The Effects of Capacity Development on Organizational Performance: The Case of Municipal Assemblies in Ghana

Abstract

The need for organizations to pay attention to their essential resources has been a global concern for some time now. This is because the performance of any organization is fundamentally determined by the requisite capacities to improve its overall performance. Organizations are therefore making efforts to improve skill gaps across individuals, groups, organizations, sectors, and institutions by developing their capacities. To enable the Ghanaian Local government sector, through its agencies - Municipal and Metropolitan assemblies – discharge their mandates effectively, developing capacity has been a frequent feature in their functional strategy in order to promote local economic development and respond to numerous socio-economic challenges at the local level. This paper seeks to examine the relationship between elements of capacity development such as Management Capacity (MC), Technical Capacity (TC) and Management Innovation (MI) as determinants of organizational performance. The study used a survey questionnaire administered to 302 from 36 Municipal and Metropolitan Assemblies in Ghana to gather data needed. The results of this study, with the use of SEM-PLS, indicate that all the elements had positive and significant implications on organizational performance. Again, the study reveals a high predictive accuracy, providing a variance of 41.6 percent of changes in the dependent variable. The study recommends for investment in resources that contribute immensely to the organization’s outcomes. The study also calls for managers of municipal assemblies to commit themselves to ensuring availability of such important resources in order to sustain the organizational performance.