Merger & Acquisition in the Public Service Commission Essay (Critical Writing)

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Introduction

Merger is the current trend prevailing in the banking industry for consolidating the Public Service Commission undertaking banks depending on the performance. Merger results in a transformation from smaller banks to the reputed bank with reduced number. “Mergers and acquisitions are increasingly being used by firms to strengthen and maintain their position in the market place” (Iqbal 2010). Merger is defined as “when one company purchases another company of an approximately similar size. The two companies come together to become one” (Merger Definition, 2009).

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Merger of banks are depended on certain factors like capital investment, gaining the cost efficiency and intense competition in the market. Merger has got a number of benefits, as a result of which the financial conditions can reach its maximum, contribute much for the growth and the development of GDP and can be a reputed one in the banking sector in gaining economies of higher scale with an increased market share and high competency. “Merger & Acquisition also leads to tax gains and can even lead to a revenue enhancement through market share gain. Companies go for Mergers and Acquisition from the idea that, the joint company will be able to generate more value than the separate firms” (Benefits of mergers and acquisitions, 2009).

The government plays a vital role in the merger, “The patriarchal stance of the government that it would bless mergers based on synergies is unlikely to yield any meaningful results. Furthermore, the government’s view that the 19 nationalized banks could be merged into eight or 10 banks appears to be an ex cathedra judgment, not backed by any concrete examination” (Going ahead with bank mergers: Nebulous Govt line, 2010).

Merger of EBI and NBD

Merger of banks was announced in the year of 2007 and the merge was between the world’s second and fourth bank which is the largest bank in the middle east. According to the chairman of the EBI, “The merger objective is to create a strong entity that will play a major role in the banking industry”. (UAE creates largest gulf Arab bank, 2007).

Merger of Banks from the HR Perspective

The HR perspective plays a vital role in the Merger of banks, it is said “This is a landmark deal, bringing together two high quality banking businesses. It offers significant benefits to shareholders, customers and of course staff” (Manibo 2007).

The organizational change is the first and foremost aspect of HR in the merged organization. The HR has a positive aspect in the changed role of the organization. In the HR perspective, employees are the assets of the organization. The main role have to be played by the HR managers and they have to make a finite research and the study of the other organization to be merged. “Today this requirement is even more acute since the past decade has been characterized by enormous growth in IM&As. In addition, it has been argued that the challenge in making M&As work is the management of people. In a case of IM&As the role of HR managers is very demanding because they needs to integrate HR practices and, moreover, perform two other roles simultaneously” (Antila 2006).

A proper transaction has to be made and the merger should be a smooth process. The bank mergers lead to the loss of job and the insecurity in the job. Various research conducted by the international labor organization specifies these issues, “The wave of mergers and acquisitions in the global banking and financial services sector also has increased job insecurity and workplace stress for employees and provided few tangible benefits for employers, the ILO report also concludes. Statistics gathered for the report show that the jobs cut due to bank consolidations in Western Europe number “at least 130,000” over the past 10 years. The ILO re searchers also estimate that the number of layoffs could reach 300,000 within the next two years” (Bill 2001).

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Merger in the banking sector has to consider various departments and the merger has benefited a lot to the NBD and EBI. “The Cash Management Services (CMS) unit successfully migrated all legacy NBD on-line customers to its well received e-banking solution smartBUSINESS, enabling clients to view real time account information, LCs & Guarantees and scanned images of documents, initiate payments and many more” (Where the world comes to bank: Annual report 2009, n.d, P.13).

The human resource of the banking sector emphasis on the leadership traits and the change management process by engaging the employees in the task. The HR policies and the inheritance of the practices are to make the roles of the employees to the common Dias. The HR study was conducted to position the employees to be the excellent performer and to make the organization very successful. “Companies involved in M&A transactions have the opportunity to take a different approach, including increased involvement of HR professionals. If they do, they will achieve a better outcome and greater success” (Strategy-Mergers and acquisitions-M&A, 2010).

Conclusion

The case of merger between the two top cadre banks revels that there are several benefits for them as the merged organization and make them the most reputed one. The role of HR in checking other discrepancies are identified.

Reference List

Antila, E M., 2006. The role of HR managers in international mergers and acquisitions: A multiple case study. Web.

Benefits of mergers and acquisitions, 2009. Maps of World. Web.

Bill, L., 2001. Bank mergers lead to job loss and insecurity. All Business. Web.

Going ahead with bank mergers: Nebulous Govt line, 2010. The Hindu Business Line. Web.

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Iqbal, A., 2010. HR issues and activities in mergers and acquisitions. Ezine Artivle. Web.

Manibo, M., 2007. Emirates bank international and national bank of Dubai announce terms of proposed merger. AME Info. Web.

Merger Definition, 2009. Teen Analyst. Web.

Strategy-Mergers and acquisitions-M&A, 2010. Themanager. Web.

UAE creates largest gulf Arab bank, 2007. Al Jazeer. Web.

Where the world comes to bank: Annual report 2009, n.d. Emirates NBD, p.13. Web.

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"Merger & Acquisition in the Public Service Commission." IvyPanda, 23 Dec. 2021, ivypanda.com/essays/merger-amp-acquisition-in-the-public-service-commission/.

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IvyPanda. (2021) 'Merger & Acquisition in the Public Service Commission'. 23 December.

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IvyPanda. 2021. "Merger & Acquisition in the Public Service Commission." December 23, 2021. https://ivypanda.com/essays/merger-amp-acquisition-in-the-public-service-commission/.

1. IvyPanda. "Merger & Acquisition in the Public Service Commission." December 23, 2021. https://ivypanda.com/essays/merger-amp-acquisition-in-the-public-service-commission/.


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IvyPanda. "Merger & Acquisition in the Public Service Commission." December 23, 2021. https://ivypanda.com/essays/merger-amp-acquisition-in-the-public-service-commission/.

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