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EVALUATION OF MANAGEMENT STYLES AND ORGANIZATIONAL EFFECTIVENESS IN HOTEL ESTABLISHMENTS IN EDO STATE

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ABSTRACT

This thesis evaluated management styles and organizational effectiveness in hotel establishments in Edo State. The objectives of the research were to identify the various management styles used in the hotel, ascertain the level of application of the management styles, determine factors influencing the choice of management styles, examine the effect of management styles on organizational effectiveness of hotels.The hypotheses of the study were: There is no significant difference in the mean rating of management styles and organizational effectiveness in hotels in Edo State and There is no significant difference in the mean rating of hotel class management style and organizational effectiveness in hotels in Edo State. Data for this research was generated using structured questionnaire, interview and secondary data from other researches. Simple frequency percentage, mean, Pearson moment correlation and Analysis of variance (ANOVA) were used to analyse the data generated for the study. The finding of the analysis proved that there is significant difference in the mean rating of management styles and organizational effectiveness of hotels (F calculated 0.298 was greater than the F tabulated 0.001) and there is significant difference in the mean rating of hotel class management style and organizational effectiveness of hotels (F calculated 0.298 was greater than the F tabulated 0.011) at 5% level of significance. The empirical survey revealed that the null hypotheses was not true. This implies that there is a positively significant relationship between management style and organizational effectiveness of hotels and there is a significant relationship between hotel class management style and organizational effectiveness of hotels. Policies and best practices that ensure sustainability of sound management style in the hotel establishments, leading to improved organizational effectiveness, should be adopted and implemented by stakeholders in contemporary hotel business. In conclusion, it is important that the application of sound management style which impacts positively on organizational effectiveness be established at the inception of the hotel business, as this will result in quality product, improved employee performance, high revenue as well as good financial outcome.



TABLE OF CONTENTS

 

Title Page                                                                                                                                i

Declaration                                                                                                                             ii

Certification                                                                                                                           iii

Dedication                                                                                                                              iv

Acknowledgement                                                                                                                  vi

List of Tables                                                                                                                          x

List of Figures                                                                                                                         xi

Abstract                                                                                                                                  xii

CHAPTER 1: INTRODUCTION

1.1       Background of the Study                                                                                            1

1.2       Statement of the Problems                                                                                          6

1.3       Purpose of the Study                                                                                                   10

1.4       Research Questions                                                                                                    11

1.5       Hypotheses                                                                                                                 11

1.6       Significance of the Study                                                                                           12

1.7       Scope of the Study                                                                                                      113

CHAPTER 2: LITERATURE REVIEW

2.1       Conceptual framework                                                                                               15

2.1.1    Definition and concept of the hotel industry                                                              16

2.1.2    Historical development of the hotel industry in Nigeria                                            18

2.1.3    Economic importance of the hotel industry                                                               19

2.1.4    Challenges facing hostel industry in Edo State                                                          22

2.1.5    Management style                                                                                                       25

2.1.6    Dimensions of management style                                                                              28

2.1.7    Factors influencing the choice of management styles in hotel                                     30

2.1.8    Organizational effectiveness                                                                                      31

2.1.9    Factors affecting organization effectiveness.                                                             35

2.1.10  Measuring organizational effectiveness                                                                     40

2.1.11  Importance of management styles in organizational effectiveness                                     43

2.2       Theoretical Framework                                                                                              45

2.2.1    Classical organizational theory                                                                                  46

2.2.2    William Ouchi theory Z                                                                                              47

2.2.3    Situational Theory                                                                                                      48

2.3       Review of Related Empirical Studies                                                                         55

2.4       Summary of Literature Review                                                                                  61

CHAPTER 3: RESEARCH METHODOLOGY

3.1       Design of the Study                                                                                                    66

3.2       Area of Study                                                                                                              66

3.3       Population of the Study                                                                                              67

3.4       Sample and Sampling Techniques                                                                             68

3.5       Instrument of Data Collection                                                                                    70

3.6       Validation of the Instrument.                                                                                     71

3.7       Reliability of the Instrument                                                                                      72

3.8       Method of Data Collection                                                                                         72

3.9       Method of Data Analysis                                                                                .           73 

 

CHAPTER 4: RESULTS AND DISCUSSION                                                                 

4.1       Presentation of Research Questions                                                                           76

4.2       Testing of Hypothesis                                                                                                 83

4.3       The Major Findings of the Study                                                                               85

4.4       Discussion of Findings                                                                                               85


CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                                                                     89

5.2       Conclusions                                                                                                                90

