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American Journal of  Economics and 
Business Innovation (AJEBI)

Intermediating Role of Human Resource Management in Organizational Conflict and its 
Influence on Organizational Effectiveness – Evidence from Bangladesh’s Banking Sector

Sohana Intasa Siddiqua1*, Tasnuva Fayezin2, Reazul Hoque3

Volume 1 Issue 3, Year 2022
ISSN: 2831-5588 (Online)

DOI: https://doi.org/10.54536/ajebi.v1i3.946
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Article Information ABSTRACT

Received: November 15, 2022

Accepted: December 09, 2022

Published: December 12, 2022

Since the economy has changed due to globalization, markets have become extremely 
competitive. The market system is shaping the expansion of  business, the economy, and 
other areas. As a result, human resource management (HRM) plays a crucial function. The 
study’s goal is to assess the effectiveness of  human resource management (HRM) and how 
organizational disputes affect HRM’s influence on organizational effectiveness in Bangladesh’s 
banking industry. This paper used primary data from 400 employees in Bangladesh’s banking 
industry through a questionnaire, of  which 310 were returned for the purpose of  testing 
study hypotheses. PLS-SEM has been used for data analysis and the result shows that the 
functional conflict has a favorable link to organizational success. Additionally, it has been 
discovered that HRM practices have a substantial impact on organizational effectiveness 
and can change dysfunctional conflict into functional conflict. The finding in this study 
reveals that there is a strong correlation between dysfunctional conflict and organizational 
success. This paper provides administrators in Bangladesh’s banking sector with an essential 
framework for comprehending why HRM is important in banks and other enterprises and 
demonstrates a positive association between HRM performance and organizational success.

Keywords
HR Practices, Organizational 
Effectiveness, Organizational 
Conflict, Banking Sector of  
Bangladesh

1 American University of  Ras Al Khaimah, UAE
2 East Delta University, Bangladesh
3 University of  Chittagong, Bangladesh
* Corresponding author’s e-mail: sohana.siddiqua@gmail.com

INTRODUCTION
Conflict resolution is essential in both HRM practice 
and theory. However, some argue that conflict should be 
avoided, while others argue that it should be welcomed 
in order to promote organizational effectiveness. The 
existence of  humans and their interactions with one 
another creates the possibility of  conflict. Dispute at 
conflicts at the intermediate level are a natural occurrence; 
we face possible conflicts at all organizational levels 
(Barker et al., 1987). The only issue that develops in the 
organization is when disagreements are impossible to keep 
at a moderate level. As a result, disagreements are crucial 
in organizations. The banking industry is considered as 
the backbone of  the financial system in most nations and 
is essential to achieving economic progression and growth 
(Kamarudin et al., 2016). The expansion of  trade and 
commerce, the creation of  jobs, and the encouragement 
of  the industrial revolution in an economy all depend 
on the banking sector growing. Bangladesh’s financial 
industry is changing and has experienced tremendous 
growth during the past 20 years (Ahamed, 2012). 
However, the rate of  development decreased, leading to 
subpar performance and effectiveness because of  a lack 
of  sufficient capital, solid governance, an increase in non-
performing loans, liquidity problems, and other concerns. 
These are some of  the main issues facing Bangladesh’s 
banking industry, as they have weakened the sector 
(Zheng et al., 2020; Amir, 2019; Habib, 2018). Every year 
to address capital deficiency, the financial rule expert 
inserts investment into the banking industry, although 
the development is not however apparent (Uddin and 
Bristy, 2014). Both the nation’s financial sector and the 
whole economy are impacted by these problems. Due to 

