European Journal of Economics and Business Studies
Volume 9, Issue 1, 2023 · ISSN 2411-9571 (Print) · ISSN 2411-4073 (Online)
Structure, Strategy and Organizational Design in Albanian Context
"Wisdom University”
ludmilla.shkurti@gmail.com
Submitted: 2016-11-28 · Accepted after Revision: 2017-02-28 · Published: 2017-03-28
Research ArticleDOI: 10.26417/ejms.v1i1.p233-248
Abstract
This research paper will try to understand and explain how much and how is understood the nature, the importance and factors that affect the business organizational structure and design in Albanian Organizations, compared with theoretical factors researched from the literature. How a business does structure in our country, knowing how important are the theoretical factors in business organization performance and therefore how much and how the principles of organizational design are applied in Albanian Organizations. Why structure, strategy and organizational design? Organizational design and organizational restructuring remains one of the most important issues that management of organizations, in the global era and information technology, must deal with, for the fact that businesses today face some unprecedented challenges: increased competition, globalization, growing of social responsibility, technological changes, changes in taste and consumer’s exigency, new strategic thinking, etc. Referring the literature and contemporary researchers, a constant topic during these recent years has been the one of how globalization and economic crisis have obliged the organizations to review their strategies and to change the way they operate, trying often therefore to structure for surviving and achieving success. These challenges should be carefully managed in order to build and hold a high performance organization, to deal with tough competition and endless problem that this era we live does bear. It is also important to understand correctly that organizational structure and design, by dictating roles connection in an organization and consequently how people function, may often be the main cause of the problems, but also one more reason of success. The way that organizations structure or the specific model of business, may constitute their competitive advantage, or special strategic skills, so it can make a business organization unique and competitive in the market. For many researchers the prevailing conclusion is that the organizations either neglect the importance of organizational design, or they just do not know what to do about it and therefore they evolve in an indirectly, spontaneous or intuitive way. From what the paper identifies, most of organizational structuring in Albania are made in a hasty way, without seeing or paying attention to full frame or circumstances. This may result in some partial and fragmentary initiatives instead of aiming in organizational designing and general structuring. This is not surprising as the subject is complex, often poorly explained and not rightly understood even though the academics and the consulters have made a great work to address the organizational design topic. However the paper shows that entrepreneurs and managers still lack a practical and systematic framework in order to guide their choices of organizational structure. To find a practical approach for the organizational design, can be difficult, even though some business schools have tried to simplify the things. The study will try to achieve this task, through careful research, in order to diagnose the organizational design process and restructuring situation in Albania, highlighting the effect of the current challenges which have an impact on this difficult process, mainly based on a survey of 200 organizational businesses in Albania.
Keywords: organizational design, organizational structure, strategy.
Introduction
This paper is part of a broader study, which relates to the discovery and then the analysis of the main factors of which are driven Albanian organizations during the organizational design process.
Consequently, the paper, this time will focus only on the analysis of the factors of context, aiming discovering the main factor, and further trying to discover if this factor in Albanian organizations is the strategy or not.
To indentify the main factors of which are theoretically driven organizations in organizational design process, the analysis is based on the literature review of some known researchers of the organizations domain as Burton and Obel (2004), Daft and Armstrong (2012), Burton, Eriksen, Håkonsson and Snow (2006), etc.
Although it is almost impossible to define all the possible factors that directly affect modern business practice indirectly the various trends in organizational and work level, it is necessary to mention those most important. The literature review identifies some key context factors that condition organizational design which are: Size, organizational technology, environment, goals & strategy, culture.
The Methodology
The methodology consists of a combination of primary data with the secondary ones. The data from studies made by the Vlora District institutions such as Municipality, Prefecture, Chamber of Commerce and Industry, etc. is used.Private firms in Albanian cities such as Vlore, Fier, Lushnje, Saranda, Durres and Tirana are used to study the structure model. A questionnaire was drawn up to complete the findings and comparison. The questionnaire was designed to be addressed to the general managers of private firms, those of functions, or of the line ones, as well as to some experts. Questionnaires are standardized and uniform for all subjects included in the study. Questionnaires were distributed to 300 firms during the second half of 2011 and during 2012, 2013. Distribution of the questionnaire was made by personally interviewing individuals in each firm or via e-mail. The questionnaires took into consideration variables such as firm size, the year of their creation, knowledge about the structure and the organization's overall strategy, linking strategy organization for structuring future challenges.
