ABSTRACT
This study focused on the impact of conflict management strategies on organizational performance (a study of selected money deposit banks in Abia State). The objectives of the study includes : to investigate the relationship between conflict management and organizational performance of the selected money deposit banks in Abia State of Nigeria; to ascertain the relationship between Conflict Management and organizational performance of the industry: to determine the challenges that affects effective Conflict Management strategies in the industry performance in Nigeria. Survey research design was adopted. Four money deposit banks were selected for the study; they are Diamond bank, Zenith bank, UBA and Ecobank Plc. The population of the study was 1263 and Taro Yamane sample size formula was used and 304 sample size was derived while 219 responded. The study utilized Karl Pearson’s Product Moment Correlation analysis with a value of 0.05 (level of significance) that corresponds to a 95% confidence level. The result revealed that there was significant relationship between conflict management strategies and banks performance. Also the adoption and implementation of conflict management strategies for the industry have a significant relationship on their performance. There are also strong correlation relationship between challenges affecting conflict management strategies and organizational performance of selected money deposit banks in Abia State of Nigeria. It is also seen that the correlation coefficient of productivity, profitability, increased market share and competitive advantage were significant. This indicates that there are positive and strong impact relationship between effective conflict management strategies and organizational performance in the industry in Nigeria. The study recommended that managers should involve and carry every party in conflicts along while resolving conflicts to enhance employees’ participation and sense of belonging in the organization. Managers should also adopt and maintain good conflict management strategies that will boost and improve performance of the industry.
TABLE OF CONTENTS
Title Page i
Declaration ii
Dedication iii
Certification iv
Acknowledgements v
List of Tables vi
List of
Figures
vii
Abstract
viii
CHAPTER 1
1.0
INTRODUCTION
1.1 Background of the Study
1
1.2 Statement of the Problem 3
1.3 Objectives of the Study
6
1.4 Research
Questions
6
1.5 Research Hypotheses
7
1.6
Significance of the Study
7
1.7 Scope of the Study
8
1.8
Limitations of the Study 8
1.9
Operational Definition of Terms
9
1.10 Brief history of
the selected money deposit banks
10
CHAPTER 2
2.0 REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework
13
2.1.2 Sources and causes of organizational conflicts 14
2.1.3 Types of organizational conflicts
20 2.1.4 Benefits of organizational conflicts
23 2.1.5 Negative effects of conflicts 24
2.1.6 Organizational conflict management
26
2.1.7 Organizational conflict management strategies
28
2.1.8 Conflict management strategies and organizational performance in banks 41
2.1.9 Instruments of measuring organizational performance in the banking industry in Nigeria 44
2.1.10 Challenges affecting effective conflict management in the banking industry in Nigeria 47
2.1.10.1 Internal business environment
48
2.1.10.2 External business environment 53
2.1.10.2.1 Micro (operating) business environment
53
2.1.10.2.2 Macro (general) business environment 56
2.1.11 The impacts of effective implementation of conflict management strategies in the
banking industry 62
2.1.12 Measurement of
the impacts of conflict management strategies on organizational
performance
64
2.2 Theoretical Framework
66
2.2.2 Schools of thoughts on organizational conflicts theory
66
2.2.2 Organizational conflict theories from sociological perspective 69
2.3 Empirical review
71
2.4 Summary of literature
78
CHAPTER 3
3.0 RESEARCH METHODOLOGY
3.1 Research Design
82
3.2 Sources of Data 82
3.3 Population of the Study
82 3.4 Sample size Determination
83 3.5 Sampling Procedure
83
3.6 Description of Instrument
84
3.7 Validity of the Instrument
84 3.8 Reliability of the Instrument
85
3.9 Method of Data Analyses
85
3.10 Model Specification
85
3.11 Decision Rule
86
CHAPTER 4
4.0 DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Data Presentation and Analyses of Research Questions 87
4.2 Analyses of Research Questions
90
4.3 Testing of Hypotheses
98
4.4 Discussion of Results 109
CHAPTER 5
5.0 SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of Findings
115
5.2 Conclusion
116
5.3 Recommendations
116
5.4 Areas
for Further Studies
117
References 118
APPENDICES
132
LIST OF TABLES
4.1.1 Return rate of Questionnaire 66
4.1.2 Age of Respondents 67
4.1.3 Sex of Respondents 67
4.1.4 Educational Qualifications 68
4.1.5 Employee Status 68
4.2.1: Responses from Question 1.1 in the
Questionnaire are Shown Below 69
4.5.1 Under the Internal and
External Environmental Factors Affecting Conflict Management
Strategies in Money
Deposit Banks in Nigeria 72
4.6 What are the Impact of Effective Conflict Management on Organizational Performance of the Money Deposit Banks? 74
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF THE
STUDY
Conflict
is a household name and a global phenomenon.
