The Effect of organization structure on the performance of supermarkets in Embakasi, Nairobi County, Kenya

Abstract

Supermarkets have a major impact on the economy and have the potential to contribute to job creation. Effective organizational structures within this sector can enhance organizational performance and facilitate job growth. Therefore, the supermarkets in Nairobi must adapt appropriate organizational structures to achieve the desired performance. This study aimed to investigate the impact of management structure on the performance of supermarkets. Specifically, the study sought to establish how divisional, hierarchical, functional, and horizontal organizational structures on the performance of supermarkets. The study is grounded in the agency theory. A cross-sectional descriptive research design was employed, targeting individuals responsible for operations, finances, and customer care from supermarkets located in the Embakasi region of Nairobi County. Using a judgmental sampling approach, 315 respondents were selected from the sampled supermarkets in the specified area. Primary data was gathered using a structured questionnaire. The collected data were rigorously examined for completeness, coded, and analyzed using the Statistical Package for Social Sciences (SPSS) Version 24. This analysis encompassed descriptive statistics, correlation analysis, and regression analysis. The findings were displayed using tables and graphs. The results indicated that all the organizational structure factors of divisional organization structure, hierarchical organization structure, functional organization structure, and horizontal organization structure significantly influenced the performance of the Supermarket business in Embakasi Region, Nairobi County. The study recommended that the study recommended that Ministry of Trade and the Ministry of Industrial Development, SMEs, and Cooperatives provide policy directives to ensure that the supermarkets put in place effective organization structures that can help the supermarkets meet their desired performance. Additionally, the two ministries should increase their training and mentorship to build capacity among supermarket management and director to adopt an effective organizational structure that can help them achieve their performance objectives. Additionally, the supermarkets need to identify the most appropriate organization that meets their own organizational needs.