A Factor analysis (principal factor) was used to give answer to the research question about the main factor that has an impact on the choice of organizational structure.
Research Question: Is the strategy the main factor that leads the choice of organizational design or an organizational structure?
The hypothesis H0:
The strategy is the main factor or the main dimension of context, which affects decision-making of business organizations in Albania for selecting and changing their organizational structure.
Hypothesis H1:
The main factor influencing the decision-making of business organizations in Albania for selecting and changing the structure is not the strategy, but other factors dictated by the challenges currently faced by business organizations in Albania.
2. Findings and Discussion
2.1 Descriptive Analyses
The statistical data: 200 (returned) questionnaires (from 300 distributed) have been analyzed, with a distribution of business activity as follows:
Fig.1. Businesses by the Section of Economic Activity.
Question no 14: How much is based the establishing organizational structure (labour division) to;
- the financial ability
- the other firms experiences (imitation)
- the spontaneous need shifted to experience/routine
- the casualty
According to the respondents’ opinion, the main factor and /or other ones which have more impact on the Albanian organizational business structuring process and design are as follow:
Tab. 1. Respondents’ Perception about Organizational Structure Factors
| Question no 14 : Respondents’ Perception about Organizational Structure Factors | ||
| Alternatives | Frequency | Percent |
| 1Financial ability | 72 | 36.0 |
| 2 Casualty | 25 | 12.5 |
| 3 Imitation | 65 | 32.5 |
| 4 Shift of the spontaneous need to exp. / routine | 30 | 15.0 |
| 5 No response | 8 | 4.0 |
Source: Authors` research.
To the Question no 23: How much do you know about business organizational structure?
The answer “I have average knowledge “is given of the 38% respondents only. (See the table no 2).
Tab. 2 Respondents’ opinion about awareness of management class in terms of organizational structure
| Nr | Alternatives | Frequency | Percent |
| 1 | Nothing | 10 | 5.0 |
| 2 | Very little | 30 | 15.0 |
| 3 | A little | 31 | 15.5 |
| 4 | On the average | 76 | 38.0 |
| 5 | Most | 40 | 20.0 |
| 6 | Everything | 13 | 6.5 |
| Total | 200 | 100.0 |
Source: Authors` research.
Based on the data we can say so that there is little awareness of the Albanian managers’ class on the importance of the structure.
To the Question no 24: How much do you know about business organizational strategy?
We have even a worse situation as the structures case. The answer “I have average knowledge “is given of the 27.5 % respondents only. (See the table no 3).
Tab. 3 Respondents’ opinion about awareness of management class in terms of organizational strategy
| Nr | Alternatives | Frequency | Percent |
| 1 | Nothing | 7 | 3.5 |
| 2 | Very little | 38 | 19.0 |
| 3 | A little | 49 | 24.5 |
| 4 | On the average | 55 | 27.5 |
| 5 | Most | 38 | 19.0 |
| 6 | Everything | 13 | 6.5 |
| Total | 200 | 100.0 |
Source: Authors` research.
Analysis of Context Factors That Guide the Choice of the Organizational Structure at the Albanian Business Firms.
Factor analysis estimates a priori the hypothesis, in analogy with the theory. The table, which shows the correlation matrix (comparing pairs of variables).It is used, as it is closely related to two important issues, first, variables can correlate with each other, but the values of these correlations are too low, caused them difficulty in determining the factor. So, in other words, depending on the coefficients correlation between pairs of variables, we could find out which of them has a significant value, serving as a factor in the analysis of factors.
The analyze by the Paired-Samples t Test will help comparing the averages of the perception assesment about impact of factors listed by the interviewers responding to the question 19 of the questioner (Q_19_1,2,3,4,5,6,7,8 ): Question no 19 : Which context factors have had impact on the new or changed structure in your company ?
Once we obtain the correlation matrix, (using SPPS 20 -software) we should define the method of the analysis; Factor Analysis or Principal Component Analysis. In our survey we used the method of Principal Component Analysis with assumptions, that total variance of variables to consider, depends on the variances of each component (factor) and the variance of the error is zero Thompson, (2004).
