satisfaction of the work force (Ezigbo, 2011). In the submission of Wolf (2002), structure does not only shape the competence of the organisation, but also the processes that shape performance. Drucker cited in Sampson, Mirilla and Emerole (2016), asserts that good organisational structure does not by itself produce good performance, but a poor organisational structure makes good performance impossible, no matter how good the individual managers may be. Therefore, the abilities of managers to combine and use different management tools and techniques; communication technologies, resources, action, performance feedback, boundary spanning, change and innovation in providing different kinds of assistance to employees along structural lines is the locus of managerial effectiveness, it is only permissible within effective organisational structure. Thus, managerial effectiveness will be elusive in the absence of effective organisational structure especially in Universities.

The organisational structure in Nigerian Universities are complex due to their fragmentation, participatory in decision–making, centralisation of authority and high level of formalisation (Widluastati, 2012). The prominent actors in the Nigerian Universities organisation structure are the Visitor who is the Head of State or the Head of Government that established it. He usually come to grace the convocation ceremonies where he uses the occasion to address the academic communities on matters of the moment (Adegbite, 2007). The second is the Chancellor, who is the titular head of the University, who by law, in relation to the University, takes precedence before all other members of the University, and when he is present, presides at all meetings of the convocation held for conferring degrees. The apex management structure within each University is the Governing Council, headed by the Chairman (Pro-Chancellor) which is charged with the administrative functions in the areas of goal setting, policy formulation, staff development, general discipline, budget approval and liaison activities with the government. Ibukun cited in Ajayi & Ekundayo (2010), posited that the main organ regulating the internal academic activities of the Universities is the Senate, headed by the Vice-Chancellor. Other members are: Deputy Vice–Chancellor(s), the Registrar, Bursar, University Librarian, Director of Works, Director of Physical Planning and Development, Director of Academic Planning and Control, Deans of Faculties, Head of Departments. The Senate regulates the academic activities of the University following the general guidelines provided by the NUC. Mgbekem (2004), opined that the Universities in Nigeria are run through committee system which are either responsible to the Council or the Senate, among these committees are: Finance and general purpose committee, development committee, appointments and promotion committee, academic planning committee, among others.

Michael Okpara University of Agriculture Umudike (MOUAU) like other Nigerian Universities is a complex institution with multifaceted structures and webs of relationship. The ultimate aim of MOUAU is to accomplish its set goals and objectives. However, the attainment of these noble goals and objectives seems to be jeopardised by the administrative structures put in place by the University management. Currently, MOUAU administration is based on participatory system of Senate and various committees, however, their direction and undertakings are not devoid of interference by government of the day and notable stakeholders which may be at variance to changing national circumstances and the dynamism inherent in academic environment. Hence, this might undermine their continuous proficiency in an increasingly competitive and globalised academic world. Thus, MOUAU may work best in a structure that establishes and delineate relationships between colleges and when communication among governing council, the administration, and colleges are regular, open and unmediated. To this end, the need to align these web of relationship and authorities inherent in MOUAU into a structure that will ensure managerial effectiveness in accordance with global transformations and best practices is a top priority not only to MOUAU management but also to all relevant stakeholders and MOUAU community. Therefore, the need for this study: Effects of organisational structure on management effectiveness of Michael Okpara University of Agriculture Umudike, Nigeria.


1.2         STATEMENT OF THE PROBLEM

Universities structure needs to be efficient, effective, flexible, innovative, fast-cycled, responsive, and aligned to current dynamism rocking the globe. However, University environment has become increasingly uncertain and unpredictable. The emergence of a more responsive University management is slow both at the federal and state level. Clark (2001), attributed this to the limits of government funding capability combined with rigid internal organisational structures. Also, Research has shown that government often interferes in the affairs of the University, especially in the selection of the Vice-chancellors. A situation whereby the members of the University are not totally free to choose their head without government interference may not augur well for the University system and structure. Where this situation is not free, then the governance of the system will still depend on external influence, which will erodes the structural framework of the University and inhibit managerial effectiveness by rendering the hierarchies passive. In the words of Adegbite (2007), there is an erosion of the statutory functions of the vice-chancellors by the chancellors and Pro-chancellors as some of them now decide to stay permanently in their offices on Campus seeing to the day-to-day administration of some Universities, and some union officials prefer to see them on issues relating to the internal governance of the University rather than the Vice-chancellor or designated officials, by so doing causing structural crisis.

