Perceived Effect of Merger and Acquisition on Employee Satisfaction: A Case

from Global IME Bank Limited

BY

Sona Panta

Symbol Number: 12012/13

TU Registration Number: 7-2-0446-0121-2013

A Summer Project Report Submitted to

Faculty of Management, Tribhuvan University

in partial fulfillment of the requirements for the degree of

Bachelor of Business Administration

Kathmandu

March, 2017

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 STUDENT DECLARATION

This is to declare that I have completed the Summer Project entitled “Perceived Effect of
Merger and Acquisition on Employee Satisfaction: A Case From Global IME Bank
Limited” under the guidance of Mr. Prakash Kumar Gautam in partial fulfillment of the
requirements for the degree of Bachelor of Business Administration at faculty of Management,
Tribhuvan University. This is my original work and I have not submitted it earlier elsewhere.

March, 2017 Sona Panta

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 CERTIFICATE FROM THE SUPERVISOR

This is to certify that the Summer Project entitled “Perceived Effect of Merger and Acquisition
on Employee Satisfaction: A Case From Global IME Bank Limited” is an academic work
done by Ms. Sona Panta submitted in the partial fulfillment of the requirements for the degree of
Bachelor of Business Administration at Faculty of Management, Tribhuvan University under my
guidance and supervision. To the best of my knowledge, the information presented by him/her in
the Summer Project report has not been submitted earlier.

Signature of Supervisor

Prakash Kr. Gautam

March, 2017

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 ACKNOWLEDGMENTS

This study entitled “Perceived Effect of Merger and Acquisition on Employee Satisfaction: A
Case From Global IME Bank Limited” has been conducted to fulfill the partial requirement
for the degree of Bachelor of Business Administration, Tribhuvan University.

First of all, I would like to express my sincere gratitude to the respected supervisor Mr. Prakash
Kumar Gautam for his valuable time and consideration throughout the entire period of the
project. Without his support, this research report would not have been completed on time.

My deepest gratitude goes to Program Coordinator Pramod Adhikari for his valuable support.
Without his support, this research report would not have been completed. Equally, I pay due
respect to the respondents for their valuable information.

Similarly, my deepest thank goes to my family members for their patience and emotional
support. Finally, I would like to thank my friends for their support, cooperation, encouragement
during the time of preparing this project work.

Sona Panta

March, 2017

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 Table of Contents
Content
Student Declaration .........................................................................................................................
Certificate from the Supervisor .....................................................................................................
Acknowledgments ............................................................................................................................
List of Tables ....................................................................................................................................
List of Figures ...................................................................................................................................
Executive Summary…………………………………………………………………

CHAPTER I .....................................................................................................................................
INTRODUCTION............................................................................................................................
1.1 Context Information ...............................................................................................................1
1.2 Purpose of the study ...............................................................................................................4
1.3 Significance of the study ........................................................................................................5
1.4 Literature Survey ....................................................................................................................6
1.4.1 Review of Major Studies .................................................................................................6
1.4.2 Review of Nepalese Study.............................................................................................11
1.5 Conceptual Framework ........................................................................................................14
1.6 Operational Definition of Variable .....................................................................................15
1.7Research Methodology .........................................................................................................17
1.7.1 Research Design ............................................................................................................17
1.7.2 Research Approach ........................................................................................................17
1.7.3 Population Sample .........................................................................................................18
1.7.4 Sampling Procedure.......................................................................................................18
1.7.5 Data Collection Tools/Technique ..................................................................................19
1.7.6 Data Analysis Tools ......................................................................................................20
1.7.7 Models and variables .....................................................................................................20
1.8 Organization of the study ....................................................................................................20
CHAPTER II ....................................................................................................................................
DATAPRESENTATION AND ANALYSIS ..................................................................................
2.1 Presentation and analysis ......................................................................................................22
2.1.1 Respondent Profile ........................................................................................................23
2.1.2 Responses regarding does merger affect employee’s performance in the bank ............25

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 2.1.3 Responses regarding were employees informed about the merger before the final
decision ...................................................................................................................................26
2.1.4 Response regarding were employees involved in the merger process ..........................27
2.1.5 Responses regarding job responsibility change after merger ........................................27
2.1.6 Responses regarding is merger necessary in the context of Nepal ................................28
2.1.7 Responses regarding bank can provide good working environment after merger ........29
2.1.8 Response regarding bank can provide good remuneration after merger .......................30
2.1.9 Responses related to ranking questions .........................................................................31
2.1.10 Pay/ Remuneration of employees satisfaction .............................................................34
2.1.11 Job Security of employees satisfaction........................................................................36
2.1.12 Employee Performance of Global IME Bank employees ...........................................38
2.1.13 Organization Culture of Global IME Bank employees ...............................................40
2.1.14 Perceived effect on Employee Satisfaction of Global IME Bank ...............................42
2.1.15Correlation analysis ......................................................................................................44
2.1.16Regression analysis ......................................................................................................45
2.2 Major findings and discussion .................................................................................................46
CHAPTER III ..................................................................................................................................
CONCLUSION AND ACTION IMPLICATIONS .....................................................................
3.1 Conclusion ...............................................................................................................................51
3.2 Action Implications ..................................................................................................................51
3.3 Scope for future research .........................................................................................................52
References .........................................................................................................................................
Appendix ...........................................................................................................................................

