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MERGERS AND ACQUISITIONS IN BANKING SECTOR-A STUDY FROM HR PERSPECTIVE

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FOCUS
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Globalization paved way for competition Economies exploring better strategies Challenges, co-petition, survive Banking Sector –Mergers and Acquisitions Late seventies, fillip in the post-liberalized period Consolidation, result orientation and effectiveness Financial aspect along with other factors

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Secondary Sources Different countries of the world Issues and activities of HR in Banks Basic statistical tools Build better future Tentative models 3 .METHODOLOGY       Conceptual Paper.

restructuring Expansion and diversification Core competencies.Mergers & Acquisitions     Economic reforms. fillip after 1994 takeover code formulated United States in 1890-1904 (first phase) end of the World War-II (2nd phase) India 1180 proposal involving 2400 companies during 1976-1986  4 .

2 billion Deregulation. mid-sized industries strategy to avoid being acquired For achieving efficiency. cost effectiveness Dynamics. competition. businesses of the companies    5 .    1995 USA– electric power industry Banking sector mergers valued at -$37. visionary and component & quality improving Merger-two/ more companies combine to one company Amalgamation of assets. liabilities shareholder’s interest.

consolidation To overcome slow growth & low profitability 6 To enhance retail loan portfolio. reducing NPAs Improving performance Reviving sick condition of the financial institutions e.Madura. 2000) Developed countries import role in sell and buy . Oriental Bank of Commerce & GTB Bank Roy (2003)public and private sector merging M & As growth worldwide @42% a year (UNCTAD.g. merging of HDFC & Times Bank. Centurion Bank & Bank of Punjab.Merger-absorption. ICICI & B.

000 jobs For enhancing productivity at a lower cost Any –time. Integration failure( ILO ) Failure –differences in culture. Depersonalization in financial relationship Scandinavian countries more degree of flexibility for M & As Customer’ attitude not positive for giving personal details in internets Sharp reduction of no. Any where Banking system. of branches Even employees are reluctant to friendly takeovers .HR DIMENSION OF M & As          7  Jacques Altali –in next twenty years no more than four/ five global firms and millions of small temporary firms Public Sector Banks shed over 90. customers desire ness. M & As fail—staff hostility.

  Cultural differences creating disappointment UK’s Morgan Grentell Group acquiring Germany’s Deutsches Bank Loss of jobs USA: Chemical Bank &Chase Manhattan Bank eliminated 12000 jobs    HUMAN FACTOR IS NEGLECTED Loss of talented resources -South Africa. Scandinavian countries. South East Asian coutries. 8 .

/ bank 3467 3411 18 3029 3172 19 3252 2467 23 4177 2200 24 4639 2006 24 5134 Emp/b 17 ankunt Popula 2981 tion/ba nk unit 9 .Table: HR of Czech Republic Bank indicat 1994 ors emplo yees 1995 1996 1997 1998 1999 58920 61073 60137 57082 52760 48955 Emp.

Tunisia.   10 . Competency building. Japan and Australia. CHALLENGES Indian Banking Scenario: M & A is a burden Integration of diverse backgrounds a difficult task Managing HR in different phases of M & As Cope with changing environment. Canada. European countries HR issues not considered importantly 1990 London recorded less than 10000 Practices in different countries like Western Europe.  Australia. United States. United Kingdom.

 INFORMATION SOCIAL OBLIGATIONS NOTIFICATION COMPENSATION REDPLOYMENT LAWS AND PRACTICESOF THE COUNTRY 11 .

Figure-II: Problematic Issues in M & As STRESS IR CLIMATE RESISTANCE SOCIAL FABRIC DEMOTIVATION CO-DETERMINATION LOW MORALE SOCIAL DIALOGUE 12 .

Figure-III: HR Activities in M & As PREM & A PHASE M&A PHASE POSTM & A PHASE • INVOLVEMENT • INFORMATION SHARING • INTEREST OF STAKE HOLDERS • CONFIDENCE BUILDING • FEAR PSYCHOSIS • POSITIVE OUTCOME • CHANGE MANAGEMENT •TRAINING & DEVELOPMENT •RESKILLING & CULTURAL INTEGRATION • APPRAISAL SYSTEM • REDEPLOYMENT FINANCIAL NECESSITIES SOCIAL RESPONSIBILITIES 13 ( PRE-COMBINATION…………COMBINATION………………SOLIDIFICATION ) .

Figure-IV: Impact of M & As Mergers & Acquisitions • SECTORAL EMPLOYMENT • Decline in permanent Employment • Job insecurity • Job instability •Non-standard forms Of work • Branch Closure • Staff Retrenchment • Employment Mobility and Turnover high Cost Savings ( Reduce operating costs. general trend) Corporate Restructuring Career and Succession plans Small and Medium sized enterprises Loss of Quality of service Indirect Unorganized Employment ESSENTIAL • Commitment • Competent • Cooperate 14 . increase income-cost ratios ) Skill up gradation ( obsolete.

training & development activities Involve Trade Unions in decision making process Talent retention strategy Recruit specialist officers Performance linked incentive 15 .SUGGESTIONS:         Greater care for Human Resources Regulatory framework by Govt. should emphasize the HR Interest of both the banking industries should be taken Communication.

it is the time to dare and endure. “This is no time for ease and comfort. cultivate trees.” Winston Churchill 16 . Where the vision is for five years. cultivate people. Where the vision is eternity. cultivate flowers.VISION  Where the vision is for one year.

SUCCESS Human Resource Finance Technology 17 .

(1.9) (9.1) Task oriented (9.1) 18 . (1.9) Team management Task Management People oriented Country club Management Impoverished Management MIDDLE OF THE ROAD MGT.

selling.conclusion: Leadership Development -Front line managers with HR skills • Win-win situation • Telling. delegating. participative: requisite skills • Upanishad: sahana Bhabatu. tejaswinam aditmastu ma vid Visa vahe. .sahanabhunaktu. sahabiryam karababahe. om santih. 19 THANK YOU ALL…………. om santih. om santih.

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