THE INFLUENCE OF DIVERSITY MANAGEMENT ON EMPLOYEE MORALE IN BREWING INDUSTRY IN SOUTHEASTERN NIGERIA

ABSTRACT

There is a challenge of the difficulty in determining the effect of Diversity Management on Employee  Morale  in the  Brewing  Industry in Southeastern  Nigeria.   The  specific objectives of the study were to determine the type of influence diversity management has on employee morale in the brewing industry in  Southeastern  Nigeria, to determine  the nature of the effect of demographic work-place diversity on the state of the minds aspect of employee morale in the brewing companies that were studied, to establish the effect of socio-cultural  work  place  diversity on the  willingness  to  perform  aspect  of employee morale  in  the  brewing  companies  in  the  area  studied,  to  determine  the  influence  of workplace  diversity management on the polarization  aspect of employee morale of the brewing   companies   in  the  area  studied  and  to  ascertain  the  effect  of   workplace management on the autonomy aspect of employee morale of the brewing companies in the area studied. The research design was a combination  of the  survey, oral interview and PEST model modification. Hypotheses 1, 2, 3 were tested using the Z test of population proportions while 4 and 5 used the Z test for Likert Scale Responses. It was found that Diversity  Management  had  a  positive  influence  on  employee  morale  in  the  brewing industry in Southeastern Nigeria (Zc  = 5.936 > Zt  = 1.645), the demographic workplace diversity had a positive influence on the state of the minds aspect of employee morale in the brewing companies in the area studied (Zc  = 7.139 > Zt  = 1.645), the socio-cultural workplace  diversity  had  a  positive  influence  on the  willingness  to  perform  aspect  of employee morale in the brewing companies in the area studied (Zc = 8.343 > Zt = 1.645), the  demographic  workplace  diversity  management  had  a  positive  influence  on  the polarization  aspect  of  employee  morale  in  the  brewing  companies  in  the  brewing companies  in  the  area  studied  (Zc   =  33.904  >  Zt   =  1.645)  and  that  the  workplace management  had a positive  effect on the autonomy aspect of employee  morale of the brewing companies in the area studied (Zc = 33.990 > Zt = 1.645). The conclusion was that Diversity  Management  had  a positive  influence  on Employee  Morale  in the  brewing industry in Southeastern Nigeria which implied that the  management of the differences and similarities of the behaviour, attitude to work, culture, religion and management styles of the workers would make for an increase in the performance factor of employee morale which determines the extent to which the  workers of the brewing companies are doing their work. Recommendations were made along that line.

CHAPTER ONE INTRODUCTION

1.1      BACKGROUND TO THE STUDY

Managing  diversity  and  employee  morale  have  had  early  influences.  Management  of diversity naturally has been of some concern to organized history throughout the history of civilization. Most of the early contributions came from practitioners such as Taylor and Fayol. Taylor is the father of scientific management and wrote his  book in 1911 while Fayol developed the fourteen principles of administration (Koontz and O’Donnel, 2000). Management in antiquity shows the interpretation of early Egyptian papyri, extending as far back as 1300 B.C., that indicates the recognition of the importance of organization and administration in the bureaucratic states of antiquity with similar records of such existence for ancient China.  Confucius’s  parables include practical suggestions  for proper public administration, and admonitions to choose honest, unselfish, and capable public officers (Koontz and O’Donnel and Weihrich, 2000).

The Roman Catholic Church, if one is to judge by age, is probably the most  efficient formal organization in the history of Western civilization. Its long organizational life has been due  not only to  the  appeal of its objectives  but  also  to  the effectiveness  of  its organization and management techniques. The development of the hierarchy of authority with its scalar territorial organization, the specialization of activities along functional lines, and the early use of the staff device are striking examples of these techniques. However, present  times  are  showing  the  challenges  of  diversity  management  where  the  Pope Benedict XVI resigned on Thursday February 28, 2013 in the face of growing issues of age and general administration (Nwachukwu, 2013).

