Most business organizations including various financial institutions need to cope with high levels of competition due to globalization and the rise of information technology, these organizations needed to have effective organizational structures which according to Arce (2001), all organizations need to possess in order to be flexible and receptive enough to innovations and acquire an adaptable and responsive structure management and staffing.
The official reporting connections that regulate the company’s workflow are laid out in the organizational structure, which offers advice to all workers. A clear design of a company’s structure makes it easy to create new roles and provides a flexible and ready means of expansion. Communication, productivity, and creativity are all aided by good organizational structure and design. It offers a conducive setting for productive work. Poor organizational design is to blame for the majority of productivity and performance difficulties.
Also, Goulding (1996) mentioned that having an effective organizational structure is also important for the management to gain understanding of people’s feeling, behaviour and response in relation to various changes brought about by globalization and the rise of technology.
Borgatti (2001) further adds that the main reason why organizational structures are important is simply because in most firms or organizations, the overall structure and the arrangement of functions play a significant role in either the success or failure of organizations.
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