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Empirical Study of the Effect of Conflict on Organizational Performance in Nigeria

O M Hotepo1, A S S Asokere2, I A Abdul-Azeez1*, S S A Ajemunigbohun2

1Department of Business Administration and Management Technology

2Department of Accounting and Finance; Lagos State University, P.M.B. 0001, LASU Post Office Ojo, Lagos, Nigeria

*Corresponding Author:
I A Abdul-Azeez
Department of Business Administration and Management Technology
Lagos State University, P.M.B. 0001
LASU Post Office Ojo, Lagos, Nigeria
E-mail: [email protected]

Published date: October 28, 2010

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Abstract

The purpose of this study is to investigate the effect of organizational conflict on organizational performance. This was carried out by investigating the causes, types, reason and strategies for managing conflicts in some selected service organizations in Nigeria, with a view of coming out with ways of improving their performance and productivity. The study employs descriptive research design and uses questionnaire to collect data from 96 managers in some selected Airlines, Road Transport and Insurance companies in Lagos Metropolis. The research revealed that limited resources is the major cause of conflict and that conflicts have both negative and positive effects on organization, but when managed properly, the positive effects can be used to encourage organizational innovativeness and build cooperation among the employees.

Keywords

Conflict; Organization; Performance; Effect; Nigeria.

Introduction

Conflicts are inevitable part of organizational life since the goals of different stakeholders such as managers and staff are often incompatible [1]. Conflict is an unpleasant fact in any organization as longer as people compete for jobs, resources, power, recognition and security. Organizational conflict can be regarded as a dispute that occurs when interests, goals or values of different individuals or groups are incompatible with each other [2]. This results into a situation whereby they frustrate each other in an attempt to achieve their objectives. Conflict arises in groups because of the scarcity of freedom, position, and resources. People who value independence tend to resist the need for interdependence and, to some extent, conformity within a group. People who seek power therefore struggle with others for position or status within the group.

Conflict is a part of organizational life and may occur between individuals, between the individual and the group, and between groups [3]. While conflict is generally perceived as dysfunctional, it can also be beneficial because it may cause an issue to be presented in different perspectives. Conflict has both positive and negative effects [4]. It can be positive when it encourages creativity, new looks at old conditions, the clarification of points of view, and the development of human capabilities to handle interpersonal differences. Conflict can be negative when it creates resistance to change, establishes turmoil in organization or interpersonal relations, fosters distrust, builds a feeling of defeat, or widens the chasm of misunderstanding.

Unfortunately, the term "conflict" has only the connotation of "bad" for many people; so much so that they think principally in terms of suppression, giving little or no attention to its more positive side. Rico [5] emphasizes this by stating that it seems entirely likely that many, if not most, organizations need more conflict, not less. Pondy [6] also stated that the absence of conflict may indicate autocracy, uniformity, stagnation, and mental fixity; the presence of conflict may be indicative of democracy, diversity, growth, and self-actualization. Tjosvold [7] complements this statement arguing that conflict is not the opposite of cooperation but a mechanism that allows to perceive benefits of cooperative work. Furthermore, conflict is considered psychologically and socially healthy. It is psychologically healthy because it provides a breather for frustrations and enables a feeling of participation and even of joy. And it is sociable healthy because it encourages opposition to the status quo and provides conditions for social chances and democracy stemming from pluralism and respect to diversity. Therefore, according to [8], conflict is ubiquitous, not necessarily dysfunctional and can be required to defy people to perform and stimulate progress.

This research studied the effect of conflict management on organizational performance by using managers of hotels, airlines, road transport and insurance companies in Lagos. It investigates the personal characteristics of the respondents, their views about conflict in the service industry, categories of staff they have experienced conflicts with, types of conflicts experienced, reasons for conflicts, sources of organizational conflicts, factors that have caused conflicts in service industry, as well as strategies for managing organizational conflicts to improve organizational performance and productivity.

The significance of this study lies in the fact that its finding will enable managers in service industry have in depth knowledge of causes of conflict and how to manage conflict in service industry not only in Nigeria but across the world. The study aims at generating data that will enhance the understanding of conflict and how it is been managed in Nigerian service industry.

