Abstract
This chapter takes into consideration the effects of radical changes in the context of mergers and acquisitions in the UAE’s banking industry and relates the findings to the existing literature, drawing on previous cases discussed in western studies. The analysis focuses on employees’ psychology after mergers, their attachment to organizational culture and their work productivity. The chapter draws on the analysis of the merger of the UAE’s two largest banks, National Bank of Abu Dhabi and First Gulf Bank.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Abu Elanain, H. M. (2010). Testing the direct and indirect relationship between organizational justice and work outcomes in a non-Western context of the UAE. Journal of Management Development, 29(1), 5–27.
Ager, D. L. (2011). The emotional impact and behavioral consequences of post-M&A integration: An ethnographic case study in the software industry. Journal of Contemporary Ethnography, 40(2), 199–230.
Ahmad, M., & Lambert, T. (2019). Collective bargaining and mergers and acquisitions activity around the world. Journal of Banking & Finance, 99, 21–44. Retrieved October 18, 2019, from https://www.sciencedirect.com/science/article/pii/S0378426618302516
Akben-Selcuk, E., & Altiok-Yilmaz, A. (2011). The impact of mergers and acquisitions on acquirer performance: Evidence from Turkey. Business and Economics Journal, 22, 1–8.
Al-Ali, A. A., Al-Ali, A. A., Singh, S. K., Singh, S. K., Al-Nahyan, M., Al-Nahyan, M., et al. (2017). Change management through leadership: The mediating role of organizational culture. International Journal of Organizational Analysis, 25(4), 723–739.
AlMazrouei, H., & Pech, J. R. (2014). Expatriates in the UAE: Advance training eases cultural adjustments. Journal of Business Strategy, 35(3), 47–54.
ArabianBusiness.com. (2019a). GCC Islamic bank mergers likely to increase, says Fitch. Retrieved from https://www.arabianbusiness.com/banking-finance/425542-gcc-islamic-bank-mergers-likely-to-increase-says-fitch
ArabianBusiness.com. (2019b). Why a second merger wave may hit UAE lenders. Accessed from https://www.arabianbusiness.com/banking-finance/421955-why-second-merger-wave-may-hit-uae-lenders.
Asian Banking & Finance. (2019). Malaysian bank mergers unlikely to take place in 2019. Retrieved from https://asianbankingandfinance.net/lending-credit/news/malaysia-mulls-merger-four-development-institutions.
Banker Middle East. (2019). GCC’s wave of bank mergers almost over, says S&P - Banker Middle East. Retrieved from https://www.bankerme.net/en/home/articles/gccs-wave-of-bank-mergers-almost-over-says-sp
Bansal, A. (2015). Understanding the integration mechanisms practiced during organizational change: Evidence from five M & A transactions. Journal of Organizational Change Management, 28(6), 929–947.
Bari, M., Abrar, M., Bashir, M., Baig, S., & Fanchen, M. (2019). Soft issues during cross-border mergers and acquisitions and industry performance, China–Pakistan economic corridor based view. SAGE Open, 9(2). doi: https://doi.org/10.1177/2158244019845180. Retrieved October 18, 2019, from https://journals.sagepub.com/doi/full/10.1177/2158244019845180
Bashir, S. (2012). Perceived organizational support and the cross-cultural adjustment of expatriates in the UAE. Education, Business and Society: Contemporary Middle Eastern Issues, 5(1), 63–82.
Bauer, F., & Matzler, K. (2014). Antecedents of M&A success: The role of strategic complementarity, cultural fit, and degree and speed of integration. Strategic Management Journal, 35(2), 269–291.
Bebenroth, R., & Ismail, M. (2014). Cultural openness, interpersonal justice, and job satisfaction among millennials and seniors: Evidence from Japanese target employees following M&A. Hyogo: Research Institute for Economics and Business Administration, Kobe University.
Behery, M., Behery, M., Abdallah, S., Abdallah, S., Parakandi, M., Parakandi, M., et al. (2016). Psychological contracts and intention to leave with mediation effect of organizational commitment and employee satisfaction at times of recession. Review of International Business and Strategy, 26(2), 184–203.
Bell, J. (2017). Long working hours and stress are leading to health problems, doctors warn. Retrieved from https://www.thenational.ae/uae/health/long-working-hours-and-stress-are-leading-to-health-problems-doctors-warn-1.660691
Bloomberg. (2019). UAE’s DIB, Noor Bank hire advisers for merger talks. Gulfnews.com. Retrieved October 19, 2019, from https://gulfnews.com/business/banking/uaes-dib-noor-bank-hire-advisers-for-merger-talks-1.63915882
Bolori, B. (2018). Is there any difference of financial features between bidder and target banks in Nigeria mergers and acquisitions?. OALib, 05(09), 1–16. Retrieved October 18, 2019, from https://www.scirp.org/journal/paperinformation.aspx?paperid=87429
Bönigk, M., & Steffgen, G. (2013). Effects of habitual anger on employees’ behavior during organizational change. International Journal of Environmental Research and Public Health, 10(12), 6215–6234.