Michael Okpara University of Agriculture Umudike is not immuneed to the above scenarios. However, it is a recognized fact that conserving the autonomy of higher educational institutions is essential in protecting academic freedom, the advancement of knowledge and the pursuit of truth (Ogbogu, 2011). This is only attainable in a systematic structure that precisely delineate chains of command and responsibilities, devoid of undue interference from both internal and external stakeholders. Furthermore, organisations with traditional structures without modification would be doomed to death like dinosaurs that could not match themselves with her environment. Michael Okpara University of Agriculture Umudike structure is complex due to their centralisation of authority, high level of specialisation, formalisation and departmentalisation, Therefore, there is need to empirically evaluate how these structural components have affected managerial effectiveness in terms of strategic decision making, problem solving, resource allocation and goal attainment of the University  for proper modification or otherwise. This is imperative in order to reposition these institutions towards becoming efficient and self-sufficient, aligning with global best performing institutions of higher learning and producing qualified graduates that are universally competent and equipped to contribute to the economic development of the state. Drawing from the above, the study: Effects of organisational structure on management effectiveness of Michael Okpara University of Agriculture Umudike, Nigeria was initiated.


1.3           OBJECTIVES OF THE STUDY

The broad objective of this study is to evaluate the effects of organisational structure on management effectiveness of Michael Okpara University of Agriculture Umudike. The specific objectives are to:

      i.         ascertain the effect of centralisation (concentration of power, localising of authority for decision-making, participation in decision) on strategic decision making in Michael Okpara University of Agriculture Umudike.

     ii.         examine the effect of specialisation (division of labour, team structure, cross-functional structure, collaboration of tasks) on goal attainment in Michael Okpara University of Agriculture Umudike.

   iii.         evaluate the effect of formalisation (procedures, rules and roles, transmission of decisions, instructions and information) on problem solving in Michael Okpara University of Agriculture Umudike.

   iv.         find out the effect of departmentalisation (grouping of activities, specialist and disciplines) on resource allocation in Michael Okpara University of Agriculture Umudike.


1.4           RESEARCH QUESTIONS

The following research questions were answered by this study:

      i.         What are the effect of centralisation (concentration of power, localising of authority for decision-making, participation in decision) on strategic decision making Michael Okpara University of Agriculture Umudike?

     ii.         How does specialisation (division of labour, team structure, cross-functional structure, collaboration of tasks) affect goal attainment in Michael Okpara University of Agriculture Umudike?

   iii.         What are the effect of formalisation (procedures, rules and roles, transmission of decisions, instructions and information) on problem solving in Michael Okpara University of Agriculture Umudike?

   iv.         How does departmentalisation (grouping of activities, specialist and disciplines) affect resource allocation in Michael Okpara University of Agriculture Umudike?


1.5           RESEARCH HYPOTHESES

The following hypotheses were tested in null form:

HO1: Centralisation (concentration of power, localising of authority for decision-making, participation in decision) have no significant effects on strategic decision making in Michael Okpara University of Agriculture Umudike.

HO2: Specialisation (division of labour, team structure, cross-functional structure, collaboration of tasks) does not have any significant effects on goal attainment in Michael Okpara University of Agriculture Umudike.

HO3: Formalisation (procedures, rules and roles, transmission of decisions, instructions and information) have no significant effects on problem solving in Michael Okpara University of Agriculture Umudike.

HO4: Departmentalisation (grouping of activities, specialist and disciplines) does not have any significant effects on resource allocation in Michael Okpara University of Agriculture Umudike.


