CONFLICT MANAGEMENT AND RESOLUTION IN SMALL AND MEDIUM SCALE ENTERPRISES IN ANAMBRA STATE

ABSTRACT

This study looked at the extent to which conflict management and resolution affect productivity in small and medium scale enterprises in Anambra state. The objectives of the study include to identify the causes of conflict in small and medium scale enterprises, to highlight the positive and negative causes of conflicts, to evaluate the strategies for managing them and to assess to which worker’s productivity are affected by conflicts.This study utilized data from primary and secondary sources, the primary sources was gathered from questionnaire and personal interview while the secondary sources was from the use of textbooks, journals, magazines, newspapers etc. The study was aimed at finding the best methods of managing conflicts in small and medium scale enterprise in Anambra state. The researcher introduced the research topic by studying the background of the topic, formulating the research questions and hypothesis. The study also led the researcher to review some work done by other researchers on the topic, also, the study discussed the research methodology used for the topic which was the survey method and the methods used for the analysis of the data collected. Subsequently, the study discussed the data collected also the tests of hypotheses was carried out using such instruments as the T- test statistical tools and Pearson Correlation Coefficient. The result of the analysis revealed that there really exists conflicts in small and medium scale enterprises and there are consequences of such conflicts  in  the  organizations  studied  and  the  strategies  used  by  management  in  resolving conflicts in their organizations did not yield positive results. The study at the end of the work discussed the summary of the major findings of the research which revealed that that workers’ productivity is affected by conflicts, to this end, the study recommended among others that better strategies should be adopted by management in resolving conflicts in their organizations, such strategies include in-house resolution, dialogue etc, this will ensure that everyone is carried along and it will make for optimal performance of staff in the organization.

CHAPTER ONE

INTRODUCTION

1.1      Background to the study

Conflicts like change will always occur given the dynamics of human interactions; It will occur between family members, workers, colleagues, supervisors, boards of management in our work or play environments, between organisations and within organisations. Why is this?  Because we all have different interests,  goals,  perception, viewpoints, values and experiences. The Paradox of conflict is that it is both the force that can tear relationships apart  and  the  force  that  binds  them  together,  meaning  that  they can  be  either  healthy (constructive) or unhealthy (destructive). This dual nature of conflict makes it an important concept to study and understand.

It is normal for people to live and work well together to have conflicts from time to time. We disagree with each other because we see the world differently and we have different ideas about what we want and how to do things. Our individual and collective backgrounds and experiences e.g. in cultural, spiritual, political and economic aspects are different, each and every one of us has a different and unique personality.

Conflict has been defined as disagreement between people with different ideas or beliefs, it is also defined as disagreement through which parties involved perceive a threat to their needs, interests or concern. Although conflict is a normal part of human life, providing numerous opportunities for growth through improved understanding and insight, there is a tendency to view conflict as a negative experience caused by difficult circumstances. Disputants tend to perceive limited options and finite solutions rather than multiple possibilities that may exist „outside the box‟ in which we are problem solving.

Conflict should not be regarded as an isolated event that can be resolved or managed, but as

an  integral  part  of  society‟s  on  –  going  evolution  and  development.  It  should  not  be

understood  solely as  an  inherently negative  and  destructive  occurrence but  rather  as  a potentially positive and productive force for change if harnessed constructively. Having understood what conflict is, it is clear that the existence of conflict in an organization is as natural as the organization itself. Conflict is a natural part of life, this is because no two individuals are the same. An organization is a collection of people from different cultural backgrounds, they have different sets of values and ideas. Individuals look at situations or problems in organizational life from their unique perspective, which is the result of the circumstance within which they have grown.

Conflict management refers to long term handling of intractable disputes. It is the label for the variety of ways by which people handle grievances, standing up for what they consider to be right and against what they consider to be wrong. When two or more people have to work together and combine ideas, the doorway of conflict is open. The manufacturing industry like any other study set up is a dynamic community. It is a work situation that is not static. Job and work situation as well as terms of employment that may not be in agreement with all employees often result in conflicts.

Adetukasi (2002) in a seminar paper posited that the element of profit is consequent upon workers‟ productivity: the lower the cost of production, the more the profit, and also that for any organization to be  effective and  efficient in achieving its  goals, the people in the organization need to have a shared vision of what they are striving to achieve, as well as clear objectives for each team/department and individual.

Behavioural scientists and personnel management practitioners are of the opinion that the success   of   an   organization   depends   on   people.   The   role   of   man   can   never   be overemphasized, No matter the extent of automation to which activities in an organization is subject to, man still remains a very valuable factor, It therefore necessitates that an understanding of how people could be monitored and carried along in a work setting be thoroughly looked into.

In the organization setting, conflict may be seen as a break-down in communication, in dialogue, in production and in operation, when this happens, the organization faces problems that no matter the plan, structures and control measures put in place, the occurrence of

conflict  is  inevitable  in  any  organization  that  has  human  beings  interacting  among themselves on one hand and with the interpersonal structures on the other hand. In understanding the behaviour of human beings at work, a good knowledge of their basic need is necessary, these needs may be classified as psychological, social and egoistic.

