Implementation of the Determinants of Organizational Structure in Business Firms

Abstract

The study focused on the determinants of organizational structure and the financial conditions of the business firms. It aims to measure the extent of implementation of the determinants of the firms’ organizational structure in terms of the strategy, technology, size of the organization, and environment that affects the firms’ profitability, liquidity, and stability. It was conducted to 45 DTI-registered business firms with 290 BOD members and managers as the respondents. The results of the study show that the determinants of organizational structure are implemented by business firms under study to a great extent. Further, the firms’ financial condition is significantly related with its strategy, technology, organizational size, and environment. The findings reveal that business firms that were implementing strategic actions to a greater extent had lesser rate of returns and lesser current assets ratio. Business firms that were implementing technology, organizational size determinants and environment determinants to a great extent had lesser rates of returns, lesser current ratios, and lesser returns. Firms should maximize the investments they have allocated for the various areas and phases of the determinants.