the recent liberalisation of  monetary policies, numerous 
international commercial banks have entered the local 
banking market, increasing competition (Mirzaei et al., 
2013).
This might have an impact on the effectiveness and 
performance of  banks by reducing monopolistic power 
and profitability (Banna et al., 2017). Ineffective banking 
practices can lead to issues like bank collapse and a loss 
of  public faith in the financial system, which can result 
in economic stagnation (Mahmud et al., 2016). However, 
all Bangladeshi banks are placing a greater focus on 
cost management and providing high-quality services 
and commodities in order to perform well (Ahmed and 
Liza, 2013). In this situation, Bangladesh critically needs 
efficient regulatory guidelines and rating systems for 
assessing banking performance, with a particular focus 
on management effectiveness, asset and profits quality, 
risk reduction, and financial stability (Moudud-Ul-Haq, 
2017). As a result, effectiveness has become increasingly 
important (Shameem, 1995), and efforts have been made 
to increase the effectiveness of  Bangladesh’s banking 
sector. This approach forces banks to operate in a 
manner that is efficient or near to “best practise” in terms 
of  service delivery (Rashid et al., 2020).
However, due to management bottlenecks, insufficient 
capital, low profitability, market risk, and other factors, 
the majority of  banks perform below expectations 
(Bangladesh Bank, 2019). Conflict is one of  the numerous 
causes of  variation in the performance of  Bangladesh’s 
banking sector, according to this study. There are 
numerous explanations for this, but according to this 
report, conflict is one of  the causes of  the deterioration 
in banking standards in Bangladesh. Moudud-Ul-Haq 

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(2017) discovers a substantial association between 
organizational higher education conflict and employee 
performance effeteness. Furthermore, he feels that HRM 
practices are critical for resolving all types of  conflicts 
that may arise in the workplace of  banking employees, 
as the banking industry contributes to a high level of  
employment as well as varied demographic profiles of  
employees. How to manage people to avoid conflict and 
use it constructively is a difficulty that HR departments 
face in all corporate sectors, including banking (Rashid 
et al., 2020). Thus, the purpose of  this study is to analyse 
the relationship between organizational conflict, HRM, 
and organizational success, as well as to apply such HRM 
techniques to reduce conflict in Bangladesh’s banking 
sector.

LITERATURE REVIEW 
Planning, organizing, directing, and regulating personnel 
operations are all part of  human resource management. 
Elarabi and Johari (2014) claim that HRM is a process 
that focuses on preserving and increasing the skills of  
specific employees as well as promoting cooperation and 
inter-employee communication to support organizational 
development. The application of  company strategy, job 
performance, financial results, conflict management 
within the firm, and sustained competitive advantage are 
all positively impacted by HRM methods “(Katou and 
Budhwar, 2010; Caliskan, 2010; Tan and Nasurdin, 2011; 
Boohene and Asuinura, 2011; Mukhtar and Siengthai, 
2011; Atteya, 2012; Loshali and Krishnan, 2013)”.
The goal of  HR planning is to predict future labor 
requirements for a firm. According to Yadav and 
Dabhade (2014), effective strategic business and 
people management is referred to as HR planning. 
These procedures seek to determine future manpower 
requirements and contrast them with the laborlabor force 
at hand. To avoid any labor surpluses or shortages, HR 
managers evaluated the supply and demand for human 
resources, according to Noe et al. (2010). They then took 
the necessary actions to solve these potential concerns. 
Werner and DeSimone (2009) claim that recruiting 
and selection strategies are designed to find qualified 
candidates for open positions now and in the future and 
to make the best decisions. Mondy and Mondy (2014) 
define recruitment as the process of  persuading people 
to submit timely and sufficient applications for jobs with 
a company.
The quantity and caliber of  the candidate pool may be 
utilized to determine how successful a recruiting procedure 
is, claims Durai (2010). Therefore, recruiting must draw 
in competent candidates as well as applications in order 
to persuade them to apply for a position. Employees 
must be capable of  handling a variety of  duties in an 
effective and efficient manner given the dynamic work 
environment and complicated business needs of  today. 
An effective training and development program provides 
employees with continual knowledge and experience.
“Training and expansion are critical for improving job 