In the Military Organisations as might be expected, some of the more important principles and practices of modern business management  may be traced to military organizations. Except for the Church, no other form of organization in the history of Western civilization has been  forced,  by the  problems  of managing  large  groups,  to develop  organization principles.  Yet  despite  the  need,  the military organizations  probably  failed  to put  the theory to use before the past two centuries (Koontz and O’Donnel, 2000).

Management of diversity has also existed in Nigeria and employee morale has been a very important performance variable. In 1946 there was the first pre-development plan and it was financed by the British Administration. Its aim was to raise raw materials as inputs in

the British factories to generate revenue to win the Second World War. The diversity here was whether the plan was for Nigeria or for Britain as their interest was on growth abroad rather than indigenous employee’s moral. Between 1962 and 1985 there were four post- independence development plans, followed by the 7-point agenda of late President Musa Y’Adua. There were the economic reforms of President Olusegun Obasanjo between 1999 and 2007 and presently there is a road map of President Goodluck Jonathan till date. The diversity here is that all the plans, programmes and strategies used by the various Nigerian administrations   have   had   good   formulations   but  it  has   been   observed   by  some development  experts that  there were very poor implementations  because of the diverse Nigerians socio-economic and religious backgrounds (Nwankwo, 2010).

Diversity management continued to have an influence on employee morale in relation to age, gender, religion, tribe, etc which could be positive if the strategies were  right and negative  if they  were  not.  As  Lawrence  (2001)  puts  it,  management  of  diversity  in organisations is dependent upon the acceptance of some primary objectives to which the employees are ready to commit, like the way it would impact on their morale which is a state of the mind of the individuals,  or groups as shown  in the willingness to perform assigned tasks.

The  effect  of  diversity  management  on  employee  morale  was  very  relevant  in  the Managements  of United  States  of  America,  Japan  and  Nigeria.  The  United  States  of America in the modern era had diverse management approaches that enhanced the spirit with which the American workers did their work. No wonder their economy became that of wealth  and  prosperity.  A typical  example  was  in the  mass  production  which  was initiated by Henry Ford which made it possible to produce a lot of cars that were different and similar as if it were the same brand. In American Management,  there was a lot of planning but the Americans were too fast in their planning making for emergent decision making, demand forecasting and simulating the objective function (Koontz, O’Donnel and Weihrich, 2012).

In the case of Japanese Management, diversity management also had a positive effect on employee morale. The Japanese did not have raw materials but had the technology, so they could import raw materials  and transform  them through the production  process to get product  like electronic  products and Toyota brand of cars. The  transform  consisted  of different  machines,  methods  and  maintenance  and  so  diversity management  was  very

relevant. The Americans were very happy about the increased productivity of the Japanese so much so that American entrepreneurs built factories and asked the Japanese Managers to man the factories, so employee morale was very relevant. The Japanese Management was boosted  by the use of life time employment,  use of  quality  circles and effective technology (Koontz, O’Donnel and Weihrich, 2012).

In the case of Nigerian Management, diversity management had also had a positive effect on employee morale. In 1946, the pre-independence development plan which was financed by the British Government  was aimed at raising different raw materials to  finance the British factories so that Britain will not lose the Second World War. The plan lasted for 10 years between 1946 and 1956 (Nwankwo, 2000). So diversity management in Nigeria had a colonial origin. The Nigerian Enterprises Promotion Decrees of 1972 and 1977 left the control and management of the different enterprises in Nigerian hands. Management was the factor that enhanced economic growth in Nigeria. Between the last quarter of 2013 and the first quarter of 2014, due to a rebasing done, the Gross Domestic Product growth rate of Nigeria was 7.4%. This made the economy of Nigeria bigger than that of South Africa that has continued to be an emerging economy with Egypt. The Nigerian economy became the largest in Africa (Nigerian Bureau of Statistics, 2014). Unfortunately, this economic growth has not been matched with effective employment of young school leavers, poverty alleviation and high literacy rate.

1.2      STATEMENT OF THE PROBLEM

Nigerian  managers  since  independence  in 1960 have struggled  with the challenges  of managing religious, ethnic and political diversities bordering on gender, nationality, social class, background, sex orientation, age, mental and physical capabilities amongst others in organisations. This major test of manager’s ability to promote organisational integration has been causing a lot of moral and performance difficulties on diversity management.

