The study set out to examine the effect of mergers and acquisitions on employee morale using First City Monument Bank, Calabar's main branch as a case study. The need for the study arose from the prevalence of information in the branch that indicated low morale and dissatisfaction among the staff due to various corporate restructuring in form of mergers and acquisitions. Among problems investigated in the study are job stress, role conflicts, and frustration among staff. This scenario revealed poor management of the restructuring process by the administrators. Four hypotheses were formulated and tested at a 99 percent confidence interval using a linear regression analysis technique and correlation. The research design used was a case study approach. From a target population of 65 respondents, a random sample of 30 was selected using simple random sampling. Data pertaining to the study were collected using a self-administered questionnaire. The findings revealed that mergers and acquisition was a positive significant predictor of staff morale in the bank. On the other hand, the working environment, corporate governance policies had a significant positive effect on staff confidence, zeal to take up newer tasks, employee engagement/retention, and job satisfaction. For that reason, the study concluded that mergers and acquisitions have a significant effect on staff morale. Basing on the findings of the study, the researcher recommended a uniform treatment (in terms of employee benefits, contracts, and promotions) for both employees of the acquired firm and parent company in order to boost productivity and avoid conflict of interest among both employees and management of the parent company and subsidiary.


Title Page - - - - - - - - - i

Approval Page - - - - - - - - ii

Declaration - - - - - - - - iii

Dedication - - - - - - - - - iv

Acknowledgement - - - - - - - v

Abstract - - - - - - - - - vi

Table of Contents - - - - - - - vii


1.1Background of the Study-----

1.2Statement of General Problem----

1.3Objective of the Study------

1.4Research Questions------

1.5    Hypothesis   -      -      -      -      -      -      -        -        -        

1.6Significance of the Study-----

1.7Scope of the Study------

1.8Definition of Terms------


2.1 Introduction - - - - - - - - -


2.3 CONCEPTUAL REVIEW- - - - - - - - -

2.5.1 Types and Delivery Channels of internet------

2.5 EMPIRICAL REVIEW- - - - - - - - -


3.1 Introduction - - - - - - - - -

3.2 Research Design - - - - - - - -

3.3Data Collection Method-------

3.4 MODEL SPECIFICATION- - - - - - - -

3.5 METHOD OF DATA ANALYSIS - - - - - - -


4.0 Introduction - - - - - - - - -

4.1 Data Presentation and Analysis - - - - - -

4.2 Characteristics of the Respondents - - - - -

4.3 Data Analysis - - - - - - - - -

4.4 Testing Hypothesis - - - - - - - -

4.5 Summary of Findings - - - - - - - -

4.6 Discussion of Findings - - - - - - -


5.0 Introduction - - - - - - - - -

5.1 Summary - - - - - - - - - -

5.2 Conclusion - - - - - - - - - -

5.3 Recommendations - - - - - - - -

References ----------

Appendix - - - - - - - - - -


The Nigerian banking industry has witnessed tremendous changes and expansion since the mid-1980s. Unfortunately, the growth and expansion in the sector are not the manifestations of a sound or vibrant banking system known anywhere in the world. Most banks in Nigeria are characterized by an inadequate capital base, poor services, a huge rate of bankruptcy, and lack of management expertise, bad debt syndrome, and greater exposure to fraud. The Central Bank of Nigeria on July 6th, 2004, announced the recapitalization of the banking sector from N2 billion to N25 billion with effect from 1st January 2006. This was with a view to make the sector internationally competitive, sound and improves its ability to provide credit to all the productive sectors of the economy. In order to meet this obligation, banks embarked on strategies of merger and acquisition, floating of new shares, and so on. At the end of the exercise, 25 new banks emerged (Olaitan 2006).

Managing and maintaining employee morale is one of the most important functions of effective HR. The cliché that a happy worker is a productive worker is a cliché for a reason. While it may be more accurate to say that an unhappy worker is an unproductive worker, every HR professional knows the value of good staff morale.  As a result of the bank recapitalization process that commenced in 2005, commercial banks over a hundred had to close shops or merge with another bank to still be in business. The effects of mergers and acquisitions in the banking industry of Nigeria on employee morale can be significant if the reorganization of the business is not handled effectively. During any merger or acquisition effort, there are at least two groups of employees involved, often coming from organizations with distinctly different cultures and styles. Learning a new culture can be challenging, but is especially so when employees are faced with uncertainty about what the future may hold and whose job is on the chopping block. Bank recapitalization which was effective from 2006 is aimed at making Nigerian banks stronger and better in-order to finance all sectors of the economy including the major drivers of the economy-Small and Medium Scale Enterprises. This effort to stabilize the banking industry of Nigeria and make it financially strong and healthy will definitely affect employee morale and productivity-either positively or negatively.

1.2 STATEMENT OF THE PROBLEM Change is often difficult for employees, especially if they were not directly involved in decisions that impact their jobs. During mergers and acquisitions, change can be especially difficult and can lead to stress which can have a negative impact on morale if not handled effectively (Iloh, 2012). Communication is critical during these times. To the extent, possible organizations should strive to share as much information about what is happening and, most importantly, how the changes will affect individual employees, as they possibly can.