Types of Organizational Conflict

Ikeda et al [9] observed that organizational conflict involves interpersonal conflicts with colleagues or supervisors, or intergroup conflicts within different sections of an organization. There are two essential types of conflict in organizations: vertical and horizontal [10]. Vertical conflict occurs in groups of different hierarchical levels, such as supervisors and salesmen, whereas horizontal conflict occurs between individuals of the same level, such as managers in the same organization. In the vertical conflict, differences in status and power between groups are in general larger than in the horizontal conflict [11] because these aspects tend to equalize in equivalent hierarchical levels. When vertical conflict takes place between operational workers and administration, their sources refer to: (i) psychological distance: workers don’t feel involved in the organization and feel that their needs are not met; (ii) power and status: workers feel powerless and alienated; (iii) differences in value and ideology: this difference represents underlying beliefs on objectives and goals of an organization and; (iv) scarce resources: disagreements regarding benefits, salary and work conditions.

In vertical conflict, apparently individuals in lower organizational level seek to avoid conflicts with higher hierarchical levels [12]. Pondy [6] observed that it is expected that the top management peers perceive more conflict internally between their groups than those of lower position. This happens because of the following reasons: (i) people in higher hierarchical level, rather than the lower ones, are engaged in non-routine activities and development of politics, where orientation for the actions are less clear and chances for disagreement, bigger and; (ii) people in higher hierarchical level, rather than the lower ones, are probably less flexible in their points of view. Hence conflict resolution is more difficult. Considering the vertical conflict [10], research examines the short-term and long-term effects of perceived fairness in organizational conflicts between employees and supervisors. The authors’ concluded that employees fairness is important in the resolution of organizational conflicts. When employees realize that there was fairness in the conflict resolution, the bond between the group strengthens. The authors added that the perceived and distributive fairness significantly enhances job satisfaction, positive organizational commitment and satisfaction with outcome of conflicts.

Causes of Organizational Conflicts

In any organization, there are many causes of conflicts; however, conflicts within an individual usually arise when a person is uncertain about what task is expected to do, if not clearly defined by the supervisor or the person in charge [2]. Furthermore, if the tasks of individuals working as a group are not clearly defined by the management they will lead to more conflicts. Conflicts between individuals may result from role-related pressures. Conflicts would arise between individuals and groups if the goals were not specified for individuals within a group [13]. Additionally, according to the literature, there are innumerable origins of organizational dispute and each produces its own variety of effects. In general, there are six major sources: (i) the interpersonal disagreements that arise when one person is experiencing individual stress; (ii) the problems resulting from role conflict, a condition that occurs when there is a clash over one's role in the organization; (iii) the power struggles that pit persons and groups against one another to achieve their own selfish objectives; (iv) the misunderstandings and disagreements from differentiation, i.e., the clashes that arise because people approach common problems from very different orientations; (v) the interdependence requirements for collaboration which, if not extensive and balanced between the parties, cause communication and interaction breakdowns which, in turn, if critical, lead to more intensive conflicts; and (vi) the external pressures from forces outside the enterprise that breed internal pressures as the system seeks to adapt but not to disrupt its internal order.

Reasons of Conflicts

Jung [14] declares that conflict is clearly associated with power and can emerge when goal achievement of an organization is avoided. It is also believed that people are aware of the factors that generate conflicts such as scarcity, obstruction and incompatible interests or goals [11]. Conflict can also be broken out when one party avoids the goal achievement of the other one. However, [15] opined that it is probable that causes for conflicts are not highly correlated with goal and objective achievement in situations of routine behavior where procedures are well defined and environment is stable. In these circumstances, conflict variables are probably more related to personality, autonomy reasons, functional interdependence and status.

Some of the reasons that justify conflict escalation according to [9] are: (i) as departments grow, people lose contact with other departments, or yet, members of a department start to think differently from other areas; (ii) the increase of emphasis in the financial measures as a tool for motivation for managers and the establishment of different profit centers inside an integrated business system end up creating many conflicts; (iii) the increasing rise of emphasis in functional specialization, politics of promotion and recruiting reinforce the isolation of departments, generating conflicts; (iv) today there is more room for workers to show criticism among each other, while this freedom of speech can be beneficial for society as a whole, in organizational context can be transformed into conflicts and (v) consumers demand lower prices, better quality in products and services, creating pressures so that departments work more effectively which can result in conflicts among departments.

