EFFECT OF MERGER AND ACQUISITION ON EMPLOYEE MORALE
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EFFECT OF MERGER AND ACQUISITION ON EMPLOYEE MORALE
CHAPITRE ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Since the mid-1980s, the Nigerian banking industry has seen considerable growth and transformation. Unfortunately, the sector’s growth and expansion are not indicative of a sound or vibrant banking system anywhere in the world.
Most Nigerian banks have insufficient capital, poor services, a high rate of insolvency, a lack of management experience, bad debt syndrome, and a higher risk of fraud.
On July 6, 2004, the Central Bank of Nigeria stated that the banking industry would be recapitalized from N2 billion to N25 billion beginning January 1, 2006. This was done to increase the sector’s worldwide competitiveness, soundness, and ability to provide credit to all productive sectors of the economy.
To meet this responsibility, banks pursued merger and acquisition strategies, as well as the issuance of new shares. The exercise resulted in the formation of 25 new banks (Olaitan 2006).
One of the most critical duties of efficient HR is managing and sustaining employee morale. The cliche that a happy employee is a productive employee is cliche for a reason. While it is more correct to state that an unhappy worker is an unproductive worker, every HR professional understands the importance of strong employee morale.
As a result of the bank recapitalization process, which began in 2005, over a hundred commercial banks were forced to close their doors or merge with another bank in order to stay in business.
The consequences of mergers and acquisitions in Nigeria’s banking industry on staff morale can be significant if the business reorganisation is not handled appropriately.
During any merger or acquisition effort, at least two sets of personnel are involved, who frequently come from organisations with quite different cultures and styles. Learning a new culture can be difficult, but it is extremely difficult when employees are worried about the future and whose job is on the line.
Bank recapitalization, which began in 2006, aims to strengthen and improve Nigerian banks in order to fund all sectors of the economy, particularly the primary drivers of the economy-Small and Medium Scale Enterprises. This endeavour to stabilise Nigeria’s banking system and make it financially sound and healthy would undoubtedly have an impact on staff morale and productivity, either positively or badly.
1.2 STATEMENT OF THE PROBLEM
Employees frequently struggle with change, especially if they were not actively involved in choices that affect their careers. Change can be especially challenging and stressful during mergers and acquisitions, and it can have a detrimental influence on morale if not handled properly (Iloh, 2012).
During these moments, communication is essential. Organisations should aim to convey as much information about what is going on and, more crucially, how the changes will effect individual employees as feasible.
Culture conflict is unavoidable when two or more organisations join forces. Two organisations rarely share the same culture. According to Pophal, when these groups come to know one other, there will unavoidably be conflict and perceived or real losses on both sides. Employees may be concerned about losing their jobs or chances.
This worry can have a severe influence on productivity and may even lead to people quitting the company to pursue other opportunities. Organisations, as well as their managers and HR personnel,
must recognise this and give opportunities for employees to get to know one another, openly address concerns, and collaborate to create a new culture that combines the best of both worlds (Leigh, 2008).
When employees are anxious about their own job security, they are more prone to become competitive with others, which can lead to friction and, in extreme cases, violence.
During mergers and acquisitions, management and human resource professionals must be on the lookout for signals of unfavourable competition and ensure that employees are kept informed about the implications for their employment and futures with the company.
While some rivalry is beneficial, competition is detrimental when it causes stress and bad conflict inside an organisation (Liegh, 2008).
1.3 OBJECTIVES OF THE STUDY
The primary goal of this research is to investigate the effects of mergers and acquisitions on staff morale at the Calabar Main branch of First City Monument Bank (FCMB). The following are the study’s specific objectives:
To investigate the impact of merger and acquisition on employees’ trust in a certain task in FCMB.
To assess the impact of mergers and acquisitions on employees’ willingness to stay with their current firm.
To investigate the impact of mergers and acquisitions on employees’ eagerness to take on newer tasks.
To investigate the impact of mergers and acquisitions on employee job satisfaction in relation to new business policies, employees’ benefits and working conditions were analysed.
1.4 RESEARCH QUESTIONS
The following research questions apply to the study in order to lead the study and achieve the research objectives listed above:
What impact do mergers and acquisitions have on FCMB employees’ confidence in a specific task?
What impact do mergers and acquisitions have on employees’ willingness to stay with their current employer?
What impact do mergers and acquisitions have on employees’ eagerness to take on new challenges?
What impact do mergers and acquisitions have on employee job satisfaction in terms of new corporate rules, benefits, and working conditions?
1.5 RESEARCH THEORIES
There is no substantial association between merger and acquisition and employee confidence on a given assignment.
There is no statistically significant association between merger and acquisition and employee retention. : There is a statistically significant relationship between merger and acquisition and employee retention.
There is no substantial association between merger and acquisition and employee Zeal to take on newer jobs.
Ho: There is no link between mergers and acquisitions and employee job satisfaction.
Hello, there is a strong link between mergers and acquisitions and employee job satisfaction.
1.6 SIGNIFICANCE OF THE STUDY
The research will assist organisations that are undergoing strategic transformations through mergers and acquisitions in developing and implementing corporate governance principles that will benefit both employees in the acquired firm and those in the parent company.
Various insights into how mergers and acquisitions can affect employee confidence, zeal, commitment, and overall productivity will be clearly highlighted in the study to further enlighten managers of various organisations on proper ways to go about merging and acquiring other firms without jeopardising employee productivity.
Furthermore, the study will serve as a reference for student researchers who seek to delve deeper into the consequences of mergers and acquisitions on an organization’s overall performance.
1.7 SCOPE OF THE STUDY
The research is limited to the main branch of First City Monument Bank Plc in Calabar. All of the study’s findings and suggestions are based on questionnaires distributed to bank personnel. Due to time and funding constraints, the researcher was unable to cover a broader topic.
1.9 LIMITATIONS OF THE STUDY
The researcher’s funds were in short supply, and he was unable to obtain some important print materials for this project at the moment they were most needed. The costs of transportation to FCMB are so high because the researcher was frequently ignored and had to leave without the necessary information.
Another constraint experienced by the researcher was restricted time for project completion and involvement in other academic activities, which took up the majority of the researcher’s time.
The research was constrained in the field of the case study due to bureaucratic issues in the Organization’s administrative procedures. It was not able to obtain all of the necessary information that would have aided in completing the work on time.
Going through various documents to gather data was a time-consuming and difficult task because some things required were labelled “TOP SECRET.”
1.10 DEFINITION OF TERMS
Mergers and acquisitions (M&A): Mergers and acquisitions (M&A) are both aspects of strategic management, corporate finance, and management that deal with the buying, selling, dividing,
and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without the creation of a subsidiary, other child entity, or the use of a joint venture.
Employee: An employee is somebody who has consented to be hired under a service contract to labour for a wage. Wages, salaries, commissions, and piece rates are all examples of compensation.
Employee Morale: In human resources, employee morale is described as an employee’s job satisfaction, outlook, and sentiments of well-being in the workplace.
FCMB stands for First City Monument Bank.
Productivity: Productivity is a measure of manufacturing efficiency. Productivity is defined as the ratio of what is produced to what is needed to generate it.
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