Bradt, G. (2015). 83% of mergers fail – leverage a 100-day action plan for success instead. Retrieved from https://www.forbes.com/sites/georgebradt/2015/01/27/83-mergers-fail-leverage-a-100-day-value-acceleration-plan-for-success-instead/
Cerimagic, S. (2010). Influence of culture on project practices: Insights from Australian project managers in UAE. Education, Business and Society: Contemporary Middle Eastern issues, 3(4), 277–288.
Charoensukmongkol, P., & Charoensukmongkol, P. (2017). Contributions of mindfulness during post-merger integration. Journal of Managerial Psychology, 32(1), 104–118.
Chen, Y., Chen, Y., Werle, H., Werle, H., Moser, R., & Moser, R. (2016). Comparing critical success factors between European M&As in China and Chinese M&As in Europe: A mixed-method analysis. Journal of Organizational Change Management, 29(7), 1217–1236.
Clarke, N., & Salleh, N. M. (2011). Emotions and their management during a merger in Brunei. Human Resource Development International, 14(3), 291–304.
Cranny, M., Salamat, R., & Bianchi, S. (2016). NBAD-FGB merger could see 28% cost savings, says former emirates NBD chief financial officer. Retrieved from https://www.thenational.ae/business/nbad-fgb-merger-could-see-28-cost-savings-says-former-emirates-nbd-chief-financial-officer-1.199025
Dahl, M. S. (2011). Organizational change and employee stress. Management Science, 57(2), 240–256.
Das Augustine, B. (2019a). GCC Islamic banks headed for more M&A deals. Gulfnews.com. Retrieved October 16, 2019, from https://gulfnews.com/business/banking/gcc-islamic-banks-headed-for-more-ma-deals-1.65877261
Das Augustine, B. (2019b). Mergers & acquisitions to pick up pace across GCC in 2019. Gulfnews.com. Retrieved October 16, 2019, from https://gulfnews.com/business/banking/mergers%2D%2Dacquisitions-to-pick-up-pace-across-gcc-in-2019-1.63610102
De Araújo, L., Silva, E., & Pereira, A. (2018). Mergers and acquisitions in the context of globalization. The International Journal of Business Management and Technology, 2(5). Retrieved from https://recipp.ipp.pt/bitstream/10400.22/12379/1/GalleY%20Proof.pdf
Dewe, P., & Trenberth, L. (2012). Exploring the relationships between appraisals of stressful encounters and the associated emotions in a work setting. Work & Stress, 26(2), 161–174.
Dorling, J. L., & Dorling, J. L. (2017). Impact of psychological capital on the resistance to change during post-merger integration: A theoretical model. Journal of Organizational Change Management, 30(6), 936–956.
Epstein, M. J. (2005). The determinants and evaluation of merger success. Business Horizons, 48(1), 37–46.
Erwin, D. G., & Garman, A. N. (2010). Resistance to organizational change: Linking research and practice. Leadership & Organization Development Journal, 31(1), 39–56.
Froehlich, D., Segers, M., & Van den Bossche, P. (2014). Informal workplace learning in Austrian banks: The influence of learning approach, leadership style, and organizational learning culture on managers’ learning outcomes. Human Resource Development Quarterly, 25(1), 29–57.
Galpin, T. (2019). Avoid M&A assimilation heartburn: An actionable model for cultural due diligence and integration. Strategy & Leadership, 47(4), 20–25. Retrieved October 18, 2019, from https://www.emerald.com/insight/content/doi/10.1108/SL-04-2019-0054/full/html
Giæver, F., & Hellesø, R. (2010). Negative experiences of organizational change from an emotions perspective: A qualitative study of the Norwegian nursing sector. Nordic. Psychology, 62(1), 37.
Grenier, A., & Bidgoli, E. (2015). The emotional consequences of organizational change. Canadian Social Work Review/Revue canadienne de service social, 32(1–2), 187–205.
Gulf Business News. (2016). https://gulfbusiness.com/merger-nbad-fgb-lead-30-cost-savings/
Gulf Business. (2019a). Abu Dhabi banks ADCB, UNB and Al Hilal merge to create third largest UAE lender. Retrieved from https://gulfbusiness.com/abu-dhabi-banks-adcb-unb-al-hilal-merge-create-third-largest-uae-lender/
Gulf Business. (2019b). Abu Dhabi’s Al Hilal Bank cuts 160 jobs ahead of three-way merger – sources. Retrieved from https://gulfbusiness.com/abu-dhabis-al-hilal-bank-cuts-160-jobs-ahead-three-way-merger-sources/
Hassan, M. K., Hassan, M. K., Mouakket, S., & Mouakket, S. (2016). ERP and organizational change: A case study examining the implementation of accounting modules. International Journal of Organizational Analysis, 24(3), 487–515.