performance, increasing employee productivity and 
satisfaction, lowering expenses, and improving work 
quality. According to Mondy and Mondy (2014)”, 
training and development are ongoing programs that 
strive to improve organizational performance and 
employee competency by providing employees with the 
skills and information they need to execute their jobs.  
Compensation is critical for recruiting and retaining 
competent workers. It relates to all remuneration and 
benefits provided to employees in acknowledgment of  
their efforts, as a result of  their employment, and as a 
result of  their contribution to the company’s growth 
(Mondy and Mondy, 2014). Pay is a human resources 
technique used to enhance employee behavior and 
performance, according to Gilmore and Williams (2009). 
Irshad (2008) asserts that every firm strives to improve 
the performance of  its employees because it wants the 
best individuals to work for it. Better pay is necessary 
to recruit the top employees and entice personnel away 
from other companies. Al-Hyasat (2006) looked at the 
efficacy and effectiveness of  HRMS (human resource 
planning, hiring and placement, performance evaluation 
of  staff  members, and employee training) as well as the 
connection between these tactics and business success. 
In twenty-one Jordanian news organizations, information 
was gathered from staff  members who hold positions 
below section head.
The efficiency and effectiveness of  HR planning 
techniques, challenging and selection procedures, people 
performance evaluation systems, and training strategies 
were positively correlated with institutional performance, 
according to the findings. Al-Sahryra and Al-Graeb 
(2010) looked at how organizational creativity and HRM 
methods are used. The study also looked at how the 
two dimensions related to one another and discovered 
how demographic and functional factors affected 
organizational creativity and HRM in the Jordanian 
telecoms business. It has been shown that there is a high 
level of  organizational innovation and HRM function 
usage. Additionally, it has been discovered that HRM 
activities have a considerable impact on organizational 
innovation.
Hypothesis 1: Organizational effectiveness is correlated 
with effective HRM strategies.
HRM philosophy and practices place a strong emphasis on 
understanding conflict. Some people believe that conflict 
should be avoided, while others believe that it should 
be welcomed to improve organizational performance. 
Managing conflict to keep it at a productive level is a 
supervisor’s duty and may take up more than 25% of  
their time (Mintzberg, 1975; Thomas and Schmidt, 1976). 
According to recent surveys, managers now spend over 
18% of  their time managing employee disagreements, 
more than tripling that amount since the mid-1980s 
(Hignite, Margavio, and Chin, 2002). Additionally, 
HRM philosophies deliver leadership for developing 
interferences and analyzing the consequences (Latham and 
Crandall, 1991). Recruitment and selection are the initial 

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stage from an HRM viewpoint. Attracting applicants and 
selecting them mostly through unstructured interviews 
are the first steps in the recruiting process (Wilk and 
Cappelli, 2003). A person has to be trained and developed 
after being chosen based on desirable characteristics. It 
becomes essential to keep staff  informed, especially in 
educational institutions “(Pfeffer, 1994; Appelbaum and 
Goransson, 1997)”. According to Latham and Stuart 
(2007), performance’s significance must be expressed 
clearly. According to Campbell et al. (1993), performance 
is defined as behavior or activity. Teaching abilities, 
research capabilities, and service are the factors used by 
Latham and Stuart (2007) to evaluate the faculty.
These many hypothetical viewpoints on HRM practices 
deliver a foundation for utilizing HRM practices to 
change dysfunctional conflict keen on functional conflict. 
This study postulates the following hypothesis because 
HRM practices may convert dysfunctional conflict into 
functional conflict.
Hypothesis 2: HRM procedures may transform conflict 
from being dysfunctional into being functional.

Organizational Conflict and Organizational 
effectiveness
Manulang asserted that a company’s effectiveness is simply 
the sum of  its employees’ effectiveness. The process of  
taking activities in support of  organizational objectives is 
known as organizational effectiveness (Robbins, 2010). In 
other words, organizational effectiveness will result from 
each component of  the company doing its responsibilities 
appropriately (Hossain, 2017). Conflict may injure many 
fine people as well as corrupt the organization. Three 
viewpoints on conflict may be identified: 1) Traditional 
views, which maintain that conflict is undesirable; 2) 
behavioral views, which maintain that conflict frequently 

