THE IMPACT OF CONFLICT MANAGEMENT ON ORGANIZATIONAL PERFORMANCE. (A STUDY OF NIGERIAN BREWERIES PLC.)

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ABSTRACT

The study examines the effect of impact of conflict management on the organizational performance. Thus, the specific objectives are to examine the impact of effective conflict management on organizational performance, determine the effect of grievance channel mechanism on organizational effectiveness, determine the impact of management intervention on organizational performance, and determine the impact of union mediation on organizational performance. The methodology that was used for the study was survey research design. Primary data was collected from a population consists of the management and staff of Nigerian Breweries Aba, Abia State with a total number of 205 in all. Pearson moment correlation and regression using ANOVA were employed as analytic technique in the study. Findings showed that Conflict Management has a positive and significant relationship with Organizational Performance. The result also reveals that grievance channel mechanism relate positively with organizational productivity, this relationship is found to be statistically significant. Furthermore, union mediation was tested, the result from the study reveals that union mediation has a positive and significant relationship with organizational efficiency. The study therefore concludes that conflict management and management intervention in controlling organizational conflict are necessary in order to maintain the right socio-economic environment that will enable the organization to achieve value maximization, and recommends that there is a continuous need for organizations to evaluate critically rules and regulation guiding the activities and operational workflow in the organization. It further recommends that strategic considerations are recommended when tightening or relaxing the policies regulating grievance channel mechanism in the organization.






TABLE OF CONTENTS

 

Title Page                                                                                                                                i

Approval                                                                                                                                 ii 

Dedication                                                                                                                              iii                                                                                                      

Acknowledgements                                                                                                                iv                                                                                       

Table of content                                                                                                                      vi  

List of Tables                                                                                                                          viii

Abstract                                                                                                                                  x                                                                                                            

 

CHAPTER 1:            INTRODUCTION

1.1           Background of the Study                                                                                            1

1.2           Statement of the Problem                                                                                           2

1.3           Objectives of the Study                                                                                              3

1.4           Research Questions                                                                                                    4

1.5       Research Hypotheses                                                                                                  4

1.6           Scope of the Study                                                                                                      4

1.7           Significance of the Study                                                                                           5

1.8       Limitation of the Study                                                                                               5

1.9       Organization of the Study                                                                                           6

1.10     Operational Definition of Terms                                                                                6

1.11     Brief History of Nigeria Brewery Aba                                                                       7

 

CHAPTER 2:            REVIEW OF RELATED LITERATURE

2.1       Conceptual Framework                                                                                              10

2.1.1    Concept of conflicts.                                                                                                  10

2.1.2    Types of conflicts in organizations                                                                            12

2.1.3    Conflict and competition                                                                                            14

2.1.4    Causes of conflict                                                                                                       15

2.1.5    Levels of conflict                                                                                                        19

2.1.6    The conflict process in organization                                                                          24

2.1.7    Conflict management and organization learning                                                        29

2.1.8    Criteria for conflict management                                                                               31

2.1.9    Measurement of organizational performance                                                             32

2.1.10  Impact of conflict on organizational performance                                                     34

2.1.11 Impact of effective conflict management on organizational performance                35

2.2       Theoretical Framework                                                                                              36

2.2.1    Cooperative theory                                                                                                     36

2.2.2    Principled negotiation                                                                                                36

2.2.3    Human needs theory                                                                                                   37

2.2.4    Conflict transformation                                                                                              37

2.3       Empirical Review                                                                                                       38

2.4       Summary of the Review of Related Literature                                                           41

2.5       Gap in Literature                                                                                                        41

CHAPTER 3: RESEARCH METHODOLGY

3.0       Introduction                                                                                                                43

3.1       Research Design                                                                                                         43

3.2       Sources of Data                                                                                                           43

3.2.1    Primary sources                                                                                                          43

3.2.2    Secondary sources                                                                                                      44

3.3       Population                                                                                                                   44

3.4       Sample Size Determination and Sampling Technique                                               44

3.5       Sampling Technique                                                                                                   45

3.6       Instrument for Data Collection                                                                                   45

3.7       Validity of Research Instrument                                                                                45

3.8       Reliability of Research Instrument                                                                             45

3.9       Methods of Data Analysis                                                                                          45

CHAPTER 4: DATA PRESENTATION AND ANALYSIS

4.1       Data Presentation                                                                                                        47

4.2       Socio-economic Characteristics of the Respondents.                                                48

4.2       Presentation and Analysis of the Research Questions                                                49

4.4       Hypotheses Testing                                                                                                    60

