CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Conflict is a regular feature in business organizations which arises from the discordance between the interests of the workers and management (Uju, 2010). Conflict is inevitable in workplace and also occurs among individual workers in an organization because their values, goals, interests and targets are not the same. Conflict occurs at both individual and collective levels, with personality, structural and other extraneous factors coming into play. Conflict in organization is inevitable in organizations regardless of sound management practices and policies put in place. The likelihood of occurrence of conflict is high in organizations with hierarchical structure where people with different opinions, ideas and philosophies interact. Conflict can be described as a situation where the interests and ideas of different employees are dissimilar and frustrate each other’s attempt to achieve organizational objectives (Longe, 2015). Conflict can equally be conceived as the breakdown of effective communication between employees and group in the organization. According to Thakore (2013), conflict is a common issue of life in any organization and would always occur as long as employees struggle for recognition, power, achievement and security. Thus, conflict does not tarnish the reputation of an organization per say, because it provides the opportunity to settle controversial issues for the betterment of the employees and organization. The responsibility of management is not to suppress or resolve conflict, since they will always occur, but to constructively manage them in order to stimulate employee performance and organizational performance. Conflict management is a key component of corporate management. Ojo and Abolade (2013) comments that the objective of conflict management is not to establish an appropriate ideal corporate situation since it is unfeasible given the differences of interests and goals between group of employees and management. However, conflict management tactically uses the available conflict resolution strategies to create an effective mechanism for conflict management in corporate organizations. Conflict has positive and negative effect on the performance of an organization and they way it is being managed influences organizational performance (Longe, 2015). Properly managed conflict enhances work performance while destructively managed conflict brings dislocation and disintegration of the entire group thereby resulting in inhibiting the performance of an organization. Effect conflict resolution strategies expose the weakness of the decisions of an organization. This however might prompt an organization to seek lasting solutions to address conflict. It is the responsibility of management to constructively address conflict in order to enhance employee as well as organizational performance, because the results of such action are good communication, cordial industrial relations, enhanced team building and increased productivity. Thus, every organization attempts to have a pleasant work environment in which the relationships among workers and that between workers and management are cordial and appreciated by both parties. The banking industry is a sector where conflict resolution ought to be given importance and must be effective given the industry’s susceptibility to huge financial losses whenever there is conflict. To this end, the study attempts to examine the effect of conflict resolution on the performance of employees in selected commercial banks in Nigeria.
1.2 Statement of the Problem
Conflict is inevitable in organizations irrespective of any industry it operates. This is because individual employees have different interests, goals and targets they want to achieve, and also the interests of employees often times are not similar to the interests and goals of management. The strategies an organization such as First Bank of Nigeria Plc adopts for resolving conflicts determines their corporate performance as well as the performance of their staff. This therefore connotes that conflict has positive and negative effects on organizational performance. Constructively-handled conflicts brings peaceful coexistence among employees, creates industrial harmony between employees and management, fosters the performance of employees, improves the profitability and growth prospects of an organization, enhances the quality of organizational decisions, informs organizations on effective ways of handling future conflicts based on experience on prior conflict, reduces unhealthy rivalry between employees and management and ensures organizational resources are effectively used (Obasan, 2011; Uju, 2010; Korir, etal, 2015). On the other hand, destructively-handled or poorly-handled conflicts results in wastage of resources, deters employees to perform at their best, creates disharmony between staff and management and makes organizational objectives difficult to achieve. In addition, the effect of poorly-handled conflict with respect in deposit money banks is catastrophic. This is because poorly-handled conflicts can expose commercial banks to risk of huge financial losses. Furthermore, unresolved conflicts has the capacity to drastically reduce the profitability of commercial banks, tarnish their goodwill, lead to high employee turnover, scare existing and prospective customers and investors away, jeopardize customers’ and investors’ confidence reposed on them, can destroy their liquidity and insolvency and at the extreme, continually unresolved conflict can lead to financial distress. It is therefore imperative for top management of commercial banks to ensure that conflicts is constructively handled whenever they occur, in order to promote the performance of employees as well as the overall performance of organizations.