Conflict management has gained a global interest as conflict is
unavoidable and inevitable in a societal life most especially in an
organizational setting since the goals of different stakeholders such as
managers and staff, customers, government agents, competitors, etc are often incompatible. Dodd
(2003), opine that business
organizations are operating in a turbulent and emerging business environment
where they are searching for measures that will allow them to improve their
performance and competitiveness.
Business organizations both local and international
are continuously in competition with other business organizations. This
competition is usually in the areas of raw materials sourcing, engagement of
skilled manpower and location of production and marketing facilities in the
most advantageous sites as well as in
the struggle for pervasive in the business world (Orie and Ibekwe, 2014). In the view of Martinez-Corts, Ines; Boz,
Marina, Francisco, Benitez, Miriam; Munduate, Lourdes (2011), people have
different experiences, values, opinions and ways to carry out tasks, which are
likely to lead to disagreements. As a matter of fact, international business
organizations have faced and are still facing conflicts as a result of incompatible
goals and objectives. Olu and Dupe (2011), view conflict as
a situation of competition in which the parties are aware of the
incomparability of potential future position in which each party wishes to
occupy a position that is incompatible with the wishes of the other. Ongori (2009), reiterates that
conflicts have both negative and positive outcomes to the individual employees
and the organization at large.
Hocker and
Wilmot (1995) also maintained that not all conflicts are bad and not all
conflicts are good. There is no one source of conflicts which occurs in
organizations at all levels of management.
Olu
and Dupe (2011) a study
survey indicated that managers spend a considerable portion of their time
dealing with conflict and that conflict management becomes increasingly
important to their effectiveness. Business
organizations and managers all over the world are adopting conflict management
and its strategies in resolving organizational conflicts. The adoption and
effective implementation of conflict management strategies will enhance performance
in business organizations. The adoption and implementations of conflict
management and its strategies vary from country to country and business
organizations to business organizations. This is as a result of environmental
factors inherent in different countries and organizational settings. There is
no set of conflict management framework and practices that is appropriate for
all countries and business organizations. Therefore,
there is need for business organizations to understand the meaning, sources and
causes, types of conflicts, benefits and negative effects. It is also important
for them to know organizational conflict management strategies and their
impacts on performance of organizations.
Following
the adoption of universal banking in 2001 in Nigeria, the banking industry has
contributed to the economic development of the country. Despite the numerous
and important roles the industry plays, it has been facing one conflict or the
other and it has resulted to fraud and forgeries, unprofessional conduct and
customer's disloyalty tends to reduce shareholders wealth, leading to a weak
and unreliable sector. Many business owners and directors abuse or misuse their
privileged position by engaging in self- serving activities. This has also led
to the loss of public confidence, it has reduced organizational performance.
The
development has led scholars, researchers, organizational bodies to discover
conflict management theories, mechanisms and strategies of handling conflict in
workplace in order to improve organizational performance.
According to Azamoza (2004), conflict can help
strengthened the organization and enable the organization to improve its
performance. This means when properly managed. This paper therefore, focuses on
conflict in organization and ways or strategies that managers can explore in
order to resolve it before it hinders the organization from reaching it goals
and objectives. In other words, the
effective application of conflict management strategies to resolve
organizational conflicts that occurred as results of incompatible goal and
environmental changes will lead to increase in organizational performance,
enhances productivity, improve growth, profitability and sustainability of the
organization. Therefore, the objective of this study is to evaluate the impact
of conflict management strategies on organizational performance, using the
banking industry as a study.