From the matrix of correlations (Table no. 4), it seems that no one of variables has a significant impact on others, so we should have to analyze the importance of each of the factors. For this, first we build striped graph averages and confidence intervals, 95% and see which of them is more important.
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
Table no.5 Paired Samples Statistics- Competition/ Strategy impact
Table no.5 /2 Paired Samples Correlations
| N | Correlation | Sig. | ||
| Pair 1 | Q_19_6 Perception of the Competition impact & Q_19_1 Perception of the Strategy impact | 200 | -.091 | .198 |
Table no.5 /3 Paired Samples Test
| Paired Differences | t | df | Sig. (2-tailed) | ||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||
| Lower | Upper | ||||||||
| Q_19_6 Perception of the Competition impact & Q_19_1 Perception of the Strategy impact | |||||||||
| Pair 1 | .485 | 2.330 | .165 | .160 | .810 | 2.944 | 199 | .004 | |
Table No.6 /Paired Samples Statistics
Table no.6 /2Paired Samples Correlations
| N | Correlatio n | Sig. | |
| Pair 1 Q_19_1 Perception of the Strategy Impact & Q_19_7 Perception of the business Model Impact | 200 | .215 | .002 |
Table no.6 /3Paired Samples Test
| Paired Differences | t | df | Sig. (2-tailed) | ||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||
| Lower | Upper | ||||||||
| Q_19_1 Perception of the Strategy Impact & Q_19_7 Perception of the business Model Impact | |||||||||
| Pair 1 | .205 | 2.165 | .153 | -.097 | .507 | 1.339 | 199 | .182 | |
It seems from the chart below (Figure no.2)that the perception on the impact of the variables that significantly affect more than others the structure are; Competition (Q_19_6), then the Business Model(Q_19_7), Strategy (Q_19_1), and Technology(Q_19_2).That means it is requiring a more detailed analysis of them.
Figure no.2 -The graph with Error Bars
For this we do compare their averages by paired Samples t-Test. By comparing the averages of the perception assesment about impact of the Strategy (Q_19_1 )and the Competition (Q_19_6) on structure we note from the first table; that the averages are respectively 8.70 and 8.21and standard deviation respectively 1.611 and 1.542 with the standard error average respectively 0.114 and 0109 ( Table no.5 ) .
From the second table, we note that they have a correlation of 0.198 and the significance 0.09 which means they are not related (correlated) ( Table no.5/2 ).
In the third table, we note that the Average / Mean = 0485, t = 2,944 and p = 0.004 <0.005. The mutual Probability of Competition assessment (Q_19_6) is very low (p = .027) and in fact shows us that there is only a 0.4% chance that the value "t "can be great if the null hypothesis is true, therefore, this "t" is important because it is less than .05. ) ( Table no.5/3 ).
The fact that the value t is a positive number indicates that the first context factor (perception on the impact of the Competition (Q_19_6) has the average more than the second one (perception on the impact of the Strategy (Q_19_1) and so this context factor -the Competition (Q_19_6 ), convinces us for an assessment higher than the other one the Strategy (Q_19_1). Therefore, we can conclude that the question of the importance of the Competition (Q_19_6) provides an estimate with a greater significance than that of the importance of the Strategy (Q_19_1), t = 2,944 and p = 0.004 <0.005. This result was predicted by the graph with error bars. (Fig.no.1).
By the Paired-Samples t Test comparing the averages of the perception assesment about impact of the Strategy (Q_19_1 )and the Business Model (Q_19_7) on structure we note from the first table that the averages are respectively 8.21 and 8.00 and standard deviation respectively 1.542 and 1.888 and the average standard error respectively 0.109 and 0.133. ) (Table no.6 ).
From the second table, (Table no.6/2 ).we note that they have correlation 0.215 and significance 0.002 which means they are not related (correlated).
In the third table, (Table no.6 /3,we note that the Average / Mean = 0.205, t = 1.339 and p = 0.182 > 0.005.
Mutual probability of Strategy assessment (Q_19_1) was high (p = .182) and in fact it shows us that there is only a 18.2% chance that the value “t” can be great if the null hypothesis is true, therefore, this “ t “is not important because it is greater than .05.