4.5       Discussion of Findings                                                                                               63

 

CHAPTER 5:            SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary of Findings                                                                                                 65

5.2       Conclusion                                                                                                                  66

5.3       Recommendations                                                                                                      67

5.4       Area of Further Study                                                                                                 68       

References







 

LIST OF TABLES

 

Table

 

4.1:      Distributed and collected questionnaires.                                                                  47

 

4.2:      Graphical representation of the respondents.                                                             48

 

4.3:      Conflict is a natural phenomena resulting to disagreement between

or among people in a work environment.                                                                   49

 

4.4:      Conflict affects performance or productivity in your organisation.                                    50

 

4.5:      Work place conflict arises when individual or group. goals are

incompatible with other attempt to realise organisation’s objectives.                   51

 

4.6:      When conflicts are well managed, organisation’s performance is

            stimulated.                                                                                                                  52

 

4.7:      Conflicts arising from unfair disciplinary measures against the individual,

deprival of promotion or annual increment among others can have adverse

effects on concerned employee.                                                                                 53

 

4.8:      Conflict may arise due to a breakdown of collective bargaining or

misinterpretation of collective agreement.                                                                 53

 

4.9:      Conflict resolution is more difficult in higher hierarchical level rather

than the lower ones.                                                                                                    54

 

4.10     Too much or too little as well as the channel chosen for communicating

            can easily stimulate opposition.                                                                                 54

 

4.11:    In Conflict resolution one party is willing to be self-sacrificing by

placing the opponent’s interest above its own.                                                           55

 

4.12:    In compromising there is no clear winner or loser but a willing to ration

the object of the conflict by accepting a win win situation.                                       55

 

4.13:    The action reaction interplay between the conflicting parties results

in consequences that may improve performance or hinder

group performance.                                                                                                    56

 

4.15:    Assessment of an organisation’s performance can be supported by the

use of return on asset, return on equity and profit margin.                                        57

 

4.16     Conflict situation in organisation’s make workers become more aggrieved,

less committed to work, frustrated, unmotivated and less productive.                  58

 

4.17.    Effective conflict management requires that the grievances of the

parties in dispute be addressed to give them a feel of palliative.                             59

 

4.18.   Effective conflict management is imperative for corporate organisations

because of its direct and indirect impact on corporate performance.                           59

 

4.19     There is no significant impact of effective conflict management on

organizational performance.                                                                                       60

 

4.20     There is no significant effect of grievance channel mechanism on

organizational effectiveness.                                                                                      61

 

4.21     Model summary                                                                                                          62

4.22    Anovaa                                                                                                                                                                                    62

4.23     Coefficientsa                                                                                                                                                                       62

 

4.24:    There is no significant impact of management intervention on

organizational performance.                                                                                       62

 

4.25:    There is no significant impact of union mediation on organizational

performance.                                                                                                               63

 

 


 


 

CHAPTER 1

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Conflict is a regular feature of formal organizations which results from divergences in interests of individual workers and management. Because individuals differ in their values, attitudes and goals, conflict among them becomes unavoidable. Conflict occurs at both individual and collective levels, personality and other structural factors coming into play (Onah, 2010).

Two types of conflicts at work have been distinguished. These are organized and unorganized conflicts. (Otobo,2005) expresses that organized conflict forms part of a conscious strategy to change the situation which is identified as source of discontent. This type of conflict is thus a group activity involving deliberate decisions taken at a mass meeting or by selected representatives of affected staff. In unorganized conflict, the worker responds to the situation in the only way open to him as an individual that is, by withdrawing from the source of discontent, or in reaction engaging in sabotage and rudeness. Agwu (2006) argues that such reaction rarely derives from any real calculative strategy. Indeed, unorganized expression of conflict are often, not regarded as conflict by the persons in the situation. This is why most people may not ordinarily associate acts of rudeness with being in a state of conflict. Quite often such rude behaviour may be attributed to “bad mood” and similar psychological states of mind. Conflicts in organizations, whether organized or unorganized, individual or group, need to be managed effectively because of their effects on the organization.

Conflict situations affect the overall effectiveness of organizations in the sense that they cause disharmony among organizational participants impacting negatively on organizational performance. This is because useful time and resources are wasted during conflicts in organizations. Nevertheless, we have to bear in mind than no organization is immune to conflict within itself since every organization is made up of different individuals with diverse interests, goals, ideas and temperaments and it is very difficult to harmonize these divergences. As a corollary, interests and goals usually conflict between the individuals and the management team as well as within the management team members.

