THE IMPACT OF ORGANIZATIONAL STRUCTURE OF COMMERCIAL BANK ON EFFICIENT CUSTOMER SERVICE IN NIGERIA ( A CASE STUDY OF FIRST BANK )

THE IMPACT OF ORGANIZATIONAL STRUCTURE OF COMMERCIAL BANK ON EFFICIENT CUSTOMER SERVICE IN NIGERIA ( A CASE STUDY OF FIRST BANK )

TABLE OF CONTENTS

TITLE PAGE……………………………………………………………………I

CERTIFICATION ……………………………………………………………. II

DEDICATION…………………………………………………………………. III

ACKNOWLEDGMENT………………………………………………………..IV

TABLE OF CONTENTS………………………………………………………VI

ABSTRACT……………………………………………………………………IX

CHAPTER ONE: INTRODUCTION

• Background of the Study

1.2       Statement of Problem

1.3     Research Questions

1.4       Research Objective

1.5       Research of Hypothesis

1.6       Scope of the Study

1.7     Significance of the Study

1.8       Operational definition of Terms

 

CHAPTER TWO: LITERATURE REVIEW

2.1       Conceptual Review

2.2.      Theoretical Review

2.3       Empirical Review

2.3.1    Organizational Structure in Commercial banks in Nigeria

2.3.2    Organization Structure

2.3.3    Overview of Commercial Banks in Nigeria

2.3.4    The four Basic Elements of Organizational Structure

2.3.5    Components / Types of Organizational Structure

2.3.7    The Effects of Organizational Structure on Job Satisfaction

2.3.8    Concept and Features of the Commercial Banking System

2.3.9    Banking structure and Efficiency

CHAPTER THREE: RESEARCH METHODOLOGY

3.1       Area of the study

• Research design

3.2 ​      Population of study

3.4       Sources of data n collection

3.5 ​      Research instruments

3.5.1    ​Validation of the research instrument

3.6       Model specification

3.7       Measurement of the variable

3.8       Data analysis techniques

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1       Data presentation

4.2       Descriptive Statistic

4.3       Testing of Hypotheses

4.4       Discussion of findings

CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION

5.1       Summary of Finding

5.2       Conclusion

5.3       Recommendations

5.4       Limitation of the Study

5.5     Contribution to Knowledge

REFERENCE

APPENDIX 1

 

 

 

 

 

ABSTRACT

The study investigated the impact of organizational structure of commercial bank on efficient customer service in Nigeria ( a case study of first bank ). The purpose of this study is to examine on how organization structure improves commercial bank on efficient customer service in first bank, Ile–Ife, Nigeria.  four questions were raised for the sake of the research while four hypotheses were also generated and tested to ascertain that this stated objective were contributed immensely to the improvement of the organizational structure of commercial bank on efficient customer service in Ile –Ife , Nigeria. a random sample sampling technique was used to select fifty-five (55) respondents used for the study. The target populations were staff of first bank in Ile-Ife. Descriptive survey research design was adopted in carrying out this study. The likert scale questionnaires were used for data collection. Both primary and secondary sources of data were collected through field survey. The research questions of bio data for respondents were answered by using simple percentage frequency were used to answer the general questions for the study. On the findings of the study, it was recommended that if organizational structure can be properly reviewed, it will certainly improve the efficient of commercial bank on customer service in Ile-Ife, and Nigeria at large.

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

•      BACKGROUND OF THE STUDY

Organizations Structure do have goals and objectives to achieve and could be better coordinated through a formalized procedure. For organization to achieve its goals and objectives, the work of such organization has to be divided among its members. Some structure is necessary to make possible the effective performance of key activities and to support the effort of staff, structure provide the framework of an organization and its pattern of management. It represents a formalized framework within which management operates. It is by means of organization structure that the purpose and work of the organization can be carried out. The workers that carried out the organizations work and purpose can only perform well where their satisfaction is adequately taken care of. It is therefore evident that for organization to realize its objectives, job satisfaction of the workers need to be considered.

According to Blum and Nylor (2019), job satisfaction is a general attitude formed as a result of specific job factors, individual characteristics and relationships outside the job. Job satisfaction is an individual’s general attitude toward his job, which is also conceptualized as a personalistic evaluation of conditions existing on the job work, supervision, or outcomes that arises as result of having a job. However, organizational behaviorists and human resources professionals have long been curious about the best way to structure a work environment in order to influence employee outcomes via job satisfaction.