There is the difficulty in determining the type of influence diversity management has on employee morale in the brewing industry in Southeastern Nigeria. There is the difficulty in finding out the nature of the effect of demographic work-place diversity on the potency aspect  of  employee  morale  in  the  brewing  companies  to  be  studied  in  Southeastern Nigeria.  There  is the difficulty  in establishing  the effect  of  socio-cultural  work place diversity on the participation aspect of employee morale in the brewing companies in the area to be studied.

There is the difficulty in determining whether the workplace diversity management  has any influence on the polarization aspect of employee morale of the brewing companies in the area to be studied. Polarization is that element of employee morale that establishes the degree to which the group of workers with their similarities and  differences is oriented towards an objective that is clear to the members and shared by them.

There  is  the  difficulty  in  ascertaining  the  effect  of  workplace  management  on  the autonomy aspect of employee morale of the brewing companies in the area to be studied.

In  diversity  management  both  similarities  and  differences  are  important  however  in management  by exception  only differences  are  important  and  not  similarities.    Other problems   also   abound   such   as   professionalism,    individual   identity,    intellectual discrimination,  etc as such practices that can dampen morale by some  staff that stretch these components in a work place too far. It has also entailed showing concern only for the achievement of departmental goals rather than overall organizational goals, neglecting the cost/effect  on broad organizational  goals.  It has  also  entailed  forgetting  that Diversity Management knowledge is to galvanize the entire different forces; environmental factors of Political, Economic, Socio-Cultural and technological environments.

1.3      OBJECTIVES OF THE STUDY

The main thrust of the study is to determine the influence of Diversity Management on

Employee Morale in the Brewing Industry in Southeastern Nigeria. The specific objectives are:

1.   To determine the type of influence diversity management has on employee morale in the brewing industry in Southeastern Nigeria.

2.   To determine  the nature of the effect  of demographic  work-place  diversity on  the potency aspect of employee morale in the brewing companies studied in Southeastern Nigeria.

3.   To establish the effect of socio-cultural work place diversity on the participation aspect of employee morale in the brewing companies in the area studied.

4.   To determine the influence  of workplace diversity management  on the  polarization aspect of employee morale of the brewing companies in the area to be studied.

5.   To ascertain the effect of workplace management on the autonomy aspect of employee morale of the brewing companies in the area studied.

1.4      RESEARCH QUESTIONS

This research is designed to provide answers to the following questions:

1.   What type of influence does diversity management exert on employee morale in the brewing industry in Southeastern Nigeria?

2.   What is the nature of the effect of the demographic work place diversity on the potency  aspect  of  employee   morale  in  the  brewing  companies   studied   in Southeastern Nigeria?

3.   What effect does the socio-cultural work place diversity have on the participation aspect of employee morale in the brewing companies in the area studied?

4.   What is the influence on the polarization aspect of employee morale of the brewing companies in the area studied?

5.   What  effect  does the workplace  management  have  on the autonomy  aspect  of employee morale of the brewing companies in the area  studied?

1.5       HYPOTHESES

The following five hypotheses will guide the conduct of this study as follows:

HA1:   Diversity management  exerts a significant  influence  on employee  morale  in  the brewing industry in Southeastern Nigeria.

HA2: The demographic  work place diversity has a significant  influence  on the  potency aspect of employee morale in the brewing companies to be studied in Southeastern Nigeria.

HA3:  The  socio-cultural   work  place   diversity   has  a  significant   influence   on   the participation  aspect  of  employee  morale  in the  brewing  companies  in  the  area studied.

HA4: The workplace diversity management has a significant influence on the polarization aspect of employee morale of the brewing companies in the area studied.

HA5: The  workplace  management  has  a significant  effect  on the  autonomy  aspect  of employee morale of the brewing companies in the area studied.

1.6      SIGNIFICANCE OF THE STUDY

This  study  was  significant  because  it  produced  data  on  the  influence  of  diversity management on employee morale in the brewing industry in South-Eastern Nigeria that will lead to contribution to knowledge, policy making and practice.