1.2 STATEMENT OF THE
PROBLEM
The
Concept of Conflict Management has gained a global
interest. This is because
organizational conflict
is a global phenomenon and it has led to stiff competitions among international
and local business organizations as a result of their incompatible goals and
objectives.
Fajana
(1995), opined that organizational conflicts can arise over a multiple of
organizational experiences, such as incompatible goals, differences of values
and philosophies or disputes over shared resources. Olu
and Dupe, (2011) also maintained the same view with Fajana on organizational
incompatible goals. They view conflict as a situation of competition in which
the parties are aware of the incomparability of potential future position in
which each party wishes to occupy a position that is incompatible with the
wishes of the other.
Adomi and Anie (2005) stated that
dealing with conflicts is a great challenge to management.
Mba (2013) opined that it is the responsibility of the management to resolve
conflicts properly for the sake of increasing organizational performance
because the result of such action will result to good communication, time
management, good cooperation and increase organizational performance. According to Ongori (2009)
when organizational conflicts occur and there are not properly managed the
adverse effect on the organization would be delays of work, lack of commitment
and lack of action and in extreme cases complete breakdown of the group. In
other words, organizational conflicts could result to
high level of insider abuses, fraud by the top management and credit indiscipline (Nzotta, 2004). Organizational conflicts also result to low morale of employees, poor decision making, conflict of interest between stakeholders and the management, authoritarian leadership style, molestation and bullying of workers or employees, unhealthy competition in the market, mismanagement of funds, insider dealings and manipulation of accounting and financial records. According to the NDIC report (1995), there is increase of financial cost to be incurred by the economy in an attempt to resolve organizational
conflicts.
Furthermore,
organizational conflicts usually result in misunderstanding and breach of
communication in organizations, flagrant abuses of corporate procedures, office
and high incidence of corruption, delays of work, disinterest and lack of
action and job satisfaction, lack of
organizational commitment, wasting of organizational resources, idling
of machines, complete breakdown of the individual or groups, lost of public
interest and confidence on organizations, poor service delivery, low
productivity, low market share and low profitability, low organizational
performance, etc.
In
Nigeria as well as in other parts of the world, organizational conflicts have
led to corporate failures. There has been a series of conflicts in almost every
sector of the economy even in the banking industry. Following the adoption of
universal banking system in 2001 in Nigeria, the industry has witnessed a lot
of conflicts that have resulted to corporate failure of money deposit banks and
acquisition and merger of others. However, conflicts in the banking industry
have caused quarrels, disagreements and polarized the bank staff and top
management into factions, with its attendant divided loyalty (Doli, 2004). The above have adverse effect on the
country’s economic development both local and international scene. For instance,
direct foreign investments would be reduced; international recognition will be
lost, etc. Ebhodagghe (1997) stated that conflicts resulting to distress
in the banking sector have negative effect on foreign direct investment,
international payment systems (documentary credits) and also international
trade of the domestic economy. The issues mentioned above have raised questions
about the efficacy of conflict management and its strategies. This is because
the relationship between conflict management and organizational performance in
Nigeria has not been adequately considered. In fact, conflict management on
organizational performance has not been subjected to vigorous empirical
analysis by researchers and scholars. Conflict management and performance issues
have relied on statements which do
not represent a true situation of the strength of the organizations in Nigeria. It is in this vein that interest the researcher to study on the topic “impact of conflict management strategies on organizational performance in Nigeria (a study of selected money
deposit banks in Abia State)”
1.3 OBJECTIVES OF THE STUDY
The main objective is to study the impact of conflict management strategies
on organizational performance. The specific objectives include to; 1. Investigate the relationship between conflict management and organizational
performance of the selected money deposit banks in Abia State of Nigeria.
2. Examine the influence of conflicts on organizational performance.
3. Ascertain key conflict management strategies adopted in the money deposit banks.
4. Determine the challenges affecting conflict management strategies in the money
deposit banks in Nigeria.
5. To ascertain
the impacts of effective conflict management on organizational performance of
the money deposit banks.
1.4 RESEARCH QUESTIONS This paper
seeks to provide answers to the following questions:
1) What
relationship does conflict management have on the organizational
performance in the money deposit banks?
2) What
are the influences of conflicts on organizational performance?
