ASSESSMENT OF THE EFFECT ACQUISITIONS ON EMPLOYEE PERFORMANCE

ASSESSMENT OF THE EFFECT ACQUISITIONS ON EMPLOYEE PERFORMANCE: THE CASE OF FIRST MERCHANT BANK
BY
SITHEMBILE SISYA
THIS PAPER WAS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
MASTERS IN BUSINESS ADMINISTRATION (MBA)
AT
ESAMI BUSINESS SCHOOL,
ARUSHA, TANZANIA
ESAMI BUSINESS SCHOOL
P.O. BOX 3030
ARUSHA TANZANIA
SEPTEMBER 2018

Contents
TOC o “1-3” h z u ABSTRACT PAGEREF _Toc523942036 h 5LIST OF ABBREVIATIONS AND ACRYNOMS PAGEREF _Toc523942037 h 6CHAPTER 1: INTRODUCTION PAGEREF _Toc523942038 h 71.1 BACKGROUND PAGEREF _Toc523942039 h 7ACQUISITIONS PAGEREF _Toc523942040 h 8First Merchant Bank Limited PAGEREF _Toc523942041 h 10Opportunity International Bank Malawi PAGEREF _Toc523942042 h 111.2 PROBLEM STATEMENT PAGEREF _Toc523942043 h 131.3 RESEARCH OBJECTIVES PAGEREF _Toc523942044 h 14Purpose of the study PAGEREF _Toc523942045 h 14Objectives of the study PAGEREF _Toc523942046 h 151.4 RESEARCH QUESTIONS AND PROPOSITIONS PAGEREF _Toc523942047 h 151.5 SIGNIFICANCE OF THE STUDY PAGEREF _Toc523942048 h 161.6 SCOPE OF THE STUDY PAGEREF _Toc523942049 h 171.7 LIMITATIONS OF THE STUDY PAGEREF _Toc523942050 h 18CHAPTER 2: LITERATURE REVIEW PAGEREF _Toc523942051 h 182.1 INTRODCUTION PAGEREF _Toc523942052 h 182.2 BACKGROUND PAGEREF _Toc523942053 h 192.3 OVERVIEW OF IMPACT OF ACQUISITIONS ON EMPLOYEES PAGEREF _Toc523942054 h 192.4 CONCLUSION PAGEREF _Toc523942055 h 27CHAPTER 3: CONCEPTUAL FRAMEWORK AND RESEARCH DESIGN/METHODOLOGY PAGEREF _Toc523942056 h 283.1 INTRODUCTION PAGEREF _Toc523942057 h 283.2 PROBLEM STATEMENT PAGEREF _Toc523942058 h 283.3RESEARCH OBJECTIVES PAGEREF _Toc523942059 h 293.4CONCEPTUAL FRAMEWORK PAGEREF _Toc523942060 h 303.4.1 Major Research Question PAGEREF _Toc523942061 h 313.4.2 Minor Research Questions PAGEREF _Toc523942062 h 313.4.3 Propositions PAGEREF _Toc523942063 h 313.4.4 Conceptual Framework/Model PAGEREF _Toc523942064 h 323.5 RESEARCH DESIGN PAGEREF _Toc523942065 h 33Interviews and questionnaires PAGEREF _Toc523942066 h 33Target group PAGEREF _Toc523942067 h 33Interview questions PAGEREF _Toc523942068 h 34Study Population PAGEREF _Toc523942069 h 343.6 RESEARCH METHODOLOGY PAGEREF _Toc523942070 h 353.6.1 Target Population and Sampling Methods PAGEREF _Toc523942071 h 353.6.2 Data Collection Instrument and Source PAGEREF _Toc523942072 h 353.7 DATA ANALYSIS METHODS PAGEREF _Toc523942073 h 36CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION PAGEREF _Toc523942074 h 374.1 INTRODUCTION PAGEREF _Toc523942075 h 374.2BACKGROUND ON OIBM ACQUISITION PAGEREF _Toc523942076 h 374.2 GENERAL INFORMATION PAGEREF _Toc523942077 h 384.3EMPLOYEE PERFORMANCE POST ACQUISITION PAGEREF _Toc523942078 h 404.4 DISCUSSION PAGEREF _Toc523942079 h 42CHAPTER 5: SUMMARY OF KEY FINDINGS, CONCLUSIONS AND RECOMMENDATIONS PAGEREF _Toc523942080 h 445.1 INTRODUCTION PAGEREF _Toc523942081 h 445.2 SUMMARY OF KEY FINDINGS PAGEREF _Toc523942082 h 445.3 CONCLUSION PAGEREF _Toc523942083 h 455.4 RECOMMENDATIONS PAGEREF _Toc523942084 h 455.5 FURTHER RESEARCH PAGEREF _Toc523942085 h 46References PAGEREF _Toc523942086 h 47Bibliography PAGEREF _Toc523942087 h 51
ABSTRACTAcquisitions are a normal part of business in most developed and developing countries. Company acquisitions are there to foster a myriad of reasons mainly, growth, change and the obvious reason of increasing shareholder wealth. In the last 7 years there has been a few high profile Bank acquisitions in Malawi, namely First Merchant Bank acquiring International Commercial Bank, First Discount House Bank acquiring Malawi Savings Bank, National Bank of Malawi acquiring NedBank Malawi and most recently First Merchant Bank acquiring Opportunity International Bank of Malawi. The focus on these acquisitions has mainly been on the business side. This thesis researches the effects of these acquisitions on employee performance, with an emphasis on the recent acquisition of Opportunity International Bank of Malawi by First Merchant Bank Malawi. This study aimed to fill an existing knowledge gap on what happens after the acquisition process is completed especially in Malawi. As shown above there has been a lot of high profile bank acquisitions but little to no literature on the effects of these acquisitions on employees and employee performance. Qualitative data was collected and used to analyse the effects of acquisitions.
LIST OF ABBREVIATIONS AND ACRYNOMSFMB FIRST MERCHANT BANK MALAWI LIMITED
OIBM OPPORTUNITY INTERNATIONAL BANK OF MALAWI
RBM RESERVE BANK OF MALAWI
CHAPTER 1: INTRODUCTION
This thesis focuses on the effects of company acquisitions on the employees that are retained by the acquiring company. The main focus will be the impact on employee performance on the acquisition of Opportunity International Bank Malawi (OIBM) by First Merchant Bank (FMB).

1.1 BACKGROUND
In June 2017, First Merchant Bank (FMB) announced that it was acquiring 100% ownership of Opportunity International Bank Malawi (OIBM). This acquisition meant that all of OIBMs property, debts, credits and employees, amongst other things, were to automatically become a part of FMB.
The acquisition was legally completed on 27th October 2017 and OIM ceased to exist. On this day all OIBM employees received letters stating that they were officially FMB employees and a selection of employees received letters informing them of changes to their employee status. These letters brought about mixed reactions and were only the beginning of the many changes that were undoubtedly about to happen.

