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EFFECTS OF ORGANIZATIONAL STRUCTURE ON EMPLOYEE PERFORMANCE IN GUINNESS NIGERIA PLC AND NIGERIA BOTTLING COMPANY, PLC, IKEJA, LAGOS STATE.

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Product Code: 00009654

No of Pages: 192

No of Chapters: 1-5

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ABSTRACT

The study aimed to evaluate the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Company, Plc, Ikeja, Lagos State, Nigeria. Five (5) specific objectives and five (5) research questions were formulated in this study to provide guidance to the study. The study employed descriptive research design to evaluate the effects of organizational structure on employee performance in the brewery firms. The population of the study is 6000 being the total staff strength of the (2) brewery firms in Nigeria stock exchange from 2011-2018 while the sample size was 375 extracted from the population using Taro Yamane method. The instrument for the study was a structured questionnaire. Data obtained were analyzed using a descriptive type of survey design such as frequency counts, percentages, and mean scores in line with the specific objectives while ordinary least squares (OLS) simple regression analysis technique were employed in testing the hypothesis of the study. The result of the study showed that work specialization on the quality service in Guinness Nigeria Plc and Nigeria Bottling Company, Plc can never be overemphasized. The findings of the study suggest that work specialization has a significant and positive effect on the quality of service and the main responses were all above the benchmark of 3.00. The research hypothesis testing done using ordinary least squares (OLS) simple regression analytical technique showed that departmentalization on training hours of employees, chain of command on revenue per employee, centralization on profit per employee and formalization on employee turnover significantly (at p< 0.05) and positively influenced employee performance at both Guinness Nigeria Plc and Nigeria Bottling Company, Plc. In view of the above findings, the study concludes that adopting appropriate structure is the fulcrum on which employee performance of brewery firms revolves. The study therefore recommend among others that Nigeria Brewery firms should give more serious attention in designing an appropriate structure that must match all departments, units and component parts of organization to facilitate employee performance at both GN Plc and NBC Plc.

 






TABLE OF CONTENTS


Title Page                                                                                                                                i

Declaration                                                                                                                             ii

Certification                                                                                                                           iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Table of Contents                                                                                                                   vi

List of Tables                                                                                                                          xii

List of Figures                                                                                                                         xiii

Abstract                                                                                                                                   xiv

CHAPTER 1: INTRODUCTION

1.1           Background to the Study                                                                                            1

1.2           Statement of the Problem                                                                                           4

1.3           Objectives of the Study                                                                                              6

1.4           Research Questions                                                                                                    6

1.5           Research Hypotheses                                                                                                  7

1.6           Significance of the Study                                                                                           7

1.7           Scope/ Limitations of the Study                                                                                 8

1.8           Limitations of the Study                                                                                             9

1.9           Operational Definition of Terms                                                                                10

CHAPTER 2: REVIEW OF RELATED LITERATURE

2.0       Introduction                                                                                                                12

2.1       Conceptual Review                                                                                                     12

2.1.1    Organizational Structure                                                                                             12

2.1.2    Model and Theories of Organizational Structure                                                       15

2.1.3    Dimensions of Organizational Structure                                                                    18

2.1.4.   Nature of Organizational Structure                                                                            19

2.1.5    Types of Organizational Structure                                                                             20

2.1.6    Indicators of Organizational Structure                                                                       23

2.1.6.1 Advantages of Work Specialization                                                                           24

2.1.6.2 Disadvantages of Work Specialization                                                                      25

2.1.7     Departmentalization                                                                                                  25

2.1.7.1 Types of Departmentalization                                                                        26

2.1.8     Chain of Command                                                                                                   27

2.1.8.1 Chain of Command Formation                                                                                   27

2.1.8.2   Reporting relationships and organizational chart                                                      27

2.1.9     Formalization                                                                                                            28

2.1.9.1 Stage of formalization                                                                                    30

2.1.9.2 Measurement of Level of Formalization                                                                    31

2.1.10   Centralization                                                                                                            31

