CHAPTER ONE

INTRODUCTION

1.1              General Introduction

This research investigated conflict management and performance of selected oil palm organisations in Edo State: Nigerian Institute for Oil Palm Research (NIFOR) Plc, Presco Nigeria Limited and Okomu Plc. The palm oil farms were chosen because of its growing trend from what earlier appeared to be the preserved of peasantry farming to its present form of mechanized industry. The palm industry, constitutes a large part of the farming sector in Nigeria and Agriculture employs almost 70% of Nigeria’s workforce, but constitutes less than 7% of Nigeria’s foreign earnings (Anyanwu, J. C. et al, 1997).

In recent years agriculture especially palm oil production is growing geometrically when compared to other farming segment and as organisation grows, it encounters many problems and challenges and some of these problems are conflict and conflict resolution, what to produce, for who, market, staffing, training of staff, staff evaluation. Others are competitors in the industry, policy formulation, meeting target, meeting customer demands’. The quest for farmers, especially the conglomerate blue chips farming industries in Nigeria to expand their land scope for production has led to intense communal conflicts and against individual farmer seeking expansion of their farm especially the blue chips Agro sector.

An organization is a group of people who work together in the pursuit of common goal (Nnabuife, 2009). These people constituting the organization have different values, tasks, perspectives, attributes, backgrounds and aspirations on joining the organization. The human beings that interact in the organizations possess different values and found themselves in situations which create tensions, giving rise to conflict (Salamon, 2010 and Strossmayer, 2013). This situation gives rise to conflict management to allow for goal congruence. The goal of the individual workforce can

only be met if the goal of the organization is achieved because employees feed on the organization. It is the organization that will help employee meet his psychological, social, security, esteemed and self-actualization needs (Maslow, 1943).

A growing organization stands to provide a better working condition for its workers than a declining organization. Hence workers should appreciate the need not to allow conflict escalate to becloud their sense of direction. Oil palm business has been in existence as petty occupation by farmers for subsistence living and little for sale due to man’s limited effort to produce limited quantity. The occupation was originally meant for peasant farmers.

Today, oil palm business has assumed tremendous dimensions especially in the South-South region of Nigeria, as the rich and even expatriate now engage in buying large expanse of land for planting oil palm trees for milling palm oil for both domestic use and export to earn foreign exchange. With mechanization, oil palm companies now hire large workforce with different expertise whose efforts are managed to focus on the goal of the organization. Hence, the oil palm organizations now strive to have deliberate plan to manage conflict whenever it occurs.

The oil palm organizations for this study are Presco Nigeria Limited, Okomu Plc and Nigeria Institute for Oil Palm Research (NIFOR). They are the leading oil palm organisations in the industry in Edo State. They are mature in the industry and have sizeable workforce. The performance of these organizations are assessed, evaluated and measured annually to show if the performance indicators reveal efficiency, effectiveness and economy in the running of the business during the year, and that the organizations are capable of meeting stakeholders’ needs. Therefore, conflict management could have direct or indirect impact on the performance variables of these oil palm organizations which could be extended to all organisations.

Conflict management is relatively a simple exercise at the early stage of the life of an organization when employee are few, simple rules and regulations, simple organizational structure with simple technology. With increasing large number of employees, the adoptions of sophisticated technologies, departmentalization of complex organizations, detail company policies, conflict management becomes very challenging and constitute problems to most management of organizations. Some of these selected organisation hired employees who are expert in their different fields with different values, cultural background, perspectives, aims and objectives before joining the organizations. Because of the unseen differences, there are bound to be conflict among them. If the conflict that may arise from time to time is not well managed, reduction in production may inevitably occur (Thakore, 2013).

Conflict occurs due to scarce resources, divergent interests, overlapping authority, interdependences, setting unreasonable standards, differences in values or perceptions, lack of employees commitment, power struggles, communication problems and other external pressures make conflict inevitable (Onyeizugbe & Orogbu 2015). Persons who do not have inner peace are always at conflict with themselves and may likely put in weak efforts during the performance of their duties (Nnabuife, 2009).

Departmentalization in which the outputs of one department serve as the inputs of another department could be a source of conflict when there is delay in feeding inputs into the receiving department. Organizational politics used in gaining unmerited favour in the workforce can constitute conflict. Organizational politics also include the exercise of power to get one’s own way through, including the acquisition of more power, often at the expense of others can be more of

problems resulting to conflict (Onyeizugbe & Orogbu, 2015). Working in a diverse society has several implications for business. In a diverse society, there can be conflict among the groups.

Abraham Maslow (1943) identified employee’s needs for wanting to work and arranged them in hierarchy. At the higher level, the strength of needs varied with the individual. In some individuals social needs predominated while in others self-actualization needs are strongest. Within the Nigeria context, with large number of unemployed youths, the lower order needs are predominant. The inability to satisfy these needs (psychologically and socially) for employees could result to conflict.