Hazelton, S. (2014). Positive emotions boost employee engagement: Making work fun brings individual and organizational success. Human Resource Management International Digest, 22(1), 34–37.
Helpap, S., Helpap, S., Bekmeier-Feuerhahn, S., & Bekmeier-Feuerhahn, S. (2016). Employees’ emotions in change: Advancing the sensemaking approach. Journal of Organizational Change Management, 29(6), 903–916.
Holland, D., & Scullion, H. (2019). Towards a talent retention model: Mapping the building blocks of the psychological contract to the three stages of the acquisition process. The International Journal of Human Resource Management, 1–46. Retrieved from https://www.tandfonline.com/doi/full/10.1080/09585192.2019.1569546
Islam, T., Islam, T., Khan, M. M., Khan, M. M., Bukhari, F. H., & Bukhari, F. H. (2016). The role of organizational learning culture and psychological empowerment in reducing turnover intention and enhancing citizenship behavior. The Learning Organization, 23(2/3), 156–169.
Islam, T., Ur Rehman Khan, S., Ahmad, U. N. B. U., Ali, G., & Ahmed, I. (2014). Organizational learning culture and psychological empowerment as antecedents of employees’ job-related attitudes: A mediation model. Journal of Asia Business Studies, 8(3), 249–263.
Ismail, M., & Umar Baki, N. (2017). Organizational factors of justice and culture leading to organizational identification in merger and acquisition. European Journal of Training and Development, 41(8), 687–704.
Jaffar, S. (2016). NBAD-FGB merger: Bigger is not necessarily better. Retrieved from http://www.arabianbusiness.com/nbad-fgb-merger-bigger-is-not-necessarily-better-639367.html
Jiang, J. (2019). An empirical study on M&A performance: Evidence from horizontal mergers and acquisitions in the United States. Open Journal of Business and Management, 07(02), 976–997. Retrieved October 18, 2019, from https://www.scirp.org/html/44-1530812_92043.htm
John, I. (2019a). ADCB, UNB, Al Hilal merge to form Dh420 billion bank. Khaleej Times. Retrieved from https://www.khaleejtimes.com/business/corporate/adcb-unb-al-hilal-merge-to-form-dh420-billion-bank%2D%2D
John, I. (2019b). DIB set to acquire Noor bank. Khaleej Times. Retrieved October 18, 2019, from https://www.khaleejtimes.com/dib-set-to-acquire-noor-bank
John, I. (2019c). GCC bank merger wave is ebbing. Khaleej Times. Retrieved October 19, 2019, from https://www.khaleejtimes.com/gcc-bank-merger-wave-is-ebbing
Kassem, M. (2017). First Abu Dhabi Bank confirms job losses. Retrieved from https://www.thenational.ae/business/first-abu-dhabi-bank-confirms-job-losses-1.78153
Khan, S. (2019). ADCB and UNB formally merge to form UAE’s third largest lender with Al Hilal Bank. The National. Retrieved from https://www.thenational.ae/business/banking/adcb-and-unb-formally-merge-to-form-uae-s-third-largest-lender-with-al-hilal-bank-1.856014
Khan, F., & Ali, U. (2015). Job satisfaction and perceived organizational support as a susceptibility factor of the intention to quit: A cross-cultural study. Bahria Journal of Professional Psychology, 14(1), 105.
Khatib, H. (2019). Business real estate news | technology | travel guide. Ameinfo.com. Retrieved from https://www.ameinfo.com/industry/finance/gcc-bank-mergers-
Kubicek, B., Hoelzl, E., & Korunka, C. (2013). Emotion regulation requirements and affective forecasts regarding expected organizational changes. Horizons of Psychology, 22, 1–13.
Laouisset, D. E. (2009). Organizational commitment to ethics and international ethical perspectives: United Arab Emirates (UAE) banks as a case study. Employee Responsibilities and Rights Journal, 21(4), 333.
Latif, H. (2017). UAE banking sector crisis: 3,000 jobs cut. Retrieved from http://ameinfo.com/money/banking-finance/uae-banking-sector-crisis-3000-jobs-cut/
Lawrence, E., Ruppel, C. P., & Tworoger, L. C. (2014). The emotions and cognitions during organizational change: The importance of the emotional work for leaders. Journal of Organizational Culture, Communications and Conflict, 18(1), 257.