Another reason pointed by [16] for the occurrence of conflicts is the asymmetric degree of interdependence, that affects the level of trust and commitment of the groups. Asymmetric interdependence occurs when parties have different levels of dependence among each other. That is, in one same group some individuals can depend on people that, in turn, show independence in relation to them. In total interdependence, on the other hand, individuals are totally dependent on one another. Kumar et al [16] states those relationships with total interdependence have less conflict than the ones with asymmetric interdependence. For [14], conflict is smaller in highly dependent relationships because, in general, the dependent party conforms itself that it can not alter the situation and accept the leader’s power.

Managing Conflicts

Conflict can be managed in different ways, some focusing on interpersonal relationships and others on structural changes. Robinson et al [17] advocates that managing conflict toward constructive action is the best approach in resolving conflict in organization. When conflict arises, we need to be able to manage them properly, so that it becomes a positive force, rather than a negative force, which would threaten the individual or group. Parker [18] argued that if conflicts arise and are not managed properly, it will lead to delays of work, disinterest and lack of action and in extreme cases it might lead to complete breakdown of the group. Unmanaged conflict may result in withdrawal of individuals and unwillingness on their part to participate in other groups or assist with various group action programs in the organization.

Avoidance of the situation that causes the conflict is an example of an interpersonal approach [19]. Another way of coping with conflict is through smoothing, emphasizing the areas of agreement and common goals and de-emphasizing disagreements. A third way according to [19] is forcing, pushing one’s own view on others; this, of course, will cause overt or covert resistance. A traditional way of coping with conflict is to compromise, agreeing in part with the other person’s view or demand. The biggest problem in developing the institutions of conflict control in organization is to develop an action of plan to identify conflicts at its initial stage. Conflict situations are frequently allowed to develop to almost unmanageable proportions before anything is done about them, by this time it is often too late to resolve the conflict by peaceable and procedural means.

Knippen and Green [20] cited in [2] argued that the best way to handle conflicts objectively is to follow six process that involves describing the conflict situation to the other person, asking the other person how he sees the conflict situation, responding the way the other person sees the situation, jointly deciding how to resolve the conflict, making commitment to resolve the conflicts, and promising to be committed in future to continue resolving conflicts, which might arise. Another way of coping with organizational conflicts is to make structural changes. This means modifying and integrating the objectives of groups with different viewpoints. Moreover, the organization structure may have to be changed and authority-responsibility relationships clarified. New ways of coordinating activities may have to be found. Tasks and work locations can also be rearranged.

Derr [21] opined that Contingency Theory is one of the conceptual tools useful for managing organizational conflicts. He stated that there are three major conflict management approaches from which intervener can draw to formulate an approach appropriate for resolving a dispute; Collaboration, Bargaining and Power play. The appropriate use of these methods depends on the individual and organizational state. Collaboration involves people surfacing their differences (get them out in the open) and then work on the problems until they have attained mutually satisfactory solutions. This approach assumes that people will be motivated to expend the time and energy for such problem-solving activity. Bargaining on the other hand assumes that neither party will emerge satisfied from the confrontation but that both, through negotiation, can get something they do not have at the start, or more of something they need, usually by giving up something of lesser importance. One party generally wins more than the other; by the skillful use of tactical trades, he can get the maximum possible from the other side. Third approach is Power Play, which differs from the other two approaches because its emphasis is on self-interest. Whereas, in collaboration and bargaining the two sides come together to try to resolve their problems, when power is the dominant mode, the actions are unilateral or in coalitions acting unilaterally. Table below illustrates the various technologies applicable to each major cause of conflict given the three different approaches.

Methods

In order to achieve the aim and objectives of the study, survey research approach was adopted and the focus of this study was crosssectional. The survey approach was used, because it has its own advantages of identifying attributes of a large population from a small group of individuals, the economy of the design and the rapid approach in data collection [22, 23, 2].

The sample selected for this study consisted of one hundred and twenty managers from Hotels, Airlines, Road Transport and Insurance companies in Lagos Metropolis. The questionnaire was delivered to all the managers and ninety six (96) valid questionnaires were returned giving 80% response rate. The respondents are supervisors or coordinators, higher level directors or company owners. In pursuit of the study objectives, the research instruments used was a structured and non-disguised questionnaire with close-ended questions, designed from literature review and previous studies. The questionnaire was pre-tested with ten managers from the sample size in order to check and ensure that no irrelevant question was present. The literature review leads to the following items to be investigated: types of conflicts, reasons for conflicts, impacts of conflict on organization, and the conflict management approaches. The analysis of data was done using frequency counts and percentages as well as verbal augmentation.