ACQUISITIONSBank on bank acquisitions, especially in banks are not a new phenomenon in Malawi or in the world. There had been a lot of bank on bank acquisitions in Malawi in the last 7 years, mainly namely First Merchant Bank acquiring International Commercial Bank, First Discount House Bank acquiring Malawi Savings Bank, National Bank of Malawi acquiring NedBank Malawi and most recently First Merchant Bank acquiring Opportunity International Bank of Malawi. These acquisitions have been for numerous reasons but most acquisitions occur due to the following reasons, though this list is not exhaustive;
Synergy – the notion with synergy is that the two companies or banks in this case, will attain greater value by joining forces. Banks aim to share resources in terms of products, property, customers.

Diversification – said to be one of the most important reasons to acquire another company. In the case of FMB who when acquiring OIBM, they diversified into a new market in the banking industry. The acquiring company which may have a core product can reduce its risk in the market by introducing a new product from the acquired company.

Growth – this should be a straightforward reason to acquire another company, for example when First Merchant bank bought shares in Barclays Zimbabwe, the Bank grew and had a presence in an emerging market. In the case of First Discount House Bank, when it acquired Malawi Savings Bank Prior to the merger, the acquisition then saw First Discount House bank assume 15% of the market share in the Malawi banking sector and in so doing, First Discount House Bank became the third largest bank in Malawi, when initially FDH was the seventh largest bank. CITATION Res14 l 1033 (Reserve Bank of Malawi ‘Financial institution supervision annual report 2014’ 2014)
As stated by Kivuti, “in the current economic and competitive global business environment, the growing number of acquisitions has presented companies with a new set of opportunities and challenges to consider. One of the challenges being performance of the retained employees, as well as the employees of the acquiring Company. Acquisitions have become an important medium to expand product portfolios, enter new markets and acquire technology, gain access to research and development and gain access to resources which would enable the company to compete on a global scale.” CITATION Mar131 l 1033 (Kivuti 2013) . From this it is clear that acquisitions for a number of reasons, but the underlying reasons for most acquisitions are the same.

However, in comparison with acquisitions on the global scale, Africa is still relatively small, Malawi is even smaller. All acquisitions in Malawi are governed by the Competition and Fair Trading Commission of Malawi. The Competition and Fair Trading Commission of Malawi define an acquisition as “as having occurred if one firm acquires control over another or if a firm acquires control of a productive asset.” CITATION Cha15 l 1033 (Malonda 2015). The Commission however only deals with the business end of acquisitions, they do not deal with the human element of acquisitions.

Acquisitions are widely known to cause a huge percentage in staff redundancies and transfers. Acquisitions are business tools that companies use to attain organizational objective and they are also tools that have weighty impacts on the employees of the companies at every level of management as two different establishments attempt to incorporate into one.
An acquisition is generally defined as the joining of two or more different organizations under one common owner and management structure. An acquisition as defined by the book Managing Human Resources in Mergers and Acquisitions, is the process of one corporate entity acquiring control of another corporate entity by purchase, stock swap or some other method. CITATION Man161 l 1033 (Managing Human Resources in Mergers and Acquisitions. 2016)
As with all acquisitions, the FMB acquisition of OIBM brought a lot of change, not just to the OIBM customers but it had a massive impact on the employees of OIBM. A large number of OIBM employees’ were dismissed, others were left in the position they were found in and others were moved across the country or demoted. In general every textbook change that occurs when a company is acquired occurred to the OIBM employees.

This paper shall explore the impact of the acquisition on the performance of the retained OIBM employees. The paper will try and explore whether management of FMB took into account effective Human Resource Management measures during the acquisition process. The human element of any business is a core part, it is therefore necessary to research the impact of the FMB/OIBM acquisition on the human element. Further the paper will try and come up with the effective HR measures that the bank should have followed. The research and information that will be acquired from the retained employees and those employees who either left of their own volition or were retrenched would assist in understanding the impact and effect of performance of employees in acquisitions.
This research can assist the FMB Management in understanding the measures that should have and could have been taken during the acquisition. In addition, the research could also assist with better understanding the corporate culture of FMB and the way the introduction of new employees who had a whole different culture, has changed. Further, the research could also assist the management and Board of FMB if they ever consider another acquisition. It can also assist future scholars in research about the human element in acquisitions, specifically acquisitions in Malawi.

First Merchant Bank LimitedFirst Merchant Bank Limited (FMB) is a subsidiary of FMB Capital Holdings plc (FMBCH) and is registered as a commercial bank under the Banking Act 2010. FMBCH is a public limited liability company incorporated in Mauritius and is listed on the Malawi Stock Exchange (MSE).

FMB offers a broad range of financial services to both corporate and personal customers with a branch network extending throughout Malawi In 2017, FMB acquired 100% ownership of (OIBM).
Opportunity International Bank MalawiOIBM was a commercial microfinance bank which targets the economically active but marginalized Malawians living in underserved areas including semi urban and rural areas. Opportunity Bank offered a wide range of banking products and services, including deposits, loans and advances, insurance, and flexible savings services. These services were designed to enable Malawians to holistically transform their lives, develop a steady income, expand their businesses, provide for their families, and create jobs.

Until the acquisition, OIBM had over 500 employees nationwide, ranging from top management to lower level staff.

FMB and OIBM had two completely different business formats. FMB is more focused on corporate banking while OIBM was more on retail banking and dealt heavily with microfinancing. OIBMs target market was mainly customers in semi-urban and rural areas, while FMBs focus is more on those in urban areas. Opportunity Bank’s approach is to provide wide access to multiple financial services (deprived, lending, insurance and payments systems) in deprived communities. Opportunity Bank’s key focus is providing sustainable and flexible savings services while FMBs modus operandi is the complete opposite.

It is clear that with the different types of businesses and business formats, the corporate culture of the two will also be vastly different. For instance OIBM employees did not work on Saturdays, but FMB works on Saturdays. This might seem like such a small difference but it can make a difference. In addition, OIBM customers as stated before were mainly what can be classified as the underprivileged and many of the customers were not even educated and could not read or speak English. But now the retained employees have to work with the corporate customers of FMB who are used to being handled in a different way.

The differences in the two entities type of business and organizational culture can greatly impact the performance of employees. This shall be discussed in depth further on in this paper.

The research shall be achieved through extensive interviews with the staff that were retained as well as those that were dismissed. In addition, interviews shall be conducted with the Human Resource department of FMB as well as interviews with the decision makers and strategists within FMB.