2.1.10.1 Advantages of Centralization                                                                                   32

2.1.10.2 Disadvantages of Centralization                                                                              33

2.1.11     Indicators of Employee Performance                                                                      35

2.1.11.1 Different types of Employee Turnover                                                                    37

2.1.11.2  Causes of Employee Turnover                                                                               37

2.1.12     Revenue per Employee                                                                                           38

2.1.12.1 How Revenue per Employee Works                                                                        38

2.1.13     Profit Per Employee                                                                                                39

2.1.14     Organizational Chart                                                                                               40

2.1.15     the Importance of Good Organizational Structure                                                  40

2.1.16     Consequences of Structural Deficiencies                                                                41

2.1.17.    Method of Grouping Department in an Organization                                             42

2.1.18      Types of Organization                                                                                             44

2.1.18.1   Formal Organization                                                                                      44

2.1.18.2   Informal Organization                                                                                    45

2.1.18.3    Private and Public Sector Organization                                                                 46

2.1.18.4    Private Enterprise Organization                                                                             46

2.1.18.5 Public Sector Organization                                                                                       47

2.1.19    Functions of Informal Organization                                                                                      47

2.1.20    Preview of Organizational Structure / Chart                                                             48

2.1.21   Other important roles of organizational chart                                                           48

2.1.22    Forms of Organizational Structure / Chart                                                                48

2.1.23    Merits of organization Chart                                                                                     49

2.1.24    Demerits of Organization Chart                                                                                50

2.1.25    Organizational Structures and its Effect on Employee Performance                           50

2.1.26    Organizational Structure and Employee Performance Framework                                    52

2.1.27     Employee Performance                                                                                            55

2.1.28    The Role of Organizational Structure and Employee Performance                 

               in Organization 57

2.1.29     Concept of Organizational Performance                                                                 59

2.1.30      Importance of Cost on Staffing                                                                              61

2.1. 31     Crucial Issues of Organizational Structure                                                             62

2.1.32      Impact of Organizational Structure on Coordination and cooperation                 63

2.1.33      The Impact of a Flat Structure on Organizational Performance                                    64

2.1.34      The Impact of Span of Control on Organizational Performance                                    66       

2.1.35      Inception of Authority on Organizational Structure and Performance               68

2.1.36      Benefit of Empowerment                                                                                       70

2.1.37      Delegation of Authority                                                                                          70

2.1.38       Barriers to Delegation of Authority                                                                        72

2.1.39      Overcoming Barriers to Delegation of Authority                                                  73

2.1.40      Line and Staff Authority                                                                                        73

2.1.41      Centralization                                                                                                         74

2.1.42      Decentralization                                                                                                     75

2.1.43      Advantages of Decentralization                                                                             76

2.1.44      Decentralization: A Panacea for Employee Performance                                     76

2.1.45      Type of Decentralization                                                                                        77

2.1.46      Decentralization and Effective Decision Making                                                  80

2.1.47      The Impact of Decentralization on Organizational Performance                                    81

2.2           Empirical Review                                                                                                   83

2.3           Summary of Related Literature Review                                                                 88

2.4            Gap In Literature                                                                                              89

2.5            Theoretical Framework                                                                                    90

2.5.1        Hierarchy-community Phenotype Model of Organizational Structure                     90       

2.5.2        Chester Barnard’s Model on Structure                                                                   91

2.5.3        Meier and Bothte’s Model of Span of Control                                                       91

2.5.4        Hatch’s Model of Decentralization                                                                        92

CHAPTER 3: RESEARCH METHODOLOGY

3.1         Research Design                                                                                                       100

3.2         Population of the Study                                                                                            100

3.3         Sources of Data                                                                                                        101

3.4         Sample and Sampling Procedure                                                                              101

3.4.1      Sample size determination                                                                                       102

3.5         Validity of the Research Instrument                                                                         105     

3.6         Reliability of the Research Instrument                                                                     105