When two or more organizations come together, a culture clash is inevitable. Rarely do two organizations have the same culture. As these groups get to know each other there will inevitably be conflict and perceived or real losses on both sides, says Pophal. Employees may fear losing their jobs or losing opportunities that they formerly had. This fear can negatively impact productivity and may even result in employees leaving the company to seek jobs elsewhere. It is important for organizations and their managers and HR staff to recognize this and to provide opportunities for employees to get to know each other, to openly address concerns, and to work together toward the creation of a new culture that will merge the best of both worlds (Leigh, 2008).

When employees are concerned about their own job security they are more likely to become competitive with others and this competitiveness can result in conflict--sometimes even violence. During mergers and acquisitions, it is important for managers and HR professionals to be alert to signs of negative competition and to ensure that employees are being kept informed about impacts on their jobs and their futures with the company. While some competition is good, competition is not good when it creates tension and negative conflict in the organization (Liegh, 2008)

1.3 OBJECTIVES OF THE STUDY The main objective of this study is to examine the effects of mergers and acquisitions on employee morale in First City Monument Bank (FCMB), Calabar Main branch. Specific objectives of the study are:

To examine the effect of merger and acquisition on employees’ confidence in a given task in FCMB. To appraise the effect of merger and acquisition on employees’ will to remain with current employer. To examine the effect of merger and acquisition on employees’ zeal to take on the newer tasks. To examine the effect of merger and acquisition on employee job satisfaction with respect to new company policies, reviewed employees’ benefits and working conditions.

1.4 RESEARCH QUESTIONSIn order to guide the study and achieve the research objectives stated above, the following research questions apply to the study:

What effect do mergers and acquisitions have on employees’ confidence in a given task in FCMB? What effect do merger and acquisition have on employees’ will to remain with current employer? What effect do mergers and acquisitions have on employees’ zeal to take on the newer tasks? What effect do mergers and acquisitions have on employee job satisfaction with respect to new company policies, reviewed employees’ benefits, and working conditions?


Ho: There is no significant relationship between merger and acquisition and employee confidence on a given task.

Hi: There is a significant relationship between merger and acquisition and employee confidence on a given task.

Ho: There is no significant relationship between merger and acquisition and employee retention.

Hi: There is a significant relationship between mergers and acquisitions and employee retention.

Ho: There is no significant relationship between merger and acquisition and employee Zeal to take up newer tasks.

Hi: There is a significant relationship between merger and acquisition and employees taking up newer tasks.

Ho: There is no significant relationship between merger and acquisition and employee job satisfaction. Hi: There is a significant relationship between mergers and acquisitions and employee job satisfaction.

1.6 SIGNIFICANCE OF THE STUDY The study will aid organizations currently undertaking strategic changes through mergers and acquisitions to design and implement corporate governance policies that will benefit both employees in the acquired firm and that of the parent company. Various insights into how confidence, zeal, commitment, and overall productivity of employees can be affected by mergers and acquisitions will be clearly highlighted in the study to further enlighten managers of various organizations on proper ways to go about merging and acquiring other firms without risking productivity of employees. Furthermore, the study will serve as a guide to student researchers who may wish to explore more into the effects of mergers and acquisitions on the overall performance of an organization.

1.7 SCOPE OF THE STUDY The study is delimited to First City Monument Bank Plc, Calabar main branch. All findings and recommendations from the study are based on issued questionnaires to employees of the bank. A wider scope could not be covered by the researcher due to time and financial constraints.


1.9 LIMITATION OF THE STUDY Funds were in very short supply to the researcher and the researcher could not purchase some valuable print materials needed for this project at the time they were most needed. The expenses on transportation to FCMB are so enormous because of many occasions the researcher was not attended to and would have to leave without the information required. Another constraint faced by the researcher was a limited time for the completion of the project and engagement in other academic activities which occupied most of the researcher’s time. The research was faced with some restrictions in the area of the case study; this is due to bureaucratic reasons in the administrative procedures in the Organization. It was not possible to get all the necessary information that would have helped in finishing the work on the stipulated time. The process of going through some records to get data was a very tedious and formidable task as some materials needed are tagged “TOP SECRET”.

1.10 DEFINITION OF TERMS Merger and Acquisition (M&A): Mergers and acquisitions (M&A) are both aspects of strategic management, corporate finance and management dealing with the buying, selling, dividing, and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity, or using a joint venture. Employee: An employee is anyone who has agreed to be employed, under a contract of service, to work for some form of payment. This can include wages, salary, commission, and piece rates. Employee Morale: Employee morale, in human resources, is defined as the job satisfaction, outlook, and feelings of well-being an employee has within a workplace setting. FCMB: First City Monument Bank Productivity: Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. REFERENCES Liegh, R (2008). The Effects of Mergers and Acquisition on Employee Morale. Copy obtainable at  Olaitan, L. (2006). An empirical evaluation of the corporate strategies of Nigerian companies. Journal of African Business, 2(2), 45-75. Iloh V. C. (2012). The Effect of Bank Consolidation on Small and Medium Scale Enterprises in Nigeria. Lagos: Longman Nigeria Plc.




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