The Effect of the Organizational Structure and Employee Competence on the Organizational Performance of Microfinance Enterprises in Accra, Ghana

Abstract

This research primarily explores the effect of the organizational structure and employee competence on the organizational performance of microfinance enterprises in Accra, Ghana. It has been largely argued that the organization’s structure plays a significant role in the attainment of the set goals and the accomplishment of the strategic objectives of many business entities. The specific objectives of the study were to examine the effect of organizational structures on the organisational performances of Microfinance Institutions (MFIs) in Ghana, determine the moderating effect of employee’s competencies on the relationship between organisational structure and organizational performances in the microfinance institutions, and investigate how organizational structures influence performance (successes and failures) of microfinance institutions in Ghana. The study adopted mixed methods in the gathering of data. First, the quantitative was done followed by the qualitative study. For the quantitative study, Simple random sampling was used to select the MFIs in Accra from the GHAMFIN database, whereas, the quantitative phase interview guide was employed. The data was analysed using SPSS version 25.0 and IBM Amos version 23 and above, while thematic and content analysis were used for the interview. The findings were first; that there is a significant relationship between organisational structure measured by decisionmaking, job codification, the hierarchy of authority and rules of observation on organisational performance. Finally, the finding of the study shows the moderating effect of employee competency measured by business competency, functional and technical competency, and personal competency increase the significant relationship between organisational structure and organisational performance. It is recommended that organizations must ensure that employees must observe rules. This can be achieved by regularly reminding employees of the need to observe rules in the workplace. The findings of the study will serve as the basis for regulatory bodies such as the Bank of Ghana (BoG) and the Ghana Association of Microfinance Institutions to be aware of the structures of MFIs in Ghana and which of the structure’s employees are not giving much attention.