Effect and Impact of Mergers on Employee Morale

Effect and w eachop of spinal fusions on Employee MoraleThe vital industries of Pakistan intrusting sector plays immaculate role to proof his growth in varied footings. From the beginning till now jargons pursues innovations n more than service indicators to sustain their existence in the theater of operations of desireing. Apart from the local banks side so many an(prenominal) volumed foreign international banks also feel in as Pakistan coasting sector was hot cake in those days even now. The total illustrated alluviation collected by the foreign banks in from the period of 80s to 90s that was around 37000 million in rupees (Article from Economic surveil Article date October 1, 1990 Author Haque, Ansarul). The first foreign international bank registered in Pakistan was Doha swear Ltd and then by Faisal Al-Islami of Bahrain. All the banks ar still now comp al ruggedely regulated by responsibility cant of Pakistan from its complete formation in 1948. The procedure an d policies atomic number 18 completely and compulsory followed by all commercial including foreign banks in Pakistan. Banking sector in Pakistan pass out from different phases much(prenominal)(prenominal) as privatization of banks was the big step taken to encourage the banking battleground to get more flexible and awe-inspiring results. The of import reason to encourage these banks becoming privatize to introduce sore and sound financial products for both individuals as well as business solutions and they did so as foreign banks such as Citi Bank covers a wide range of financial products to its customers in first. In Recent era now every big bank is offering a wide variation of flexible financial solutions to its customers with the customer needs and attention with the encumbrance of providing good customer services by applying Quality Service Indicators in every split of every bank. Banks in Pakistan nearly providing same financial solution to the nation that that bank testament survive who retains the customer by giving them personal interest by quality services.From last hardly a(prenominal) years back, banks in Pakistan be acquire involved in optical fusion and science activities such as in 2006 Standard Chartered Bank acquired Union Bank and in 2007 NIB Bank Ltd acquired the PICIC Bank, and afterwards(prenominal) that ABN Amro bank acquired Prime Commercial Bank which was later acquired by the RBS Bank. And now the RBS Bank is purchased by the Faysal Bank Ltd in October 2010. These merger and erudition activities shown a rapid turn of banking kitchen-gardening but the employees are those who baffle from these M/A stages even mostly lost their jobs due to commitment with new wariness.The mainly tendency to ask this guide on merger and acquisition of banks and its inwardness on employee job satisfaction because in that location has been seen a big dislodge in shape of merger activities after the big financial crises that mi litary issue the whole world business strategies in different mode so many employees getting jobless. each segment of realize or business and individuals of the nation is bear upon by the financial crisis due to the cycle of collecting deposits and lending funds chain broken. Peoples do not put one over the power to save the money in the banks because of less profitability and more expenses that reduced the profitability of the banks too and let them to merge and acquisition themselves with an separate well-established bank that bear their costs and their existence too. During merger and acquisition activities lots of employees victimize in different limits. They suffer from the stiffed phase of their job. Most of the employees job satisfaction take aim goes ultimate down as they think they will be getting fired or jobless as new wariness would be come up with new teams of professionals and new procedure of working conditions in this way their team spirit train affected.M ainly, after merger and acquisition activities, there are twain aspects come into headlines which are relate to those employees who are coming from different administration with this attitude to adjust themselves in new milieu with challenges. So there esprit de corps is high due to stress push them to survive in new environment. The other aspect of employees are those who are suffering from merger subprogram that either the organic law needs them more or they will be getting jobless due to next management rules (Leigh Richards, Demand Media 2010). This doubtfulness let their motivation take aim down which effect their job satisfaction too.Main objective to conduct this direct on the effect of merger and acquisition to employee esprit de corps is to identify those factors which let the team spirit direct high or down after merger and acquisition of deuce or more industries. mostly it has been seen the invalidating proportion that the merger and acquisition of two s ectors impact positively to let the morale level down of employees which result job dissatisfaction too. But this also has been that the merger and acquisition activities will also throw out the employee level to survive among the best and hold their position in the changing environment. Low morale employees pot also hurt the organization structure too as Bohl (1989) stated that poor morale is contagious. It may begin with one dis-satisfied employee and broaden into a general malaise, or spread from department to department and ultimately infect the entire organization. Insidious as it may be, poor morale is reversible- (p. 52).My research addresses the questions that what coincidence exists between after the event of merger and acquisition of banks and morale of an employee. Either this relation positively affected or negatively. The other question is to be asked that the significance of that kin which reveals the facts that either the relation is strongly effect or slightly or normal. notwithstanding the research questions include the material which explains the level of effect of those factors effect on employee morale. The other question which needs the explanation most is that the results outcomes occurs from the event of merger and effects on employee morale. Either employee morale goes down or they dissatisfied from their jobs and tend to leave the job to replace themselves in another(prenominal) bank or their morale is too high to put more efforts to achieve the advantage level from the merger activities. The last but not the least question needs the answer is that the morale level of the employees of RBS Bank after getting acquired by Faysal Bank is getting high to work better(p) or getting low by losing their brand loyalty and organization commitment merge with another and about what extent of ratio