EFFECT OF ORGANIZATIONAL STRUCTURE ON PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KADUNA STATE, NIGERIA; THE ROLE OF LEARNING ORIENTATION

Abstract

The purpose of this study was to examine the effect of the dimensions of organizational structure (complexity, formalization and centralization) on the performance of SMEs as well as the role of learning orientation. Adopting a cross-sectional survey design, Primary data was collected through the use of structured questionnaire randomly administered to 417owners/managers of SMEs in Kaduna state of Nigeria. Krejcie and Morgan (1970) statistical formula for sample size determination from a finite population was used to obtain a sample size from a population of 2650 SMEs in Kaduna state and an additional 50% of the sample size was added to eliminate any instance of a short fall or sampling error. Data cleansing and preliminary analysis were undertaken using SPSS.23. Structural Equation modelling via SmartPLS 3.0 was employed to compute the two main models; structural and measurement models for the test of the hypotheses. The findings of the study revealed that complexity positively and significantly affects SME performance while centralization and formalization had a negative and insignificant effect on SME performance in Kaduna state. Also, learning orientation moderated the effect of complexity on SME performance but not centralization or formalization. The study recommended that owner/managers of SMEs deliberately improve their learning orientation as it will influence better performance.