Results and Discussion

Personal details of respondents

Personal details of respondents covered are sex, highest qualification and working experience. The data in Table 1 reveals that males consist 64.6% and females 36%. Also from Table 2, respondents with Bachelor’s degree rank highest with 40.6% followed by Higher National Diploma holders with 22.9% and Master’s degree holders 17.7%. This shows that respondents are knowledgeable and well trained enough to understand the concept of conflict management. The respondents who have working experience of 11-15 years are in the majority (39.6%), followed by those that have worked for 16-20 years. The third ranked is those who have 6-10 years experience. The implication of this is that most of the respondents have worked enough to have experienced organizational conflict and how it was managed.

CAUSES OF CONFLICTS CONFLICT MANAGEMENT TECHNOLOGIES
COLLABORATION BARGAINING POWER PLAY
External pressures Open systems planning Negotiation Force and threats of force, use of laws co-optation, strategic use of information, coalition
building
Individual stress Counselling, coaching,
problem solving
Contracting Transfer, careful job
description
Power struggles Build organizational climate, make decisions close to information source, best ideas prevail, encourage participation
problem-solving
Negotiation, solve substantive issues of scarce resource, allocation, establish power parity Use of legitimate authority, co-cptation, coalition building, favor system
Low interdependence Increasing group
Interaction
Negotiation to enhance interaction Use of legitimate authority to structure
more interaction
Role disputes, differentiation,
high interdependence
Team building, communication
skills, problem solving, confrontive style, imaging, third party consultation,
climate
Support with formal authority and rewards

Table 1: Conflict Management Paradigm.

Sex of the Respondents No. %
Male 62 64.6
Female 34 35.4
Highest Qualification
OND/NCE
11 11.5
Bachelor’s Degree 39 40.6
Higher National Diploma 22 22.9
Masters’ Degree 17 17.7
Postgraduate Diploma 07 7.3
Working Experience (years)
1-5 09 9.4
6-10 18 18.6
11-15 38 39.6
16-20 20 20.8
Above 20 years 11 11.5

Table 2: Personal Details of the Respondents.

Causes of Conflicts

On the major causes of organization conflict, the respondents mentioned lack of resources, different expectations, competition, lack of cooperation, salary comparison, interdependence, and communication problems. Table 3 below showed that lack of resources and communication problems have the highest frequency (24% and 18% respectively) which reiterates the earlier findings of [2], which stated that employees compete in organization because of limited resources. This competition can take the form of financial, promotion, manpower equipments, etc. Other important causes of conflicts in organization are competition, lack of cooperation, different expectation and interdependence. However, its worth mentioning that salary comparison is the item that generated least conflicts. This is in contrary with the assumptions that financial and monetary issues form part of major causes of conflicts in an organization. This is in line with the findings of [9].

CAUSES FREQUENCY %
Lack of resources 24 25
Different expectations 10 10.4
Competition 12 12.5
Lack of cooperation 11 11.5
Salary comparison 09 9.4
Interdependence 10 10.4
Communication problems 20 20.8
Total 96 100

Table 3: Causes of Organizational Conflicts.

Types of Conflicts

Respondents were requested to indicate the types of conflict, which are very common in their organization. The analyzed data in Table 4 shows that interpersonal conflict ranked highest as the type of conflict experienced by the respondents in their organizations. This is due to sharing of limited resources or furthering individual interests at the expense of organizational interests. This is in conformity with the earlier findings of [24] that interpersonal conflict is one of the major causes of conflicts in Nigerian universities libraries. Inter-group conflict ranks second with 22.9% respondents. This type of conflict occurs between groups, teams or department [1]. [25] cited in [24] report the existence of conflict between LIS and computing service department which operated in a non-coverage structure in the UK; the conflict centered on the degree of mutual suspicion which had grown between the two departments. Also, the result shows that other types of conflicts that exist in the respondents’ organizations are personal, intragroup, procedural, and task.

Types of conflicts No. %
Inter-personal 38 39.6
Intra-group 05 5.2
Inter-group 22 22.9
Personal 10 10.4
Task 07 7.3
Procedural 14 14.6
Total 96 100

Table 4: Types of Conflicts.