During acquisitions, the performance of the staff has to be managed. When a company acquires another company you are bringing about two different entities with different backgrounds, hiring criteria, resources, cultures and most importantly different people. There has to be a performance management plan set up. In essence it is a new organization because new people, systems and policies have been brought in, sometimes what was working before might not work now. When talking about performance management Armstrong states, “the overall aim of performance management in the new organization, where the high technology is one of the first priorities, is to establish a high performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership. Its key purpose is to focus people on doing the right things by achieving goal clarity.” CITATION Mic061 l 1033 (Armstrong 2006)
1.2 PROBLEM STATEMENT
In this research paper, the main question to be answered is whether, due to the acquisition of OIBM by FMB, there was any impact on the employees of both institutions, but mainly the employees of OIBM.
Change has a direct and intense effect on people, organizational systems, and business operations. The failure to understand and to develop strategies to manage the impact of such change poses a direct threat to profitability and the preservation of equity value. CITATION Mar131 l 1033 (Kivuti 2013) Bibler, stated that the two major human problems that can occur in acquisitions are the loss of key people and the loss of organizational effectiveness CITATION RSB89 l 1033 (Bibler 1989) . Therefore in order for an acquisition to be effective not only the business side has to be considered but also effective people management. If the employees either leave the company or are not effective in their performance a company would end up resolving more problems that necessary.

Acquisitions must therefore be handled with a lot care, especially in relation to the human element. If employees are not handled in an effective manner it can lead to a myriad of problems, such as tardiness, absenteeism, turnover, reduced output, declining morale, loyalty, commitment, and trust of those who remain in the post combination firm. This would defeat the whole purpose of an acquisition because the new combined firm might end up with a lot of disgruntled employees which will lead to reduced performance levels.

Acquisitions are automatically viewed as a negative event for most employees, they are viewed as threats. It is the duty of both companies in an acquisition to safeguard the welfare of employees, unfortunately in Malawi there are no specific laws regarding this. Due to the low presence of trade unions in Malawi employees are usually left unprotected in the event of a company acquisition. Communication with employees is therefore a key component in the way M ; A’s affect employees.

This particular research is going to explore if there was any impact on the performance of employees at OIBM/FMB, whether there any strategies by the FMB HR department and the success rate of the strategy if any. Further, once the problem has been answered, the paper shall also attempt to give recommendations on the way the HR element should have been handled.

1.3 RESEARCH OBJECTIVESPurpose of the studyThe main purpose of this research is to find out what the impact of the acquisition of OIBM by FMB was on the performance of the retained employees. Further, the research shall also find out what the HR component of the acquisition was, if there was and whether FMB was successful in the strategy, if they were not successful, recommendations on what they could do.

Further, the research can also help the FMB Board and Management in any other acquisitions they might have. FMB has acquired over three other banks in sub-Saharan Africa in the last five years, it is therefore safe to assume that they might have further expansion plans.

This study will also contribute to knowledge on employee performance in acquisitions especially in Malawi as there is a gap in the literature on such topic. This study can be used as a reference point for future researchers.

Objectives of the study
The Four Objectives of this Research are;
To examine if there was employee engagement during the acquisition.

To investigate if the involvement of HR professionals from the beginning planning stages can positively contribute to maintaining employee engagement during the acquisition.

To investigate the impact of the acquisition on the retained employees performance.

To draw conclusions and to make proposals and recommendations for the FMB HR department for the future post-recession increase acquisitions and the next phase of HR to ultimately enable them to maintain employee engagement levels during acquisitions.

1.4 RESEARCH QUESTIONS AND PROPOSITIONS
1.Did the FMB management have a human resource strategy in their acquisition plan of OIBM?
2.What was the effect of the acquisition on the OIBM employees?
3.Would have engagement of both OIBM and FMB staff helped with the acquisition?
4.What strategies could be adopted by companies when dealing with corporate culture in the acquisition context?
5.What would can we learn from the Case of FMB and OIBM?
1.5 SIGNIFICANCE OF THE STUDY
Acquisitions of companies generally mean that one company acquires 100% shares in another company. This means the “parent” company acquires everything including the employees, properties and customers. However, acquisitions have become more often connected with lowered morale, job dissatisfaction, unproductive behaviour, increased turnover and absenteeism, rather than with increased financial performance as expected CITATION Mar131 l 1033 (Kivuti 2013). Most company acquisitions end up causing a lot of conflict between the differences between the two companies, specifically the two cultures of the organisations. It is very rare for the two companies to have similar workplace cultures.

It is not easy for the two merged/combined companies to have smooth sailing at the beginning of the acquisition process. As a result, the acquiring company has to have the right tools to deal with any problems that may arise and such tools have to include methods to handle the employees of the acquired company, as well the buying companies’ employees. It is necessary for the acquiring company to ensure that the post-acquisition process is handled extremely delicately and well as anything that can be perceived as negative by the employees it could trigger a lot of problems for the future of the company.

This study is important to find out what FMB did in regards to the human element of the OIBM acquisition. It is also important to understand how acquisitions affect the performance of employees in Malawi. In addition, the study will give an insight in Bank acquisitions in Malawi. The theoretical significance in this case will be to see what theory says about the human element in acquisitions and to see what FMB did or what FMB could have done and what can be done about retaining employees and also high levels of performance.
Davy states that employee problems as being responsible for one-third to one-half of all acquisition failures. That is a huge number of failed acquisitions. That shows how dangerous it is when employees are not handled well and delicately during acquisitions. Therefore, the underlying causes of employee problems must be studied carefully because their understanding has the potential of improving acquisition planning and outcomes.
The study will also assist other human resource practitioners in similar situations as this, where the company has acquired another company and they are looking at staff performance.

1.6 SCOPE OF THE STUDY
The scope of this research is OIBM employees that are were retained and are now FMB employees. The research will focus on their performance within FMB and there shall also be a comparison with their performance at OIBM. This shall be ascertained by looking at the actual work environment, the employee’s perception, opinion and views of their new circumstances, as well as their current mind-sets.
The research will also focus on employees of OIBM that were retrenched by FMB right before the acquisition as well as those who were moved to FMB to were later retrenched. These employees may assist in understanding whether a human resource strategy should be implemented right at the beginning of the acquisition process with acts such as staff consultations and staff meetings.
In addition, the research shall also include those employees who were retained by FMB but due to various reasons pertaining to the merger they resigned from FMB. The information taken from these employees will help us to understand why they left FMB and how to avoid such and retain staff.

1.7 LIMITATIONS OF THE STUDY
Though the field of acquisitions is wide and far reaching, this particular thesis will deal with just the impact of the specific acquisition on the employees of OIBM/FMB. It shall not deal with any legal, financial or other strategies that deal with acquisitions.
CHAPTER 2: LITERATURE REVIEW2.1 INTRODCUTIONThis section aims to provide a comprehensive review of the critical factors in relation to the effects of acquisitions on employee performance. The section will look at literature in business, law, human resource and organisational culture with regards to acquisitions. The main areas to be presented here are theoretical foundation, acquisitions, performance of employees and the effects acquisitions on employees.