3.7         Method of Data Analysis                                                                                          106

3.8         Model Specification                                                                                                 110

CHAPTER 4:   DATA PRESENTATION AND ANALYSIS

4.1         Data Presentation                                                                                                      114

4.2         Data Analysis                                                                                                            115

4.2.1      Personal Data of Respondents                                                                                  115

4.2.1.1   Gender distribution of the Respondents                                                                   115

4.2.1.2   Age Distribution of Respondents                                                                             116

4.2.1.3. Educational Level                                                                                                      117

4.2.1.4   Marital Status                                                                                                           119

4.2.1.5   Position / Designation                                                                                              120

4.2.1.6   Work Experience                                                                                                       121

4.2.2.1   Effects of work specialization on the quality of services in GN and NBC                     122

4.2.2.2:  Effects of departmentalization on training hours of employees in                       

              GN and NBC                124

4.2.2.3    Effects of chain of command on revenue per employee in GN and NBC        126

4.2.2.4    Effects of centralization on profit per employee in GN and NBC                                    128

4.2.2.5    Effects of formalization on employee turnover in GN and NBC.                                    130

4.3       Testing of Hypotheses                                                                                                            131

4.3.1    Hypothesis 1                                                                                                               132

4.3.2    Hypothesis 2                                                                                                               135

4.3.3    Hypothesis 3                                                                                                               138

4.3.4    Hypothesis 4                                                                                                               141

4.3.5    Hypothesis 5                                                                                                               144

4.4         Discussion of Findings                                                                                             147     

CHAPTER 5:  SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                                 151

5.2       Conclusion                                                                                                                  152

5.3           Recommendations                                                                                                      153

5.4       Suggestions for Further Studies                                                                                 155

            REFERENCES                                                                                                         156          APPENDICES                                                                                                                  

         

 

 

 

 

 

 

LIST OF TABLES


3.2       Population Distribution Table                                                                                    101

4.1       Distribution of questionnaires and response rate                                                       114

4.2       Gender distribution of the respondents                                                                      115

4.3       Age distribution of the respondent of GN and NBC                                                  116

4.4       Educational qualification distributing of the respondents                                          117

4.5       Marital status distribution of the respondents                                                            119

4.6       Position / designation distribution of the respondents                                                120

4.7       Work experience distribution of the respondents                                                       121

4.8       Effects of work specialization on the quality of service in Guinness Nigeria

Plc and Nigeria Bottling Company, Plc                                                                     122

 

4.9       Effects of departmentalization on training hours of employees in GN and NBC  124

 

4.10     Effects of chain of command on revenue per employee in GN and NBC                126

 

4.11     Effects of centralization on profit per employee in GN and NBC                                   128

4.12     Effects of formalization on employee turnover in Guinness Nigeria Plc

and Nigeria Bottling Company, Plc.                                                                         130

 

4.13     Result of the ordinary least square (OLS) simple regression of the effects

of work specialization on the quality of service in Guinness Nigeria

Plc and Nigeria Bottling Company, Plc                                                                    132

 

4.14     Result of the ordinary least square (OLS) simple regression of the

effect of departmentalization on training hours of employees in GN and NBC        135

 

4.15     Result of the ordinary least square (OLS) simple regression of the effect of

chain of command on revenue per employee in Guinness Nigeria Plc

and Nigeria Bottling Company, Plc                                                                           138

 

4.16     Result of the ordinary least square (OLS) simple regression of the effect of

centralization on profit per employee in Guinness Nigeria Plc and

Nigeria Bottling Company, Plc                                                                                  141

 

4.17     Result of the ordinary least square (OLS) simple regression of the effect of

formalization on employee turnover in GN and NBC                                                144






 

LIST OF FIGURES

Figure 1:         Organizational chart as an example of formalization                                     30

Figure 2:         Organizational chart of brewery firm                                                             42

Figure 3:         Indicators of organizational structure and employee performance                57

Figure 4:`        Robbin’s and Goldsmith’s organizational structure.                                      99