5.3       Recommendations                                                                                                      91

            References                                                                                                                  93

            Appendixes                                                                                                                 100     

 

 

 

  

 

 

LIST OF TABLES 

3.1       Sample Distribution by Managers and Staff of Hotels Location Category                     68

3.2       Sample of Managers and Staff based location of Hotel Category                                   70

4.1       Presentation of Research Questions                                                                           76

4.2       Presentation of Percentage Response of Management Styles

used in the Hotel Industry in Edo State                                                                      78

4.3       Percentage Response of Level of Application of the Identified

Management Styles in Hotels within the Study Area                                                 79

4.4       Presentation of Percentage Response of Factors Influencing

Choice of Management Styles in Hotels                                                                    80

4.5       Presentation of Percentage Response of Effect of Management Styles

on Organizational Effectiveness of Hotels in Edo State                                            82

4.6       Management Styles and Organizational Effectiveness                                              83

4.7       Hotel Class Management Style and Organizational Effectiveness                                     84

 

 

 

 

 

 

LIST OF FIGURES

1.1       Situational Leadership/Maturity Continuum                                                            54

 

 

 



CHAPTER 1

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Management style is very important to the success of any business organization, as it is said to be a key factor for the viability of any business (Shani, et al, 2014). Management style is the distinctive way in which an organization makes decisions and discharges various functions of goal setting, formulation, implementation of strategy, corporate image building, dealing with key stakeholders and other basic management activities (Gollineli, 2010). The term “management style” can be defined as the method a manager uses in administering an organization (Northouse, 2010). It includes controlling, directing, indeed all techniques and methods used by managers to motivate subordinates to follow their instructions. The various management styles adopted and utilized by managers in the Nigerian hotel industry are; Bureaucratic management style; Participatory management style; Autocratic management style; Entrepreneurial management style; Paternalistic management style; Conservative management style among others (Ashibogwu, 2008).In autocratic management style, the manager makes decisions unilaterally, and without much regard for subordinates. Decisions reflect the opinions and personality of the manager only and not that of the employees. Abiodun, et al (2013). In democratic management style, the manager allows the employees to take part in decision-making; therefore, everything is agreed upon by the majority. The communication is extensive in both directions (from employees to managers and vice-versa). In democratic management style, every employee is given a seat at the table, and discussion is relatively free- flowing. Employees are encouraged to share their thoughts, ideas, feelings that will add value to the organization. The manger takes into consideration the opinions of the employee before making a decision gains a variety of ideas from the suggestions from employees, which will lead to a better decision making outcome. (Abiodun et al, 2013). Laissez-faire management style is a type of management style in which the manager hands-off and allows group members to make the decisions. Employees are empowered to determine their own objectives, solve their own problem and make their own decision with little or no interference. (Abiodun et al, 2013).

According to Yankey and McClellan (2010) “organizational effectiveness is the extent to which an organization has met its stated goals and objectives, and how well it performed in the process. Ittner (2012) narrated that organization effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce. While, Orfilia (2015) pointed that organizational effectiveness is a process of “fulfilling objectives without incapacitating (an organization’s) means”. Ittner, (2012) sees organizational effectiveness as a unique way of integrating employees with the organization to achieve its vision or objectives and that to a large extent the effectiveness of an enterprise is largely dependent on the management styles adopted by managers which is central in the management of organizations. An important consideration is what factors can affect the organizational effectiveness both in profit and non-profit organizations. The factors that influence organizational effectiveness includes organizational characteristics, environmental characteristics, employee characteristics, financial climate, managerial policies and practices (Ashibogwu, 2008).

Hotels are residential building that provides lodging, meals, and other services to the traveling public on a commercial basis (Gollineli, 2010).  Bello and Bello (2010) claimed that the hotel industry is a concomitant human exchange, willingly entered into, and delineated to enrich the healthy living of the parties concerned through providing accommodation, food and drinks. Agba (2013) asserted that hotel is a place where any traveller can get food and shelter in exchange for money. In the same vein; Chikozho, et al (2014) refers to the hotel industry as an organisation that provides myriads of services like accommodation, food, entertainment and good comfort desires for strangers when away from their homes for profit making. Thus, the hotel industry comprises business whose primary activities are the provision of hotel accommodation, selling of food, beverages for consumption on the premises and provision of entertainment. (Ofobruku, 2012). The hotel industry is a service oriented business that renders both products and services to guests or visitors from within and outside their environment. The business is seen as the people oriented business which implies offering welcoming environment to visitors/guest (Bello and Bello, 2012).