The literature will show that acquisitions greatly impact employees in several ways. The problem here is how acquiring companies deal with employees once the acquisition process is completed. There is usually little focus on employees and how the new changes will affect the existing and joining employees. The hypothesis in this review is that acquiring companies do not look into the impact of their actions during the acquisition process and that as a direct result of this there is a negative impact on employee performance.

2.2 BACKGROUNDFMB and Opportunity International entered in to an agreement on 29th June 2017 where FMB acquired 100% shares in Opportunity International Bank Malawi (OIBM). OIBM was part of Opportunity International a global non-profit organisation that helps people in developing countries work their way out of poverty. Founded in 1971, the organization has provided more than $10 billion in loans to help clients launch and expand businesses, feed and educate their children and create jobs in their communities. At the end of 2016, more than 10 million clients in 22 countries across Africa, Asia, Latin America and Europe were using an Opportunity International loan, savings account, insurance policy or training to improve their lives. Through microfinance and complementary products and services in education, agriculture and health, the organisation has helped clients create or sustain 17 million jobs on its way to achieving its goal of 20 million jobs by 2020. More than 95% of Opportunity’s loan clients are women who would otherwise likely not have access to financial services because of legal and cultural gender inequities. The global headquarters of Opportunity International are in Chicago, with other key offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the United Kingdom. The organisation serves clients through a network of more than 23 000 people worldwide. CITATION Fir18 l 1033 (First Merchant Bank 2018).

Prior to FMB acquiring OIBM, OIBM had been on a massive retrenchment project and has retrenched and closed a lot of branches across Malawi from the year 2015 to June 2017. CITATION Owe17 l 1033 (Khamula 2017)2.3 OVERVIEW OF IMPACT OF ACQUISITIONS ON EMPLOYEESThe literature reviewed shows that there is a lot of emphasis on the culture of the acquiring firm during an acquisition. The literature shows that in order for the acquisition process to be considered a success the welfare of the employees has to be considered and there has to be a great emphasis on the culture. The culture of the company has to be an important aspect in the strategic plan of an acquisition.

Within the field of strategic management acquisitions have been researched as a method of diversification, focusing on the reasoning behind and potential for different acquisitions growth strategies and the effects of those decisions CITATION Lar991 l 1033 (Larsson 1999). Therefore, all strategic decisions in company acquisitions must be decisions that will look at every aspect of the business, not just some aspect of the business. All aspects must include the human element of the business, meaning the employees of the new firm to be formed after the acquiring.
It is therefore necessary to have solid and proper strategy for employees and not just make up one as the process goes. While designing the employee strategy in an acquisition, the Human Resources (HR) department, should be actively involved as well. Their role must not be cosmetic only. The role of the HR department essentially starts with the talk of the acquisition, right at the beginning of the process, even before the two parties have official met. The formulation of the strategy cannot be completed without the presence of the HR professional on the initial decision table.
The strategy for executing the acquisition should be formulated while keeping in mind all the issues concerned, technical, mechanical, and human issues CITATION Jai14 l 1033 (Jain 2014). Ehms in her research on the human element of an acquisition states that “Human and organizational capital is one of the most expensive cost factors, and it would be only natural to expect Human Resources being best prepared to analyse and evaluate it, Human Resources could add tremendous value to the process.” CITATION Ang16 l 1033 (Ehms 2016) . From this the importance of the Human Resources department in an acquisition is evident. In addition, the necessity of a human resources strategy has been shown, it is also clear that a without proper strategy of some sort it will negatively affect employees.

When acquiring another company, there is usually hope that there will be a synergy between the two entities. As shown above, one of the reasons for acquisitions is the hope of synergy between the two entities. Hitt et al state that “According to the value increasing school, mergers occur, broadly, because mergers generate synergies between the acquirer and the target, and synergies, in turn, increases the value of the firm”.CITATION MIC01 l 1033 (Michael A. Hitt 2001). If there is no synergy in any parts of the organisation, then acquisition would be deemed to be unsuccessful. It is therefore important that the synergy is cultivated during the acquisition process, not only business synergies but also synergies between the employees of the acquiring and acquired companies.

As indicated by Jain et al, “an unplanned acquisition may not only affect its market position financially but may also result into huge manpower loss of the organization.” CITATION Jai14 l 1033 (Jain 2014) They go on to say that the HR department has a very important role to play in case of an acquisition, but is most ignored. Most of times the HR professionals are either not involved or are involved at a very late stage in the process. The HR department has to be involved from the very beginning, from the initial stages of negotiating the acquisition. The success of any acquisition and integration depends not merely on the financial or technological aspects but also on the human element of the company in order to make an acquisition successful.

As with other audits that take place while an acquisition is going on, there is a need for a human capital audit as well. Most companies will probably do some sort of audit of the company that they want to acquire or they do some sort of due diligence report. There is a need to also do some due diligence on the employees to be acquired along with the company. This audit, like any other, needs to also be thorough, there should be research done on the organizations culture and an audit on what the employees would expect. The issues related to recruitment, training, performance appraisal, compensation, labour relations and legal compliance, should be discussed beforehand. (Jain 2014). Executives now know that in today’s economy, the management of the human side of change is the real key to maximizing the value of an acquisition CITATION Jac01 l 1033 (Jackson 2001) . The fundamental objective behind such discussion is to develop better understanding and to deal with problems in much better way that may arise during and after the acquisition process. It would also help the acquiring company in pre-empting any issues that may arise in the case of employee performance being affected by the acquisition.

It is also important to realise that after the acquisition and integration of the two entities there can be a conflict of the HR policies, cultures and strategies between the two. There should not be an assumption that the two entities had similar policies. No two companies are alike, as stated briefly above FMB and OIBM were completely different. FMB is a commercial bank and OIBM was a microfinance bank, this would inevitably result in different HR policies and strategies. As stated by Jain, “The main problem that occurs after the acquisition has taken place is the issues related to the major HR policies in the existing company. Both the employees have enjoyed different benefits and have also suffered from different drawbacks, so it is to be noted that after the merger or acquisition has taken place, it may not have turned vice-versa.” CITATION Jai14 l 1033 (Jain 2014)If done right, acquisitions can actually benefit the employees, which in the end is good for the company, happy employee’s means good performance of duties. Simons states, “This allegedly occurs because the transaction constitutes a mechanism for stimulating additional investment in human capital and promoting “skill upgrading” of the workforce, particularly if these transactions result in the implementation of new technologies.” CITATION Sim00 l 1033 (Simons 2008)Jackson et al deduce that some of the reasons that the human capital element capital element is usually neglected in acquisitions could be because of the following:
The belief that they are too soft, and, therefore, hard to manage
Lack of awareness or consensus that people issues are critical
No spokesperson to articulate these issues
No model or framework that can serve as a tool to systematically understand and manage the people issues; and therefore
The focus of attention in M ; A activity is on other activities such as ?nance, accounting, and manufacturing. CITATION Jac01 l 1033 (Jackson 2001)As noted by Kivuti, Acquisitions have become more often associated with lowered morale, job dissatisfaction, unproductive behaviour, increased turnover and absenteeism, rather than with increased financial performance as expected. CITATION Mar131 l 1033 (Kivuti 2013) .