Conflict management is an important aspect of organizational management. Ugbaja (2002) notes that the aim of conflict management is not to create an ideal corporate situation since that is not attainable given the divergences in the individuals goals, etc. However, conflict management systematically uses the available conflict resolution strategies to build an effective mechanism for conflict management in organizations. Although there may be existing mechanism and procedures already in place to deal with conflicts whenever they occur, some organizations with reactive managers rise to the situation when it occurs. Dunlop (2002) expresses that the virtues of organizational harmony underscores effective conflict management which is indisputable to effective organization’s performance. For this reason, every organization strives to ensure good work environment in which relationships among workers on the one hand, and workers and management on the other are cordial and appreciated by all the organization’s participants.

Based on the forerunning it is evidence that every organization encounters conflicts on a daily basis. The conflicts cannot be avoided, but it is possible to manage them in a way that managers recognize them on time. If managed properly, it will bring catalyst for change and can have a positive impact on employee satisfaction and performance of the organization. Conversely, unmanaged conflict negatively impacts both employee satisfaction and job performance. According to Zeljko (2013) One of the more important determinants of productivity, efficiency and performance, and finally job contentment is also the conflict as an independent variable of organizational performance.

The Nigerian Brewery is one such organization where conflict management is not only essential but should be effective given the organization’s vulnerability to huge financial losses whenever there is conflict. Against this background, therefore, this study is set to examine conflict management in the Nigerian Brewery Plc with a view to determining its impact on its performance.

1.2       STATEMENT OF THE PROBLEM

Conflict in any organization may not enable the organization to achieve its set objectives, result to low productivity among staff, leads to economic loss, insubordination, lack of direction and development of new ideas, communication breakdown, low morale, fragmentation and a host of other problems if not properly managed. Hart (2000) asserts that, successful organization in the future must create the capability to absorb conflict during the organization’s life cycle. The Centre for Effective Dispute Resolution (2005) supports the perception of an increase in organizational conflict with some hard facts. Their research reported a 17% increase in organizational conflict measured by the more than 115,000 employment tribunal applications in 2004 in the United Kingdom. According to Rivers (2005), the hidden costs of unresolved conflict in organizations are enormous and finding effective ways to manage and resolve organizational conflict can have a significant impact on productivity and therefore, enhance performance. Healthy differences of opinion are however vital in an organization in order for it not to stagnate, but when individuals are not able to work through their differences constructively and agree on a way forward, the conflict becomes destructive and damaging to individual, teams and ultimately to the organization (Rivers, 2005).

Understanding organizational conflict like that of Nigerian Brewery is therefore, important as it costs the management time, money, employee commitment and reputation, of which at the end, will provide solution to any conflict situation bedeviled by the organization in order to enhance performance. It is in the light of the above problem that the following research questions are being asked, of which this study is expected to provide answers to.

1.3       OBJECTIVES OF THE STUDY

The main objective of this study is to determine the effect of impact of conflict management on the organizational performance. The specific objectives are;

i.               To examine the impact of effective conflict management on organizational performance.

ii.              To determine the effect of grievance channel mechanism on organizational effectiveness. 

iii.       To determine the impact of management intervention on organizational performance. 

 iv.       To determine the impact of union mediation on         organizational performance.

 

1.4       RESEARCH QUESTIONS

The following questions will be addressed in this study;

i.               What is the effect of effective conflict management on organizational performance?

ii.              What is the effect of grievance channel mechanism on organizational effectiveness?

iii.  What is the impact of management intervention on organizational performance? 

 iv.       What is the impact of union mediation on organizational performance?

 

1.5       RESEARCH HYPOTHESES

The following hypotheses were postulated for this study and tested at o.05 level of significance:

H01:    There is no significant impact of effective conflict management on organizational performance.

H02:    There is no significant effect of grievance channel mechanism on organizational effectiveness. 

H03:    There is no significant impact of management intervention on organizational performance. 

H04:    There is no significant impact of union mediation on organizational performance.

 

1.6       SCOPE OF THE STUDY  

This study focuses on the effects of conflict management on the performance of organizations. No doubt, it will be practically difficult to cover all organizations in this study. Hence, the scope of the study is restricted to Nigerian Brewery Company Aba. It is believed that this will make a good representation.

