Organizations today are facing constant change which includes changing customers’ choices, globalization, new technological innovation, as well as new emerging markets. Thus, there are business organizations that were the main competitors in their markets but could not survive as a result of constant change. Some of these organizations include Bendel Glass Company, Super Bru Ltd, Sparkling Limited, Peoples’ bank among others. Being agile is a method by which organizations in the 21^st century can survive in a fast-changing business environment [1-8]. Agility allows both public and private organizations to adapt to their changing business environment and customers’ expectations. To achieve agility, structural changes are needed in organizational design to allow for greater agility. Thus, the way an organization is designed in terms of its structure may hinder or accelerate its ability to respond to changes taking place in its environment. Studies on the effect of organizational structure on organizational agility are limited within the literature; hence this study aims to examine how an organizational structure is related to organizational agility [9-16].

Conceptual Review

Organizational Agility: There is no generally accepted definition of organizational agility, however, it is accepted that organizational agility is a strategic tool for increasing growth in business performance. Most conceptualization of organizational agility is anchored on speed, flexibility and nimbleness by which organizations respond to changes in their business environment [17,18]. According to Walter, organizational agility is a dynamic capability by which an organization quickly and efficiently responds to changes taking place in its volatile market environment to increase business performance. Teece et al. [19] define organizational agility as ‘the capacity of an organization to efficiently and effectively redeploy/redirect its resources to value-creating and value protecting (and capturing) higher-yield activities as internal and external circumstances warrant’. Furthermore, Lee et al. [10] conceptualized organizational agility as a ‘higher-order dynamic capability to configure and reconfigure organizational resources in response to the environment or emerging competitive realities. This study describes organizational agility as the capability of an organization to quickly see and respond to opportunities in its dynamic business environment.

Previous studies have linked organizational agility to positive organizational outcomes. For instance, agile organizations tend to maintain and enhance their current competitive market positioning Gunasekaran et al. [7] as well as improving customer’s satisfaction Mishra et al. [14], employee satisfaction Lin et al. [11], firm’s performance/profitability [4,9].

Organizational Structure

Organizations are established to achieve a set of objectives; thus, job tasks and relationships must be formally assigned to individuals and groups within the organization to enable it to achieve its objectives. The organizational structure indicates a formalized system of task and reporting relationships that controls, coordinates as well as motivates employees towards the achievement of the goals set by the organization Ahmady et al. [2]. Nene and Pillay [16] define organizational structure as a system that determines how tasks are formally structured and coordinated within a group that is intentionally organized to accomplish a common goal. It shows employees’ roles, authority and power relations within the organization.

Burns and Stalker [3] identified two types of structure: mechanistic and organic. Mechanistic organizational structure is highly formalized, standardized and centralized. Employees in such an organization have a clear understanding of their duties and tend to strictly follow company policies, practices and procedures. On the other hand, organic structures are usually flatter, more flexible and adaptable to dynamic changing environmental conditions. Such organizations adopt informal authority, as well as informal decision-making processes. 

A review of the literature shows that previous researchers have identified several dimensions of organizational structure which include specialization, standardization, formalization, centralization and configuration Pugh et al. [18]; formalization, specialization, standardization, the hierarchy of authority, complexity, centralization, professionalism and personnel ratios Daft [5]. This study emphasizes three dimensions, formalization, centralization and complexity. Organizational complexity indicates the extent, to which jobs are dispersed within an organization in terms of managerial levels, educational levels, in addition to geographic dispersion. Complexity can be vertical, horizontal or geographical Gresov and Drazin [6]. Vertical complexity refers to the number of managerial levels, while horizontal complexity refers to the number and separation of jobs at the same organizational level March and Simon [12]. Geographical complexity refers to the separation of organizational units along geographic locations. The level of standardization of jobs is referred to as organizational formalization. It involves the extent of compilation and documentation of rules, regulations and detailed job descriptions to guide the behavior of personnel in an organization. Centralization refers to the extent to which decision-making activities are concentrated in the hands of few, especially at the top. The opposite of centralization is decentralization. In a decentralized organization, decision-making is pushed down to the managers closest to the action [13].