It is no secret that acquisitions have an effect on employees, any type of change naturally has an effect on those involved. Acquisitions as in many cases and in the case of FMB/OIBM invariably resulted in decline in the number of branches and also leads to staff retrenchments. In the OIBM case, FMB either closed or merged several branches with FMB branches. This obviously resulted in job losses, resignations or demotions. For example, the OIBM company secretary, upon the acquisition she automatically lost her position as company secretary as FMB already had one. Due to some internal issues and frustrations she eventually resigned two months after the acquisition process was completed.
Acquisitions very often lead to higher workloads being placed on remaining staff, with companies requiring flexibility in terms of working hours, mobility and skills, excellent and highly motivated employees of the acquired entity may feel frustrated and may resign or they may not give their best to the organisation. CITATION Lal17 l 1033 (Saraf 2017). After the acquisition of OIBM, majority of the OIBM credit department were dismissed and all the remaining members were transferred to FMB head office in Blantyre. All the workload also automatically became a part of FMB credit department. This led to a higher workload on the FMB credit department.

Acquisitions also lead to a change in the organisational culture, as Latif states, organisation culture is the part of employee’s identity, if the cultural issues are not effectively addressed, it may lead to loss of commitment among employees resulting in lost opportunities to retain qualified personnel and motivate individuals. An acquisition deal, which may appear to be perfectly sound from financial point of view, may fail miserably if cultural and human issues are not properly addressed in the newly created entity. CITATION Lal17 l 1033 (Saraf 2017) . For example, OIBM had more of a less strict dress code for employees than FMB. This is mainly due to the types of business models. FMB has a very strict dress code, they insist on traditional suit and tie. This is something that the retained OIBM employees had to get used to. This change could lead to disgruntled employees and that could lead to low performance levels.

Brockner et al state that acquisitions lead to substantial downsizing or even mass layoffs, usually basing their conclusions on data from a small number of large, publicly-traded corporations. Such layoffs have been alleged to have a traumatic, lasting negative impact on workers who are fired and also on survivors, or those who remain with the firm in the aftermath of the layoff CITATION Bro871 l 1033 (Brockner 1987). It is therefore imperative that the acquiring company make sure that the emotional wellbeing of all staff is looked after and not just the monetary side.
In addition to the mental wellbeing, the acquirer company also has to ensure that they look into the office culture, this includes insuring that the employees have sufficient information on what is going on. Communication is very important. According to Buono and Bowditch, during acquisitions activity rumour mills are overly active, leading to more anxiety and counterproductive behaviours. Often based on fears rather than reality, these rumours can significantly exacerbate employee anxiety, tension and stress. CITATION Ant031 l 1033 (Anthony F. Buono 2003.) Several OIBM employees voluntarily resigned from FMB due to the rumour mill. FMB management was not very forthcoming with information and employees were left to wonder and come up with their own conclusions. Some employees who might have been retained because they were worried that they would be dismissed.

Furthermore, to add to the above, it is important to ensure that the human side of acquisitions is considered and dealt with in the right manner. Cartwright and Price state, the failure of an acquisition to achieve its financial or strategic objectives is often blamed on a clash of cultures between the combining entitiesCITATION Car031 l 1033 (Cartwright 2003).
Literature shows us that the role of the human resource department is very crucial to acquisitions, some studies show that the role of human resource departments also plays a critical role in succeeding with acquisitions. In their research Marks and Clutcliffe found that corporate executives generally failed to integrate human resource aspects into the acquisition process.CITATION MMa98 l 1033 (Cutcliffe 1998) The reasons for not integrating a human resource aspect to the acquisition process is not known, but it could be that the executives did not recognise that the perhaps it would have a significant and negative effect on the employees.
Waight, states that it is not only the financial, economic or commercial factors of the acquisition that will affect the outcome of the pre-planning, but also the HR-department. A detailed acquisition plan over how the implementation of the acquisition should be executed is important CITATION CLW04 l 1033 (Waight 2004). Camara and Renjen assert that the detailed acquisition plan should contain elements such as organizational structure, management structure, product lines, and business process. The speed of the integration process is also considered as a factor of success CITATION Cam041 l 1033 (Camara 2004). In a survey conducted by Bohls, where the surveyed 109 companies with active acquisitions, it was found that there was no role played by Human Resource in the pre-acquisition phase in about two thirds of the companies and these companies had post acquisition employee problems. CITATION DLB89 l 1033 (Bohl 1989)Employee behaviour is very important to study after an acquisition. Literature shows that there is a connection between job changes and satisfaction of employees. Cavanagh states that when employees perceive that the outcomes of their jobs are met or achieved they are satisfied, but when their expectations are not met they feel betrayed by management and develop a sense of mistrust. CITATION SJC92 l 1033 (S.J 1992)What has been noted from the literature is that there is a lot of emphasis on the organisational culture of the work place during the acquisition but there is not a lot of mention on what the ideal type of culture should be. Researchers seem to argue that combining different organizational cultures always leads to human integration problems or problems with the creation of synergies, but examples of merger success and synergy creation are also present. CITATION Cha091 l 1033 (Chakrabarti 2009).

Organizational culture is regarded as important in determining individual’s commitment, satisfaction and longevity with the organization, and thereby playing an important role in the every-day life of organizations, as such it is an important factor to note in acquisitions and integration of two companies. CITATION RLa01 l 1033 (R. Larsson 2001).

There is a lot of literature on bank acquisitions in America and in Europe, but there seems to be little written about bank acquisitions in Africa and very little on Sub-Saharan Africa or Malawi. This apparent lack of literature is interesting considering there has been some bank acquisitions in Malawi, one recent example is FMB acquiring Capital Bank in Mozambique and Bostwana, and International Commercial Bank in Malawi in 2013 or the acquisitions of Malawi Savings Bank by First Discount House Bank and INDEBANK by National Bank of Malawi.

Acquisitions are a major part in driving the economy of a country that it is interesting that very few has been written about them let alone the impact they may have on the workforce of a country.

2.4 CONCLUSIONIt is obvious that whenever there is change in any company it can have positive or negative effects. So it is not surprising that acquisitions can have a negative effect on the acquiring company if not handled in the right way. The most affected are usually staff members. In most acquisitions, the emphasis is usually on other stakeholders such as shareholders and customers. In the case of FMB acquiring OIBM, in all the press releases there was hardly any mention of the employees. All the press releases touched on what a good business move the acquisition was and how OIBMs customers will not be affected. CITATION Fir18 l 1033 (First Merchant Bank 2018).

The literature reviewed has been from primarily European and American authors and nothing from any Malawian authors. There is a clearly a gap in the literature. European or American literature can serve as a guide but cannot assist with an African problem.