1.7       SIGNIFICANCE OF THE STUDY

Conflict exists in all organization and human groupings of which, if not properly managed, can affect the achievement of the organization’s corporate objectives (Deer, 2006). The outcome of this study would be of value to organizations both public and private in that, it will provide ways of resolving different conflict situations using the right strategies that can manage the conflict situations effectively. The study will also provide a plat form for management of conflict scientifically using psychometric test to examine the psychological faculties of workers in organizations which will go a long way to minimize the rate of conflict in the work-place. The study is also expected to be of great value to academicians and practitioners in the field of conflict management, public relations and public administration. The study can also be useful to researchers for further studies in the area of conflicts and its management.

 

1.8       LIMITATIONS OF THE STUDY

The following are the limitations of the study;

1. Uncooperative attitude of some of the staff of the organization who refused to complete the questionnaires given to them or to be interviewed for fear of official reprisal. Their refusal to cooperate adversely affected the amount of data collected through primary sources.

2. Financial Constraint: The study could have been very extensive if more organizations were included. But the researcher could not afford the cost involved. Thus, the study is restricted to only one corporate organization.

3. Time Constraint: The researcher could not complete the study within a record time because of the pressure of other academic works on him.


1.9       ORGANIZATION OF THE STUDY

This study is divided into five (5) chapters and organized as follows;

Chapter one formed the introductory part; this is where the main theme of the research questions and hypothesis, significance of the study, scope, organization of the study, operational definitions of terms.   

Chapter two dealt with the literature review.

Chapter three centered on the research methodology which includes sources of data, model specification and analytical tool.

Chapter four is the data presentation, analysis and discussion of findings while

Chapter five focused on summary, conclusion and recommendations.

1.10     OPERATIONAL DEFINITION OF TERMS

Conflict: This refers to a situation of disharmony and grievance. Organization: This refers to a combination or group of people who work together to achieve a goal.

Idiosyncrasy: This refers to a set of attitudes, behaviors and values which characterize an individual.

Goal: This refers to a set objective.

Goal congruency: This is a situation of overlapping personal interests.

Strategy: This is an approach or measure adopted in order to achieve a goal.

Organization: This refers to a business entity.

Disharmony: This refers to a situation of absence of togetherness.

Management: This refers to the art of planning, organizing, directing and controlling. It also refers to decision-makers in an organization.

1.11     BRIEF HISTORY OF NIGERIA BREWERY ABA

We are proudly Nigeria’s pioneer and largest Brewing firm. Our company was incorporated in 1946 and in June 1949, we recorded a landmark when the first bottle of STAR lager beer rolled off our Lagos Brewery bottling lines. This first brewery in Lagos has undergone several optimization processes and as at today boasts of one of the most modern brew house in the country.

In 1957, we commissioned our second brewery in Aba. The Aba Brewery has also recently undergone several optimization processes and has been fitted with best in brewery technology. In 1963 we commissioned our Kaduna Brewery while Ibadan Brewery came on stream in 1982. In 1993, we acquired our fifth brewery in Enugu. A sixth brewery, sited at Ama-eke in 9th Mile, Enugu was commissioned and christened Ama Brewery in October 2003. Ama Brewery is today the biggest and most modern brewery in Nigeria.

Operations in the Old Enugu Brewery were however discontinued in 2004. We acquired a malting Plant in Aba in 2008.

In October 2011, our company bought majority equity interests in Sona Systems Associates Business Management Limited, (Sona Systems) and Life Breweries company Limited from Heineken N.V. This followed Heineken’s acquisition of controlling interests in five breweries in Nigeria from Sona Group in January 2011. Sona Systems’ two breweries in Ota and Kaduna, and Life Breweries in Onitsha have now become part of Nigerian Breweries Plc, together with the three brands: Goldberg lager, Malta Gold and Life Continental lager.

In 2014, we got approval from the Securities and Exchange Commission and the respective shareholders of both Nigerian Breweries Plc and Consolidated Breweries Plc to merge the operations of both companies. The merger became final on December 31, 2014

Following the successful merger, we now have three additional breweries in Ijebu-Ode, Ogun State, Awo-Omamma in Imo State and Makurdi in Benue State. The merger also brought an additional seven brands into our portfolio.

Thus, from that humble beginning in 1946, our company has now grown into a Brewing Company with 11 breweries, 2 malting plants and 26 Sales depots from which our high quality products are distributed to all parts of Nigeria.

Nigerian Breweries Plc has a growing export business which covers global sales and marketing of our brands and dates back to 1986. NB Plc offers sales, logistics and marketing support to make our brands shelf-ready in international markets, including world-class outlets such as TESCO and ASDA Stores in the United Kingdom. Our brands are available in over thirteen countries, across the United Kingdom, South Africa, Middle-East, West Africa and the United States of America.

 


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