Abstract
Corporate mergers and acquisition has become a highly popular strategy in recent years. Thus, much attention has been focused on its outcomes. It has served as a substitute for innovation, a greater means of diversification. The banking sector is often referred to as an engine growth of the economy. The intermediation role which the sector plays in national development cannot be overemphasized. Thus, given the recent consolidation exercise in the Nigerian banking sector, we explored the impact of mergers and acquisition on managerial commitment in this paper. We adopted the descriptive survey method and primary data were obtained using oral interview and questionnaire. The population of this study comprised all consolidated banks in Nigeria and the total sample size for this study was 384 respondents from commercial banks in South East Nigeria. The Chi-square (X2) non-parametric statistic was used to test the hypotheses. The results revealed that mergers and acquisitions have significant positive effect on managerial role and commitment of managers of commercial banks in Nigerias South East Region. We, therefore, recommend that incentive measures such as improved pay and good working environment should be promoted in commercial banks during mergers and acquisitions as these will further enhance managerial commitment.
Highlights
Over the past decade, a lot of research has been devoted to whether managerial commitment is enhanced through mergers and acquisitions
Managerial commitment is vital for the success of this important sector of the Nigerian economy. It is against the importance of the banking sector that we explored the impact of mergers and acquisitions on managerial commitment in the Nigerian banking industry
Executive compensation tends to increase with firm size, so managers may hope to achieve personal financial gains by engaging in mergers and acquisitions (M&A), at least in part, the higher observed compensation of the managers of larger institutions rewards greater skill and effort
Summary
A lot of research has been devoted to whether managerial commitment is enhanced through mergers and acquisitions. Haynes and Thompson (1999) had explored the productivity effects of acquisitions for a panel of 93 UK building societies over the period 1981-1993 with results indicating significant and substantial productivity gains following acquisition Through, these gains were not found to have resulted from economies of scale, there were found to be consistent with a merger processes in which assets are transferred to the control of more productive managements. The extent mergers and acquisitions serves as a substitute for innovation, energy and attention required during negotiations, increased use of leverage, increased size, and the greater diversification may have on managers' risk orientations Because of these effects, managers may reduce their commitment to innovation (Hitt, Hoskisson and Ireland, 1990). In section five, we provided recommendations based on evidence, inclusive of our conclusion
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