 

 

 

 



 

CHAPTER 1

INTRODUCTION


            1.1           BACKGROUND TO THE STUDY

The organizational structure of a company is a system used to define its hierarchy. Each employee’s position is identified, including their function and who they report to within the firm. It is the way in which a company or organization is organized, including the types of relationships that exist between the directors, managers and employees. The organizational structure, which may refer to the hierarchy of not just a business, but also any entity such as a charity, government department, agency or education establishment, is developed to establish how an entity operates and helps the organization in achieving its goals and objectives. The organizational structure outlines how activities including task allocation, supervision and coordination are directed towards its individual aims. It is also a “viewing glass” or perspective through which employee’s may see their organizations and their environments (Bock, 2013).

The success or failure of any organization depends on amount of people efforts in the organization and especially organization structure in order to achieve aims of firm that is possible by efficient use of hardware and software resources (Bridges and Bridges, 2017). In this regard ability of the management to motivate and create the desire to work hard on employees has a major role, so management structure of organization is mentioned as a vital link between management and staff. Because of the organization principles, policies implementation, management structure could be useful in the use of investments, efficient technology, advanced methods of work, the methods of motivating human resources and so on in order to improving productivity in organizations (Brandt and Agrawal, 2016).

Organizational structure is considered as formal and rational distribution or jobs, responsibilities, powers and the way of coordination and communication in order to achieve the main objectives of any organization in its inception (Ramadani, 2012). Nelson and Quick (2011) further posit that the organizations structure is meaningless unless supported by appropriate system and a well-conceived culture. Martinelli (2011) argues that the type of organization 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. Ajagbe (2011) sees organizational structure as “how jobs tasks are formally divided, grouped, and coordinated” the nature of formalization is the degree to which the workers are provided with rules and procedures that deprive versus encourage creative, autonomous work and learning. In organizations with high formalization, there are explicit rules which are likely to obstruct the impulsiveness and the flexibility needed for growth. Centralization or rigid authority structure also creates a non-participatory environment that reduces communication, commitment and involvement with tasks among participants. It refers to hierarchical level that has authority to make decision. If decisions are delegated to the lower levers, the organization is decentralized, and if decision making power authority is set aside at the top level, it is centralized.

Germain (2008) considers the outcome of structure on the performance mediating supply chain management and found that formal structure has a positive effect on performance in stable environment and a negative effect is achieved in dynamic atmosphere. Employee performance relates to how successfully an individual group of people with a particular purpose perform a function. Essentially, this is what is meant by employee performance and achievement of successful outcomes. The organizational structure of an organization for this research is studied by looking at variables such as formalization and centralization. The research will examine these organizational structure variables in Guinness Nigeria Plc and Nigeria Bottling Company, Plc, Ikeja, Lagos State, Nigeria.

Formalization is a set of rules, policies that an organization has to follow. One advantage of formalization is that a certain standard of performance is always guaranteed. Centralization is the amount of authority higher level people in the hierarchy have over the business processes. A highly centralized company will have complete control by the higher authority and mostly all decisions will be made by the higher authority. A decentralized organization is one in which lower levels can make decisions as well.

There has been a lot of debate regarding what is the right kind of structure, hence we will try to look at real life cases and examine what is the right kind of organization structure required in a dynamic environment especially in a brewing firm. (Liao, 2011). This study develops a research framework that examines relationships among various structural dimensions and employees performance in brewing industry in Nigeria. Four aspects of organizational structure are considered; the number of layers in hierarchy of the organization, the nature of formalization, the nature of internal and external boundaries that exist in the organization and the nature of technology (appropriate) adopted by the organization. The employee’s performance is represented by supervisor’s rating, quality and quantity, goal accomplishment, efficient and effective, dependable and enthusiastic, ability and capability. Given the importance of structure to the performance survival, and sustainability of companies and contributions of the brewing sector to the economy, this research therefore deems it necessary to investigate whether appropriate structure is a critical success factor for success of brewing firms in Nigeria and extent it has helped in the performance of its employees. The brewery firms have called for a well structured and conducive environment for employees so as to retain intellectual and skilled employees in order to achieve towards greater productivity. Therefore, this research is aimed to find out the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Company, Plc, Ikeja, Lagos State. This is necessary to identify how best the brewery firms like GNB and NBC can retain competent employees.


