Merger system Creating Dark Side Merged Financial Institution : Narayan Paudel

In the process of merger or amalgamation or acquisition, the assets and liabilities of two or more organizations are combined to create one organization and the remaining companies are merged with one of the companies prior to the merger or merger, or the legal status and existence of all companies are terminated and a new organization is born.

In recent times, banks and financial institutions, especially large commercial banks, have been merging with each other or going through the acquisition process, and this trend has now also started in insurance companies. The regulatory bodies themselves have encouraged it and even pressured it if necessary.

In order to make the numerical presence more systematic and qualitative, the process of merger or merger or acquisition can prove to be a strategic business tool. It is said that cost effectiveness through the process of merger, merger and acquisition, increased efficiency through the benefits of frugality, increased income, and due to collective existence and wide network, i.e. geographical scope, the range of customers is expanded and helps in the value addition of the organization.

In addition to being able to take maximum benefit from the available managerial skills, the capital base is strengthened and the business market share also increases. It is said that the energy or efficiency obtained by combining two or more organizations is more than that of a single existence. Since this process is also a contract to gain something and lose something, the interests or interests of all stakeholders have influenced or tried to influence the decision.Actions such as amalgamation, merger and acquisition of organizations should be considered as a necessary and appropriate option for organizational restructuring.

However, it also has its own problems and challenges. It requires prior agreement and understanding among the participating organizations regarding some major issues. In the pre-merger situation, how to evaluate the shares and how to adjust the existing shareholders will be the main issues to be addressed. Reorganization of the board of directors, number of employees, matching of levels and services, management of the existing institutional network and matching of organizational culture, etc., should be discussed.

Now many problems have appeared in some organizations that have gone to merger.

It has also been seen that the chief executive officer only rips off the employees of the organization where he was previously employed, embraces the policy of favoritism, i.e. discriminates, transfers employees who do not suit him to creating unsuitable positions and forces them to resign without a role.

It was also found that this kind of trend has created such dissatisfaction and bitterness in the staff that the merger would have been disguised as nothing. Therefore, only if this aspect can be properly addressed by the stakeholders, the real benefits of the merger can be taken.