1.7    SCOPE AND DELIMITATIONS OF THE STUDY

The focus of the study is to determine the influence whether positive, negative or not at all of Diversity Management in four Brewing Companies in Southeastern Nigeria. Only the brewing industries of the food and beverage sub sector is to be studied. The independent variables were the diversity management, demographic workplace diversity, socio-cultural work place diversity, workplace diversity management and workplace management.

The dependent variables were employee morale, potency, participation in assigned tasks, polarization and autonomy. The Breweries studied were Nigerian Breweries Plc, Guinness Nigeria Plc, Hero Breweries Plc and the Continental Breweries Limited. The geographical scope of the work was Southeastern Nigeria. The study was delimited in   these Breweries that have their depots in the five States of the Southeast geopolitical zone of Nigeria. The time scope of the study is two years.

1.8 PROFILES OF THE FOUR BREWERIES STUDIED

1.8.1 The Profile of Guinness Nigeria Plc

In 1759, Mr. Arthur Guinness built his brewery on a site whose area was four acres. The site was not far from the Western entrance to the city of Dublin in Ireland. Even though the gate is no more, the brewery which bears the name of the founder has increased in size to upwards of 66 acres and is one of the biggest breweries in the world (Guinness Nigeria Plc, 2011).

In  1936,  the  high  demand  for  Guinness  necessitated  the  establishment  of  a  second brewery.  This  was  located  at  Park  Royal  near  London.  In  1963,  the  third  Guinness brewery was opened at Ikeja, Lagos, Nigeria. Quite unlike the situation in both Dublin and Park Royal, Guinness in Nigeria is bottled in the brewery and the Ikeja brewery has the largest bottling hall of all Guinness breweries all over the world (Guinness Nigeria Plc,

2011).

The world wide popularity of Guinness has made it possible to establish breweries in the following countries:

1.        Malaysia;

2.        Cameroon;

3.        Ghana; and

4.        Jamaica (Guinness Nigeria Plc, 2011).

Guinness is also brewed under Guinness supervision in the following countries:

i.         Kenya;

ii.        Sierra Leone;

iii.        Australia; iv.        Trinidad; v.         Canada;

vi.        Mauritius;

vii.      New Zealand;

viii.      Seychelles;

ix.        Liberia;

x.         Thailand;

xi.       Indonesia; and

xii.      Venezuela (Guinness Nigeria plc, 2011)

In 1959, Guinness went into the production of a lager brand of beer called Harp in Ireland and soon expanded this market into many other countries including U.K.  where it sells very widely. Lager beer is now produced in Ireland, U.K., Malaysia, Cameroon and in the Benin Brewery in Nigeria (Guinness Nigeria Plc, 2011).

1.8.2    The Profile of Nigerian Breweries Plc

Nigerian Breweries Plc (NBPLC) is the country’s pioneer brewery. Incorporated in 1946, it commenced production in 1949. It started as a joint venture between the United African Company (UAC) International, UK and Heineken of Holland, Thus, at inception, it was

100 per cent foreign owned. By the early 1950s, when it began operating fully,  some indigenous traders already involved with its products were invited to become shareholders. Under the indigenization policy of the early 1970s the foreign shareholders were forced to sell a significant proportion of their holdings. Today, the company is 60 per cent Nigerian owned and 40 per cent foreign owned. The 60 percent Nigerian stake is held by company employees and members of the public,  while the 40 per cent foreign ownership is split almost equally between CWA Holdings Limited (for Unilever) and Heineken Brouwerijen BV.

The foreign partners now perform the role of technical advisers, with Unilever advising on commercial  aspects  such  as  accounting,  purchasing,  marketing  and  personnel,  while Heineken does the same for technology. Organizationally, the company has four divisions:

technical,  finance,  marketing and personnel,  each of which  is headed by an  executive director.

