CHAPTER ONE
INTRODUCTION

1.1 Background to Study
Once the decision has been made to undertake a business venture, it is essential to plan and establish a structure for the organization in a way that maximizes efficiency and profitability. Walton (1985) defines structure as “the basis for organizing, to include hierarchical levels and spans of responsibility, roles and positions, and mechanisms for integration and problem solving”. Organizational structure is defined as the established pattern of relationships among the components of a company, that is, the way in which the company has been set up; the formally defined framework of an organization‟s tasks and authority relationships. This goes in to say that all the duties and responsibilities of all those working in the company ought to be clearly identified and all areas of authority be clearly spelt out and designated such that every employee knows and understands his or her job responsibilities. By so doing a clear distinction is made between top members of the company and ordinary workers, those responsible for decision making, those to whom reports will be reported to and those who produce such reports. Such a scenario will hold for all companies be it small, medium-sized or large companies as they do need these said organizational structure to function and carry out their operations effectively. In as much as these companies all use organizational structures, they will differ from each other as each and every organization must be structured in a way that best suits its needs and helps it achieve its success. As small companies develop into larger ones, and as the large ones expand their operations globally, their organizational structures must be adapted to fit their changing needs.

Organizations do need structuring and it is quite important for them to have structuring such that lines of authority along with individual duties and responsibilities can be understood by each and every member of the company. There are, however, other important additional ways that these structures optimize the operation as proposed by Orgplus; which is a consulting firm that deals with the
complexities and difficulties of organizational structuring and chart creation. These other important ways could include the following:
 Turning groups of individual members or employees in the organization to teams and thus getting everyone geared and focused in the same direction which is the achievement of the organization‟s goals.
 Orienting new employees to the ways of the company and providing them organizational objectives, career and succession plans.
 Understanding the complex nature of the structures that exist and helping to simplify the relationships that exist within.
 Empowering employees to understand the strategic vision and mission of the company by clearly defining dependencies and relationships. For the better understanding of the organization‟s structure, most organizations tend to put in place a graphic presentation known as an organizational chart in which is clearly spelt out the various areas (departments) of the organization, the roles theyplay, their various lines of responsibility and authority, advisory roles as well as areas of decision making. In effect these organizational charts enable employees at all levels in the organization to immediately know their place in the organization, the people to whom they are responsible as well as their own areas of responsibility.

1.2 Statement of Problem
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 & Deal, 1997). The type of organizational structure which an organization incorporates should be a function of the goals and objectives of that organization, thus it is very  important for any organization to establish a structure that is appropriate and will suit every aspect of the organizations operations. Many problems do arise in an organization due to the fact it fails to put in place the appropriate structures required
for the effective running of its operations and activities. 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 (Mintzberg, 1983). There has been a long standing concern on a better understanding of how organizational structure affects organizational performance. This concern goes back at least to Cyert and March (1963, p.21), who used the following questions in motivating their theoretical enterprise: “What happens to information as it is processed through the organization? What predictable screening biases are there in an organization? How do hierarchical groups make decisions?” A more hierarchical structure, by lowering the incentives to collect soft information and to invest in geographically close assets – the ones more likely to provide superior performance (Chen et al., 2004) – effectively reduces performance. Therefore, the net effect is that more hierarchical structures should deliver worse performance.

1.3 Objectives of Study
1.3.1 Main Objective
The goal of this study is to assess the effect of organizational structure on the
performance of the organization with the Cameroon Development Corporation (CDC)
as a case study.
1.3.2 Specific Objectives
The specifics objectives are;
 To determine the factors that influence the organizational structure of CDC.
 To assess the effect of the current organizational structure on the performance
of CDC.
 To make recommendations based on the findings of the study.
1.4 Hypothesis
“There is no significant relationship between organizational structure and
organizational performance”.
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