Abstract:
The aim of this study was to determine the effects of organizational structure (formalization and centralization) on employee job stress and employee efficiency of micro finance firms in Ghana. Guided by theoretical concepts in organizational behavior and institutional theory, a standardized questionnaire was adapted and used to collect data from a sample of 222 employees working in the microfinance industry in Ghana. The collated data was analyzed using factor, correlational and regression analysis. Results from factor analysis showed that out of the seven factors tested only two components were found to be predictive of formalization (that is job codification and rule observation). Again it was found that out of the nine factors tested two components were found to be predictive of centralization (that is hierarchy of authority and decision making). Also out of the six factors tested two components were found to be predictive of job stress (that is lack of organizational support and job pressure). Finally out of twelve factors tested two components were predictive of employee efficiency (that is performance capacity and attendance). It is concluded that not all standardized factors of formalization and centralization are predictive of organizational structure in the Ghanaian situation. Correlational and regression analysis showed a negative relationship between formalization and job stress. It is concluded that organizations that are highly formalized will have more productive employees due to reduced job stress levels, whiles those with less formalized organizational structures will have less productive employees due to higher levels of job stress. It is therefore recommended that management of microfinance firms in Ghana design their organizational orientation to be highly formalized so that job stress of employees are reduced leading to increased productivity.