At its inception in 1949, NBPLC had only Star Lager (Nigeria’s first) on the market, over the years it has broadened its product range. Except for the period 1984 86,  when sales volume suffered an annual average decline of about 18 per cent, turnover growth in the company has generally been accompanied  by growth in profit and  production volume. Thus, when normal growth was restored in 1987, the 51 per cent and 83 per cent increases in turnover and operating profit, respectively, for 1987 – 88 were accompanied by about

35 per cent volume growth. Similarly, the turnover of about N1.7 billion recorded in 1991 was  partially  the  result  of  8  per  cent  growth  in  sales  volume.  However,  from  all indications, product pricing which has to do with what the buyer pays which includes both the cost  and  the profit  which  has  been the  major  factor  in the  impressive  growth  in operating profits.

The  deteriorating  results  recorded  by  the  company  in  1984-86  reflected  the  foreign exchange rationing policy of the period, which was necessitated by the severe balance of payments crisis of the post-oil-boom  era. The import license allocation of the company could hardly satisfy one third of its foreign exchange requirements.  The government’s mandatory backward integration policy in the mid-1980s saw the company establishing a

5,000 – hectare  farm, estimated  to be worth N30 million,  in Niger State. The farm  is highly mechanized and produces mainly maize, rice and sorghum, with soya  beans and cowpeas as rotational crops. The main crops are used as replacements for barley malt. The changeover  in  input  mix  was  assisted  by  the  company’s  N2  million  Research  and development (R&D) facility, which was commissioned in June 1987 and plant conversion costing about N100 million (N.B.P.L.C, 2011).

The  company  works  with  highly  structured  plans,  with  annual  budgets  of  intentions translated into explicit targets. The Board of Directors sits towards the end of the year to deliberate on the report of each divisional head. Annual budget estimates are made in the middle  of  the  year  while  decisions  on  annual  plans  are  left  till  the  end  of the  year (N.B.P.L.C, 2011).

The company has experienced remarkable changes in its technical capability. The change in  input  content  in  the  late  1980s  also  involved  changes  in  processing  technology (N.B.P.L.C, 2011).

Different measures of productivity are used for the technical division and other divisions. In the  technical  section,  productivity  is  measured  in terms  of  the  efficiency  of plant operation and also in terms of capacity utilization. In other divisions, it is in terms of the accomplishment  of assigned  responsibility.  The  company is viewed  as a leader in the brewery industry and in Africa it enjoys a  high rating, in term of both productivity and product quality (N.B.P.L.C, 2011).

NBPLC concentrates on the production of its beer and related products, leaving ancillary services such as bottles, crown corks, labels, cartons and crates to be  supplied by other local  manufacturers.  In  fact,  Nigerian  law  precludes  a  brewer  from  producing  such ancillary services. Only the companies in the soft drinks industry appear to sponsor firms to produce  such services.  Backward  integration  into  farming was a special concession granted  to  the  breweries  in  1984  following  the  stringent  foreign  exchange  control measures introduced in that year. It also uses outside transport companies for 60 per cent of total distribution (N.B.P.L.C, 2011).

The company; collaborates with other producers in the industry in lending materials which are  urgently  required.  Under  the  umbrella  of  Manufacturers  Association  of  Nigeria (MAN),  it  cooperates  with  competitors  to  discuss  issues  affecting  the  industry,  e.g. adverse government policy and other economic factors. There is no collaboration between competitors in marketing and no cooperation in technical services, probably because most of the local brewers have foreign technical partners (N.B.P.L.C, 2011).

The prosperity of the company has been preserved by its efficient costing system, which seeks to protect profit margins which are the ratio of net profit or gross profit over sales in a high-inflation setting by adjusting prices in response to changing  costs of production. Input costs rose about 10.53 per cent in the period 1982 to June 1992 and selling prices have risen to almost the same extent (N.B.P.L.C, 2011).

1.8.3 The Profile of Hero Breweries Plc

Hero Breweries Plc was incorporated on 23rd  January, 1976 with head office in Onitsha, Anambra State. It was listed on the Nigerian Stock Exchange in 1988. Proshare reports, shows that Hero Breweries Plc declared in 2008, 2009 and 2010  Audited Results with N42.225m  million  losses  in  2010.  The  Stock  Exchange  weekly  reports  that  Hero

Breweries Plc’s audited result for the year ended 31st  March 2008 shows low  turnover

same as in 2007. Loss after tax stood at N23.005 million compared with N224.21 million in 2007. Consequently, if previous year’s losses are taken into account, the retained loss carried  forward  stood  at  N440.3  million  compared  to  N417.3  million  in 2007  (Hero Breweries Plc, 2011: 18).