Organizational structure has an effect on individuals’ attitudes and behaviors. It is influence by the manager’s personal preferences for ways of relating to subordinates and other managers, and ways of attacking problems. Organization structure refers to the arrangement of task, interrelations of various departments and levels of authorities to achieve co-operation of efforts, delegation of authority and effective communication along the scalar chain of command. Structure defines how job tasks are formally divided, grouped, and coordinated. It shows the hierarchical relationships among members of the organizations (March & Simon 2018).

Moreover, almost every organization wants to achieve the highest possible productivity level or optimized productivity. Undoubtedly skilled and efficient manpower is one of the most important tools for achieving organizational goals because human resources has important role in increasing and reducing productivity in organization. This therefore means that if organization has greatest capital and the best technology and facilities coupled with a good framework within which management operates, but don’t have productive and well satisfied human resources, such organization will not achieve its goal (Mehdad, 2016; Ostovar &, 2018). Labour as a factor of production is very fundamental and sensitive to every bit of things around them. The way they relate with their colleagues, junior and even superiors in the organization go a long way to affect their productivity and job satisfaction. The way authority flows also goes a long way to influence the behavior of workers and hence their expressions of job satisfaction. These makes organization structure a big determinant of job satisfaction which thus makes it an important area of study.

In financial institutions, the organizational structure invokes contemporary debates on two critical issues of scholarly interest to both organizational and financial researchers. First, financial researchers and policymakers worry that the main danger in the financial system is that banks and markets are becoming too big to understand or too complex. To avoid a collapse of the financial system, banks need to shrink and be simple (Liu, Norden and Spargoli, 2015). Bankers are displeased with the view of capping on bank size. They argue that this is inefficient because size and complexity help banks diversify risks and innovate to create additional profit opportunities (Liu, Norden and Spargoli, 2015). Second, organizational researchers are raising questions on how organizational structure influences internal operations and promotes task interdependencies, employee efficiency, and transparency in the workplace such as a bank (Nouri, 2019).

Organizational structure impacts how well employees interact and communicate internally to provide internal service to colleagues and deliver external service to customers. Eze, Bello and Adekola (2017) assert that “organization” relates to the word organism. In this regard, it means a body structure divided into different parts held together by a fabric of relationship as one organic whole. In researching organization structure, scholars need to focus on the well-defined formal system of tasks, patterns of interactions and relationships, and coordination that positively influence how employees use resources to achieve organizational goals (Eze, 2017). The decision to structure an organization has become paramount and strategic to enable performance at the employee and organizational levels in a volatile, uncertain, complex and ambiguous environment (VUCA) (Muhammad, 2019).

Organizational structure is a critical antecedent to organizational performance (Njiru &

Nyamute, 2018). It affects effectiveness, internal efficiency and interdependencies across-functions in using operational and strategic resources in an organization (Naser & Mokhtar, 2014). Organization adaptation to the environment calls for decentralized decision-making authority and rights, reduction of hierarchical levels and enhancement of the flow of information and communication across and within the various organizational levels. Structural flexibility and communication are essential to support rapid decision making and emergent responses to organizational and customer needs (Slevin, 2017).

Scholarly work on organizational structure has evolved from simple forms, characterized by a low degree of departmentalization, wide spans of control, and centralized authority to increased formalization. Examples of complex post-bureaucratic structures include matrix, team, and virtual organizations that outsource major business functions. (Njiru & Nyamute, 2018). Extant studies on organizational structure have focused on various issues in the organizational context. For example, Muhammad (2019) examined the effect of complexity, formalization, nature of hierarchical and technology on company performance in Indonesia. The analysis of results shows that the organization’s structural complexity and hierarchical levels have a positive but not significant effect on performance.

On the other hand Commercial banks have been widely acknowledged for their significant role in the economy particularly in funds mobilization for growth. Ideally, growth tends to be easily achieved through the channeling of savings towards investment activities. Improvement in the financial sector follows from the financial sector development. This arises through effective financial intermediation, a well-diversified opportunity, improvement in the quality of information and better avenues for prudence in lending and monitoring to take place (Ewetan & Okodua, 2020). While savings remain crucial to economic development, the role of the financial sector in generating the required level of savings becomes vital.

The role of banks in intermediation remains a catalyst towards a nation’s development in the sense that investment funds are mobilized from a surplus end to the deficit end. Moreover, other essential roles of fund mobilization, allocation of credit, the system of payment and settlement including monetary policy implementation cannot be left out and undoubtedly can efficiently increase the performance of the banks (Mohammed, 2016). On this basis, deposit money banks tend to mobilize savings and extend loans and advances to their respective customers taking into consideration profitability, liquidity and safety principles (Okoye and Eze, 2015). Mobilization of savings is critical towards building an inclusive growth in the financial sector even though most of the funders’ attention is still on making credit available through accessibility, rather than savings. This is based on the idea that credit creates a direct link to increasing income. Within the micro-framework, savings provide security of funds, liquidity, positive real return and convenience which subsequently meet the various needs of the savers.