Conflicts in so many organizations are everyday phenomenon erupting at the least provocations and depending on the type and causes can  and does obstruct the smooth running of an organization and its productivity. The goal of human behaviour is adjustment to needs-stimulated tension in a way that will bring satisfaction.

A small business whether small or big, simple or complex, private or public, etc is created to provide competitive prices. Business in Nigeria has been classified as small, medium and large. However, a small scale industry can be defined by criteria of project costs, capital, cost, turn over by the employee etc. The federal and state ministries of commerce and industry have adopted the criterion of value of installed fixed capital to determine what a small scale industry is, in this respect the value has varied from N60,000 in 1972, N159,000 in 1975, N250,000 in 1979, N500,000 in 1986 to a fixed investment of not more than N2,000,000.00 ( two million naira) 1n 1992. This figure is exclusive of building and subject to government determination and land prevailing objectives of public policy. In the wake of SFEM and SAP, this value has now been reviewed and subsequently increased to five million naira. Since this happened, there may be a need to classify the small scale industry into MICRO and SUPER MICRO business, with a view to providing adequate incentives

and protection for the former. In the meantime, any business or enterprise below the upper limit of N250,000 and whose annual turnover exceeds that of a cottage industry currently put at N5,000 per annum is a small scale industry. The National Directorate of Employment (NDE) concept of small scale industry has been fixed to a maximum of N35,000.

The Small and Medium Enterprises Equity Investment Scheme SMEEIS is a voluntary initiative of the bankers‟ committee approved at its 246th meeting held on 21st December

1999. The initiative was in response to the Federal Government‟s concern and policy measures for the promotion of small and medium enterprises (SMEs) as vehicles for rapid industrialization, sustainable economic development, poverty alleviation and employment generation.

The scheme requires all banks in Nigeria to set aside ten percent (10%) of their profit after tax (PAT) for equity investment and promotion of Small and Medium Enterprises. The 10% of the profit after tax to be set aside annually shall be invested in SMEs as the banking industry‟s contribution to the federal government efforts towards stimulating economic growth, developing local technology and generating employment. The funding to be provided under the scheme shall be in the form of equity investment in eligible enterprises and or loans at simple digit interest rate in order to reduce the burden of interest and other financial charges under normal bank lending as well as provide financial, advisory, technical and managerial support from the banking industry. Every legal business activity is covered under the scheme with the exception of trading ( merchandising and financial services) 10% of the fund set aside has been earmarked for lending to microfinance enterprises.

1.2      Statement of the Problem

Without much doubt, one of the greatest problems in Nigeria today is that of handling dwindling productivity of workers and the management of conflicts. The manufacturing firm like any other business concern is established, organized and operated primarily to produce goods and services and make profit. Conflict makes the organizations‟ climate not to be conducive  for  both   workers  and  management  thereby  generating   low  morale  and productivity.

In view of numerous pressures resulting from harsh economic conditions, industrial conflicts tend to be on the high side. This is because workers are always demanding for higher wages and better welfare in order to meet up with the increasing cost of living, and until this issue is addressed, there cannot be genuine conviction that all efforts put in place to resolve/manage conflict may achieve the desired objective. Effective conflict resolution systems, even in very small organizations, create opportunities for conflicts to be identified and addressed early and constructively.

The researcher is well aware that there has been various studies on this topic but this study is being undertaken mainly due to the large concentration of industries in Anambra state and also  the  entrepreneurial  spirit  of  the  people,  constant  conflict  therefore  reduces  the

productivity and hence the economic activities of the state.

There are various causes of conflicts, in an organization as a result of people with divergent views coming together to work, these could be: unmet expectations, unreasonable or unclear policies, interdependent tasks, organizational complexity incompatible personalities, unclear job boundaries, limited resources, time pressure.

1.3      Objectives of the Study

This research intends to achieve a number of objectives by filling a knowledge gap. These objectives include the following:

1.   To identify the causes of conflicts in small and medium scale enterprises in

Anambra state.

2.   To highlight the positive and negative consequences of conflicts in small and medium scale enterprises.

3.   To evaluate the strategies for managing conflicts in small and medium scale enterprises in Anambra state.

4.   To assess the extent to which workers‟ productivity are affected by conflicts in small and medium scale enterprises in Anambra state.

1.4      Research Questions

1.  What are the causes of conflicts in small and medium scale enterprises in Anambra state?

2.  What are the positive and negative consequences of conflicts in small and medium scale enterprises in Anambra state?

3.  What are the strategies for managing conflicts in small and medium scale enterprises in Anambra state?

4.  To what extent will workers‟ productivity in small and medium scale enterprises be

affected by conflicts?

1.5      Formulation of Hypotheses

Hypothesis 1:

Ho:     Management style and poor welfare package do not significantly represent the major causes of conflict in small and medium scale enterprises.