resign or fired from the bank or join the bank after merger activity.Business reason to conduct this study is to follow out the tendency of t hose employee who odd the job after this merger and acquisition activities that affects their work image, their brand loyalty, their organizational commitment and their change of culture dimensions or to find out that is this business strategy of merger and acquisition of banks is useful to motivate the employees to work in different environment to get the chance be a professional and succesful as they were neglected. From the panorama of management, merger activities are more useful and beneficial to get the cream of professional and other resources and let the others go and start a new and diversified culture but on the other situation from employees it may be beneficial and may be not because of changing culture and uncertain randomness about the new rules and procedure for working. The personal reason for this study is to be as a school-age child of management sciences and as an employee of a bank MCB Bank Ltd, seen the stage of merger activities. MCB Bank Ltd purchased the RBS Bank initially even the both bank system was getting merged but due to political issues this locoweed was cancelled. In that period the thing which was examine that the employees of RBS Bank are not happy to be acquired by another bank as they lost their identity and loyalty.LITERATURE REVIEWThere are material body of series of literature review published on merger or acquisition and on employee morale which shows a considerable subject of research. The term merger in consideration of baking battleground is when two banks willingly operated as a single identity or operated by a single bank is known as merger as (Greenwood, 1994) define, A merger involves a blend of two companies, quite than mere legal enjoinment or absorption of one theater into another. Merger and acquisition are now means to be more important to achieve the corporate diversity and growth (Cartwright Cooper, 1992). Even merger of two is defines as a process in which the merged company loses his identity to be one firm by the acquirer (Kithinji Waweru, 2007). It has been seen that if there is any change recognized in the organization that affects the individuals (Wilson, 2004). (Tehrani, 2007) changes from merger have seen negative impact on well-being in context to accept that change and can also add the stress on workplace level. As (Vaananen, 2004) measured change solo finished employees perceptions of whether or not their standing at work had changed during the period of a merger.The effect of merger and acquisition on employee moral can have significant impact if the reorganization of the merged firm is not handled successfully. Change from the result of merger can be difficult and leads to the stress that has a negative impact on employee morale (Richards, 2009), and the factor which lead to the stress is lack of communication passes from top level to take down level management during merger times (Pophal, 2009). (Cofer Appley, 1964) Focus on stress by this term stress . Has all but preempted a field preliminaryly shared by a bend of other concepts. (p. 441) which includes the level of anxiety, conflict, frustration, emotional disturbance, trauma and many other factor questioned under the reference of stress. through with(predicate) this we easily identify that stress impact on employee morale level. Workplace environment changes make an effect on employee behavior which either downgrade their morale or either upgrades their morale to accept the change for working flexibility if provided by that reorganization firm. (Pract, 1998) explains the stress and morale getting poor in the context of general practitioners where this concern is positively seen. (Robertson, Haton, Felce, 2005) also tested the results of stress from workplace change and the level employee morale. This field study also resulted in the context of change of environment. This would entail the fact as the workplace environment change then the stress on well-being affected in an y terms.(Deborah, Victor, Callan, Sartori, 1999) in which they discuss the factor of stresson employee adjustment due to the organizational change.As we know the merger activities includes the process of merging two or more organization then the culture clash is obvious thing which is hardly genuine by the employees and this would let their morale down (Pophal, The effects of Merger and acquirement on Employee Morale, 2009). This have been seen that after merger activities, mostly new management comes up with new policies and the HR role starts to hire the new professional to complete the gap due to this merger activity happened leads to fear of job-less from the organization and this would let their morale down during the merger activities. According to (Sen, 1997) Unemployment can be a major causal factor predisposing the great unwashed to social exclusion. The exclusion applies not only to economic opportunities, such as job-related insurance, and to pension and medical entitle ments, but also to social activities, such as participation in the life of the community, the lack of which may be quite problematic for jobless people.(Difonzo Bordia, 1999) A tale of two corporations Managing uncertainty during organizational change in which they suggest the reason of ineffective strategies of communication during the organizational change which lead to flourish the rumors and let the employee morale either positive or either negatively. (Difonzo Bordia, 1999)- Human Resource Management, 1998 also find out the in his field study that the employee morale were unanimously drooped down and the level of anxiety has been intense and the comments from the management that youre sacking to be rid of me, so why should I continue to work so hard? shows the morale level so down. search METHODOLOGYThe Type of StudyThe type of study is deductive in which the variables have been taken from empirical data and other journals and articles. And this study is descriptive in natu re which describes the relationship between the variables and their effect on employee morale during the merger activities.Theoretical FrameworkStressEmployee MoraleManaging Uncertainity unification ACQUISITIONCompetitivenessAnxiety of JoblessHypothesis BuildingFollowing are the hypothesis interrogation in this field study on effects of merger and acquisition on employees morale.H1 Merger and Acquisition activities results into higher employee moraleH2 Merger and Acquisition activities results into lower employee moraleH3 Merger activities results high stress level impact on employee morale levelH4 Managing uncertainty has a positive significant impact on handling employee morale levelH5 Merger