INDUSTRIAL HARMONY AND ORGANIZATIONAL EFFECTIVENESS OF MANUFACTURING FIRMS IN RIVERS STATE, NIGERIA

INDUSTRIAL HARMONY AND ORGANIZATIONAL EFFECTIVENESS OF MANUFACTURING FIRMS IN RIVERS STATE, NIGERIA.

This study aims to examine the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State.

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CHAPTER ONE

INTRODUCTION

 1.1 Background to the Study

In this era of high dynamism and stiff competition in the business world, the issue of how to enhance the effectiveness of firms has become more necessary than ever. The effectiveness of firms is paramount to remain competitive. Considering the high rate of proliferation of technology and unending rivalry among firms, enhancing the effectiveness of firms will go a long way to boosting their sustainability in the industry. Organizational effectiveness is the extent to which a firm attains its predetermined goals. Organizational effectiveness has been one of the most researched topics since the development of organizational theory due to its importance in enhancing the firm’s wellbeing.

In line with the above assertion, Rieley (1993), maintained that organizational effectiveness is a major factor that influences the survival of all types of business in the twenty-first century. Oghojafor, Muo, and Aduloju (2012) defined organizational effectiveness as the extent to which a firm is capable to achieve its goals. Organizational effectiveness over the years has been seen as the extent of goal attainment. Furthermore, Ghorpade (1970) identified that organizational effectiveness has become highly investigated because of the predominant role played by organizations in our lives. The effectiveness of firms boosts the economic wellbeing and also enhances the financial position of the organization. However, the employees who are the major resource of the organizations are saddled with the responsibilities to ensure the effectiveness of the organizations. In line with the above assertions, it is therefore of paramount importance to ensure industrial harmony so as ensure friendly and cooperation among employees which is capable of boosting the effectiveness of the firm.

Industrial harmony refers to a cooperative and friendly agreement on working relationships between employers and employees for their mutual benefit (Osad & Osas, 2013). Onyeigugbe, Agbara, Olohi, and Chidigo (2018) posited that industrial harmony is a situation in which management and employees cooperate willingly to achieve the aims and objectives of the organization. Odia and Omofonmwan (2007) pointed out four distinct areas of industrial harmony which could be seen as the dimensions of industrial harmony. These are; responsibilities, employment policies, collective bargaining, communication, and consultation. In recent times, the industrial crisis is assuming unprecedented proportions within the Nigerian work environment (Nwokocha, 2015). Furthermore, Hanson (2006)maintained that industrial harmony represents the absence of strike by industrial unions in an organization which is bound to result in effective and efficient organizations (Onyeizugbe, Agbara, Olohi & Chidiogo, 2018). Industrial harmony fosters the relationship between employees and employers or management, and such a harmonious relationship enhances the employees’ morale towards the effectiveness of the firm. Creating an environment of industrial harmony reduces the tendency of the industrial crisis and boost cohesion in the workplace. Industrial harmony is concerned with the relationship between the trade union and the employers in the industry, and the intervention of government in the relationship. The function involves the relationships and interactions between employers or management and employees, either as an individual or as groups between supervisors and workers and his trade union, and between one trade union and the other. The industrial harmony covers employment problems, security, condition for work, labor and employment, remuneration, grievances and disputes, safety, health and welfare of workers, social security and employee development. Industrial harmony involves a coherent approach to the problem of motivation, handling grievances and conducting relationships with organized labor.

Campbell, Bownas, Peterson, and Dunnette (1974), did extensive work on organizational effectiveness and he identified twenty-six measures of organizational effectiveness which include, overall effectiveness, productivity, profit, accidents, quality, efficiency, turnover, growth, absenteeism, satisfaction, motivation, control, employee morale, conflict/cohesion, goal congruence, managerial task skills, role, and norm congruence, managerial interpersonal skills, readiness, information management and communication utilization of the environment, stability, evaluation of external entities, internalization of organizational goals and value of human resources.

Over the years, several scholars have examined the construct of organizational effectiveness and organizational transparency. Ukpabi, Ikaba, Enyindah, Orji, and Idatoru (2014), examined how corporate social responsibility impacts the effectiveness of the oil and gas industry. Corporate social responsibility also predicts organizational effectiveness (Olowokudejo & Aduloju, 2011). Onyeizugbe, Aghara, Olohi, and Chidiogo (2018) sought to determine the extent of the relationship that exists between industrial harmony and employee performance in selected Food and Beverage Firms in Anambra state. They observed a positive relationship in their study. Lasisi and Lolo (2018) examined the link between collective bargaining and industrial harmony in the Shell Petroleum Development Company (SPDC), Port Harcourt, Rivers State, Nigeria.

