Introduction
1.1 Background To The Study
Today, nearly all successful organizations, in local and national level spend most of their time in resolving conflicts among its employees and other stakeholder such as customers, suppliers, legislative bodies, the government and its regulatory agencies, the community in which it does business, opinion leaders and other interest – based organizations and parties in negotiation on how to improve organizational performance and efficiency socially, ethically, economically and ecologically (Ogbor and Orishede, 2013). In order for us to understand the role of organizations in society, it is imperative that we know how organizations manage conflicts which arise from disparate and conflicting interest and demands from its various employees (Scott, 2013). To understand the relationship between conflicts and the relevance of a stakeholder perspective in managing conflict, it is also necessary that we see organizations not only as rational entities consciously designed to produce goods and services by passive on looking employees and society, but more importantly as an arena where conflicts and competing interests are managed. According to Anthony and Bhattachryya (2010), organizational performance could be defined as a measure of organizational success with regards to the value it creates and deliver to internal as well as external customers. It is described as an action or achievement considered in relation to how successful it is. Within any organization there are usually different positions and jobs. People occupying these positions have different perceptions, goals, thought and concerns. It is difficult to conceptualize a society or an organization without inherent differences and contradictions and these leads to conflict. Conflict can be a serious problem in an organization. It can create organizational climate that makes it nearly impossible for employees to work together.
Kalins (2013) stated that although Organizations are set up with some pre-defined goals and objectives, these can only be achieved when the diverse interests of the organization’s employees are effectively managed. However, organizations can successfully produce their products or services over time while managed the different workers and their interests upon which they are founded.
Because conflicts is an inevitable and unavoidable aspect of everyday life, power differences exists in organizations and that the effective use of power is necessary to established objectives and to secure contribution of them. The pluralists see organization as a fragmented terrain on arena where each member has his or her own interests to pursue, using the organization as an instrument for the pursuance of individual interests. Conflicts theorists such as Alpher, Tjosvoid and Law (2000), Baron and Kozan (1997), Kuhn and Rahim (2008) and Wall and Callister (1995) have argued that much of the power generated by organizations is not placed in the service of achieving organizational performance but is used to perpetuate an exploitative system, to preserve class privilege and to secure narrow private gain. This line of argumentation resonates well among those who have observed the increasing disparity between the compensation of execute and pay level of rank and file employees and between expatriates and local employees and the extent to which certain ethnic groups remain in segregated jobs and lower-paying less secured jobs while more relevant strategic positions in both public and private enterprises are exclusively reserved for a particular ethnic group. It is on this basis that Perrow (1986) suggested that “organizations generate power, it is the inescapable accompaniment of the production of goods and services which comes in many forms from many sources, it is contested and it is certainly used”.
Conflict is ever present in an organization as a result of conflicting goals and interests (Amason 1968), Long 2009, Rahim 2000). Conflict is a disagreement between employees and management or owners and workers in an organization (Ogbor, 2013). It is struggle or contest between people with opposing needs, ideas, beliefs, values or goals (Ribinson, 1998).
Conflict can be seen as a disagreement between employees and management or owners and workers in an organization (Ogbor, 2013). The usefulness of the concept of stakeholder in an attempt to understand how conflict is manifested and managed in an organization can thus be seen against the background of actors within and outside the organization having multiple and conflicting interest. For example, the village fisherman in the Niger Delta of Southern Nigeria has an interest in how Shell Petroleum Development Corporation (SPDC) is managed. Similarly, labour union has a stake in how shells operation does not negatively affect the ecosystem. Thus, a stake is a claim, which is an assertion to a title or a right to something. According to Carroll and Buchholtz (2006), a claim is also a demand for something due or believed to be due. In other words, an owner -investor or a stakeholder in a business organization has an interest in how the business ought to be conducted profitably without jeopardizing its long-term competitiveness and survival. Secondly a competitor of a business organization also has an interest in the manner in which its competitor conducts its business without putting the later at a competively disadvantaged position. For example, a competitor will fight against unethical advertisement that unduly places it at a disadvantageous strategic position vis-a-vis that of the competitor. The idea of a stake, therefore, can range from simply an interest in an undertaking at one extreme to a legal claim at ownership at the other extreme. In between these two extreme is having a “right” to something.
According to Carroll and Buchholtz 2006) a stakeholder may be described as any individual or group who can affect or is affected by the actions, decisions, policies, practices or goals of the organization”. Just as conflict refers to the outcome of organizational intricacies, values, actions, views, directions and disagreements which can be settled by identifying and neutralizing etologial factors, the stakeholders, may also be affected by the actions, decisions, policies or practices of the business organizations. With stakeholders, therefore, there is a potential two way interaction or exchange of influence.
In today’s competitive global business environment, there are certain individuals and groups that have legitimacy in the eyes of management. That is, they have a legitimate interest in or claim on the operation of the organization. The most obvious of these groups are stakeholders, employees, and customers, from a highly pluralistic society point of view, stakeholders include not only these groups but also other groups like competitors, suppliers, the community, special interest groups, the media, government and its agencies, and the society or the public at large. Many observes such as Starik (1993), Hemmati et al (2002) and Buyese and Verbeke (2003) have argued that the natural environment and future generations should also be considered among company’s important stakeholders. As pointed out by Ogbor and Orishede (2013) that Nigeria has had to battle with the containment of conflict at all levels. Ethnic conflicts, social conflicts, organizational conflicts all have taken their toll on the Nigerian project. There has been an increase in such conflicts since the onset of the present democratic dispensation in the country. The mushrooming conflicts include, the labour unions versus government, Muslims versus Christians, especially in Northern Nigeria, husband versus wife, mother – in-law versus daughter –in-law, one ethnic group against another and owners versus employee’s/ management in most oil companies.
Conflict can also be said to be beneficial where it brings about radical change in the organization existing power structure, current interaction pattern and entrenched attitude and also can lead to increase in productivity. While some conflict are functional others are not. It can also affect the organization negatively when it is associated with decreased employee satisfaction, decreased productivity, leads to economic loss, fragmentation to mention but a few. It is the management major responsibility to device strategies in bringing down conflict as low as possible, which will enable the organization to still function to succeed (Robbins and Sanghi, 2005).
Considering the vital position which SPDC and AGIP Plc occupies in the Nation as some of the major oil producing business organizations that supports the economy, it therefore become pertinent to conduct a research on the impact of conflict and conflicts management on organizational performance, using these companies as a focal point since the production capability of the companies will directly have a great impact on the Nation economy.
It is against this background the study was undertaken so as to enable the organization to understand and appreciate the inherent of conflict and how to resolving it will result to an improvement of organizational efficiency.
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