Influence of Organizational Structure on Organization Performance Among Commercial Banks in Kenya

Abstract

Organizational structure is a system that outlines how specific activities are handled to fulfill a strategic mission in an organization. Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives). The specific dimensions of Organizational Structure were centralized, decentralized structures, hierarchical structures, formal meetings, communications, power and lines of authority. The study used a cross-sectional survey design. Financial sector in Kenya faces many organizational challenges like unsatisfactory working conditions, high staff turnover, lack of organizational involvement in decision-making, and fear of going under, among others. The objective of the study was to determine the influence of organizational structure on organization performance among Commercial banks in Kenya. The population of the study was 41 Commercial Banks in Kenya. Primary data was collected using questionnaires while secondary data was collected from financial and operational reports of the banks. Data analysis was done using descriptive statistics such as mean and standard deviation. Inferential statistical was used to determine the strength of the relationship between organization structure and performance of the banks. the study found out that the management systems of the banks have adopted different dimensions of organizational structures and concluded that organizational structure impacts organizational performance positively. It is recommended that commercial banks should adopt appropriate organization structures that are appropriate to their needs and stakeholder needs. It is recommended that further studies are done using other research designs and on other factors that influence performance of commercial banks in Kenya.