1.8.4 The Profile of Continental Breweries Plc

The company was established  at Awoomama  in 1980 in Imo  State and   is very  well located on the Onitsha-Owerri Road. It is very close to such big towns like Oguta, Orlu, Owerri  and  Onitsha  and  this  gives  it  the  advantage  of proximity  to  a  lot of traders travelling from Owerri to Onitsha. Owerri is the State Capital of Imo State, Onitsha is the biggest commercial center in Southern Nigeria. The location advantage of the brewery is instrument to their product “33” lager beer to be very popular and the patronage of the customers has led to the brewery being a very big  brewery with very modern brewery facilities such as matching,  cementing,  match  rating and bottling facilities (Continental Breweries Plc, 2011).

1.9 OPERATIONAL DEFINITIONS OF TERMS

Accountability  is the extent to which obligation  of an organization  to account  for  its activities in a brewing firm.

Autonomy  is that extent  to which the organization  takes decision  independent  of  the control or influence of the owners in a brewing firm.

Demographic  workplace  diversity  is the totality of the  individual  differences  of  the workers that border on such personal characteristics like sex, marital status, name, age and educational qualification in a brewing firm.

Diversity  Management  is  defined  as  the  provision  of  an  operating  environment  to achieve the objective  of understanding  the multitude of the individual  differences and similarities that exist amongst the workers in the brewing industry in Southeastern Nigeria.

Employee Morale is that factor of performance which makes workers happy when they are doing their work in a brewing firm.

Participation is defined as the extent to which different mechanism of the organization express opinions in a brewing environment.

Polarization explains that aspect of element of employee morale in the brewing firm that establishes the degree to which the group of workers with their similarities and differences is  made  to  understand  specific  task,  work  content  and  objective  that  is  clear  to  the members and shared by them under a defined work environment.

Potency explains the degree to which the individual needs, formal and informal such as background  challenges  and standard rewards expectations  of the workers in a  brewing firm are satisfied because of their membership of a particular group in the organization. Socio-cultural workplace diversity is defined as the totality of the social units: friends, age groups, family status, life styles, company, clubs belonged, community services and other social interactions that affect the individual differences and similarities in a brewing firm.

Workplace diversity management explains the type, location, perception of the brewing firm by the environment and conditions of the working environment provided to achieve the objective of studying the differences and similarities of people in the workplace. Workplace management explains the managerial and administrative leadership provided by a brewing environment to achieve the  overall objectives of managing the workplace effectively.

1.10     LIMITATIONS OF THE STUDY

The attitude of the respondents: The survey research design has the limitation that some respondents  are  reluctant  to  give  answers  to  probes.  This  limitation  is  minimized  by persuading the respondents and by having a covering letter.

The interviewing situation: The oral interview has the limitation that the  interviewing situation may change especially if more than one field data collector is used to do the fieldwork. This limitation is minimized by the Researcher doing most of the field work. Representation of Reality: A model to be modified has the limitation that it is only an abstraction or representation  of reality. This limitation is  minimized  by relying on the responses of the managers and staff of the Brewing Companies to be studied.

The structured nature of the instrument: The questionnaire research instrument has the limitation that its structured nature may compel the respondents to give answers that they do  not  fully  endorse.  This  limitation  is  minimized  by  also  using  an  oral  interview schedule.

The open-ended nature of the schedule: The oral interview schedule has the limitation that  it  contains  open-ended  questions  that  are  difficult  to  analyse.  This  limitation  is minimized by using numbers divided by the total number of schedules returned to give the frequencies.

The cryptic nature of the dichotomous  schedule:  The dichotomous  (yes or no)  oral

interview schedule for getting responses to implement the PEST Model has the limitation that the answers do not span the entire answer continuum. This limitation is minimized by using Likert Scale Responses.

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