CHAPTER 3: CONCEPTUAL FRAMEWORK AND RESEARCH DESIGN/METHODOLOGY
3.1 INTRODUCTION
Chapter 3 outlines general approach for the research methodology to be used in this research, which offers an explanation into what type of research this study was about. It also defines the population of the study and the sampling techniques which were used, methods of data collection and data analysis.
3.2 PROBLEM STATEMENT
In this research paper, the main question to be answered is whether, due to acquisition of OIBM by FMB, there was any impact on the employees performance, with a main focus on the employees of OIBM that were retained by FMB.
When there is a change in an organisation, it has a direct and profound impact on the people, organizational systems, and business operations. If there is a failure to understand and to develop strategies to manage the impact of such change poses a direct threat to profitability and the preservation of equity value. (Kivuti 2013) .

Bibler, stated that the two major human problems that can occur in acquisitions are the loss of key people and the loss of organizational effectiveness. (Bibler 1989). Mergers and acquisitions constitute a transfer of wealth from workers to shareholders (Kivuti 2013). Acquisitions must therefore be handled with care, especially in relation to the employees. If employees are not handled in an effective manner it can lead to a myriad of problems, such as tardiness, absenteeism, turnover, reduced output, declining morale, loyalty, commitment, and trust of those who remain in the post combination firm.

Acquisitions are automatically viewed as a negative event for most employees, they are viewed as threats to the status quo. As stated above any change in an organisation has a profound effect and impact on the people in the organisation, so employees have a right to have a negative view on acquisitions. Communication with employees is therefore a key component in the way M ; A’s affect employees.

This particular research is going to explore if there was any impact on the employees at OIBM/FMB, whether there was any strategies by the FMB HR department and FMB management and the success rate of the strategy if any. Further, once the problem has been answered, the paper shall also attempt to give recommendations on the way the HR element should have been handled.

RESEARCH OBJECTIVES
The main purpose of this research is to find out what the impact of the acquisition of OIBM by FMB was on the performance of the retained employees. Further, the research shall also find out what the HR component of the acquisition was, if there was and whether FMB was successful in the strategy, if they were not successful, recommendations on what they could do. Further, the research can also help the FMB Board and Management in any other acquisitions they might have. FMB has acquired over three other banks in sub-Saharan Africa in the last five years, it is therefore safe to assume that they might have further expansion plans.

The three Objectives of this Research are;
To investigate the impact of the acquisition on the retained employees performance.

To investigate if the involvement of HR professionals from the beginning planning stages can positively contribute to maintaining employee engagement during the acquisition.

To draw conclusions and to make proposals and recommendations for the FMB HR department for the future plans of acquisitions and the next phase of HR to ultimately enable them to maintain employee engagement levels during acquisitions.
CONCEPTUAL FRAMEWORK
As explained above, acquisitions have historically been associated with extremely low morale by employees, unproductive behaviour, job dissatisfaction, employees resigning and absconding. It is not known for increased financial performance as the acquiring company would expect.

As a result of this the fundamental causes of employee non-performance need to be studied and researched carefully. If the cause are understood it will have the potential of improving the outcomes acquisitions. Further, recognising the various ways in which acquisitions can influence employee performance can have long-term implications for economic development of individuals, organizations and nations, especially in developing economies.
The various ways acquisitions impact the performance of employees form the conceptual framework in this study.
A conceptual framework is a theoretical structure of assumptions, principles, and rules that holds together the ideas comprising a broad concept. Therefore, the independent variables in this study are the salary/compensation, sense of ownership and belonging, job security and chain of command while the dependent variable is employee performance. The moderating variable is employee motivation while the extraneous variable in the study is the company policy forming the undernoted diagram.
3.4.1 Major Research Question
The major research question in this paper is whether the acquisition of OIBM by FMB impacted the performance of the retained employees?
3.4.2 Minor Research Questions
The minor research question is whether the procedural methods used by the FMB HR department during the acquisition process could have helped in employee performance.

3.4.3 PropositionsIt is proposed that due to the manner in which the acquisition of OIBM by FMB was conducted in that there was lack of proper employee consultations and a lack of a post-acquisition plan to ensure that employee’s performance levels are high.

3.4.4 Conceptual Framework/Model
3.5 RESEARCH DESIGN
With the research design, it is about turning a research question into a research project. Since this is a qualitative research project, it shall not rely on numbers or statistics, but rather on explaining the issues and explaining the events and people. In addition, it is not possible to interview all the employees or personnel affected by the acquisition, the results obtained here will be generalized.

The research shall be conducted as follows;
Interviews and questionnairesThe interview setting will be either a face-to-face situation or a telephone interview according to preference and availability of the interview partners. When these interviews are conducted by telephone, the interview partners will be assured an undisturbed surrounding and a clear line which will allow the partners to be understood clearly so that the interview could be recorded as well if need be. The interviewees will be informed that the conversation is recorded, in the event that it is. The interviewees will be given the questions in advance, in order for them to be familiar with the questions and the interview.
Target groupThe target group of these interviews shall be a combination of the current OIBM staff that were retained by FMB, staff that were retrenched and staff that were retrenched but left by their own accord. If possible, FMB and past OIBM HR practitioners shall also be interviewed to get their perspective.

The target group was chosen because they are the people closely and directly affected by the M;A. The HR practitioners were chosen because they were involved in the acquisition, or during the process or in the aftermath.

Interview questions
What level of management are you? (choose between top, middle or lower)
How long were you working with OIBM?
What are your thoughts on acquisitions?
Did the acquisition and integration of OIBM and FMB affect you in any way? Positive or negative
Was there any communication to the staff during the process?
Would you have benefited from any communication?
Have you adopted to the culture of FMB?
Do you think that Top Management considered the need for an HR strategy?
Do you think HR can influence the outcome of employee satisfaction in an acquisition?
Do you see other crucial points which have not been mentioned yet?
What changes are you experiencing as a result of the acquisition?
On a scale of 1 to 10 with 10 being the highest, what are your current levels of commitment?
To what extent does the salary/compensation affect your level of performance?
In the current acquisition setting, do you think salary has anything to do with performance?
Does the acquisition affect the sense of belonging in the bank?
In the new joint setting of FMB and OIBM, is there a sense of security amongst the staff both old and new?
Does job security affect your performance?
Study Population
The study population for this study will be those OIBM employees that were retained and were transferred to FMB head office. The reason for this is these employees represent a good selection of the retained employees. The employees that were transferred to FMB head office were from literally across the country and from several branches. They are also from a range of different departments, such as HR, Credit, Admin, Finance and Corporate.

3.6 RESEARCH METHODOLOGY
3.6.1 Target Population and Sampling Methods
The target population for this research is staff of OIBM that were retained by FMB. The staff shall be from all levels of management. The employees to be interviewed are those who work in the head office as the head office has a good representation of all levels of management as well as several departments. Further, upon acquiring OIBM majority of the OIBM branches were closed and most employees who were retained were given roles at head office.