1.6           SIGNIFICANCE OF THE STUDY

Theoretically, the study findings will also be of great importance to other Universities and institutions of higher learning within and outside the country. It will help them to embark on an honest appraisal of their structural arrangement so as to minimize the inefficiency inherent in the structure while maximizing their management effectiveness and institutional goal attainment. Furthermore, the study designed a conceptual framework that delineate on the effect of organisational structure on managerial effectiveness, specifying their variables and contextual factors which will aid to the understanding of the construct and will be a useful guide to students and potential researchers embarking on research in similar topics. The study will also add to the scholarly material available on the research topic

Empirically, the findings of the study will be of utmost significance to the Michael Okpara University of Agriculture Umudike. The findings of the study and recommendations will help the MOUAU to align and realign their internal and external structures to be in congruence and in conformity with the culture, strategies, mission and vision statement of the institution while adapting to the dynamism inherent in the external and internal environment and augmenting managerial effectiveness. The study findings will illuminate on how the structural components of MOUAU: centralisation of authority, specialisation, formalisation and departmentalisation has affected managerial effectiveness in terms of strategic decision making/planning, problem solving, resource allocation and goal attainment of MOUAU. The study findings will also makes glaring factors inherent in the institution’s structure that are positively and negatively influencing managerial effectiveness in the institution so as to mitigate the negative variables  and optimise the efficiency of the positive variables towards enhancing managerial effectiveness and institutional goal attainments.

On the part of the academic and non-academic staff of MOUAU, the findings will help them to be conversant with the pattern of relationship among positions in the institutions and among members of the institutions, it will also help them to know how activities such as task and resource allocation, coordination and supervision are directed towards the attainment of institutional goals and objectives, and how power and responsibilities are assigned, controlled, coordinated, and how information flows between the different levels of management. Being acquainted with these knowledge will help them to know who and where to report, which will increase their efficiency, improve institutional goal attainments and reduce structural crises emanating from stakeholders’ interference.  


1.7           SCOPE OF THE STUDY

This research focused on the effects of organisational structure on management effectiveness of Michael Okpara University of Agriculture Umudike.

Unit scope

The target population of the study were all the senior and managerial staff, academic staff and non-academic staff of Michael Okpara University of Agriculture Umudike.

Content scope

The study focused its main interest on how structural components of Michael Okpara University of Agriculture Umudike: centralisation of authority, specialisation, formalisation and departmentalisation has affected managerial effectiveness in terms of strategic decision making, problem solving, resource allocation and goal attainment in the University.

Geographical scope

The study will be conducted in Abia State. Abia State is an abbreviation of four of the state’s densely populated regions Aba, Bende, Isuikwuato and Afikpo. It is one of the thirty-six (36) states that constitute the Federal Republic of Nigeria. Aba people are of the Igbo ethnic group who predominates much of the south-eastern part of Nigeria. Their traditional language is Igbo. English is widely spoken and serves as the official language in governance and business. Abia is 2.4mm people are mainly Christians. Abia state consists of seventeen (17) Local Government Areas. They are: Aba north, Aba south, Arochukwu, Bende, Ikwuano, IsialaNgwa North, IsialaNgwa South, Isuikwuato, Obingwa, Ohafia, OsisiomaNgwa, ugwunagbo, Ukwa, East, Ukwa West, Umuahia North, Umuahia South, Umunneochi.

Abia State, which occupies about 5,834 square kilometers. The southern part of the state lies within the riverine part of Nigeria. It is low-lying tropical rain forest with some oil-palm brush. The southern portion gets heavy rainfall of about 2,400 millimetres (941n) per year especially intense between the months of April through October. The rest of the state is moderately high plain and wooded savannah. Crude oil and gas production is also a prominent activity, as it contributes to 39% of the GDP. The manufacturing sector only account for 2% of the GDP. Agriculture, which employs 70% of the second economic sector of Abia with its adequate seasonal rainfall, Abia has much arable land that produces yam, maize, potatoes, rice, cashews, plantains, karo and cassava. It is in this environment that Michael Okpara University of Agriculture Umudike located.