Among other objectives of hotel establishments are profit making and attainment of maturity and liquidity status. The hotel industry assumes an important value in the tourism industry because it is essential for the provision of all other tourism services and it is the first service demanded by tourists who reach tourism destination (Orfilia, 2015).  In the process, they provide employment, provide goods and services, purchase goods and services and, thus, contribute to the growth of the society and economy at large. It has been observed that in most Nigerian small-scale settings, the effectiveness of this process is greatly determined by the availability of and access to personnel, finance, machinery, raw material and possibility of making their goods and services available to their immediate community and the nation at large (Ashibogwu, 2008). The extent to which members of an organization contribute in harnessing the resources of an organization equally depends on how well the managers of the organization understand and adopt appropriate management style in performing their roles as managers. Thus, efficiency in resources mobilization, allocation, utilization and enhancement of organizational performance depends, to a large extent, on management style, among other factors. Small and Medium Enterprise Development Agency of Nigeria (SMEDAN, 2008)  reports that most small and medium scale businesses in Nigeria die before their fifth anniversary due to poor application of relevant management style. The hotel industry in Edo state have witness some difficulties over time while some new hotels spring up, others fail, while some survives, some others have been there successful and are doing well, expanding and succeeding (Ofobruku, 2013).

Management style in an organization is one of the factors that play significant role in enhancing or retarding the interest and commitment of the individuals in an organization. Thus, Glantz (2010) emphasizes the need for a manager to find his management style. Messick and Kramer (2011) argued that the degree to which an individual exhibits management style traits depends not only on his characteristics and personal abilities, but on the characteristics of the situation and environment in which he finds himself. Since human beings could become members of an organization in order to achieve certain personal objectives, the extent to which they are active members depends on how they are convinced that their membership will enable them to achieve their predetermined objectives. Therefore, an individual will support an organization if he believes that through it his personal objectives and goals could be met if not, the person’s interest will decline (Messick and Kramer, 2011).

In order to make profit and attain maturity stage, hotels provide employment, food and beverage services, accommodation, purchase goods and services and, thus, contribute to the growth of the society and economy at large. Unamaka (2010) observes that in most Nigerian hospitality setting, the effectiveness of this process is greatly determined by the availability of and access to personnel, finance, machinery, raw material and possibility of making their goods and services available to their immediate community and the nation at large. The extent to which members of an organization contribute in harnessing the resources of the organization equally depends on how well the managers of the organization understand and adopt appropriate management style in performing their roles as managers which affects organizational effectiveness positively (Obiwuru et al, 2011). Thus, efficiency in resources mobilization, allocation, utilisation and enhancement of organizational effectiveness depends, to a large extent, on management style, among other factors.

Berson and Linton (2012) identify managerial expertise, attitude to work, organizational culture, performance, work environment, management style and motivation as some of the factors that exert negative effect on organizational effectiveness in the hotel industry in Nigeria. Ashibogwu (2008) notes that one of the reasons for unsuccessful hotel business experience is lack of use of market research to confirm demand and assess suitability of proposed offering as well as maintaining high level of customer patronage. Inappropriate management style could be one of the reasons for low productivity, high turnover, low profitability, lack of job satisfaction, morale as well as high failure of hotel establishments in Nigeria.

The need to study the management style in the hotel industry and how it impact on the organizational effectiveness of indigenous hotels in Edo State is pertinent to this study, to underpin the dominant management  style applied by hotels in the study area, know the effect of management styles on organizational effectiveness as well as its challenges, so as to ensure sound management style and enable entrepreneurs in the hotel business arrest or reduce the failure militating against hotel business in Nigeria. Manager in this study, is considered to be an organizational office holder of responsibility, which are made up of managing directors, general manager, managers, and supervisors within the hotel setting. Thus, the research examines how the various management style can affect the organizational effectiveness and success of the hospitality business in Nigeria. It is against this background that this study intendes to evaluate the management style and organizational effectiveness in hotel establishments, contribute to empirical studies on management style and organizational effectiveness in the hotel industry, proffer recommendations where necessary to reposition hotel industry as an integral part of the engine of economic growth and development in Edo State and Nigeria at large.