Commercial banking in Nigeria dates back to the early colonial period. The decline in barter system of trade and the rise in financial transaction of the colonial government required an institution in the form of a commercial bank for safety and transmission of funds. It was for this purpose that African banking corporation based in South Africa was invited in 1892 to open a branch office in Lagos. The African banking corporation was therefore the first modern commercial bank to open a branch office in Lagos in that year.

In the year 1894 its operation were taken over by the bank of British West Africa.  In 1899, the bank in Nigeria was established by the royal Niger Company. In the year 1912, the bank of British West African absorbed the bank of Nigeria and exercised monopoly over Barclays bank started operation in Nigeria, other colonial, banks joined in the later year. The indigenization exercise abolished the existence of the expatriate banks in Nigeria. Their existence was terminated. For some of the following reason: 1. the integration of the monetary and security market for liquid assets and investment of excess reserve and in effect retardation of the emergence of local money and capital markets. 2. The banks by virtue of their interlocking relationship with important transnational banks are assured of credit Accommodation. 3. The operations of the banks failed to take into consideration the credit needs of Nigeria. The discrimination suffered by Nigeria spurred them to attempt to found their own bank.

In year 1973 the banking industry was indigenized by the federal government acquiring 40% of the equity of foreign banks in Nigeria. These indigenous commercial banks in Nigeria represent the effort of Nigeria businessmen to establish their own banks since the expatriate banks have not been particularity interested in giving them assistance they own business. The first effort in this direction was the establishment of the industrial and commercial bank in 1929 which failed in 1930.  The Nigeria mercantile bank was formed in 1931 but it went into voluntary liquidation in 1936. Successful indigenous banking effort in Nigeria began with the establishment of the national bank of Nigeria in 1933. The next successful Indigenous bank the African continental bank was established in the year 1957. The pan Nigeria bank was established in the year 1951. Currently there are over 60 Indigenous commercial banks in Nigeria with numerous branches spread throughout the country. In fact, the period 1947 to 1952 witnessed the experience of bank failures in Nigeria. It has been shown from available records that these banks also collapsed with the same rapidity with which they were established. By 1954 twenty one(21)out of the twenty five (25)  indigenous banks failed due to inadequate capitalization over trading, lack of technically skilled personnel and of course poor management. The failures were affairs for banks officials, depositor and government. The forty three commercial banks which responded to our survey reported having a total of 397 board members for an average of about 9 members per a board. No bank has more than 15 members and no bank has more than 15 members on its board.  There appeared to be no relationship between bank size and board size or size. For example, the biggest three banks and fifteen and thirteen board members.

Similarly, some state owned banks had between five and six board members just as state owned banks had between five and six board members. The survey also revealed that out of the 397 board members, only 154 of them had equity interest in the banks they were directing. In other word, 234 board members were not shareholders in the bank they directed. As would be expected, the directors without equity interest were primary representing state and federal government interests in the banks. The directors were government appointees. The indigenous bank as a group have contributed significantly to the economic development operate mostly in the indigenous  business sector and have extended credit to small and large scale indigenous entrepreneur . Secondly, they have contributed to the development or potential depositor and banking habit W.A. (1970) in his development process states that development occurs in all directions.  Simultaneously, growth and development run into bottlenecks sectors. “Thirdly the aggressive mobilization of the domestic savings through direct contact with the people and the use of mortem have contributed development. Introduced by Shaw and MacKinnon in (1973) as the concept of “financial deepening” and also providing employment opportunities for Nigeria in responsible position in banking Industry.

The Structure of the Nigeria Commercial Banks can be Discussed As: Branch banking, the commercial banks in Nigeria operate the branch banking structure. This is a structure arrangement whereby very few large banks with network of branch office dominate the economy. This branch banking takes instructions from their head offices (not autonomous).  Indigenous banks this is a banking structure in which the ownership of banks invested completely on the indigenes of the country. These banks operate mainly in their state of origin some of them have their head office at their state origin. They serve mainly indigenous interest. Mixed banks, these are banks that are jointly owned by Nigerians and foreigners. The maximum ownership interest of the foreigners in mixed banks is 40%. The indigenous owners have a 60% minimum ownership interest in the mixed banks. (Orjih .J.(2016)