1.2.      STATEMENT OF THE PROBLEM

Business organization in an attempt to adopt the best type of structure with the aim of attaining maximum performance has faced a lot of problems. Also many organizational flaws can be related to inappropriate structures 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.

The problems associated with effects of organizational structure on employee performance are significant issues and these have generated opinions. Employees of Guinness Nigeria Plc and Nigeria Bottling Company, Plc, Ikeja quit their present working place because of lack of proper working environmental fixtures and these have gone a long way to affect the productivity of such employees and invariably affected the turnover of the organization.

The dissatisfaction of these employees on their job have made them go looking for job in some other organization where they think that better provisions are made for these variable lacking in their former workplace. Moreover, because of improper positioning or location of plant, building and machineries, the employees work under stress and productivity adversely affected.

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.

The brewing sector is faced with mixed performance. Evidences from the subsector confirm that quite a number of brewing firms are performing very poorly, in some cases, they go into liquidation, while few others are performing excellently well using all known performance indicators. For instance, Nigeria breweries and Guinness breweries have been paying dividend to their shareholders consistently for the past twenty years. Besides payment of dividend, almost all other performance indicators have been on the positive trend. However, the excellent performances of some brewery firms are still worrisome as about 70% of brewing firms went under liquidation within the last twenty years. The essence of this study therefore is to determine whether adopting appropriate structure is one of the critical success factors that support those firms that are performing well in the sector and the extent to which appropriate structure has helped the performance of its employee. Also, studies have established that efficient and effective performance depend on the designing and adoption of a fitting structure by the organization, in other words, no effective and efficient organization if the structure of the organization does not support the people who work within the system that provide the key element to determine its success. Based on this, the study looked at the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Plc, Ikeja, Lagos State Nigeria.

 

1.3.      OBJECTIVES OF THE STUDY

The broad objectives of the study is to evaluate the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Plc, Ikeja, Lagos State Nigeria. The specific objectives are to:

1.              examine the effect of work specialization on the quality of services in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

2.              evaluate the effect of departmentalization on training hours of employees in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

3.              determine the effect of chain of command on revenue per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

4.              examine the effect of centralization on profit per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

5.              determine the effect of formalization on employee turnover in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

 

1.4       RESEARCH QUESTIONS

1.            To what extent does work specialization has an effect on the quality of services in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja?

2.            What is the effect of departmentalization on training hours of employees in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja?

3.            To what extend does chain of command has an effect on revenue per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja?

4.            What is the effect of centralization on profit per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja?

5.            What is the effect of formalization on employee turnover in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja?

 

1.5       RESEARCH HYPOTHESES

Based on the study, the following hypotheses were formulated to guide this study

H01:       Work specialization has no significant effect on the quality of services in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

H02:       Departmentalization has no significant effect on the training hours of employees in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

H03:       Level of chain of command has no significant effect on revenue per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

H04;       Centralization has no significant effect on the aspect of profit per employee in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.

H05:       Formalization has no significant effect that influence employee turnover in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja.


1.6.      SIGNIFICANCE OF THE STUDY

This study will provide organizational policy makers and professionals with a new approach to developing a better organizational structure for improved performance. They need to be conscious about span of control, culture, division of labour and specialization, authority and delegation is so important to the organization and as such its importance in the growth of the organization is vital especially at these times when Nigeria Brewery is under the spotlight as a result of the recent globalization in the world.

