March, 2010

Recent merger waves in most organizations fail to increase organizational performance and sustain competitive advantage. Several U.S. organizational mergers failed to sustain market competition and retain employees. Most consolidated and merged banks in Nigeria are in distress and have failed to increase organizational performance. Currently, organizational leaders are facing challenges regarding how to integrate two or more merged cultures to maintain employee commitment, job satisfaction, and employee retention. About 75% of the mergers fail because of lack of cultural integration. Some effects of the merger failure in the banking industry include high employee turnover, decrease in job satisfaction, and reduction in shareholder value. The current quantitative, descriptive, correlational research study collected data related to a merged bank in Abuja, Federal Capital Territory (FCT) of Nigeria to examine if a significant relationship existed between organizational culture and organizational performance. The study results indicated that a measure of the combination of cultural traits (mission, involvement, consistency, and adaptability) had a significant relationship with each of the organizational performance measures (employee commitment, job satisfaction, and employee retention). Findings from the study revealed that lack of culture integration during merger and acquisition contributed to low performance merger failures in the Nigerian banking industry. Thus, merger failures link to inadequate employee commitment, reduction in job satisfaction, and increase in employee turnover that indicate lower organizational performance. The study implication is that organizational cultural differences hinder organizational performance.

Reference: Okoro, H. M. (March, 2010). The Effects of Organizational Culture and Performance: Merger in the Nigerian Banking Industry. Paper Presentations at “The Symposium on Global Mindset Development in Leadership and Management”, Vol 2, Num 1.