3) What
is the key conflict management strategies adopted in the money
deposit banks?
4) What
are the challenges affecting conflict management strategies in the money
deposit banks?
5) What are the impacts of effective conflict
management on organizational performance of the money deposit banks?
1.5 RESEARCH HYPOTHESES
H01:
There is no significant relationship between conflict management and
organizational performance of the banking industry in Nigeria.
H02: There is no significant influence of conflicts on organizational
performance.
H03: Collaboration, accommodation, negotiation, arbitration, compromise, avoidance,
collective bargaining, adjudication, domination are not key conflict management
strategies adopted in the money deposit banks.
H04: There is no significant challenge affecting conflict management strategies in the
money deposit banks.
H05: There is no significant impact of effective conflict management on organizational
performance of the money deposit banks.
1.6 SIGNIFICANCE OF THE STUDY In a dynamic business environment like
Nigeria, where business organizations operate with increasing competition and
the economic platform is ever volatile leading to incompatibility and
disagreements among business organizations. The resultant effect is
organizational conflict. Therefore,
there is the need for organizations especially banks to study its strategies
especially conflict management concepts in order to continue existing. The
ultimate goal of any business is the maximization of profit and this goal is
achievable by enhancing performance through effective management of organizational
conflict. It aims
at providing deep rooted analyses of conflict management concept, theories and current
issues in the study.
This study is necessary because:
It would enable banks to provide a clear picture of how conflict can be managed
effectively for improving banking operations that will in turn lead to increase
in performance. Furthermore, it will be of immense benefit
to the banks in Nigeria in determining their conflict management strategies and how to manage conflicts even when dealing with bank customers. Finally, it will be useful in the
academic community (students and researchers) to uplift their knowledge and
further research on the study.
1.7 SCOPE OF THE STUDY This research centered on the impact of conflict management strategies
on organizational performance using four selected money deposit banks operating
in Abia State namely: Diamond Bank PLC, Ecobank PLC, Zenith Bank Nigeria PLC
and United Bank for Africa (UBA). It covers the meaning, sources and causes,
types, benefits and negative effects of conflict. The scope equally covers
organizational conflict management, strategies and its performance impact on
the banking industry. It equally discusses challenges affecting effective
conflict management strategies in the banking industry in Nigeria and effects
of effective management of conflict in banks in Abia State of Nigeria.
1.8 LIMITATIONS OF THE STUDY A study of this nature cannot be completed
without huddles. Due to the nature of banking operations, which needs high
level of secrecy, the challenges faced by the researcher includes: i.
Uncompromising attitudes of respondents: the respondents showed less concern
and displayed high level of laxity that resulted to the loss of some questionnaire. ii.
Methodological issues: the researcher faced stiff challenge and difficulties
while handling research methodology.
Above
all, the researcher was able to overcome the above limitations by appealing to
the respondents on the need of the study and that any information given will be
treated with strict confidentiality. The researcher consulted experts and also
the experts’ opinion of the supervisor in dealing with methodological issues to
achieve the general aims of the study.
1.9 OPERATIONAL DEFINITION OF TERMS Conflict: a form of disagreement in
an organization between two individuals or groups who have cause to interact formally
or informally as a result of compatible goals or objectives
Conflict Management: conflict
management is seen as the management process concerned with the identification
of the causes of conflict, formulation of strategies and implementing
with the available option capable of resolving it with the aim of achieving organizational goals.
Strategy: strategy is the determination
of the basic long term goals and objectives of an enterprise and the adoption
of courses of action and the allocation of resources for carrying
out these goals.
Negotiation: this is a conflict management strategy
use in resolving conflicts. It is viewed as a series of single, separate,
unique events that are the responsibility of the parties involved.
Mediation: Mediation is a form of assisted
collaborative negotiation supported by a third-party outsider to a conflict
situation who has no power to impose a resolution and who meets with the
parties to the conflict, together and separately, to help them (the conflicting
parties) reach their desired outcomes in an all-win manner for the good of all
the parties. Arbitration: Arbitration
is a conflict management processes used in resolving conflicts when
collaboration and negotiation fails, the parties to a conflict situation may
turn to binding or non-binding arbitration, in which a third party hears all
sides of the conflict and
makes a decision for the parties. Bank: A bank is defined by the Agricultural Credits Act 1928 S5 (7) as any firm,
incorporated Company or society carrying on the banking business and approved
by the minister. A bank is an institution corporated or unincorporated,
recognized by a country’s highest monetary authority or government for the
purpose of carrying on the banking business determined by that monetary
authority or government.