Staff may observe bias during the administration of rewards to them. To manage the conflict that may result from this, Stacy Adams (1963) advocated equity theory which measures a person’s output against his input, or against the input/output of others to find if there is equity. The bases for administering rewards should be explained to all employees to enhance productivity and prevent future conflict. In the selected organizations, activities are departmentalized into Finance Department, Marketing Department, Production Department, Human Resource Department and Maintenance Department. These departments absolve employees with different expertise, cultural background and perspectives and are expected to cooperate in achieving the overall goals of the firms. Sometimes their roles overlap. Production and Marketing Departments are expected to cooperate in fixing the price of a product. Staff of Finance and Production Department should cooperate during procurement of materials and agree on whose custody the materials should be kept to avoid conflict.

The aim of staff function is to facilitate the performance of line function. The relationship should not be servant/master relationship that will lead to conflict. Conflict are normally associated with

dissatisfaction among employees which are related to working procedure, working facilities, confusion on provisions stated in the company’s policy (Anyadura, 2006) and the violation of provisions in terms and conditions of employment stated in collective agreement. It arises in case of disagreement over workloads, problems in communication, individual differences in needs, wants, goals, values, opinions, preferences or behaviours, as well as in case of disputes between employees and employer. As human being interact in organizations, their differences create tension (Darling & Walker, 2001) giving rise to conflict.

Conflict is a social factual situation in which at least two parties (individual, groups, states) are involved and strives for goals which can only be reached by one party, and or want to employ incompatible means to achieve a certain goal. This implies struggle over values or claims to status, power, scarce resources in which the aims of the groups or individuals involved are not only to obtain the desired values but to neutralize, injure or eliminate rivals (Alabi, 2010).

The absence of conflicts may indicate autocracy, uniformity, stagnation and mental fixity; while the presence of conflicts may be indicative of democracy, diversity, growth and self-actualization. Conflict management consists of the interventions designed to reduce conflicts or in some instances, to increase insufficient conflicts. Conflicts can create negative impact to group, but may also lead to positive effects depending on the nature of the conflict (Obasan, 2011).

Conflicts management involves doing things to limit negative aspects of conflicts. The aim of conflicts management is to enhance learning and group outcomes, including effectiveness or performance in the organization setting (Rahim, 2002). Conflict management should enhance organizational efficiency, effectiveness, economy, increase in market shares, reduce pilfering, meeting target, customers satisfaction, retain workforce or reduce employee turnover, increase

revenue generation and enhance organization’s position to compete globally in the industry. Presco Nigeria Limited and Okomu Plc in Edo State now export their products to earn foreign exchange because of presence of good company policies that keep conflict at desirable level.

The management of industrial conflict is usually achieved through competing, avoiding, accommodation, compromise and collaboration. If the disputants are unable to handle the conflict, third parties are apt to become involved and expected to assist in the conflict resolution (Okonba, 2005). The third party can play either the role of mediator, arbitrator, conciliator or consultation. The aim of conflict management is not to eliminate conflict, which is both impossible and undesirable, rather the aim and primary objective is to transform actual or potential violent situation into a peaceful process through negotiation, mediation, communication, reconciliation and cooperation. Irrespective of the location, age, size and composition of the organization, conflict management is expected to bring about improved relations, relaxed atmosphere; improve communication, empowerment, efficient problems solving, high productivity, a sense of achievement and team cohesion (Ngbekem, 2004).

Conflict as a factor that affects performance was not noticeable in the early years when production of palm oil and palm wine, got from palm trees started. The technologies required were simple and were defined from local materials. The production could not meet demand. Secondly, due to small scale production of the products in terms of land cultivation, few hands were engaged, conflict management was not seen as a major factor to address due to the simple management employed, and conflicts noticed at early stage were nailed in the bud.

Managers of organizations are trained for effective conflict handling, and to prevent conflict from negatively affecting the performance of an organisation. Functional conflict could enhance the

organisational performance. But dysfunctional conflict can negatively affect performance variables. Such variables include sales, revenue, profit, return on sales, return on assets, return on investment, employees turnover, customers satisfaction, market share, effectiveness, efficiency, economy, employee morale, etc. The introduction of mechanized production of palm oil with sophisticated expensive technology and more hands saw the need to manage conflicts which is an inevitable occurrence in the firm.

1.2              Statement of the Research Problem

The process of managing conflict for organization’s optimum performance is complex and dynamic task confronting organizations. Managements of organizations have many problems and challenges to grapple with, occurring on daily, monthly and yearly basis. Some of these challenges are internally generated, while others are caused by external factors.

Management of these organizations do plan their courses of actions to overcome these challenges. In the face of well-articulated plans and executions, conflict could occur. Conflict can make management to lose focus even when all other challenges to the organization are effectively and efficiently handled because conflict is disagreement which brings disharmony in the system.

Conflicts management is a challenging task facing the management of oil palm organizations of this study. Conflict is traceable to a number of factors which include working procedure, working facilities, confusion stated in the company’s policy and violation of provisions in terms and conditions of employment stated in the collective agreement. Other causes could be traceable to the employees themselves such as struggle over values, power or scarce resources. Since no two persons are exactly the same, conflicts may be said to be inevitable.

