Project Topics

EFFECT OF MERGER AND ACQUISITION ON THE EMPLOYEES’ JOB SATISFACTION OF DEPOSIT MONEY BANKS IN NIGERIA

ABSTRACT
Mergers and acquisition and other forms of business combinations have desirable strategic advantages. However, inherent in these business combinations are the fears of hampering employee job satisfaction which may prove to be traumatic especially for the employees of acquired firms; the impact can range from anger to depression which may result in high turnover, decrease in morale, motivation, productivity and consequently, merger failure. The study evaluates the effect of merger and acquisition on the employees’ job satisfaction of deposit money banks in Kaduna Metropolis. The study is quantitative in nature (overhaul casing) using structured questionnaire as instrument of data collection which was used to collect data from the employees’ of merged and acquired DMBs domiciled in Kaduna metropolis. Employee job satisfaction was measured using the short version of the Minnesota Satisfaction Questionnaire (MSQ) developed by Weiss, Dawis, England, & Lofquist, (1967). The study examined how M&A affected the satisfaction, morale and psychological threat of employees of the merged and acquired DMBs in Kaduna metropolis. Differences in the participants satisfaction level was measured using the MSQ and the hypotheses was tested using chi-square test of goodness of fit. The findings reveal that the respondents were more often satisfied than dissatisfied with their jobs. Therefore, it was recommended among others that banks should continue to recognise employees’ level of involvement with building the new organizational culture following an M&A exercise.

CHAPTER ONE: INTRODUCTION
1.1          Background to the study.
One of the dominant features of a free market economy is free entry and free exit, which have an underlying attribute of competition. Competition in business itself results in either survival or extinction of companies (Isiaku, 2003). While the surviving companies will be contending with how to optimally manage their resources to maintain or increase their market share through expansion or diversification to remain in contention, the victims of competition which are the falling companies would need to be resuscitated through restructuring to survive. According to Isiaku, (2003), the strategic business practice by which firms diversify and expand is mergers and/or acquisitions (M&A). Mergers and acquisitions and other forms of business combinations have desirable strategic advantages such as hedging against competition, enhancement of market share and shareholders‘ value through economies of scale and economics of scope. However, inherent in these business combinations are the fears of dangers that the emergent large corporate entities may result in monopolies or unfair competition within the economy of the country.
Mergers and acquisitions (M&A‘s) have become a key part of many corporate growth strategies (Cocheo, 2008 and Rosta, 2008). Banks are involved in M&A in order to reduce risks and increase returns and geographic diversification, that is expanding operations into multiple locations used to obtain greater market power.