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 LIST OF TABLES

Table Title Page

no no

1.1 Review of Major Studies 6

1.2 Reviews of Nepalese study 11

1.3 Name of 10 Branches of Global IME Bank along with the number of 18
respondents

2.1 Demographic characteristics of respondents 23

2.8 Ranking scores of major reasons for merger in Nepalese banks 32

2.9 Ranking scores of importance of merged banks 33

2.10 Respondent’s responses regarding Pay/Remuneration 34

2.11 Respondent’s responses regarding Job Security 36

2.12 Respondent’s responses regarding Employee Performance 38

2.13 Respondent’s responses regarding Organization Culture 40

2.14 Respondent’s responses regarding Employee Satisfaction of Global IME Bank 42

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 LIST OF FIGURES

Fig Title Page

no. no.

1.1 Conceptual framework 14

2.1 Responses regarding does merger affect employee’s performance in the bank 25

2.2 Responses regarding were you informed about the merger 26

2.3 Responses regarding were employees involved in merger process 27

2.4 Response regarding is merger necessary in the context of Nepal 28

2.5 Response regarding is merger necessary in the context of Nepal 29

2.6 Response regarding bank can provide good working environment after merger 30

2.7 Responses regarding bank can provide good remuneration after merger 31

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 EXECUTIVE SUMMARY

The Nepalese banking sector is presently facing huge problem and is in critical juncture. So in
order to cope with this problem Nepal Rastra Bank has directed the banking institutions to go in
the process of merger and acquisitions. NRB has provided several benefits to the merging
institutions. Responding to the benefits by NRB, the banks and the financial institutions of the
country are opting in the process of merger. Merger has become more popular through past
years. However, financially they are not always successful. A reason might be that employees
leave the organization and are not satisfied with the organization. This has been studied in this
research.

Many literatures have revealed that people issues are more important in every change process
like merger and acquisitions. Job satisfaction is determined by various factors in the organization
such as achievement, advancement, interpersonal relations, working conditions, policy, and
personal life. Though the merger trend is increasing in Nepal, it has witness several challenges
which making the success of merged institution in doubt.

The major objective of this study is to evaluate the effect of merger and acquisition on
employees of Global IME Bank Limited.

This study is based on primary sources of data. The primary sources of data have been used to
assess the opinion of respondents with respect to perceived effect on employee satisfaction in the
Global IME bank of Nepal and analyze their perception with respect to factors affecting
employee satisfaction. The set of 70 questionnaires were distributed to employees in 10 branches
of Global IME bank. The empirical model employed in this study intends to analyze the
relationship of employee satisfaction to the personal and organization factors of employee
satisfaction. The data was collected through communicating with employees, assistant level of
the merged bank. 5 point Likert scale was used for this study. It is widely used rating scale that
requires the respondents to indicate a degree of agreement or disagreement with each of a series
of statement. All the employees are asked to give their view within 5 options. For the analysis
and interpretation of the data, Excel and SPSS was used. Total responses collected from the
respondent are coded and tabulated into SPSS worksheet. Depending upon the nature of the
question such as multiple choices, ranking scale and Likert Scale, the coding was followed as per

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the rule. The Descriptive techniques like Mean, Standard deviation, Weighted Average Mean,
Coefficient of correlation, Regression are used to analyze the data collected for this study.

The found that pay remuneration has positive relationship with employee satisfaction of merged
Global IME bank. It indicated that higher the job security, employee performance and
organization culture higher would be the employee satisfaction of merged bank.

The major conclusion of the study is that a factor of merger of Global IME Bank greatly
influences employee satisfaction. The result shows that employees of Global IME bank satisfied
with responsibility of job is ranked highest for pay/ remuneration of merged bank. Likewise,
satisfied with the work assigned is ranked highest for job security. The study also showed that
achievement of goals of employees through merged bank is ranked highest for employee
performance. The study also revealed that employee enjoy working with the employee of
different cultures is ranked highest for organization culture. Similarly, the study showed that
employees’ believe that merged banks motivates employees for their job satisfaction.