1.2       STATEMENT OF THE PROBLEM

The hotel industry in Nigeria is facing a lot of challenges because of poor application of relevant management styles. Some of these challenges are highlighted as follows;

High labour turnover which increases the cost of recruiting new employees in the hotel industry can affect the hotel organization due to poor application of management style.  According to Ashibogwu (2008), workers leave most hotel establishment because they are not satisfied with the autocratic style of some managers thus, breeding poor relationship with management and his/her colleagues. More explicitly, the cost implications of labour turnover are leaving costs, which include payroll cost and personnel administration of lost associates. Direct cost of recruiting new employees to replace the lost employee,  cost of induction and training of new staff, opportunity cost of time spent by management trying to replace lost staff. High workers turnover also affects the general output of the organization (Ashibogwu, 2008).

Poor salary and lack of fringe benefit is another problem occasioned by inappropriate management style in the Nigerian hotel industry. Some employers rather than provide suitable means by which their staff are motivated and retained for effective job performance, employees are continuously deprived of their physiological need through poor salary, delay in the payment of salaries as well as lack of fringe benefits and these have behavioural consequences on their efficiency in the workplace (Agba, 2013).

Poor adoption of participatory management style among hotel managers is responsible for inflexible work hours, low morale, reduced productivity and lack of job satisfaction among employees which has given rise to the adoption of supplementary livelihood by workers even if it entails running down their organizations (Agba, 2013). This negative trend threatens organizational effectiveness, growth and survival of most hotel outlets in Nigeria.

Wrong management style adopted by hotel managers can result in bad bureaucratic management policies that do not support workers participation in decision making could lead to employee‘s disappointment and seriously affect work productivity (Northouse, 2010). Staff who participate in decision making have more feeling of prestige, satisfaction, enthusiasm, sense of belonging, importance and positive attitude to work. Staff effectiveness can be seriously affected in hotels through poor management policies that hinder proper elevation of associates (Agba, 2013). Communication gap between hotel managers and staff is a challenge often encountered because of poor management style approach. Thus, adequate communication flow between management and employees enhances organizational job effectiveness. Poor dissemination of vital information hampers integration among units and people in the work place or environment hence; hindering goal attainment in the organization (Northouse, 2010).

Lack of staff training constitutes yet another big challenge in most hotels in Nigeria because of the low entrepreneurial style of management adopted by most hotel owners. Training refers to a set of activities that enable an associate to acquire more skills, knowledge and attitude for effective job performance (Agba, 2013). Staff training assist newly appointed associates to make adequate and timely adjustment to their new job environment. It is a way of appealing to mobilizing and motivating employees to be more effective in their duties (Agba, 2013). Lack of staff training will stimulate and enhance the poor performance of existing worker, it will hinder the employees from developing capabilities which can promote the overall performance of the organization (Ashibogwu, 2008).

Improper use of autocratic management style can result in lack of career development and promotion in the work place which affects workers seriousness on the job thus influences staff productivity. This is because a worker who is motivated through career development would take his/her work very serious (Ofilia, 2015). Similarly Ofobruku (2013) opined that too much time in one position may be perceived as career stagnation and have an adverse effect on commitment and staff productivity. Promotion (a non-monetary incentive) refers to advancement of a worker to a high job, which is better in terms of responsibilities, status, prestige and salary than the former. It is the up-grading of an associate. Promotion is a way of recognizing and developing abilities of associates for effective job performance.  To enhance the performance of workers, the income, promotion and other benefits enjoyed by their colleagues in other profession must be assured. Except this is done, the morale of such workers will fall, and this could lead to high job turnover (Agba, 2013).

Unfavorable work environment and poor service delivery leading to customer dissatisfaction is a problem often experienced because of poor conservative management style and approach. The work environment plays a significant role in workers output and quality service delivery (Ashibogwu, 2008). The availability and prudent management of the work environment determine the product and services of an organization as well as its staff performance or effectiveness (Northouse, 2010). When hotel managers refuse to pay attention to the environment where work is done or neglect to make it comfortable, suitable and very conducive for the employees to carry out their job efficiently this will go a long way in affecting workers performance as well as the quality of service delivered to customers.

Careless borrowing resulting in huge financial debt can become a serious problem in most hotel organizations because of lack of sound management style. A hotel with a high amount of debt can become over-leveraged, meaning they have high fixed cost relating to financing and as such, unstable (Agba, 2013). Large amounts of business financing can create a variety of problems for a hotel organization. On the one hand, if the hotel outlet has too much debt, its access to financing becomes constricted, before it can have chance to complete its growth strategy. In addition, if a hotel establishment has high amount of debt and revenue suddenly stalls, such as in a recession, it may leave the business unable to fulfill its obligations.

