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Critical evaluation of organizational structure and culture impact on the productivity of MFIs within the example of Agroleasing

Author

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  • Aram Mkhitaryan

    (European University of Armenia, Department of Economics & Management)

Abstract

Nowadays, for surviving in dynamic and global environment, companies need to have strong organizational culture to have competitive production or service, flexibility for quick response of environmental changes, which can be achieved by optimal organizational structure. It will impact on the whole company's productivity and influence on better performance and duties balance. The main purpose of this study is to identify the cultural and structural issues of the MFIs in Armenia, examine the best practice and give improvement action plan. Based on the literature review there are diverse studies that prove the relationship between structure and culture of the company and their correlation with productivity. Actually, organizational structure and culture have a great influence on the productivity, as the formal and informal communications between employees predict the level of their work efficiency. Being a driver of a company's execution, organizational culture and structure are connected with different activity outcomes. While examining the current situation in Agroleasing few problems were identified in accordance with productivity of the company. One of them is connected with the complicated organizational structure as there are several positions that are not used in reality. The other was linked with the absence of cultural behavior; the employees are acting based on their preferences and professional level. These two issues had a serious impact on the performance of the company. Summarizing the best approaches of literature review and identifying the problems of Agroleasing, several test-cases were organized in order to evaluate the current efficiency of the organizational structure and to understand the roots of employee's diverse behavior approaches. According to the results of researches recommendations were highlighted for each sphere. A new organizational structure was offered in order to simplify the complexity of the duties, also servant leadership behavior was recommended as a way of better internal cultural environment creation.

Suggested Citation

  • Aram Mkhitaryan, 2022. "Critical evaluation of organizational structure and culture impact on the productivity of MFIs within the example of Agroleasing," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 24(2), pages 106-120, December.
    • Handle: RePEc:rse:wpaper:v:24:y:2022:i:2:p:106-120
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    References listed on IDEAS

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    5. Bob Ssekiziyivu & Rogers Mwesigwa & Juma Bananuka & Zainab Namusobya, 2018. "Corporate governance practices in microfinance institutions: Evidence from Uganda," Cogent Business & Management, Taylor & Francis Journals, vol. 5(1), pages 1488508-148, January.
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    More about this item

    Keywords

    microfinance; culture; microloan; efficiency; productivity;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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