Empirical Review

Previous researchers have examined the effect of organizational structure on organizational outcomes. Mon [15] examined the effect of complexity, formalization, nature of hierarchy and technology on company performance in Indonesia’s manufacturing industry. Findings indicated that organizational structure dimensions of complexity and nature of hierarchical variables have a positive but not significant effect on performance, while formalization and technology have a positive and significant effect on firm performance. Ogbo et al. [17] conducted research in selected technical and service firms in Nigeria. The study aims at examining the effect of organizational structure (specialization, formality, centralization and complexity) on company performance. The results indicate that there is a significant association linking organizational structure to company performance. The effects of organizational structure on the job satisfaction of employees in the Nigerian Financial sector were examined by Thomas [20], using a sample of 259 respondents. His findings indicate that there is a correlation between organizational structure and optimum job satisfaction. In Iran, Ahmadi et al. [1] study examined the relationship between organizational structure and organizational agility in an insurance company. The relationship between organizational agility and two dimensions of organizational structure (formalization and centralization) was found to be positive and significant, however, no significant relationship was found between complexity and organizational agility. From the results of these researches, this study makes the following propositions:

H1:  There is no relationship between organizational structure and organizational agility.

H2:  There is no relationship between organizational complexity and organizational agility.

H3:  There is no relationship between organizational formalization and organizational agility.

H4:  There is no relationship between organizational centralization and organizational agility.

Participants

Participants in this study were 208 postgraduate students in the Faculty of the Social Sciences, Delta State University, Abraka, who are working in both public and private organizations in Edo, Delta and Bayelsa States. These respondents were administered a structured questionnaire, however, 187 useful and completed questionnaires were coded and used in data analysis.

Measures

This study adopted scales used by previous researchers to measure both the dependent (organizational agility) and independent variables (organizational structure). Organizational agility was measured by nineteen items adopted from Worley et al. Respondents were asked to describe their organization, using 4-likert scale which ranged from 1 (Strongly disagree) to 4 (Strongly agree). Organizational structure was operationalized by formalization, centralization and complexity. Formalization was measured by seven items adopted from Lambert, Paoline and Hogan - and Oldman and Hackman, centralization was measured by seven items adopted from Caruana, Morris and Vella - and Oldman and Hackman, while complexity was measured by eight items adopted from Deewar et al. Respondents used 5-likert scale ranging from 1(Strongly disagree) to 5(Strongly agree) in responding to these items.

Model Specification:

oa= f(of, oc, ox) ………….1

oa = β₀+ β₁of +β₂oc +β₃ox + €₀ ......2

Where:

oa             =              Organizational agility 

of              =              Organizational formalization

oc              =              Organizational centralization 

ox              =              Organizational complexity

β₁ …β₃      =              Coefficients

β₀              =              constant terms

€₀                 =              Error terms

The demographic characteristics of the participants in this study are shown is Table 1. As indicated in Table 1, male respondents [N = 140 (74.87%)] were in a majority, while female respondents were only 47 (25.13%). The age of the respondents ranges from 20 – 29 years [N = 22 (11.76%)]; 30–39 years [N = 100 (53.48%)]; 40–49 years [N = 60 (32.09%)]; and above 50 years [N = 5 (2.67%)]. In terms of marital status, the number of singles was 40 (21.39%), while those who are married were 147 (78.61%). Further, in terms of highest educational attainment, 5 (2.67%) had qualifications below the Bachelor’s degree, while 124 (66.31%) had Bachelor’s degree and 58 (31.02%) had postgraduate degree. Finally, participants had worked in their organization for a period which ranges from 1 -10 years [N = 125 (66.84%)]; 11 – 20 years [N = 57 (30.48%)]; 21–30 years [N = 4 (2.14) %)]; and above 30 years [N = 1 (0.53%)].

Table 2 indicates the descriptive statistics of the study variables. As shown, the total number of observations was 187. The mean, standard deviation and Cronbach alpha for formalization (of) were (4.17, 0.59 and 0.83); centralization (oc) (3.91, 0.54 and 0.79); complexity (ox) (3.25, 0.58 and 0.87); and agility (oa) (2.93, 0.62 and 0.91) respectively.

The correlation among the study variables are shown in Table 3. The Pearson correlation coefficient between agility (oa) and formalization (of) was r = 0.46, p<0.05; agility (oa) and centralization (oc) was r = -0.06, p> 0.05 and agility (oa) and complexity(ox) was r = 0.37, p<0.05. These results indicates that the correlation between the dependent variable (agility) and independent variables formalization and complexity were positive and significant at p<0.05, however the correlation between the dependent variable (agility) and independent variable (centralization) was negative but insignificant at p<0.05. Although, the correlation among the study variables were not high, Variance Inflation Factor (VIF) was performed, to confirm the absence of multicollinearity among the independent variables. As shown in Table 4, the mean VIF was 1.12, which is less than the cutoff value of 10. This result confirms the absence of multicollinearity.