occurs in organizational life; and 3) interaction views, 
which maintain that conflict is inevitable and occasionally 
even necessary due to the structure and operation of  
organizations. (Stoner and Freeman, 2009; Robbins, 2014; 
Wahab, 2011). At the institutional or organizational level, 
disputes frequently take an asymmetrical form. Human 
resources are the source of  the complexity that frequently 
arises, including tasks, status and position, authority, etc 
(Muhammad Hisyam, 2016).
Conflict management is one way to resolve conflicts 
or turn them into a force for increasing organizational 
success. Contrary to popular belief, some disagreements 
can literally increase the performance of  an organization 
(Boutros-Gali, 1999). 
Conflict is now increasingly seen as a necessity rather 
than as something that has a negative impact, and it 
demonstrated the influence of  conflict variables on 
organizational effectiveness variables through the 
relationship between sub-variables. “Conflict seems to 
be essential characteristics of  organizational effectiveness 
and learning,” write Luthans, Rubach, Sechein, and Senge 
in Afzalur Rahim (Rahim, 2017).
The understanding of  conflict, according to Carruthers 
(2000), refers to the approach to individual behaviour 
as a conflict that develops within a person, and the 
understanding of  conflict through an organizational 
approach is a situation that results from disagreement over 
the goals to be attained and the strategy to accomplish 
them (Davis and Newstrom, 1996) Conflict management 
is the process of  preparing for conflict and handling it 
when it occurs (Aula and Siira, 2010). Therefore, conflict 
itself  is not a problem; the problem arises when ineffective 
leaders employ subpar conflict management strategies.
Hypothesis 3: Organizational effectiveness and conflict 
within organizations are related.

Figure 1: Conceptual Framework

METHODOLOGY
As phenomena are previously known and intended for 
additional explanations within the context of  theorized 
correlations, thus this study is quantitative in character 
and explanatory in nature. Explanatory research is a 
study method that explores the causes of  an occurrence 
when there is few accessible information (Greener, 

2008). He continued by saying that it may improve 
your comprehension of  a certain subject, allow you 
to determine how or why a specific phenomenon is 
occurring, and allow you to make forecasts around the 
prospect. 
The population of  this research has been targeted with 
multistage sampling techniques in which entire three 

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banks were considered via random sampling from entire 
population. Furthermore, data was only collected by 
using quota sampling, the staff  was divided into three 
tiers. Questionnaires were administered in top level, 
middle level and first line managers with the help of  
snow ball technique. A total of  34 items were taken 
from the (Huselid,1995; Gould-Williams,2003 and 
Pfeffer,1998). Each variable has high internal consistency 
and dependability during the initial investigation 
(Organizational Effectiveness 0.702, Organizational 
Conflict 0.753 and HR practices 0.711). 1 represents 
strongly disagreed and 7 represents strongly agreed 
on a seven point Likert scale. 400 employees were 
given questionnaires to complete; 310 of  those 400 
questionnaires were returned, and 280 were chosen for 
examination. The SEM from Smart PLs was then used 
for analysis.

Structural Equation Modeling by Smart PLS
Structural Equation Modeling (SEM) is a statistical-based 
multivariate modeling methods. Application of  SEM is 
similar but more powerful than regression analysis; and 
number of  scientists using SEM in their research is rapidly 
increasing. This review article algorithmically discusses 
the SEM methodology. SEM strategies, SEM steps and 
SEM stages are introduced in this article; validity tests are 
presented as well. Novelty of  this article is in modified 
steps of  SEM application in modeling strategies, also in 
its developed practical comprehensive SEM application 
flowchart. This article is a roadmap for business advisors 
and those scholars trying to compute SEM for their 
decision making, complex modeling and data analysis 
programming Structural Equation Modeling (SEM) 
is a statistical-based multivariate modeling methods. 
Application of  SEM is similar but more powerful than 
regression analysis; and number of  scientists using SEM 
in their research is rapidly increasing. This review article 
algorithmically discusses the SEM methodology. SEM 

