GREAT ZIMBABWE UNIVERSITY

Department of Management Studies

MASTER OF COMMERCE IN STRATEGIC MANAGEMENT

MODULE: MANAGEMENT ORGANISATIONAL BEHAVIOUR

ASSIGNMENT: GROUP ASSIGNMENT

DATE: 9 SEPTEMBER 2019

STUDENT NAMES:
Tafadzwa R Maringire
Nyasha M. Gwaidzo
Faith Y. Marikopo
Paidamoyo P Makonye
Nick Mudhosi
Lethubuhle B Moyo
Justin Mailos

LECTURER NAME: DR. MAKANYEZA

MARK: …………………/.……………………….

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Evaluate Conflict Management Strategies applied by an organization of your choice in
Zimbabwe.

Conflict of interest in organizations is inevitable, whether in the manufacturing or service

industry. It can be categorized into two types, that is, interpersonal or relationship conflict
which refers to personality clashes between and among individuals (Billikopf, 2010). The
second one, institutional or task conflict, which is conflict that arises between and among other
organizations or functions of the same organization (Bates, et al., 2007 and Nel & Werner,
2014). Conflict arise because of differences in people’s characters and structures in the
organization. These differences make workplace conflict endemic regardless of best
management practices in organizations to avoid it. Whether the conflicts will be destructive or
constructive depends on the attitudes and skills of the participants as well as time pressures and
resource shortages. Conflict in organizations needs to be managed in order to create and
maintain a healthy working environment.

In this research paper, the researcher is going to look at the conflict management strategies used
by Zimbabwe Electricity Supply Authority in its conflict with employees over compensation
issues.

ZESA – Employee Compensation Conflict

Zimbabwe Electricity Supply Authority (ZESA) is the main power supply utility in the nation.
It was shaped because of the amalgamation of the Electricity Supply Commission (ESC),
Central African Power Corporation (CAPCO) and neighborhood districts after the order of the
Electricity Act in 1985.

The degree of compensation or remuneration is one of the variables that impacts work
fulfillment and staff maintenance (Mapako, 2002). ZESA employees demanded $117 million in
salary arrears. This was as a matter arising from a collective bargaining agreement in 2012
which management just brushed off. ZESA argued that implementing an arbitral award granted
by the Court would have a heavy bearing on electricity consumers. To do this ZESA threatened
a six percent tariff hike to cater for the additional $5.6 million on its payroll. The organization
had a foundation described by insufficient worker motivation because of an erratic and rigid
grading system and managers who could not take full responsibility as they had little
empowerment and also there was no recognition of performers.

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For ZESA, the conflict emanated from the fact that employees asserted their demands for an
increased share in organizational rewards which included monetary benefits, acknowledgment,
appreciation, position, and independence. The sources of conflict for ZESA ranged from
external factors and organizational factors. The external factors included economic pressures
which were being spiraled by recession. These economic pressures affected the employees well
being and led to them demanding salary adjustments. Organizational factors were mainly
centered on compensation and remuneration issues for the employees. The conflict was however
intensified by a poor approach to handle the conflict by management.

Elements of a conflict

Organizational conflicts usually involve three elements, power, organisational demands and
worth. (Turner and Weed, 1983). ZESA management misused its power and ignored pertinent
issues which the employees raised. They went on to award heavy perks for the senior managers
and adjusted salaries insignificantly for the rest of the employees. Organizational demands are
the people's expectations which again the ZESA management ignored and never took seriously.
Worth was also compromised as the employees self-esteem was undermined due to the menial
salaries awarded to them. They felt abandoned and unfairly treated by management.

The National Employment Council for the Zimbabwe Energy Industry (NEC ZEI) oversee
conflict management and resolution for all disputes that may arise in terms of the NEC
Constitution or Labour Act (NEC Constitution, 2012). In addition, it is management’s duty not
to suppress or resolve all conflicts, but to manage them in order to enhance and not to detract
from organizational goals.

Negotiation is a strategy used to settle differences amongst people or departmental functions

through collaboration, compromise or agreement with the aim of finding a solution that can
pacify all parties involved (Thomas & Kilmann, 2007). ZESA uses workers’ committees to
represent and negotiate on behalf of its employees on all cases between the employees and
management and board members who will be representing ZESA. This strategy follows the
Labour Act which recognizes the right to collective bargaining. The 2005 Zimbabwe Labour
Amendment Act supports the creation of workers’ committees in organizations where less than
50% of workers are unionized. These committees should work together with representatives of
management to discuss workplace issues. In addition, workers’ committees should ensure that
collective bargaining agreements designed by the organization should cater for measures to curb
violence at the workplace. (Grogan, 2000; Gwisai, 2006)

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Conciliation

Conciliation is a type of conflict resolution. Pearl (2011:426) views conciliation which is

similar to mediation as a consensual form of dispute resolution or prevention in which typically,
a third party, the mediator assists the two conflicting parties to reach agreement or, in a legal
context, negotiate a settlement. The mediation process is typically private and confidential,
lowering the risk to participants of disclosing information and encouraging them to speak freely
without fear of compromising a potential court case. The mediation process treats conflicting
parties as collaborating in the construction of an agreement. The ultimate aim is to reach a
mutually satisfying agreement, not to declare a winner or a loser. Machingambi (2007:16)
describes conciliation, as a form of third party assistance involving an outsider to the dispute
who comes in as a facilitator to provide alternatives and endeavour to reach a resolution by
agreement.

