THE IMPACT OF CRISIS ON HUMAN RESOURCE STRATEGY IN OIL COMPANIES IN NIGERIA (A CASE STUDY OF EXXON MOBI)

CHAPTER ONE

                                     INTRODUCTION

1.1   Background to the Study

Today, the changing conditions governing the organizations, increasing the competition and the need of its effectiveness in such conditions indicate their requirement of a valuable generation of the employees, a generation which can be called as the organizations soldiers. Undoubtedly, these employees are the point which means the organizations are effective. Considering the changes within the organization, Sarawagi (2008) introduced eight challenges of change in the employees’ expectations, globalization, balance between work and life, increasing the moral aspect of the activities of human resources, organizational restructuring, and management of variety in the work force and developing group attitude which the human resources facing with, (Sarawagi, 2008); and also in his book of Management Human Resources (2007) and with a look at both the changes within and out of the organization, Robert Mathis referred to four major challenges related to distribution and contrasts in human force, accessibility of the human force and the necessity of improving quality, economic and technological changes and the structural changes of the organization (Robert Mathis, 2007). What the different researchers agree about it is that the human resources cannot cope with the challenges it faces just through having traditional and conventional roles and it requires playing newer roles and value creation in other areas.

Ulrich (1997) mentioned four tasks of strategic partner, administration affair expert, employees’ supporter and change agency as the future roles of human resources. The strategic partner is about the compatibility of activities and practices of human resources with the general business strategy. The administration affairs expert is about the provision of routing tasks and administrative tasks of the human resources such as employment, training, services compensation, etc. with a better quality and lower cost. As the employees’ supporter, the human resources must be aware of the employees’ needs, care about their interests and support them against organizational changes. The role of change agency is about supporting the changes and effects of the business change in the human resources (Ulrich, 1997).

Lawler and Mohrman (2003) have considered three roles of administrative, strategic partner and business partner for the modern human resources (Lawler and Mohrman, 2003). The characteristic of today’s organization is dynamicity, complexity, ambiguity and tradition abscondence and dealing with crisis. In the path of crisis, the organizations are consistently under the influence of the surrounding environment and they have accepted change as an unavoidable necessity (Rashidi, 2014). With understanding the fact that the crisis has become the inseparable and essential part of the organizations of the third millennium, it is necessary to have the power of being compatible with the recent changes in various social and economic fields. In order to overcome the uncertain, complex and dynamic conditions, the only way the managers have is to empower the organization and employees through obtaining the knowledge and skill which quickly becomes obsolete. Hence, having capable and efficient human resources which are considered the base of national wealth and the vital properties of the organization will be followed by a major amount of advantages for companies, organizations and economic enterprises (Bazaz Jazayeri, 2002). In the current era, one of the factors causing crisis in the organizations is inefficient use of the intellectual resources, mental capability and potential capacities of the human resources. Most of the organizations do not use the employees’ capabilities in and optimized way and the managers are not able to utilize their potential capabilities.

The scholars of change management and optimization of the organization have introduced the necessity of empowerment of the human resources as an influencing strategy for organizational performance and optimization and they believe that the human resources empowerment is one of the attitudes of the modern era which is used by the organizations right now and in fact, it is a respond to the critical need of the contemporary era’s management (Kinela and Dennis, 2004). In other words, one of the conditions of success of any organization for coping with crises and environmental changes and appropriately reacting to them is to have strategic look at the human resources. In the same regard, the concept of development of human resources and a long-time look at providing the human resources for accessing the organization’s success has been posed and its role and importance increasingly become more obvious and clearer. The significant point of this matter is that the human resources development requires paying attention to the crises, environmental changes and consistent examining of needs and necessities in order to access the necessary providence for responding them. In other words, any social system must consistently search and examine its surrounding environment in order to survive and be alive and be able to cope with threats, mange the crises and benefit from the opportunities through identifying the needs, opportunities and environmental threats. Hence, it is necessary for any organization to identify the facing challenges and determine the strategies of dealing with crises and manage the different aspects of crises. Therefore, this study will investigate the impact of crisis on Human Resource strategy in oil companies in Nigeria.

1.2   Statement of the Problem

In a situation of crisis, it could be important to create organizational structures and processes that build organizational resilience potential. Rather than viewing plans as an outcome of a process to be utilized in a step-by-step fashion during a crisis, perhaps it is best to consider whether certain elements of planning activities can lead to effective response through building of organizational resilience potential that, when realized, enables adaptive behaviours and takes advantage of improvisation and creativity. When mentioning the importance of stimulating resilience potential, it is important to refer that the employees could benefit from it too. When concerning the dilemma that organizations sometimes face between structure and flexibility, “minimal structures” are an appropriate template for striking a balance between both (Bastien and Hostager, 1988; Brown and Eisenhardt, 1997; Kamoche and Cunha, 2001). According to this literature, such a balance ensures that, while certain key processes are more or less maintained as given, other complementary ones are allowed to fluctuate in order to facilitate change and innovativeness. Maybe paying attention to some factors will make a difference in the organizations in terms of the measures they are forced to apply in turbulence environments such as in a crisis scenario.

1.3   Research Objectives

The study has both general objective and specific objectives. The general objective or main objective of this study is to investigate the impact of crisis on Human Resource strategy in oil companies in Nigeria. The specific objectives are:

i)             To ascertain the effect of crisis on Human Resource strategy in oil companies in Nigeria.

ii)            To examine the economic effect of crisis on Human Resource strategy in oil companies in Nigeria.

iii)          To understand the reasons for crisis in the department of Human Resource Management in oil companies in Nigeria.

1.4   Research Questions

The following are some of the questions which this study intends to answer:

i)             What are the effects of crisis on Human Resource strategy in oil companies in Nigeria?

ii)            What are the economic effects of crisis on Human Resource strategy in oil companies in Nigeria?

iii)          What are the reasons for crisis in the department of Human Resource Management in oil companies in Nigeria?

1.5   Research Hypotheses

The following will be the research hypotheses to be tested for this study

i)             There is no significant difference in crisis on Human Resource Management and employee performance.

ii)            There is a significant relationship between crisis on Human Resource Management and financial performance of an organization.

1.6   Significance of the Study

This study focuses on the impact of crisis on Human Resource strategy in oil companies in Nigeria. Therefore, the main focus will be to try to understand how the employees are facing the crisis that is affecting the country and most of the organizations; try to see how they are dealing with the measures taken in terms of HR and how it affected them and, as a consequence, if it affects or not the organization, especially in terms of productivity. It is hoped that this study will be important for practice in the way that if organizations understand how the measures they take influence so much their employees and consequently their productivity, they will pay more attention to it and it can be a way to, in the end, increase productivity.

1.7   Scope of the Study

This study focuses on the impact of crisis on Human Resource strategy in oil companies in Nigeria. Port Harcourt, Rivers State shall be the focus of this study. This is because there are many oil companies in this area. This will make the work quicker and faster.

1.8   Limitation of the study

This study faced limitation that need to be taken into consideration. Apart from the obvious time limit and the delicate subject matter, there were issues that arose from the methodological choices applied to the study. Some respondents were not willing to disclose accurate information needed for the validity of the study.

1.9   Definition of Terms

The following terms were used in the course of this study:

Crisis: any event that is going (or is expected) to lead to an unstable and dangerous situation affecting an individual, group, community, or whole society.

Human Resource Management:  is the strategic approach to the effective management of organization workers so that they help the business gain a competitive advantage, Commonly referred to as the HR Department, it is designed to maximize employee performance in service of an employer's strategic objectives.

Strategy:  involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions.

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