Despite various work on how to enhance the effectiveness of firms, there is very scanty empirical work that has examined the relationship between industrial harmony and organizational effectiveness of manufacturing firms in rivers state, Nigeria. It is this observed gap that has informed the researcher to examine how industrial harmony relates to the effectiveness of manufacturing firms in Rivers State.

1.2 Statement of the Problem

The issue of organizational effectiveness is critical to firms that must survive this turbulent moment. The low level of effectiveness of a firm reduces the competitive position of the organization in the industry.

The problem of organizational effectiveness manifests in low profitability, low morale and inability of the firm to compete favorably in the industry. There is again the problem of job flexibility in the manufacturing firms which again leads to job dissatisfaction which could affect the effectiveness of the firm. Furthermore, the manufacturing sector is grappling with weak internal operations processes, poorly designed innovative strategy and flexibility of work which is capable of reducing the competitiveness, effectiveness and employee morale. Despite some attempts to boost effectiveness in the manufacturing industry, there is still an issue of ineffectiveness as it relates to the cohesion and adaptability of most of the firms in the industry.

The ineffectiveness of some of these firms has led to dissatisfaction of employees, sabotage and lack of commitment towards the firms’ goals Ogbo, Okechukwu, and Ukpere (2012). Furthermore, the effectiveness of firms indicates their level of performance and success and low effectiveness of the firm could lead to liquidation and thus increasing the rate of unemployment in the country. Observations have revealed that the industrial crisis could have a detrimental consequence on the effectiveness of the firm. The problem of inefficiency in the manufacturing firms has resulted in a high rate of retrenchment in the sector and this has intensified the rate of poverty, hunger, and social miscreant. An organization that is constantly involved in the industrial crisis, will end up spending most of their time and resources in resolving the crisis. Furthermore, industrial harmony enhances the work environment which could boost the cohesiveness of employees. As such organizations must ensure industrial harmony to avert the consequences of the industrial crisis. It is on this note that this study seeks to examine the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State, Nigeria.

1.3 Conceptual Framework

Figure 1.1: conceptual framework showing the link between industrial harmony, organizational effectiveness, and organizational culture.

Source: Adapted from Odia and Omofonmwan (2007); Campbell, Bownas, Peterson, and Dunnette (1974)

1.4 Aim and objectives of the study

This study aims to examine the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State. The specific objectives are;

1. To examine the relationship between employees-employer relations and cohesion of manufacturing firms in Rivers State, Nigeria.
2. To investigate the relationship between employees-employer relations and adaptability of manufacturing firms in Rivers State, Nigeria.
3. To determine the relationship between employee-employer relation and job satisfaction of manufacturing firms in Rivers State, Nigeria.
4. To examine the relationship between collective bargaining and the cohesion of manufacturing firms in Rivers State, Nigeria.
5. To investigate the relationship between collective bargaining and the adaptability of manufacturing firms in Rivers State, Nigeria.
6. To determine the relationship between collective bargaining and job satisfaction of manufacturing firms in Rivers State, Nigeria.
7. To examine the relationship between management policy and cohesion of manufacturing firms in Rivers State, Nigeria.
8. To investigate the relationship between management policy and adaptability of manufacturing firms in Rivers State, Nigeria.
9. To determine the relationship between management policy and job satisfaction of manufacturing firms in Rivers State, Nigeria.
10. To examine how organizational culture moderates the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State, Nigeria.

1.5 Research Questions

The following research questions will be proffered to serve as a guild in this study

1. What is the relationship between employees-employer relations and cohesion of manufacturing firms in Rivers State, Nigeria?
2. What is the relationship between employees-employer relations and the adaptability of manufacturing firms in Rivers State, Nigeria?
3. What is the relationship between employees-employer relations and job satisfaction of manufacturing firms in Rivers State, Nigeria?
4. What is the relationship between collective bargaining and cohesion of manufacturing firms in Rivers State, Nigeria?
5. What is the relationship between collective bargaining and the adaptability of manufacturing firms in Rivers State, Nigeria?
6. What is the relationship between collective bargaining and job satisfaction of manufacturing firms in Rivers State, Nigeria?
7. What is the relationship between management policy and cohesion of manufacturing firms in Rivers State, Nigeria?
8. What is the relationship between management policy and the adaptability of manufacturing firms in Rivers State, Nigeria?
9. What is the relationship between management policy and job satisfaction of manufacturing firms in Rivers State, Nigeria?
10. How does organizational culture moderate the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State, Nigeria?