In Zimbabwe conciliation is a phenomenon which is used as a bridge to arbitration. This

concept of dispute resolution was introduced in the labour dispute resolution system in
Zimbabwe in 2002 following the major amendment to the Labour Relations Act which also saw
the repulsion of the statutory instrument 379 of 1985 on termination of employment procedures.
The amendment of the Labour Relations Act No 17 of 2002 sought to streamline the labour
dispute settlement under the Labour Act with a view to reducing the backlog of cases in the
system and introducing an efficient and expeditious system of resolving labour disputes

In 2009 when ZESA slashed its employees salaries by 30% the trade unions called for a strike
to force management to restore slashed allowances. A show cause order was issued. Certificate
of no settlement was issued after parties failed to agree at conciliation stage. The matter went
for compulsory arbitration before Manase and Manase who ruled in favour of employer.

In 2010 ZESA indicated that they could not implement the salary increments agreed upon in the
energy industry and the issue went for conciliation and it failed to bring the parties to an
agreement. In 2011 again ZESA Management argued that the company could not afford to pay
the salary increment unions were garnering for and the matter went for conciliation which again
failed.

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In 2012 ZESA management offered its employees $275 at A3.1 whereas the signed and gazette
agreement was saying $275 at A1.1. they cited incapacity to pay. Other industry companies
complied with the CBA, ZESA refused citing interpretation differences. Three mandatory
meetings to conciliate the issue were held at NEC level but the parties failed to come to an
agreement.

All the conciliation efforts failed to bring about an agreement between the parties in conflict. At
an ILO Labour Law Reform workshop held at Monte Claire, Nyanga on 11-13 May 2010, Dr
Madhuku presented the ILO commissioned audit which was conducted on dispute resolution
system in Zimbabwe (Grogan, 2000; Gwisai, 2006). The findings showed the whole picture of
deficiencies affecting conciliation which included lack of enforcement of conciliation
agreements, involvement of legal practitioners, and the absence of guidelines for conciliation
process, complicated and disharmony of the dispute resolution system. It is also of paramount
importance to note that the outcome of conciliation agreement is not enforceable in Zimbabwe,
unlike in the South African Law where settlement becomes an agreement which is enforceable
in the courts. Thus trying to settle is not a conclusive jurisdiction and there is no provision for
enforcement of the agreement in the event that other parties decide to renege from the
agreement.

Arbitration

Arbitration, is a quasi-judicial process that focuses primarily on the merits of the disputants’
arguments. Resolution is reached through a ruling that is imposed by the arbitrator, usually in
the form of a written award. The arbitrator’s primary responsibility is not to uncover the parties
underlying interests but, rather, to adjudicate the case presented to him or her and to make a
declaration as to the merits of each party’s claims (Elkouri and Elkouri 2012).

The contract forming the basis of the dispute may contain a binding arbitration clause obliging
the parties to submit to arbitration or alternatively, disputing parties may opt by way of
Submission Agreement to arbitrate their disputes as they arise. Arbitration proceedings are held
in private to cater for sensitive issues. An Arbitrator may be selected on the basis of their
qualifications, technical expertise or special knowledge relevant to the subject matter of the
dispute. The arbitrator may be nominated by the parties to the dispute, or they request that a
particular institution be charged with appointing a suitable Arbitrator. Parties may retain a
degree of control over the resolution as there are no obligations to conduct Arbitration

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proceedings. Awards made by the Arbitrator are final and binding and may only be set aside in
certain limited circumstances (Pearse Trust 2012)

ZESA used the arbitration process to settle conflict which had arisen between employees and
management. In February 2009 ZESA’s lowest paid employee who is a grade A3.1 was being
paid $190 with transport allowance of $70; 30% retention allowance;35% housing allowances;
5% responsibility allowance; and 30% no pensionable allowance of basic. The then appointed
minister of Energy gave a directive to ZESA holdings board to slash 30% of allowances with
effect from 23 April 2009. The reason behind this directive was a way to reduce operating costs
as part of the national economic reforms. Retention allowance was reduced by 15%, housing
and non-pensionable allowance were reduced by 10%.

After the slashes were implemented trade unions called for a strike to force management to
restore slashed allowances. The parties involved failed to reach an agreement at conciliation
stage which then led to the matter being taken for compulsory Arbitration before Manase and
Manase who ruled in favour of the employer. The employees then appealed to the Labour Court
and they still lost the case then they went on to appeal at the Supreme Court in 2012.