Poor paternalistic management style adopted can result in bad decisions about cost and pricing. Good management style adopted by hotel outlet enhances effective costing and pricing in most hotel organizations. Thus, Costing decisions are also affected by the finances of the company (Agba, 2013). When there is a recession or crisis, a firm formulates various decisions in respect of cost for retaining sufficient profits and to avoid a situation of bankruptcy. Business might look for elimination of unnecessary saving and efficient methods for reduction in costs.

Lack of sound management style adopted by hotel managers can also cause lack of proper cash budgets resulting in damaged business relations, essential inventory and equipment shortages in the hotel industry. Your business can come to a halt or your working capital management may be jeopardized (Ashibogwu, 2008). If you do not have the essential finances to cover short-term and long term expenses. Creditors can demand payments for the items or services they have delivered to you at any time failure to meet these demands can cause a big setback for the business. Preparing cash budgets can help you forecast outflows of money and the amount of finances required to meet these outflows.

1.3       PURPOSE OF THE STUDY

The purpose of this study is to examine the management styles used in hotel establishments in Edo State for organizational effectiveness. Specifically, the study;

  1. Identified the various management styles used in the hotel industry in Edo State.
  2. Ascertained the level of application of the identified management styles in hotels in Edo State.
  3. Determined factors that influence the choice of the identified management styles by the managements of hotels in Edo State.
  4. Assessed the role of management styles on organizational effectiveness among hotels in Edo State.

1.4    RESEARCH QUESTION

The study sought answers to the following research questions.

  1. What are the various management styles used in the hotel industry in Edo State?
  2. What is the level of application of the identified management styles in hotels within the study area.
  3. What factors influence the choice of the identified management styles by the management of hotels in Edo State?
  4. What are the effects of management style on organizational effectiveness among hotels in Edo State?

1.5       HYPOTHESES

The following hypotheses will be tested:

H01: There is no significant difference in the mean rating of management styles and organizational effectiveness in hotels in Edo State.

H02:  There is no significant difference in the mean rating of hotel class management style and organizational effectiveness in hotels in Edo State.

1.6    SIGNIFICANCE OF THE STUDY

The findings of the study, if utilized will be beneficial to the following individuals and groups:

The outcome of this study will enable hotel business practitioners know various management styles and the extent at which they were applied to hotel business practice.  This will help them to apply management styles that could enhance efficiency and effectiveness in their business; hence ensure business sustainability. Managers of hotel business will be enlightened via the outcome of this study on the management styles that is mostly adopted and how effective they are.  This will enable them apply same without necessarily experimenting the process.  Thus, maximize organization efficiency and minimize waste of organization scare resources.

The outcome of this study will serve as a reference material for future researchers in the domain of management styles and organizational effectiveness. This is because, the outcome of this study will determine various management styles used in hotel industry, including their correlation to organization effectiveness. In overview of this, scholars in hospitality management, research institutions, lecturers and researchers will find pieces of information in this study useful as a scholarly material in their related research and studies, thus, expanding the frontier of knowledge in domain of management styles and organizational effectiveness. Furthermore, authors in the domain of hospitality management will be enlightened on the usefulness of management styles to hotel business, thus motivate them to research and publish books and journals in the area of management style at it relate to hospitality business.

Non-professionals/Laymen in hotel business will benefit greatly from this research work as it will provide them with basic knowledge on the working relationship between various management styles and organization effectiveness, including models capable of explaining correlations among the various dimensions of management styles and effectiveness of hotel organizations.  This will equip them with basic management styles they could apply should they have interest to venture in hotel business practice in future.

This research work may be useful to the government of Edo State as it will educate them on the correlation between management styles and organization effectiveness; hence enable the government to formulate human resources development policy for hotels.  Aside, policy makers for hotel sub sector in Edo State will be enlightened on the relevancies of management styles to hotel business sustainability, thus, could motivate the government to partner with relevant education agencies on enhancement of hospitality management curriculum for schools and colleges with relevant management inclinations.


1.7     SCOPE OF THE STUDY

This study focused on the influence of management styles on organizational effectiveness in the hotel industry in Edo State.  The scope of the study is limited to registered hotels in Edo State. This implies that only hotels that are registered with the Edo State Ministry of Culture and Tourism were studied. Registered hotels in the eighteen local government headquarter towns in Edo State were studied.  This implies that this study evaluated the  management styles used in hotel establishments in Edo state for organizational effectiveness with emphasis on registered hotels in the eighteen local government area headquarter towns in Edo state.  In addition, the scope of the present study focused on both management and staff in hotels in Edo state.  This implies that both management as well as staffs were examined in this study.


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