strategies, SEM steps and SEM stages are introduced in 
this article; validity tests are presented as well. Novelty 
of  this article is in modified steps of  SEM application 
in modeling strategies, also in its developed practical 
comprehensive SEM application flowchart. This article 
is a roadmap for business advisors and those scholars 
trying to compute SEM for their decision making, 
complex modeling and  data analysis programming 
Structural Equation Modeling (SEM) is a statistical-based 
multivariate modeling methods. Application of  SEM is 
similar but more powerful than regression analysis; and 
number of  scientists using SEM in their research is rapidly 
increasing. This review article algorithmically discusses 
the SEM methodology. SEM strategies, SEM steps and 
SEM stages are introduced in this article; validity tests are 
presented as well. Novelty of  this article is in modified 
steps of  SEM application in modeling strategies, also in 
its developed practical comprehensive SEM application 
flowchart. This article is a roadmap for business advisors 
and those scholars trying to compute SEM for their 
decision making, complex modeling and data analysis 
programming “A multivariate statistical analytic method 
called structural equation modelling is used to examine 
structural connections” (Hair et al., 2016). This method 
examines the structural link between measured variables 
and latent constructs by combining component analysis 
and multiple regression analysis (Awais-E-Yazdan et al., 
2022). This method is preferred by the researcher since 
it estimates several related dependencies in a single 
inquiry. The two types of  variables used in this study are 
endogenous and exogenous. Endogenous variables are 
equivalent to both independent and dependent variables 
(Awais-E-Yazdan et al., 2022). Moreover, SEM has been 
performed via Smart PLS software.

RESULTS AND DISCUSSION
Out of  280 participants, 231 were men, making up the 
majority of  the participants who were targeted for data 

Table 1: Profile of  the respondents.
Demographics Categories Frequency Percentage
Gender Male 231 82.5

Female 49 17.5
Marital Status Married 186 66.4

Single 94 33.5
Age 20 to 29 84 30.0

30 to 39 112 40.0
40 to 49 70 25.0
50 to 59 14 5.0

Education Bachelor Degree 90 32.1
Master Degree 177 63.2
MPhil/Phd 13 4.64

Experience Less than 1 year 9 3.2
1-10 years 156 55.7
11-20 years 65 23.2
21-30 years 30 10.7
31-40 years 20 7.1

Occupation Top level Management 18 6.4
Middle level management 89 31.7
First line Management 173 61.7

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collection. 66.4% of  the participants were married, with 
a frequency ratio of  186. The majority of  employees in 
the private banking industry are between the ages of  
30 and 39, with a frequency ratio of  112. According to 
demographic statistics, private banks in Bangladesh have 
highly educated staff  members, with 63.2 percent of  
them holding master’s degrees and 156 percent of  them 
having one to ten years of  experience. With a frequency 
of  173, the participants who were targeted during data 
collection primarily belong to first line management. The 
Table 1 is where the respondents’ profiles are displayed, 
and they are as follows.

Findings of  Measurement Model
Cross Loadings
An item that loads at.32 or higher on two or more 
criteria is referred to as “cross loading.” If  there are 
numerous adequate to strong loaders (. 50 or better) on 
each component, the researcher may want to consider 
excluding a cross loading item from the study. If  
crossloading items must be larger in their own latent 
variable, their relevance in explanatory research is 0.7. 
(Hair et al., 2016). Organizational Effectiveness (OE), 
Organizational Conflict (OC), and HR Practices (HRP) 
are all items of  latent variables in this study, and cross 

Table 2: Factor Analysis (Cross Loadings)
Sl. No. Latent Indicators Organizational 

Effectiveness (OE)
Organizational Conflicts 
(OC)

HR Practices 
(HRP)

1 OE2 0.947 0.653 0.198
2 OE3 0.756 0.577 0.309
3 OE4 0.760 0.711 0.455
4 OE5 0.788 0.610 0.635
5 OE6 0.780 0.526 0.612
6 OE7 0.829 0.596 0.583
7 OC1 0.611 0.732 0.441
8 OC3 0.256 0.862 0.757
9 OC4 0.072 0.933 0.589
10 OC5 0.564 0.929 0.444
11 OC7 0.582 0.755 0.718
12 OC8 0.484 0.765 0.763
13 OC9 0.251 0.736 0.437
14 OC10 0.650 0.936 0.383
15 OC11 0.544 0.812 0.623
16 HRP1 0.351 0.581 0.756
17 HRP2 0.534 0.326 0.788
18 HRP3 0.315 0.612 0.822
19 HRP4 0.684 0.555 0.823
20 HRP5 0.542 0.175 0.799
21 HRP8 0.556 0.266 0.701
22 HRP9 0.613 0.487 0.806
23 HRP10 0.646 0.688 0.865
24 HRP12 0.215 0.553 0.801
25 HRP13 0.667 0.455 0.832
26 HRP14 0.631 0.622 0.783