In 2010 the employees, through their trade unions proposed for the lowest paid employee to be
paid $214 and the previous allowances before the slash to be restored; ZESA management
argued that the company could not afford to pay the salary increment which the trade unions
were garnering for. Once again the issue was taken for voluntary arbitration after parties failed
to agree on the conciliation stage. The arbitrator, Kabasa, awarded the employees a 12.5%
salary increase with effect from 1 January 2010. The ruling from the arbitrator was accepted by
management and the increases got implemented on 16 July 2010, back pay dating back to
January were paid over July and August 2010.

The trade unions went on again to propose for another salary increase in 2011, proposing for the
lowest paid employee to be paid $253, transport allowance of $70, retention, housing,
responsibility and tools allowance of 305, 35%, 5%, 35%, and 10 of basic respectively. ZESA
management still held on to the argument that they could not afford to pay the salaries the trade
unions proposed. After failing to reach an agreement at conciliation the matter was taken for
voluntary arbitration this time the matter was arbitrated by Gwisai and Kabasa who awarded the
employees an 18% increase on their salaries. A 2.5% cost of living adjustment was also

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awarded to the employees during the arbitration citing that inflation had eaten away employees’
earnings.

It is of uttermost importance that management take note of the fact that arbitration may breed
resentment amongst employers and employees. Mucheche (2012) referred to compulsory
arbitration as “... the worst, most inefficient and primitive form of resolving collective
bargaining disputes…” (p. 47). Mereki (2012b) alluded that arbitration has replaced collective
bargaining in most state controlled utilities. The arbitration strategy unjustifiably prolongs the
collective bargaining process and can be considered in bad light by management which felt that
most arbitrators were ruling in favour of employees in order to get repeat business.

Litigation

Litigation is a formal technique for settling conflict through the court arrangements of a country
when other options of conflict resolution have failed (NASBP, 2014). According to Minow
(1998:324), litigation is not a perfect type of social activity. Victims and witnesses endure
experiences of affirming, and questioning, without being afforded the ability to narrate their
experiences. Prosecution and the proof given at trials will not allow the production of a complex
account of the events that would have transpired. Hayner additionally indicates the way that
prosecutions may not be possible in many cases because there might be an inadequately
working legal framework, characterized by corrupt or compromised officials, or there might be
an absence of solid proof for the sorts of deeds perpetrated by highly secretive organizations.

Cash strapped legal systems have next to zero observer security programs, police and open
public prosecutors may not have what it takes to explore and exhibit solid cases. Very often
judges and public prosecutors are come up short on, courts work with insufficient physical and
budgetary assets, and without basic administrative support and blanket amnesties have been
passed by previous regimes. Now and then there is an absence of political will to handle
"troublesome" cases. This strategy can be exorbitant and tedious which could be hindering to
the survival of the organization.

In 2012 the lowest paid employee at ZESA was at grade A1.1 being paid $275. Management at
ZESA was offering grade A3.1 salary of $275 whereas the signed and gazetted agreement stated
$275 at grade A1.1. ZESA was faced with industrial action when its management and

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employees failed to reach a mutual understanding through negotiations done by management
and workers on collective bargaining issues (The Herald, Tuesday 10 July 2012). Whilst other
companies in the energy sector such as PetroTrade, NOIC, Petrozim line and REA complied
with collective bargaining agreement ZESA refused citing interpretation differences and this
enticed industrial action. Three mandatory meetings to conciliate the issue were held at NEC
level. The matter was then taken for voluntary arbitration and employees were awarded
increases through arbitral award. ZESA appealed to High Court on grounds that one of the
arbitrators did not declare conflict of interest. To date ZESA has never made a follow up on the
case. NEWUZ lawyer applied to have the case dismissed for want of prosecution.

This strategy that was implemented resulted in a prolonged litigious process and brought
tension between management and employees. It must be noted that this litigious approach has
characterized all ZESA collective bargaining agreements since January 2009. As an
organization ZESA needs to unlock and analyze this problem because collective bargaining
process changing aspects, if they are of the wrong type, are possibly costly to the organization,
employees and the country. Khan (2006) disputed that, a steady industrial relations environment
is a key requirement for the economic development of any country.

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References

FOLBERG, J., AND TAYLOR, A., (1984) Mediation: A Comprehensive Guide to Resolving
Conflicts Without Litigation, San Francisco, Jossey-Bass Inc.

1. Elkouri, Frank, and Edna Asper Elkouri. 2012. How Arbitration works, 7th ed.
Washington, DC: Bloomberg BNA Books
2. www.pearse –trust.ie

1. Kodikal, Rahiman &

https://www.researchgate.net/publication/308035653_Conflict_Management_Strategies-
A_Comparative_Analysis_of_the_Employees_Working_For_Service_Sectors/link/58b6
5959aca27261e5166565/download
2. Jennifer Lawless and Aurora Trif (2016). https://doi.org/10.1515/ijm-2016-0005
3. M Simosi https://link.springer.com/content/pdf/10.1007%2F978-0-387-35356-2_4.pdf
4. J Bercovitch https://legacy.earlham.edu/~chriss/ConflictRes/pdf
%20files/Conflict.Conflict%20Management%20in%20Organizations.pdf
5. Olukayode Longe
https://pdfs.semanticscholar.org/2366/a1f4270ce8568e178fd2471aef428212edc4.pdf

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