The fact that the value “t “is a positive number indicates that the first factor Strategy (the perception of the importance of the Strategy Q_19_1) is greater than the average of second- factor technology (perception of the Business Model (Q_19_7) however, the first factor strategy (Q_19_1) not convince us to a higher rating than the Business Model (Q_19_7).
Therefore, we can conclude that both questions about the importance of the Strategy (Q_19_1) and the Business Model (Q_19_7) provide us an assessment of the same significance, t = 1.339 and p = 0182> 0.005. This result was predicted by the graph with error bars.(fig.no.1)
By the Paired-Samples t Test comparing the averages of the perception assesment about impact of the Strategy (Q_19_1 )and the Technology (Q_19_2) on structure we note from the first table (Table no.7) that the averages are respectively 8.21 and 7.44 and standard deviation respectively 1.542 and 1.906 and the standard error Mean respectively 0.109 and 0.135.
From the second table, we note that they have correlation 0.080 and significance 0.263 which means they are not related (correlated) (Table no.7/2 ).
In the third table, (Table no.7/3 )we note that the Average / Mean = 0.770, t = 4.624 and p = 0.0 > 0.005.
Mutual probability of Strategy assessment (Q_19_1) was high (p = .0) and in fact it shows us that there is only a 0% chance that the value “t” can be great if the null hypothesis is true, therefore, this “ t “is not important because it is greater than .05.
The fact that the value “t “is a positive number indicates that the first factor Strategy (the perception of the importance of the Strategy Q_19_1) is greater than the average of second- factor technology (perception of the technology impact Q_19_2), however, the first factor strategy (Q_19_1) not convince us to a higher rating than technology one (Q_19_2.)
Therefore, we can conclude that both questions about the importance of the Strategy (Q_19_1) and Technology (Q_19_2) provide us an assessment of the same significance, t = 1.339 and p = 0.0> 0.005.This result was predicted by the graph with error bars.(fig.no.1)
Table no7.Paired Samples Statistics
| Mean | N | Std. Deviation | Std. Error Mean | ||
| Pair 1 | Q_19_1 Perception of the Strategy Impact & | 8.21 | 200 | 1.542 | .109 |
| Q_19_2 Perception of the Teknonology Impact | 7.44 | 200 | 1.906 | .135 |
Table no7/2.Paired Samples Correlations
| N | Correlation | sig | |
| Pair 1 Q_19_1 Perception of the Strategy Impact & Q_19_2 Perception of the Teknonology Impact | 200 | .080 | .263 |
Table no.7/3 Paired Samples Test
| Paired Differences | t | df | Sig. (2-tailed) | ||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||
| Lower | Upper | ||||||||
| Q_19_1 Perception of the Strategy Impact & Q_19_2 Perception of the Teknonology Impact | |||||||||
| Pair 1 | .770 | 2.355 | .167 | .442 | 1.098 | 4.624 | 199 | .000 | |
The analyze go further by the Paired-Samples t Test comparing the averages of the perception assesment about impact of all other factors (see the Annex ) listed by the interviewers responding to the question 19 of the questioner : Question no 19 : Which context factors have had impact on the new or changed structure in your company ?And doing that we find out that strategy is not the main factor that drive the Albanian businesses during the organizational design process.
Conclusion
The principal factor analysis did answer our question research regarding the most important factor by which the Albanian business firms are driven during the organizational design process or when they make their choices regarding the organizational structure.
Findings showed us that the strategy is not the main factor that drive the Albanian businesses during the organizational design process, or when they make choices about structural change.
As a result this analysis helped us highlighting that although the strategy is listed as one of the factors that drive organizational design process and change of structure in organizations in business in Albania (section of the descriptive analysis which is not part of this paper) here we did evidence that the strategy as a mentioned theoretically important dimension of context leads slightly or moderately the Albanian business organizations in decision process about organizational design.
The analysis highlights the "competition”, as a more important factor, which leads organizational structuring process. This result, for the author of this study is related to the challenges that Albanian organizations business face today, that dictate much more and harder on them than the main factors that theoretically should affect their decision-making, about organizational design process.