1.2       STATEMENT OF PROBLEM

Banking is a service industry and as such banks should have it as a duty to provide services to its customers. In other to remain in good business, the banks services must be tailored towards the public needs and rendered them efficiently. All efforts must be made to eliminate or reduce delays speed and accuracy should be the watch-word. A bank which produces and renders service efficiently would embraces the patronage of the public and enhance the economic growth. Infect the rendering of efficient services will enhance profitability and growth of the bank. All these obligations of a bank, its customers are very important in any country. The reverse however seem to be case in the Nigerian banking sector made by the customers of first women, the asset that there are inadequate service and frustrating delay in first bank plc they normally complain that “time is money” and they believe that any time wasted or lost in order to with draw or deposit money is a lot to their business. Civil servants often complain that a great number of hour is lost when they level their office for hour just either to deposit or withdraw money from the bank. All these problems will affect our economy, if not amended and also the gross national product will be adversely affected. The researcher, therefore want to determine the principle causes of this delay, caused by the staffs of first banks offices and its organizational structure. “An investigation into these question is the main basis of the study.

1.3     RESEARCH QUESTIONS

1. What are the ways of improving the quality and the efficiency of those financial services/products rendered to the customers of first bank (Nig) Plc?
2. What are the ways of eliminating or reducing delay by first bank (nig) plc to its customers?

• Does the service rendered and produce by first bank (Nig) Plc embrace the patronage of the public and enhance the economic growth of the country?

1. Does the organizational structure of first bank plc have an impact on efficient customer service?

1.4       RESEARCH OBJECTIVE

The specific objectives are to:

1. Find out ways of improving the quality and the efficiency of those financial service products, rendered to the customers of first bank plc.
2. Investigate some ways of eliminating or ridiculing delay by first bank (nig) plc. to its customers.

• Examine if the service rendered and produce by first bank (nig) plc will embrace the patronage of the public and enhance the economic growth of the country.

1. Examine the impact of organizational structure of first bank plc on an efficient customer services.

1.5       RESEARCH OF HYPOTHESIS

Ho: There is no improvement in the quality and the efficiency of those financial service/ products rendered to the customers of first bank (Nig) Plc

Hi:   There is an improvement in the financial in the quality and the efficiency of those financial service / products rendered to customers of first bank (Nig) plc.

Ho: There is no delay by first bank (Nig) plc to its customers.

HI: There is delay by first bank (Nig) plc to its customers.

HO: The service rendered and produce by first bank (Nig) PLC does not enhance the patronage of the public and enhance the economic growth of the country.

HI: The service rendered and produce by first bank (NIG) plc embraced the patronage of the public can enhance the economic growth of the country

4. Ho: The organizational structure of first bank plc does not have an impact on efficient customer services

HI: The organizational structures of first bank plc have an impact on efficient customer service

1.6       SCOPE OF THE STUDY 

This research study covers the impact of organizational structure of commercial bank on efficient customer service in Nigeria ( a case study of first bank ).

1.7     SIGNIFICANCE OF THE STUDY

This research work can be of great help to those who have little or no knowledge in banking business. It will be valuable to people who are interested in the banking profession and want to make it their career. This study will also help the management of first bank plc to appreciate areas where improvement is needed in its organizational structure in other words the management of first bank plc will find it helpful in making some amendments such as restructuring its organizational structure so as to be able to improve on the service which it renders to the customers or members of the public.

1.8       OPERATIONAL DEFINITION OF TERMS

ORGANIZATION: is an entity such as a company an institution or ana association comprising one or more people and having a particular purpose. Or  it can be referred to as management of part and specifications of individual part of it, can be regarded as the ability to act as one body or social group, which is established in a more or less purposive or deliberate manner for the attainment or the accomplishment of a special goal.

STRUCTURE : this refer to the way in which something is Organized or put together.

ORGANIZATIONAL STRUCTURE: To organize means to put into working order or to arrange in system. In this content, therefore organizational structure mean creating an rearrangement of positions and responsibilities through and means of which an enterprise can carry out its work.

 CUSTOMER : Any person who maintain an account with a bank and also transacts business of any kind with it is known as customer.

FINANCIAL SERVICE/ PRODUCT: This is the range of banking operations (services) which are available to the customers of a commercial bank.

EFFICIENT: Producing result within the shortest possible time.

QUALITY: The Degree of excellence.

PUBLIC: Any group that has an actual or potential interest of impact on an organizations ability to achieve it objective.

COMMERCIAL BANK: This is an institution that collects money from the general public for safe keeping either on current account or savings account and makes them available when required. It offers loans at interest to those who required security.

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