3.6.2 Data Collection Instrument and Source
This study is qualitative in nature and both primary and secondary data was used to achieve the information.
The primary data was achieved from the employees of FMB who were affected due to the acquisition. There was a use of questionnaires and interviews to come up with the primary data. The questionnaires used in this study were open ended to give the interviewee some flexibility in answering their questions instead of structured questions which might limit the interviewee. Open ended questions also gives room for answers to questions that the interviewer might not have accounted for.

The questionnaire and interviews are also economical and efficient. In this study the questionnaires were emailed ahead of time to give the interviewee the chance to respond.

The secondary data was gathered through the use of other available written material on the subject such as newspapers, press releases from FMB and other literature.

3.7 DATA ANALYSIS METHODS Before the questionnaires were processed, an exercise was conducted where only those that were completed were kept. This was to encourage uniformity and fairness. Since this research is mainly qualitative, the data was analysed by using averages and percentages. The data was analysed by using simple tabulations.
The answers were therefore categorised into similar categories in an attempt to identify patterns, associations and relationships between answers.

However it has to be noted that due to the data being collected by using open ended questionnaires it was in some cases vague as some answers were unique and wide ranging.

CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSION
4.1 INTRODUCTIONThis chapter deals with the analysis of the data that was collected from the interviews and questionnaires, in relation to the performance of employees due to the acquisition of OIBM by FMB.

This chapter shall therefore have findings and a discussion. The chapter has three sections, an analysis of the OIBM acquisition, a descriptive analysis of the information obtained from the respondents, and finally an analysis of employee performance post acquisition.
Forty questionnaires were administered to respondents in all three levels of management of FMB, only 35 were returned, this shows an 87.5% response rate.

In addition, they were several interviews with 8 respondents who were willing to have face to face interviews.

BACKGROUND ON OIBM ACQUISITIONAs has been explained previously, FMB acquired 100 percent shares in OIBM, as a result of this all staff and stock of OIBM automatically became FMB’s. Both FMB and OIBM employees were informed by use of an internal circular that OIBM had been acquired. In addition to that FMB had several press releases about the acquisition that can be found on the FMB website.
This acquisition also resulted in several OIBM branches being closed, for example Blantyre Market Branch and Fatima Branch. The result of this is that several people were still employed but left without positions.

As explained above, FMB is a commercial bank and OIBM was more or less a micro lending institution. This is two completely different formats. For example at OIBM they had a form of group lending where through groups, mainly in rural areas, an individual could borrow MK100, 000.00. While at FMB most loans are commercial and range in Millions and Billions. The acquisition however meant that these two groups of employees had to work together and co-exist.
Another vast difference between FMB and OIBM was the working hours. FMB works Saturdays and OIBM did not. But now OIBM employees were expected to follow suit and start working Saturdays which is a huge adjustment.

While the acquisition process was still ongoing, the employees were kept on the dark for about 4 months and most employees did not know what was going on. The acquisition happened in June 2017 and employees only got letters from FMB in September/October. This is when employees were told who is staying, being let go or being transferred. But during the preceding 4 months the OIBM employees were still expected to work as normal.
FMB has however continued to retrench employees and close branches, the latest being 200 employees retrenched in August 2018. Though it must be stated that the recent wave of retrenchments included both ex OIBM and FMB employees.

4.2 GENERAL INFORMATIONThe following is some general information that was gathered from the interviews and the questionnaire.

Majority of the staff who filled in the questionnaires had been with the bank (OIBM) for more five years (60%), the rest had been with the bank for a shorter period (1-5 years). The duration of employment is important because it shows the respondent understanding of issues and changes within the bank and the working culture. It must be noted that OIBM was founded in 2002. Therefore 60% of the respondents had been with OIBM for an influential period and were conversant with the influence of the acquisition on employee performance.

According to the questionnaires, acquisitions in general are perceived negatively. However 28.6% of the respondents stated that they viewed acquisitions as something that can be good. But it was noted that out of the 28.6% that viewed acquisitions as good, majority were in the top tier of management.
There was also 11.4 % that noted that they did not have a view on acquisitions. Below is a figure showing how the respondents viewed the acquisition. When analysing the questionnaires I divided the answers into three categories, positive view, negative view and neutral.

From the questionnaires, 74% of the respondents stated that the acquisition had impacted them negatively, with most stating that they had new responsibilities, and there roles had been changed. For example one used to be a branch manager but after the merger was made an administration officer. Three respondents however did state that the acquisitions had made a positive impact on them as they had either been promoted or they felt “recognised”.

All the respondents however did note that due to the acquisition and the changes brought about by the acquisition, they had lost some colleagues and they were not happy about this. They did also note that, even though they were relieved they still had jobs, they were not happy with the way their colleagues were treated upon retrenchment.

60% of the respondents stated that though they have adapted to the FMB culture, they struggled with it in the beginning. They stated the vast differences in the two banks. In addition, there seemed to be a consensus that very few felt welcome when they first started working as FMB employees. This was felt even more by those that were transferred to FMB offices or branches.

EMPLOYEE PERFORMANCE POST ACQUISITIONThe main purpose of this research was to find out the impact of the FMB/OIBM acquisition on performance of employees. This section will therefore deal with an analysis of the various aspects of acquisitions that can influence employee performance.

The findings have shown that 74% of the respondents were affected by the acquisition and even though it has been over a year since the changes started, they are still struggling with performance. This shows that a majority of the respondents felt that their performance was affected by this acquisition. These employees stated that their performance levels have dipped from when they were working at OIBM.
These 74% stated that they do not feel a sense of belonging or ownership to their work or to the bank. The consensus seems to be that they feel like they are targets and may get retrenched at any minute. 42.8% stated that though they are still employed by FMB, they have been looking for employment elsewhere and this has affected their performance.

Commitment to the job was only noted by a few respondents and it was noted that these employees were those either in the top tier of management or those who had been promoted.

74% said that they had, had a negative impact, such as demotion, being transferred or staying in the same positions but having benefits being removed. They all stated that due to this they have a negative view towards FMB as a whole and it affected their morale. Due to this they are not committed to the job at all and view their jobs as a means to an end. There was also a section that stated that they felt “unwanted” or not useful.

All the respondents stated that they felt that the acquisition was not handled in a good way and the human capital element was not taken into account. One respondent stated that they felt that the employees’ contribution to a successful bank was not taken into account and that was why there were no consultations or proper communication with the employees. 86.5% stated that had there been proper and clear communication with the employees during the whole process, both post and pre acquisition, there would have been more ease amongst the employees and that might have improved employee performance post acquisition.
17% of the respondents stated that their careers had been affected by the acquisition and the changes to the Bank. They stated that they had what they perceived as good positions while working for OIBM but with the FMB structure they felt that they had “gone down a step”. For example the respondent who was a branch manager and is now an administration officer. This respondent felt that they were on the right career progression but had now gone back a few steps on the career ladder.