Hypothesis 2:

Ho:     There are no positive and negative consequences of conflicts in small and medium scale enterprises in Anambra state.

Hypothesis 3:

Ho:     A collaborative conflict management system will not promote industrial harmony in small and medium scale enterprises in Anambra state.

Hypothesis 4:

Ho:     Workers‟ productivity in small and medium scale enterprises are not significantly affected by conflicts.

1.6      Significance of the Study

The significance of the study cannot be overemphasised; it is believed that the study will go a long way towards identifying and examining the immediate causes, effects and procedures

for resolving conflicts in Nigeria, it is also significant because data so generated from the study is sufficient in expanding further field knowledge of this topic from many other dimensions. It is significant to the existing body of knowledge; the study also presents sufficient challenges for academics and practitioners to increase their research interest in their field of knowledge of this topic. The government and also policy makers will also benefit from this in that they will learn how to apply the best and most effective and adequate industrial relation strategies to manage/resolve whatever kind of crises may likely occur.  There  is  also  the need  to  undertake the study of industrial  dispute because the researcher stands to benefit from the study, such benefit could be seen in her application of the immense knowledge gathered from this work to organizations and the larger society.

1.7      Scope of the Study

This study focused mainly on conflict management and resolution in small and medium scale industries in Anambra state. Due to financial and time constraints, this study will be limited  to  six  selected  companies  in  Anambra  state,  the  companies  are:  Cutix  Nigeria limited,  Geolies  Nigeria  limited  located  in  Onitsha,  Dikbeem  Nigeria  limited,  Olimax Nigeria limited located in Nnewi, Delink Nigeria limited and Surjars Nigeria limited located in Awka .

1.8      Limitations of the Study

Although business and other social sciences investigation strive to employ scientific tools and methods, even the very attempt is itself bedevilled by various kinds of problems; such problems limit the level of accuracy and reliability that the social scientist can achieve in any specific research endeavour.

A work of this nature will certainly have numerous set back and obstacles on its way, these include:

1.        Time constraint: A study of this type would normally require years to put together, the luxury of such time was not there for the researcher, this certainly was a major constraint.

2.       Cost: The financial involvement for a study like this was a challenging one.

3.        Human Complexities: Also since there were complexities inherent in human nature, there  is  a  limit  to  approximating  scientific  methods  towards  eliciting  accurate response from people.

4.        Negative attitude of some corporate bodies: Some Nigerian corporate bodies have not fully developed a culture of providing relevant information on their activities for research purpose. Officials that are to give relevant details and information have not been forthcoming because of their attitudinal disposition to research work.  Also some of the questionnaires distributed were not properly filled while some were not filled at all.

5.        Dearth  of  materials:  Though  the  topic  is  not  a  new  one  in  the  broad  area  of management, getting recent textbooks and other research materials like journals and periodicals that addressed the issue are extremely difficult, based on this, the researcher sought solace in internet research which also had its attendant problems.

1.9      Operational Definition of Terms

For the purpose of clarification and understanding of this study, some concepts require operational definition.

1.  Conflict: Conflict is a breakdown in the standard mechanism of decision making so that an individual or group experiences difficulty in selecting an alternative action.

2.  Management: It is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.

3.  Motivation:  Motivation is  a general  term  applying to  the entire class  of drives, desires, needs, wishes and effort to satisfy a want or goal.

4.  Mediation: this is an amicable settlement of dispute under the chairmanship of a

person mutually agreed upon by both management and worker‟s representative.

5.  Human Relation: Is defined as the area of management practice that is concerned with the integration of people into work situation.

6.  Trade Union: This is an association of staff aimed at protecting and promoting the interest of workers.

7. Personality: Personality is the stable psychological structure and processes that organize human experience and shape a person‟s action and reaction to his environment.

8.  Productivity: Is usually defined as a ratio of output produced per unit of resources. It can be looked at as how well resources have been used in producing a given level of output over a period of time.

9.  Organization:  A  group  of  people brought  together for the purpose of  achieving certain objective. An entity designed to achieve a common goal.

10. Organizational  Performance:  The  degree  of  how  well  or  badly  the  organization achieved its set goal.

11. Leadership:  A  process  of  guiding  and  directing  people  and  influencing  their behaviours positively for the benefit of the group to which they belong.

12. Conflict Management: To regulate a conflict and to reduce its negative effects

13. Conflict Resolution: To address the underlying issues of a conflict and to focus on the relationship and communication between parties

14. Conflict Transformation: To overcome the root and structural causes of conflict and to strengthen conflict solving capacities in individuals, communities and society.

15. Dispute: Short- term disagreement that are visible on the surface and relatively easy to resolve because they involve interests that are negotiable. Dispute often exist within a larger, longer and more deep-rooted conflict

16. Conflict Prevention: To prevent a conflict from escalating violently or to take action before a violent outbreak of a conflict emerges. 17. Conflict Settlement: The imposition of a settlement by a third party, for example through a judge or an arbitrator.

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