The study will also be of help to the organization in repositioning things for improved performance especially as it concerns the relationship between management and employee. It will thus assist stakeholders to be aware of the importance of organizational structures in ensuring industrial peace and harmony. A dysfunction structure leads to role conflict which affects the employee performance as well as increase in disharmony alongside with authority in the organization. And it would also help the target population i.e. Guinness Nigeria Plc and Nigeria Bottling Company Plc to improve their organizational polices and HRM practices through recommendations and suggestions. 

Theoretically, the study is expected to bridge the gap in the literature on the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Company, Plc. Also, the study will add to the existing literature on how organizational structure will enhance employee’s performance in organizations and related concepts. The study will provide an additional framework in the identification and solutions to the challenges facing organizational structure on employee’s performance in Guinness Nigeria Plc and Nigeria Bottling Company, Plc.


1.7.      SCOPE/ LIMITATIONS OF THE STUDY

The research work is mainly concerned with the effects of organizational structure on employee performance in Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja, Lagos State Nigeria from 2011-2018 and the scope of this research will be categorized into three namely:-

·       Unit scope

The unit scope is on employees of Guinness Nigeria Plc and Nigeria Bottling Company Plc, Ikeja, Lagos State Nigeria with the intentions to harness the organizational structure elements which are the explanatory variables i.e work specialization, departmentalization, centralization and decentralization in relation to employee performance.

·       Content scope

The content of this study covers organizational structure and employees performance including the indicators of both variables, empirical review and theoretical framework.

·       Geographical scope

The study will be carried out at Guinness Nigeria Plc, Ogba, Ikeja L.G.A and Nigeria Bottling Company Plc, at No 1 Nbc plant lateef Jakande Road, Agidingbi, Ikeja L. G.A both of Lagos State Nigeria.


1.8       LIMITATIONS OF THE STUDY

The greatest limitation of the study is having access to the office as the environment were highly restricted because of security reasons and entrance into the brewery firm were mainly on invitation. Thus securing an invitation to share the questionnaire and conduct interviews were very difficult and there were restrictions on number of times I was permitted to have access to the offices where required information were gathered. Executive, non-executive and even the lower level management staff of Guinness Nigeria Plc and Nigeria Bottling Company, Plc that were part of the unit scope of the study were also difficult to reach because of the distance and diverse locations involved. Thus, many of them were reached via email and their replies did not come with ease, many of the executive and non-executive were written on many occasions before they completed the questionnaire mailed to them due to the time spent in completing the study. Generally, obtaining required information apart from secondary data sourced from the firms’ statistical bulletin, annual reports and magazines were the major constraint encountered in completing the study.


1.9       OPERATIONAL DEFINITION OF TERMS

Organization: It is an entity comprising multiple people, such as an institution or an association, who has collective goals and is linked to an external environments.

Structure:  This is an arrangement and organization of interrelated elements in material object or system so organized.

Organizational structure: This is defined as how job tasks are formally divided, grouped, and coordinated. The key elements of organizational structure include; work specialization departmentalization, chain of command span of control, formulization, centralization and decentralization.

Employees: These are group of people who work together in a particular companies or firms with a mutual understanding to achieve the organizational goals, and also for them to earn a living.

Performance: It simply means the production of valid results as a result of valid inputs by the employees in an organization, also on the management as a whole.

Employee performance: It can be defined as the employee’s ability to accomplish its aims using the resources he/she has in a properly structured manner. Employee can also be defined by the extent at which the employee is effective in executing its strategies.  

Work specialization:  Is the degree to which organizational activities are subdivided into separate jobs (individual specializes in doing part of an activity rather than the entire job). It also refers to division of work.

Departmentalization: This involves dividing an organization into different department, which perform tasks according to the departments’ specializations in the organization and can be found in both public and private sector.

Centralization:  Can be defined as a hierarchy decision making structure where all decisions and processes are handled strictly at the top or the executive level. Policies are put in place to ensure the rest of the company follows the direction of the executive.

Decentralization: Refers to decision making at lower levels in the hierarchy of authority. In contrast, decision making in a centralized type of organizational structure is at higher levels.

 

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