It is conflict that makes people disagree on issues and even leads to breakdown of laws and orders. At the community, national and interactional levels, conflict can result to wars in which lives and properties worth billions of naira are destroyed. In the organization, the presence of conflict signals are regarded as a weak signal that requires management urgent attention because it can lead to strikes. Conflict can reduce the oil palm organizations’ performance by reducing their productivities, revenue generations, profits, loss of market shares, reduction in employees morale, increase pilferages, low investment, derail strategic planning objectives, loss in communication with management, lack of trust for management, disharmony in the organization and reduction in commitment to task.

Conflict can hinder the introduction of change and new technologies by the oil palm organizations. It can be a threat to the survival of organizations. Conflict can be a result from unfair reward system. Bias in dealing with different employees and injustice melted on some junior staff by some senior members of staff can lead to conflict. Conflict promotes inappropriate leadership style, envy, jealousy, inordinate ambition, intention to outsmart others. It can lead to the problem of poor customer satisfaction, increase employees turnover, loss of market share and non-attainment of the oil palm organizations goals.

In the oil palm organization, the presence of conflict can also lead to initiating necessary social changes, developing of creative ideas and innovations, presenting important problems, making quality decisions, solving problems, organization reengineering, developing solidarity and group cohesion. Burag (2017) empirically examined the effect of land acquisition for palm oil farming on conflict in the surrounding communities in Okomu in Edo State, using regression analysis and product moment correlation to predict the parameters and hypothesis testing. It was found that

each time they acquired more lands for increase palm oil farming, they meet with resistance from the communities who complained that they were being deprived of their means of livelihood. It was recommended that both parties should dialogue to reach a compromise over the dispute. Alabi (2010) empirically investigated management of conflict in Nigeria. He adopted survey and structured questionnaire were used to gather the data. The cause was traceable to poverty and unjust allocation of the available resources. To better manage the conflict, both parties were advised to embrace the culture of peace and harmony that will move the nation forward. Schmuel (2014) investigated conflict resolution in Israel and he selected 150 personnel from different organisations. He used structured questionnaire and descriptive statistical method to gather and analyze his data. He found out that the outcome produced by negotiated settlement is better than those reached by litigation. Alternative dispute resolution method was therefore recommended because it saves cost, reduced communication gap and is more friendly.

However, the researcher acknowledge the fact that very little research have been done in the area of how conflict in an organisation affect the performance of the selected oil palm organisations in Edo State. The researcher is not out to collaborate or contradict the works of the earlier researchers in this area, but to add value to the void created.

1.3              Objectives of the Study

The aim of this study is to use data from primary and secondary sources of information to examine the influence of conflict management on the performance of some selected oil palm organizations in Edo State. The specific objectives are;

Objectives

1.      To determine the extent trade dispute management can influence employees’ turnover in the selected oil palm organizations in Edo State.

2.      To determine the extent in which grievance management can influence employees’ morale of the selected oil palm organizations in Edo State.

3.      To determine the relationship between pilferage minimization and market share in the selected oil palm organizations in Edo State.

4.      To determine the influence of strike on revenue generation in the selected oil palm organizations in Edo State.

1.4              Research Questions

In order to achieve the purpose of this study, the following questions were raised.

1.      To what extent  can trade dispute management  influence employees’ turnover in the selected oil palm organizations in Edo State?

2.      To what extent can grievance management influence employees’ morale of the selected oil palm organizations in Edo State?

3.      What is the relationship between pilferage minimization and market share in the selected oil palm organizations in Edo State?

4.      What is the influence of strike on revenue generation in the selected oil palm organizations in Edo State?

1.5              Hypotheses of the Study

To answer the research questions, the following hypotheses were formulated for testing; Ho1: Trade dispute management does not have significant influence on employees’ turnover of the selected oil palm organizations in Edo State.

Ho2: Grievance management does not have significant influence on employees’ morale of the selected oil palm organizations in Edo State.

Ho3: There is no significant relationship between pilferage minimization and market share of the selected oil palm organizations in Edo State.

Ho4: There is no significant influence of strike on revenue generation of the selected oil palm organizations Edo State.

Table 1.1: Variables of Conflict and Performance

Source: Researcher’s Field Survey, 2019

1.6              Significance of the Study

The study is intended to contribute to a better understanding of the concept of performance in terms of employees’ turnover, employees’ morale, market share, and revenue generation in the selected oil palm organizations. The study may help employees, management, investors, creditors and future palm oil farmers to appreciate the challenges of the presence of conflict in the organizations. It may throw light on how policy makers can come out with enduring policy that will stabilize oil palm organizations in the industry.

To the researchers and consultants, the findings of this research may help them to balance their views in terms of the effect on performance when conflict is poorly managed. This will not only help palm oil organisation to grow and provide jobs for the teaming unemployed youths, it will also improve on our gross national product.

1.7              Scope of the Study