loading analysis of  factor analysis reveals that these items 
are all extremely heavily internally loaded. In Table No. 2, 
further statistics are provided in more profundity.

Internal Consistency Reliabilities
In PLS-based research, researchers choose the Composite 
Reliability. Composite reliability may result in larger 
estimations of  genuine reliability compared to Cronbach’s 
alpha. Including Cronbach’s alpha, the acceptable cutoff  
for composite reliability is the same as for the other 
reliability metrics. From 0 to 1, with 1 denoting perfect 
predicted reliability, is the range for composite reliability. 
Composite reliabilities in a model should be equal to or 
larger than.6 for exploratory purposes, equal to or greater 
than.70 for confirmatory reasons (Henseler et al., 2012), and 

equal to or more than.80 for confirmatory studies (Chin, 
1998; Höck and Ringle, 2006). (for ex., Daskalakis and 
Mantas, 2008). The numerous indicators may only be little 
wording variations of  one another rather than being really 
representative measurements of  the construct the factor 
reflects, according to very high composite reliability (>.90). 
With values of  0.769, 0814, and 0.815, the endogenous 
variable Organizational effectiveness (OE) in this 
instance has strong Cronbach’s Alpha, Rho A, and 
Composite reliability, indicating that the components of  
the variable OE have good internal consistency reliability. 
Organizational Conflicts and HR practices also have 
excellent internal consistency reliability of  their items, as 
shown below in table No. 3 accordingly, which is similar to 
the exogenous and mediating variables.

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Convergent and Divergent Validities (AVE and 
Discriminant validity)
A test of  convergent and divergent validity may be 
performed using AVE. In a reflective model, AVE 
represents the average communality for each latent 
component. In an acceptable model, AVE should be 
larger than.5 and bigger than the cross-loadings, which 
indicates that variables should account for at least half  of  
the variation of  their respective indicators. (Chin, 1998; 
Höck and Ringle, 2006) AVERAGE below 50 indicates 
that explained variance is more than error variance.

Table 3: Internal Consistency Reliabilities.
 Latent Variables Cronbach's Alpha rho_A Composite Reliability
Organizational Effectiveness 0.769 0.814 0.815
Organizational Conflicts 0.712 0.800 0.792
HR Practices 0.807 0.872 0.860

All of  the latent variables in this study have extremely 
strong and substantial average of  variance extraction, 
as shown by the AVE values of  OE (AVE = 0.52), OC 
(AVE = 0.641), and HRP (AVE = 0.627). Additionally, 
the square root of  AVE is displayed in the diagonal cells 
of  the Fornell-Larcker criteria table in the SmartPLS 
output, and correlations are displayed below it. As a result, 
in absolute value terms, there is discriminant validity as 
indicated by table No.4 if  the top number (which is the 
square root of  AVE) in any factor column is higher than 
the numbers (correlations).

Table 4: Convergent and Divergent Validities 
Latent Variables Organizational Effectiveness Organizational Conflicts HR Practices AVE
Organizational Effectiveness 0.721 0.521
Organizational Conflicts 0.727 0.800 0.641
HR Practices 0.765 0.723 0.792 0.627

R_Square and F_Square (Model Fit Test) 
The structural model’s overall effect size is measured by 
R-square, also known as the coefficient of  determination
and previously mentioned and shown above. Results of
the OC and HRP below the cutoffs of  0.26 and 0.21 are
referred to as “significant” by Chin (1998) and Höck and
Ringle (2006), respectively. Here, the R-square would be
seen as having a modest strength or influence. However,
what is termed “high” depends on the field: a number

of.25 would be regarded as “high” if  the prior state of  the 
art in the relevant field had produced even lower values.
The R-square change effect is also known as the f-square 
effect size measure. The R2 change’s contribution to 
the unexplained variance is expressed using the f-square 
equation (Hair et al., 2014). Once more, OE has an 
excellent F Square value of.27, and HRP likewise has 
a decent F Square value as a mediator, with a 0.13-bit 
smaller effect because of  the Mediation effect.