Of interest it is the finding of this paper that "business model" which is not evidenced theoretically, and it does not constitute a factor of context such as the strategy, is listed instead by respondents as important context factor in this analysis and it turns out to be the second factor, almost identical to “competition”, regarding the importance of it impact on the organizational design. This lead us in the conclusion that the new trends as well as the challenges facing businesses in Albanian context, are the critical and guide their process of organizational design.
From the study conducted, we found that despite changes which have occurred in recent years in Albania, and in particular in Vlora, Fier, Lushnje, Saranda, Durres and Tirana, we still do have little managers’ awareness about the importance of the organizational structure, strategy and design.
Recommendations for Researchers
Of interest would be the research about the structural dimensions that would be more present in organizations with high or low performance, or for organizations in certain sectors of the economy. So we could better understand their impact on organizational performance in the future.
In conclusion, the research reported in this paper has modestly provided few answers, but has generated some new research questions which seem to require further study. He has thrown little light on the controversy over the existence of fundamental universal dimensions of organizational structure, but he has suggested an approach that could be helpful in determining the existence or non-existence of these dimensions. Moreover, he has raised an opportunity for researchers about some relatively successful organizations structures which could be described differently and independently by several dimensions.
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Anexes
Paired Samples Statistics Techonology / Business Environment Change Impact
| Mean | N | Std. Deviation | Std. Error Mean | ||
| Pair 1 | Q_19_2 Perception of the Techonology impact | 7.44 | 200 | 1.906 | .135 |
| Q_19_4 Perception of the business environment change impact | 6.78 | 200 | 1.993 | .141 |
Paired Samples Correlations
| N | Correlation | Sig. | ||
| Pair 1 | Q_19_2 Perception of the Techonology impact & Q_19_4 Perception of the business environment change impact | 200 | .002 | .980 |
Paired Samples Test
| Paired Differences | t | df | Sig. (2-tailed) | ||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||
| Lower | Upper | ||||||||
| Pair 1 Q_19_2 Perception of the Techonology impact & Q_19_4 Perception of the business environment change impact | .660 | 2.755 | .195 | .276 | 1.044 | 3.387 | 199 | .001 | |
Paired Samples Statistics Digitalization /Business Environment Change Impact
| Mean | N | Std. Deviation | Std. Error Mean | |
| Pair 1 Q_19_3 Perception of the Digitalization impact (Computer /internet) Q_19_4 Perception of the business environment change impact |
6.69 | 200 | 1.789 | .126 |
| 6.78 | 200 | 1.993 | .141 |
Paired Samples Correlations
| N | Correlation | Sig. | |
| Pair 1 Q_19_3 Perception of the Digitalization impact Q_19_4 Perception of the business environment change impact |
200 | -.170 | .016 |
Paired Samples Test
| Paired Differences | t | df | Sig. (2-tailed) | ||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||
| Lower | Upper | ||||||||
| Pair 1 Q_19_3 Perception of the Digitalization impact Q_19_4 Perception of the business environment change impact |
-.090 | 2.895 | .205 | -.494 | .314 | -.440 | 199 | .661 | |
Paired Samples Statistics Business environment change/ Consumer Request Change Impact
| Mean | N | Std. Deviation | Std. Error Mean | ||
| Pair 1 | Q_19_4 Perception of the business environment change impact | 6.78 | 200 | 1.993 | .141 |
| Q_19_8 Perception of the Consumer Request Change Impact | 6.08 | 200 | 1.584 | .112 |
Paired Samples Correlations
| N | Correlati on | Sig. | ||
| Pair 1 | Q_19_4 Perception of the business environment change impact Q_19_8 Perception of the Consumer Request Change Impact |
200 | -.142 | .045 |
| Paired Samples Test | ||||
Paired Samples Correlations
| N | Correlati on | Sig. | |||||||||||
| Paired Differences | t | df | Sig. (2-tailed) | ||||||||||
| Mean | Std. Deviation | Std. Error Mean | 95% Confidence Interval of the Difference | ||||||||||
| Lower | Upper | ||||||||||||
| Pair 1 Q_19_4 Perception of the business environment change impact Q_19_8 Perception of the Consumer Request Change Impact |
.695 | 2.716 | .192 | .316 | 1.074 | 3.618 | 199 | .000 | |||||
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