The major limitation encountered by the researcher is respondent apathy. The researcher was surprised that many staff of the University did not want to participate in the study despite that one of the major functions of Universities is research. Thus, convincing the staff of Michael Okpara University of Agriculture Umudike to participate in the study was a difficult task and very challenging. However, the researcher was able to overcome these challenges to ensure that the sturdy was completed.


1.8       OPERATIONAL DEFINITION OF TERMS

The followings are the operational definition of terms in this study:  

Centralisation: Centralisation refers to how organisational decisions are made at the top. It involves concentration of power, localising of authority for decision-making, extent of participation in decision as it is the case in Michael Okpara University of Agriculture Umudike.

Departmentalisation: Departmentalisation means the process of grouping activities into departments, specialist and disciplines as we have in Michael Okpara University of Agriculture Umudike.

Effectiveness: Effectiveness is the capability of producing a desired result or the ability to produce desired output. When something is deemed effective, it means it has an intended or expected outcome, or produces are achieved. It measures the degree to which institutions achieves its goals or the way outputs interact with the economic and social environment. In relation to the study, effectiveness of these institutions involves becoming efficient and self-sufficient, aligning with global best performing institutions of higher learning and producing qualified graduates that are universally competent and equipped to contribute to the economic development of the state. 

Formalisation: Formalisation refers to the process which managers specify procedures, rules and roles, transmission of decisions, instructions and information in Michael Okpara University of Agriculture Umudike.

Goal attainment: Goal attainment refers to the abilities of management to achieved desired goals and objectives as enshrine the mission and vision statements of Michael Okpara University of Agriculture Umudike.

Management effectiveness: Managerial effectiveness is a manager’s ability to achieve desired results or output. How well he applies his skills and abilities in guiding and directing others towards institutional goal attainment. It can also be seen as a manager’s ability to use different management tools, techniques, human and material resources towards institutional goal attainment. Management effectiveness in the study are measured by effectiveness of both institutions management in strategic decision making/planning, problem solving, resource allocation and goal attainment.

Management: Management is the administration of an organisation. They are saddled with the responsibility of coordinating the affaires and activities of the institution towards its stated goals attainment. Management in relation to the study includes: The Pro-Chancellor, Vice-Chancellor, Deputy Vice–Chancellor(s), Registrar, Bursar, University Librarian, Director of Works, Director of Physical Planning and Development, Director of Academic Planning and Control, Deans of Faculties, Head of Departments among others.

Organisation: An organisation are established institution as a means of achieving defined objectives, it design specifies how goals are subdivided and reflected in the subdivisions of the organiusation for proper coordination and goal accomplishment. The organisations under consideration in this study are Michael Okpara University of Agriculture Umudike.

Organisational structure: Organisation structure is the pattern of relationship among positions in the organisation and among members of the organisation, it defines how activities such as task allocation, coordination and supervision are directed towards the attainment of organisational goals and objectives. It determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management. Organisational structure in this study are measured by organisational structure components: centralization, specialisation, formalisation and departmentalisation.

Problem solving: Problem solving encompasses decision making, finding and formulating the problem, implementing decisions, audit and review of achieved results as been practiced in Michael Okpara University of Agriculture Umudike .

Resource allocation: Resource allocation refers to the process of assigning and managing assets in a manner that supports Michael Okpara University of Agriculture Umudike , strategic goals attainment by the institutions management.

Specialisation: Specialisation refers to the degree to which an organisation divides tasks into separate jobs. It encompasses division of labour, team structure, cross-functional structure, collaboration of tasks as are present in Michael Okpara University of Agriculture , Umudike.

Strategic decision making/planning: Strategic decision making/planning is the management ability in charting a course based on long-term goals and long term vision of Michael Okpara University of Agriculture Umudike and achieving them.

Universities: A University is an institution of higher education and research which award academic degrees in various academic discipline. Universities under consideration in the study are: Michael Okpara University of Agriculture Umudike.

 

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