activities increase the competition which results lower the employee morale levelH6 Merger activities increase the competition which results higher the employee morale levelH7 Merger activities increase the anxiety level of getting jobless which results lower employee morale levelSample siz e that you have chosen and why you have chosen that sampleThe sample size of this field study is based on the descry through questionnaire alter by 150 employees from 6 different branches of RBS Bank acquired by the Faysal Bank Ltd. Large take of questionnaire filled by lower and medium level of employees working in different branches and also filled by the management professionals to see what they observed from this merger and acquisition activity and its effect on employee boilersuit focusing on their morale level too.Data collection tools to be utilise and why you are using that toolThis field study is based on secondary data collection in which empirical research done on merger and acquisition activities and their effect or impact on an employee morale data includes to find out the significance of relation between merger and employee morale through the level of stress, managing uncertainty, anxiety of jobless, competitiveness and role conflict exists in the study of RBS Bank merger or acquisition by Faysal Bank Ltd while the primary data for this study is gathered by the survey through complete research questionnaire about merger and its effect or impact on employees morale filled by the employees of RBS Bank and even with Faysal Bank Ltd. The questionnaire is based on likert scale from 1 to 5 questions where 1 shows strongly disagree and 2 shows disagree and 3 shows neutral answer and 4 shows hold and 5 scale shows strongly agreed with the said questions. The main purpose to use these tools to easily find out the relation and impact of merger on employee morale through empirical data and that data would be proved through the survey questionnaire from the employees of acquired firm which id RBS Bank.What software would you use and why would you use itThis field study is based on different variables relationship effects on employee morale. First the data has been taken from secondary sources including research articles, journals and also from primary s ources through field survey questionnaire from RBS Bank employees then mark the data and found the co relational analysis done. SPSS 14 (Statistical Package for Social Sciences) software used for analysis of the attained data. The SPSS software is most useful systematic programmer to find out exact results by calculating large amount of data easily and in short time. SPSS software gives the set of co relation of variables and regression values in a tabular format.LIMITATIONS OF THE RESEARCHThis field study on the variables effects on employee morale from merger and acquisition activities is limited by so many other factors due to time constraint to get the most accurate results either they influence on results. Even the size of the sample is also limited in number such as bill by 150 employees of RBS Bank in which mostly are lower level working in different branches and some are filled from middle level management professional to gain their horizon too. This sample size was en ough to find out co relational values between the relation of merger and its effects and impact on employee morale. The results cannot be truly accurate due to biasness of filling such survey questionnaire but can be rarely happened. The variables have been taken are also limited because to find out most close relationship between their co relation existence.FUTURE RESEARCH DIRECTIONThere are many areas still undiscovered with the relation of M/A activities and there effect on organization culture and boundaries. In which the effect was only seen with the relation of employees and human capital of the United States activities but not with the assets, records, liabilities due, customer feedback, customer acceptance and loyalties. These are still not closely account into with the relation of merger activities of organizations. Such in these activities the questions should be asked from the customer of those banks which are going to be acquired by the other bank that are they happy w ith this activity of merger, do they seen this thing positive in sense, do they get benefit after this merger activity or not, would they continue to work with the same bank or will shift to another well-established bank. These are the questions still needs answers from the perspective of merger and acquisition activities of banks. Another direction would be in the same context is to find out the after merger activities of banks and role of HR manager to manage the uncertainty level of the employees during merger process. We have seen that there is a lot of stress on employees while merger is in progress but no such communication transfer to the employees which result the employees are unaware from such activities and getting afraid that how the new management treat with them, are they getting jobless due to not fulfilling the set criteria by the new management, or they would be given more work and responsibilities. These rumors or thinking process of employees let their motivation level down due to their job satisfaction effected. For that purpose the role of managers is most required to fetch the employees and picture them the safety of their job and their professional as well as social value in the organization by using useful tools such as re-screening of employees or through motivational activity tools. close to research may work on it but not deeply inside.WHO WOULD BENEFIT FROM THIS STUDY?This study is done for the purpose to find out the relationship of morale after the merger and acquisition process of RBS Bank and Faysal Bank Ltd which would benefit to the management of Faysal bank in the context that now the employees of their organization are truly motivated with high morale or they are not motivated by low morale due to this merger activity. In this way the organization would easily make some managerial tools to utilize their human capital employees such as by motivating them a part of Faysal Bank Ltd which gives them new loyalties and more fle xibility of their jobs and work and giving more attention and more rewards program from the previous one. The other would get the benefits mostly are the human resource department which understand the need of communicate the merger policies and terms to clarify the questions of employees. HR department tend to be more ethical and kindly to support their employees by communicating them about the M/A activities. Communication gap from management to lower level employees during merger and acquisition activities have been seen a big issue.