Hypotheses Testing

The result of regressing organizational agility (dependent variable) on organizational structure (independent variable) is shown in Table 4. The value of F-test determines the statistical significance of the model. Overall, Table 5 indicates an F (3,183) = 26.64, p = 0.000, which is less than 0.05 (p<0.05), thus the regression model statistically significantly predicts the outcome variable (i.e., it is a good fit for the data). The R-squared value of 0.304 indicates that approximately 30.4% of the variance in the dependent variable (organizational agility) is accounted for by the independent variable (organizational structure). Thus, H1 is rejected. Therefore, organizational structure significantly predicts organizational agility.

Furthermore, the regression coefficients, standard errors, t-values and level of significance of the multiple regression analysis is shown in Table 6. From this table the regression model is thus:

oa = 0.197 + 0.471of - 0.041oc + 0.286ox 

(3)

From equation 3 above, a one-unit change in organizational formalization will affect a 47 times positive change in organizational agility, with a standard error of 0.072. Thus, with β = 0.471, t = 6.50, p = 0.000 < 0.05, H2 is rejected.

Table 1: Shows the socio demographic characteristics of the participants in the study

Table 2: Descriptive Statistics of Study Variables

where, of = formalization, oc = centralization, ox = complexity, oa = agility

Table 3: Correlations among the study variables

^*p<0.05

where, of = formalization, oc = centralization, ox = complexity, oa = agility

Table 4: Variance Inflation Factor (VIF)

Table 5: Results of regression analysis

Table 6: Regression coefficients of study variables

Therefore, there is a positive and significant relationship between organizational formalization and organizational agility. Also, a one-unit change in organizational centralization will affect a 4 times reduction in organizational agility, with a standard error of 0.067. Thus, with β = -0.041, t = -0.61, p = 0.543 > 0.05, H3 is rejected. Therefore, there is a negative and insignificant relationship between organizational centralization and organizational agility. Finally, a one-unit change in organizational complexity will affect a 29 times positive change in organizational agility, with a standard error of 0.058. Thus, with β = 0.286, t = 4.90, p = 0.000<0.05, H4 is rejected. Therefore, there is a positive and significant relationship between organizational complexity and organizational agility.

The main objective of this study was to demonstrate the effect of organizational structure on organizational agility in Nigeria. In more specific terms, the study sought to examine the extent to which the dimensions of organizational structure (i.e. formalization, centralization and complexity) influence the ability of organizations to speedily respond to changes in their business environment (organizational agility). The results of the study indicate that overall, organizational structure was a strong predictor of organizational agility. This finding is consistent with the results of Ahmadi et al. [1]. Organizational structure was also found by other researchers to be strongly related to job satisfaction Thomas [20] and company performance [17, 15].

Organizational formalization and complexity were found to be positively and significantly related to organizational agility. This finding implies that organizations will be more agile if the rules are clearly and explicitly stated, there is a high degree of specialization as well as geographical dispersion of activities within the organization. Further, centralization of organizational activities was negatively but insignificantly related to organizational agility. This implies the need for decentralization of organizational activities, instead of centralization. A decentralized organization can act more quickly to solve problems as more people provide input into decisions and employees are less likely to feel alienated from those who make decisions that affect their work lives.

In researching the association between organizational structure and organizational agility, this study demonstrated that the structure of an organization significantly predicted the responsiveness of an organization to the dynamic changes in its business environment. To take advantage of emerging global opportunities, organizations must have efficient and agile business processes, flexible organizational structure, open-to-change workforce, agile networks and partners and easily adaptable technology. So, for success to be guaranteed in the 21^st century, organizations must adopt competitive bases such as speed, flexibility, innovation and quality by means of the integration of reconfigurable resources and best practices of knowledge-rich environment to provide customer-driven products and services in a fast-changing environment [21]. The study makes the following recommendations:

• The management of organizations in Nigeria (both private and public) should be abreast of the changes taking in their business environment

• The speed by which organizations respond to the dynamic changes within organizations is of utmost importance

• Restructuring of organizational activities is needed, in terms of formalization, complexity and decentralization, to ensure organizational agility

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