Effects of Conflicts

Table 5 reveals the response of the managers on the issues of benefits of conflicts to organization, the results indicates that conflicts have both positive and negative effects to the organization. This reflects that if conflicts are not resolved properly might affect the organization adversely in terms of poor performance, lack of cooperation, wasting of resources and productivity. In addition, conflict has positive effect to the organization especially in building cooperation among the employees, encourages organizational innovativeness and improves quality decisions in resolving conflicts, which account for 46%. Therefore, it is the duty of the management and the employees to develop ways on how to promote cohesiveness in organizations and if possible, conflicts should be resolved at their stage to enhance organizational performance. This corroborates the earlier findings of [2].

Positive effects No. %
Builds cooperation 16 16.7
Organizational Innovativeness and 09 9.4
Productivity
Individual developments 07 7.3
Improving quality decisions 07 7.3
Conflict management skills 5 5.2
Negative effects
Interferes with organization operations 18 18.6
Lack of cooperation 12 12.5
Wasting of resources 07 7.3
No productivity 09 9.4
No Cohesion 06 6.3
TOTAL 96 100

Table 5: Effects of Conflicts.

Conflict Management Strategies

Table 6 indicates the various conflict management techniques adopted by respondents’ managers in Nigerian service industry. Bargaining attracted the highest responses of 28 (29.2%). Bargaining assumes that neither party will emerge satisfied from the confrontation but that both, through negotiation, can get something they do not have at the start, or more of something they need, usually by giving up sonething of lesser importance. Collaboration which try to exploit the possible mutual gains of the parties in the dispute and views the conflict as a creative force pushing them to achieve an improved state of affairs to which both sides are fully committed, ranked second with 19 responses (19.8%). However, in other situations avoidance is used to resolve conflicts in organization as it is supported by 15.6% of the managers. Other strategies employed by the managers include confrontation, compromise and power play. This reflects that management applies more than one approach to resolve conflicts in organization.

Strategies No. %
Avoidance 15 15.6
Collaboration 19 19.8
Power-play 10 10.4
Bargaining 28 29.2
Confrontation 11 11.5
Compromise 13 13.5
Total 96 100

Table 6: Strategies for Managing Conflicts.

Conclusion

Conflicts are part of human nature and it is extremely important to study it not only for theoretical purposes but also for organizational practice [9]. Pawlak [26] suggests that conflict analysis and its resolutions has an important role in private, public and political organizations, as well as in judicial and work disputes, in military operations and many other institutions. The results from the study indicate that the major cause of organizational conflicts is lack of resources. This leads to competition for the scarce resources. Therefore, it is pertinent on the organization’s management to ensure that the available limited resources are utilized optimally for the benefit of the organization and other stakeholders. Though conflict is often viewed as negative, it is capable of increasing organizational innovativeness and productivity, thereby improving organizational performance. In addition, conflicts build the spirit of teamwork and cooperation among the employees of an organization [2].

The study also revealed that the most used means of managing conflict among the managers in Nigerian service industry is Bargaining, Collaboration, and Avoidance. When conflicts are properly managed in organization, it will lead to the attainment and achievement of organizational goals and objectives. In the height of the findings of this study, the following are recommended:

(i) Managers should develop diverse but appropriate strategies to resolve and manage conflicts as they arise before escalating to unmanageable level.

(ii) Efforts should be made by the managers to occasionally stimulate conflict by encouraging divergent views and rewarding staff and unit/department for outstanding performance [24].

(iii) Proper communication procedures should be put in place to resolve conflict. For instance, when any disagreements arise among the employees, it should be reported to the management and then management should get statements from the parties involved, brainstorm the issue and make recommendation on how to resolve the conflict [2].

(iv) Efforts should be made by the management to organise seminars/workshops on organizational conflict management from time to time for the employees [24]. This will enable employees learn about conflict and how it can be effectively managed for individual and organization effectiveness.

(v) Lastly, group interaction and activities should be followed up so as to ensure a degree of functionality compatible to conflicts. Positive conflicts will only be possible if particularities of the organization are analyzed.

Competing Interests

The authors declare that they have no competing interests.

Authors’ Contributions

HOM prepared the Introduction and literature review. AIA gathered all the data, carried out the final estimations and statistical analysis. SSA drafted the final manuscript. ASS edited the final draft.

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