ORGANIZATIONAL STRUCTURE AND CORPORATE PERFORMANCE A STUDY OF MTN NIGERIA

ORGANIZATIONAL STRUCTURE AND CORPORATE PERFORMANCE A STUDY OF MTN NIGERIA

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ABSTRACT

This study examined the organizational structure and corporate performance (a case of MTN Mobile Communication Nigeria Limited Ekiti main branch. Research questions guided the study. A survey method was used for this study. The population consisted of all the management staff of MTN Mobile Communication Plc Kaduna with a total population of twenty five (25) persons. The entire 25 person were selected for the study. A questionnaire developed by the researcher based on liker 5 point scale was used for the study.  Mean scores and frequencies were used to analyze the data based on the research questions. Research results show that internal and external mechanism of corporate governance is used to regulate the performance of MTN. The control mechanism put in place by MTN include internal and external organizational structure auditing as well as board of director monitoring and balance of power. The systemic problems militating against corporate performance include high cost of monitoring, inadequate supply of accounting information to shareholders.

CHAPTER ONE

INTRODUCTION

1.1        Background of the Study

Organization structure may be measured the framework of the organization, given that a foundation within which the organization functions. Organization structure is understood to affect the behavior of organization members. As Hall [1977] noted, this belief is based on a simple observation. Buildings have halls, stairways, entries, exits, walls, and roofs. The specific structure of a building is a major determinant of the activities of the people within it. Similarly, behavior in organizations is influenced by the organizing structure. The influence of this structure, while not as apparent as that of a building, is assumed to be pervasive.

 An organizational structure that can be categorized as being correct is depended on the goals of the organization, the surroundings that the organizations is doing business in and the type of work carried out by the organization. Most, if not all organizations, two types of structures exist. The first one is the formal structure, the documented one that describes ranks of individuals, authority channels, departments and grouping of elements. The second one is the informal structure, the undocumented one that entails how participants interact with each other in an organization. Whereas the formal structure notes how participants are expected to communicate to each other, the informal structure is how they actually do relate with each other (Styne H & Nicholas J.M, 2012).

In an organization effectiveness is a fundamental subject in the study of organizations structure, it still serve as one of the6 regularly mentioned yet least understood concepts in organization theory. crash to understanding organizational objectives, the environment it operates in, the markets, how it does its business, how it’s structured and all the elements of an organization leads to faulty assumptions of performance (Bedeian A.G, 1986). Once an organization has made a decision on how it expects its employees to act in the place of work, what employee attitude it expects, what it wants its employees to achieve, it can then implement its structure and encourage the growth of culture principles and customs to achieve these expected audacity, manners and objectives.    Structure does not only lead to increased organizational capabilities, but also the processes that result in increased performance (Wolf D, 2002; Clemmer J, 2003).

Good performing employees working in a structure that is poorly designed tend to adapt to the poor structure. This observable fact is as a result of employees not having total control of the organization’s procedures, processes, policies and all the organization’s supporting systems. These manners are often greater than before by a performance management system that at random pushes people for behaving like the system, structure, or processes they have been forced into (Clemmer J, 2003).

The World Bank (2009) states that corporate performance in governance comprises two mechanisms, internal and external corporate governance. Internal corporate governance, giving priority to shareholder’s interest, operated on the board of directors to monitor top management. On the other hand, external corporate governance monitors and controls manager’s behaviors by means of external regulations and force, in which many parties, such as suppliers, debtors (stakeholders), accountants, lawyers, and providers of credit and investment bank.

In the past, so many corporate organizations have been caught of getting involved in unethical practices, for example the discovery of financial scam by the Central Bank of Nigeria after the consolidation exercise, involving seven top bank executives in Nigeria, which puts the credibility of their corporate image under suspicion, which further shocking investors confidence. Consequently, corporate performance mechanism has been a crucial issue discussed again.

It is against this background that the researcher sees the subject matter; organizational structure and corporate performance of MTN Mobile Communication Limited, Ekiti main branch as an issue worthy of being investigated.

1.2        Statement of Problem

In the past, so many organizations in Nigeria have been involved in unethical practice, which puts the credibility of their corporate image doubt. As such MTN Mobile Communications just like other telecommunication company have been constraint with issues arising from customer’s complaint of high tariffs, exploitations of workers by using contract staff as against direct engagement of workers that would be remunerated according to their condition of service. Previous researches into the subject have brought to light the poor structure of so many companies with indebted accounts in Nigeria economy. Their accounting systems did not reflect the company’s financial status. A typical example is the financial scam of Oceanic and Intercontinental Bank after the consolidation. Most management of such outfits was not accountable to stakeholders of the companies. Besides, the counts and the regulatory agencies were short of authority, corruption and kickbacks were part of the system in the companies. The poor organizational structure practices led to the collapse of so many companies in Nigeria. There is a great need to study the organizational structure and corporate performance of MTN Mobile Communication Ekiti main branch.

1.3        Objective of the Study

The main objective of the study is to examine the organizational structure and corporate performance. The specific objectives are:

i)             To examine the effect of corporate structure on the performance of MTN.

ii)           To examine the internal and external corporate governance performance control mechanism in MTN.

iii)          To identify the systemic problems of corporate performance governance in MTN.

iv)          To proffer workable solutions to the identified problem of corporate performance in MTN.

1.4        Significance of the Study

The study will be significant to MTN Mobile Communication especially as they utilize the findings of this research in enhancing policy governance and structure in their organization. The study will also add to the existing knowledge on the subject matter and will also be a reference material for further research on corporate performance.

1.5        Research Questions

The central research question is: What is the organizational structure and corporate performance of MTN Mobile Communication? The specific questions are:

i)             How does corporate organizational structure affect the performance of MTN?

ii)           What is the internal and external corporate performance governance control mechanism in place in MTN?

iii)          What are the systemic problems militating against corporate performance in MTN?

iv)          What are the solutions to such problems?

1.6        Scope of the Study

The study covers the examination of the organizational structure and corporate performance using MTN Mobile Communication as a case study. The collection of empirical data is limited to MTN Mobile Communication Ekiti main office. The study covers a time from 2010 - 2015.

1.7        Definition of Terms

Corporate performance: This is relationship that exists between the different participants, and defining the direction of the firm also role to get a goal.

Corporation: This refers to corporate entity or a body by means of which capital is acquired, used for investing in assets producing goods and services.

Shareholders: People who have invested in a company through subscribing to the company’s stock.

Board Structure: Management at the top comprising of board of directors.

Ownership Structure: Shareholders and directors.

CEO: Acronym for Chief Executive Officer.



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