It should also be noted that those employees who stated that they were discontent with their new surroundings were also the ones that stated that pay/compensation affected their performance. These employees interestingly were also the ones that were affected financially by the acquisition, for example they had benefits removed.

4.4 DISCUSSIONAs shown in the literature review, it appears that acquisitions are perceived negatively. They are perceived to be a shake to the status quo. Most employees seem to view them as something that will change things and most employees do not like change. However, if looking at the analysis, even though majority seemed to have a negative perception, it is not as black and white as good or bad. Some employees have a positive perception towards acquisitions. Some employees welcome the change that acquisitions bring.

It appears that due to anxiety of potential job losses or just general change employees view acquisitions negatively. This may result in a myriad of problems, such as absenteeism, poor performance, loss of self-confidence and low performance by employees. This research has shown that there was a lot of feelings of anxiety and worry among the employees even post acquisition. Most employees felt that their jobs were not safe and this led to bad performance or low commitment to the jobs. There was a sense of loss, grief, anger and confusion amongst the employees, mainly due to little or no communication from FMB. There was a feeling of detachment from their duties, resentment towards FMB for changing the status quo that they were used to and loss of identity and culture.

As result of this the respondents were stressed and there was tension which led to low job performance. Trying to adapt to the culture of FMB and dealing with new superiors as well did more damage to employees’ self-esteem and affected their work. All this led to low levels of job satisfaction.

This research has shown that acquisitions can be extremely challenging to employees of both the acquired and acquiring companies. The uncertainty and the adapting to the new changes can have a profound impact on employees, especially on their performance.
CHAPTER 5: SUMMARY OF KEY FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 INTRODUCTIONIn this chapter, the key findings of this research will be discussed as well as any conclusions and recommendations, all this is based on the key objectives of the study. This is done after identifying the background to the problem and the objectives. A literature review was done, as well as an explanation on the methodology used to collect the relevant data. The last chapter analysed the collected data. This study was researching whether there was any impact on the performance of employees due to the acquisition of OIBM by FMB.

5.2 SUMMARY OF KEY FINDINGSThe general objective of this research was to find out if there was any impact on the performance of employees after the OIBM acquisition by FMB.
In order to achieve this a questionnaire and interviews were used to find out if employee performance was affected. The respondents chosen were 40 employees of OIBM who were retained by and are still working at FMB. This ensured that the main source of data is primary data. These respondents were those that are currently working at FMB head office in Blantyre as the head office has a good representation of all levels of management as well as employees from different employees.

The study finds that a majority of the respondent’s performance was affected by the acquisition and this impact was negative. There was a small percentage however that indicated the impact was positive. The performance levels were affected because the employees had a sense of uncertainty and there was a lot of anxiety. The respondents also felt that there was little or no communication during the whole process. In addition, there was a lack of sense of belonging by the respondents in their new roles or new bank.

The employees also had no job security and most felt as if they were targets in the event of any retrenchments. There was also a sense of anger and resentment towards the bank, which in turn affected the performance of employees.

5.3 CONCLUSIONIn conclusion, the findings of the study show that due to the negative perceptions of acquisitions, there was an impact on employee performance. Majority of the respondents stated that had there been proper communication with the staff as well as post acquisition communication the employees’ performance might not have been affected.

The study also concludes that acquisitions if not handled correctly negatively impact employees. The study has shown that there must be an active policy to handle the human element of the acquisition in order to manage the fear, anxiety, uncertainty and loss of sense of belonging by the employees.

5.4 RECOMMENDATIONSThe data gathered showed that even though a majority showed that the acquisition had a negative impact, not all of it was negative. Showing that if handled in the right manner, the negative perceptions of acquisitions could be changed.

The recommendation here would be to encourage companies that are thinking of acquiring another company or those that have acquired a company should have a policy to handle change management. This policy must include how to handle employees during the whole acquisition process as well as post qualification. This policy should tackle the negative perceptions such as fear, anxiety and discontentment.
In addition the bank should increase their training and induction of new employees. By new they should include those who have joined due to any acquisitions. The training should not just focus on the work to be done but also the work place and culture as this can increase a sense of belonging. This can lead to the new members acquiring the relevant skills and knowledge which would lead to improved self-esteem and better performance.

5.5 FURTHER RESEARCHThis study focused mainly on the acquisition of OIBM by FMB and only 35 employees filled in their questionnaires out of a targeted 40. Further research can be done on other banks in Malawi or the region as acquisitions are a part of doing business and will continue to happen. The further studies can include a wider range of respondents.

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Armstrong, Michael. Performance Management. Key strategies and practical guidelines. London: Kogan Page, 2006.

Bibler, R.S. The Arthur Young management guide to mergers and acquisition. New York: John Wiley & Sons, 1989.

Bohl, D.L. “Tying the corporate knot.” American Management Association, 1989.

Brockner, Joel, Steven Grover, Tom Reed, Rocki DeWitt, and M. O’Malley. “Brockner, Joel, Steven Grover, TSurvivors Reactions to Layoffs: We Get By With a Little Help From Our Friends.” Brockner, Joel, Steven Grover, Tom Reed, Rocki DeWitt, and M. O’Malley. “Survivors ReaAdministrative Science Quarterly, 1987: 526-542.

Camara, D. and Renjen, P. “The secrets of successful mergers: dispatches from the front lines.” The Journal of Business Strategy, Vol. 25, Issue 3, 2004: 10-14.

Cartwright, S., ; Price, F. Managerial preferences in international mergers and acquisitions: An international comparison. Advances in Mergers. Amsterdam: JAI Press, 2003.

Chakrabarti, R., Gupta-Mukherjee, S., ; Jayaraman, N. “Mars-Venus marriages:Culture and cross-border M&A.” Journal of International Business Studies, 2009: 216-236.

Cutcliffe, M. Marks and J. Making mergers work. Virgina: American Society for Training and Development, 1998.

Davy, J.A, Kinicki,A, Kilroy J and Scheck C. “After the merger: Dealing withpeople’s uncertainty.” Training and Development Journal, 1989: 57-61.

Ehms, Angeliks. “THE ROLE OF HUMAN RESOURCE MANAGEMENT IN THE CONTEXT OF MERGERS AND ACQUISITIONS.” Dusseldorf, 2016.

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Jackson, Randall Schuller and Susan. “HR Issues and Activities in Mergers and Acquisitions.” European Management Journal Vol. 19, No. 3, 2001: 239-253.

Jain, Ritu Dixit and Trilok Kumar. “HR’s Role in Mergers & Acquisitions.” Advanced Research Publications, 2014.

Khamula, Owen. Opportunity Bank of Malawi in job cuts 250 employees, half of its workforce. 26 January 2017. https://www.nyasatimes.com/opportunity-bank-malawi-job-cuts-250-employees-half-work-force/.

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