1.6 Research Hypotheses 

The following null hypotheses will be formulated in this study to serve as a tentative answer to the research questions.

HO_1: There is no significant relationship between employee-employer relations and cohesion of manufacturing firms in Rivers State, Nigeria.

HO_2: There is no significant relationship between employee-employer relations and the adaptability of manufacturing firms in Rivers State, Nigeria.

HO_3: There is no significant relationship between employee-employer relations and job satisfaction of manufacturing firms in Rivers State, Nigeria.

HO_4: There is no significant relationship between collective bargaining and the cohesion of manufacturing firms in Rivers State, Nigeria.

HO_5: There is no significant relationship between collective bargaining and the adaptability of manufacturing firms in Rivers State, Nigeria.

HO_6: There is no significant relationship between collective bargaining and job satisfaction of manufacturing firms in Rivers State, Nigeria.

HO_7: There is no significant relationship between management policy and cohesion of manufacturing firms in Rivers State, Nigeria.

HO_8: There is no significant relationship between management policy and the adaptability of manufacturing firms in Rivers State, Nigeria.

HO_9: There is no significant relationship between management policy and job satisfaction of manufacturing firms in Rivers State, Nigeria.

HO_10: Organizational culture moderates the relationship between industrial harmony and organizational effectiveness of manufacturing firms in Rivers State, Nigeria.

1.7 Significance of the study

This research work is of great relevance to the manufacturing sector, the management of manufacturing firms, it is also of great importance to the government, scholars and future researchers. This study will be useful to the manufacturing firms by providing relevant issue as it borders on industrial harmony and effectiveness. The study will further enable the management of the manufacturing firms to know the extent to which their industrial harmony in terms of employee-employer relations, collective bargaining, and management policy relates to their effectiveness. Again, this study will be of great relevance to the government as it will enable them in terms of policy formulation which is aimed at improving the level of effectiveness of the manufacturing firms. This study is of immense benefit to scholars and future researchers because it will serve as a reference material to those who are interested in carrying out future studies regarding the variables under investigation.

1.8 Scope of the study

The scope of this study, cover the content scope, geographical scope, and unit of analysis.

Content Scope: The content scope covers in-depth knowledge about the predictor variable (industrial harmony) and its dimensions, the criterion variable (organization effectiveness) with its measures and the moderating variable (organizational culture).

Geographical Scope: The geographical scope of this study covers a sample of manufacturing firms in Rivers State.

Unit of Analysis: This study was carried out at the organizational level of analysis (Macro level).

1.9 Limitations of the Study

The main limitation of this study that may affect its generalization is its sample size which is restricted to selected manufacturing firms in Rivers State. More so, data hoarding may be another limitation to this study Since some employees may be reluctant in divulging information relating to their organization. Also, the short period within which the study is expected to be conducted and completed could be another limitation.

1.10 Operational Definition of Terms

Adaptability: It is the degree to which a firm can alter behavior, structures, and system to survive the wake of organizational change.

Cohesion: It is the extent to which employees within an organization feel a sense of unity with one another.

Collective bargaining: collective bargaining as “the process whereby management and union agree on the terms under which workers shall perform their duties.

Employees-employer relation: This can be defined as the degree of cooperation that exists between employees of an organization and the employers of labor.

Industrial harmony: industrial harmony is a situation in which management and employees cooperate willingly to achieve the aims and objectives of the organization.

Job satisfaction: Job satisfaction is defined as an emotional response to a job that stems from the examination of perceived results with those that are expected. It is a psychological connection of an employee with his job

Management policies: Management policy is a document that prescribes acceptable methods or behavior.

Organizational culture: culture is the set of characters that describes an organization and gives it a distinct identity. Organizational culture has also been defined as the “normative glue” which binds an organization together

Organizational effectiveness: This is the degree to which the organization attains its goals, which could be financial or nonfinancial.

1.11 Organization of the study

This study covers five chapters. Chapter one of the study deal with the introduction which comprises study background, the statement of the problem, conceptual framework aims, and objective, questions to guide the research, hypothesis, significance, limitation, and definition of terms. The second chapter deal with an extensive review of related literature. Chapter three presents the details of the methodology to be employed in the work. Chapter four will deal with data presentation, analysis, and discussion of findings while chapter five covers the summary of the work, conclusion, recommendation and an enumeration of the study’s contribution to knowledge.