Table 5: R Square and F Square Analysis (Model Fit Test)
Latent Variables R Square R Square Adjusted F Square
Organizational Effectiveness -- 0.27
Organizational Conflicts 0.26 0.26 --
HR Practices 0.21 0.22 0.13

Findings of  Structural Model 
Mooney and Duval (1993) and Wood (2005) both assert 
that the bootstrap has several significant consequences for 
researchers. First off, the approach is straightforward and 
needs a basic understanding of  mathematics. Second, the 
approach may be used to a wide range of  statistical ideas. In 
this Table 6. Beta, standard error, and T-statistics analyses 
are included in the path coefficient table, which analyses 
the significance of  hypotheses with various significant 

values. At 0.05, the beta value is significant, and at 1.96, 
the T value is significant. Here, OC is highly associated to 
HRP with a beta value of  0.315 and a T value of  5.102. 
Additionally, OC is significantly related to OE as a result of  
a direct impact with beta and T values of  0.382 and 5.133. 
Additionally, through HRP, there is an indirect connection 
between OC and OE. Because of  the mediation effect, 
OC-HRP also has a substantial connection with OE, with 
beta and T values of  0.282 and 7.912 respectively.

Table 6: Path Coefficient
Path Coefficient
Hypotheses Beta Standard Error T Statistics
Direct Effect
OC -> HRP 0.315 0.071 5.102
OC -> OE 0.382 0.053 5.133
Indirect Effect
OC-HRP-> OE 0.282 0.078 7.912

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CONCLUSION
This study confirms the first hypothesis of  the study, 
which states that there is an association between 
organizational conflict and organizational effectiveness. 
The research discovers a strong link among OE and 
“functional conflict”. This study’s discovery of  a 
substantial association between dysfunctional conflict 
and organizational success lends weight to the theory that 
there is a link between the two. As a result, it is clear from 
the findings that although dysfunctional conflict reduces 
organizational performance in the banking industry as 
well as other economic sectors, functional conflict helps 
to increase it. The study’s second objective is to determine 
is HRM performs and OE are related? Research has also 
provided solid evidence that organizational success in 
Bangladesh’s baking industry is significantly influenced 
by recruiting and selection, training and development, 
performance evaluation, and the involvement of  the 
union. Acceptance of  this concept therefore gives the 
administrators in Bangladesh’s banking industry a crucial 
foundation for understanding why HRM is crucial in 
banks and other industries. As a result, analysis reveals 
that HRM performs have a favorable relationship with 
organizational success. 
Effective HRM practices are thought to help keep conflict 
at a functioning level. Additionally, communication 
is proven to be important. The findings of  this study 
provide strong evidence in favor of  the hypothesis that 
HRM practices serve as an important moderating variable. 
Therefore, this study suggests that using HRM practices 
as a arbitrator in turning dysfunctional conflict into 
functional conflict will help Bangladesh’s banking sector 
reduce employee conflict and increase organizational 
effectiveness. The findings imply that, in banks as in other 
business sectors, maintaining organizational conflict at a 
functional level may improve organizational effectiveness. 
This study also reveals that through enhancing employee 
performance and happiness, HRM may play a significant 
role in banks and contribute to greater organizational 
success. Additionally, this research specifically focused 
in particular variables i.e. Organizational Effectiveness, 
Conflict and Mediation role of  HRM, however future 
studies should extent and alter this model by exploring 
impact of  other variables of  alike Organizational Culture, 
Performance Appraisal and others on organizational 
effectiveness. Moreover similar analysis should also be 
performed on different nature of  organizations as this 
research particularly focused on banking industry thus 
the findings are limited to banking industry and relevant 
financial institutions only. 

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