1.10 BRIEF HISTORY OF THE SELECTED COMMERCIAL BANKS IN NIGERIA
Presently, there are 21 money deposit banks licensed by the Central Bank of
Nigeria (CBN), to operate and carry out banking operations in the country. In
the course of this study, four money deposit banks operating in Abia State of
Nigeria were selected and they are: Diamond bank plc, Ecobank, Zenith bank and
United Bank for Africa (UBA).
DIAMOND BANK PLC:
is one of the money deposit banks licensed
by the Central Bank of Nigeria (CBN) the country’s apex bank and national
banking regulator as a financial services provider. Diamond bank has it’s
headquarter in Lagos, Nigeria. The bank started operations as a private limited company on March 21, 1991. The bank
was incorporated on December 20, 1990 and became a universal bank in 2001. As
at June 2013, Diamond bank PLC operates 240 branches in Nigeria. The bank has banking subsidiary in Benin, Senegal, Cote d’Ivoire, Togo and the United Kingdom. In Benin Republic, it has 20
branches, 2 branches in Senegal, 1 branch in Togo
while Cote d’Ivoire has 3 branches. The bank also has subsidiaries in countries it operates. The official website of the bank is
www.diamondbank.com. ECOBANK PLC: It is a
Pan-African banking conglomerate, with banking operations in 36 African
countries. As a leading independent regional banking group in West Africa and
Central Africa, it serves wholesale and retail customers. It maintains
subsidiaries in Eastern Africa, as well in Southern Africa. It has
representative offices in Dubai, China, Angola, France and South Africa. Ecobank
Nigeria is one of the commercial banks licensed by the Central Bank of Nigeria.
It was established in 1986, its Nigerian corporate head office is in Lagos,
Nigeria. It operates as a universal bank, providing wholesale, retail,
corporate, investment and transaction banking services to its customers in
Nigeria. Ecobank products include loans, savings, investments, debit and credit
cards. In 2011, Ecobank Nigeria acquired 100% of the shareholding in Oceanic
Bank and the bank has over 610 branch networks in the country. The official website of the bank is www.ecobank.com
ZENITH BANK NIGERIA PLC
Zenith
bank is one the money deposit banks licensed by the Central Bank of Nigeria. It
was established on May 1990 and became
a public limited company on June 17, 2004 and listed on the Nigerian Stock
Exchange on October 21, 2004. The bank has its headquarters in Lagos, Nigeria
and over 350 branches and business offices located across all states of the
federation. Zenith bank has
international presence in the United Kingdom, United Arab Emirate, Ghana,
Gambia and Sierra Leone. Zenith bank has the following subsidiaries:
Zenith Insurance, Zenith Pension Custodian, Zenith Ghana, Zenith Bank UK,
Zenith Trust Company, CyberSpace Networks.
The official website of Zenith bank is www.zenithbank.com.
UNITED BANK FOR AFRICA (UBA) United Bank for
Africa is a money deposit bank licensed
by the Nigeria’s apex bank and banking regulator, the Central Bank of Nigeria
(CBN). It was establishes in 1948 when the British and France Bank Limited
(BFB) started business in Nigeria. Following Nigeria’s independence from her
colonial master, Britain, UBA was incorporated in 1961 to take over the
business of BFB. It is a multinational financial institution with business offices in 20 African
countries. It also has offices in the United States, United Kingdom and France.
In 2005, UBA merged with erstwhile Standard Trust Bank plc and further acquired
the erstwhile Continental Trust Bank Limited (CTB) in 2005. UBA’s products
include: Internet banking U-Direct, Mobile banking U-Mobile, Wholesale banking,
corporate banking, Investment banking, Customer banking, Money Transfer, Debit
Cards, collections, Treasury, Trade, Savings Accounts, Current Accounts,
Domiciliary Accounts, and Non-Resident African Banking. The official website of the bank is www.ubagroup.com.
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