Lee, S., Kim, S., & Kim, J. (2019). A comparative study of cross-border and domestic acquisition performances in the South Korean M&A Market: Testing the two competing theories of culture. Sustainability, 11(8), 2307. Retrieved from https://www.mdpi.com/2071-1050/11/8/2307
Lok, P., & Crawford, J. (2004). The effect of organisational culture and leadership style on job satisfaction and organisational commitment: A cross-national comparison. Journal of Management Development, 23(4), 321–338.
Maceda, C. (2013). Downsizing leaves UAE staff overworked. Retrieved from http://m.gulfnews.com/business/sectors/careers/downsizing-leaves-uae-staff-overworked-1.1167005
Maceda, C. (2017). 85% of UAE employees ‘not engaged’ in their jobs: Gallup. Retrieved from http://gulfnews.com/business/sectors/careers/85-of-uae-employees-not-engaged-in-their-jobs-gallup-1.2108037
Mayenkar, S. (2019). Dubai Islamic Bank to acquire Noor Bank. Gulfnews.com. Retrieved from https://gulfnews.com/business/banking/dubai-islamic-bank-to-acquire-noor-bank-1.64507923
NBAD. (2017). FAB recognized as leading financial institution in UAE and the region at Euromoney Middle East awards for excellence. Retrieved from https://www.nbad.com/en-ae/about-nbad/overview/newsroom/2017/fab-recognised-as-leading-financial-institution-in-uae-and-the-region.html
Ndaba, Z., & Anthony, C. (2015, November). The impact of employee engagement on organisational change in a telecommunications organization. In European conference on management, leadership & governance (p. 288). Academic Conferences International Limited.
New world. (2016). Hana financial group kicks off strategy to rank among Top 40 financial groups in world. Retrieved from http://newsworld.co.kr/detail.htm?no=2486
Nwanma, V. (2019). Global finance magazine - Nigerian merger will create Africa’s biggest Bank. Global Finance Magazine. Retrieved from https://www.gfmag.com/topics/blogs/nigerian-merger-will-create-africas-biggest-bank
Olatunji, O. R., & Uwalomwa, U. (2008). Psychological effects of mergers and acquisition on employees: Case study of some selected banks in Nigeria. World Review of Entrepreneurship, Management and Sustainable Development, 5(1), 102–115.
Rao-Nicholson, R., Khan, Z., & Stokes, P. (2016). Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions. International Business Review, 25(1), 103–113.
Reuters. (2017). First Abu Dhabi Bank cuts up to 20 jobs in global markets -sources. Retrieved from https://www.reuters.com/article/nbad-redundancies/first-abu-dhabi-bank-cuts-up-to-20-jobs-in-global-markets-sources-idUSL8N1HK0PB
Reuters. (2019). UAE’s United Arab Bank cuts 150 jobs—sources. Gulfnews.com. Retrieved October 19, 2019, from https://gulfnews.com/business/banking/uaes-united-arab-bank-cuts-150-jobs%2D%2Dsources-1.63608699
Rhoades, S. A. (1998). The efficiency effects of bank mergers: An overview of case studies of nine mergers. Journal of Banking & Finance, 22(3), 273–291.
Rizvi, M. (2019). Banking on mergers: More consolidations seen in UAE lending sector. Khaleej Times. Retrieved from https://www.khaleejtimes.com/business/banking-finance/banking-on-mergers-more-consolidations-seen-in-uae-lending-sector
Rodrigues, H., & Bido, D. (2019). Individual unlearning from the point of view of managers in merger and acquisition events in Brazil. Cuadernos de Administración, 35(64), 3–19. Retrieved from http://historiayespacio.univalle.edu.co/index.php/cuadernos_de_administracion/article/view/6391
Sachsenmaier, S., & Guo, Y. (2019). Building trust in cross-cultural integration: A study of Chinese mergers and acquisitions in Germany. International Journal of Cross Cultural Management, 19(2), 194–217. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/1470595819856387
Salim, B. (2013). Strategic initiatives during merger between Emirates Bank International (EBI) and National Bank of Dubai (NBD).
Senior, C., Senior, C., Fearon, C., Fearon, C., Mclaughlin, H., Mclaughlin, H., et al. (2017). How might your staff react to news of an institutional merger? A psychological contract approach. International Journal of Educational Management, 31(3), 364–382.
Sergie, M. (2016). Bank mergers spread in mideast as low oil signals boom days over. Retrieved from https://www.bloomberg.com/news/articles/2016-12-21/bank-mergers-spread-in-mideast-as-low-oil-signals-boom-days-over
Shanmugam, B., & Nair, M. (2004). Mergers and acquisitions of banks in Malaysia. Managerial Finance, 30(4), 1–18. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/03074350410768994/full/html
Sharif, A. (2017). Abu Dhabi’s NBAD, FGB pick managers to Lead merged Bank. Retrieved from https://www.bloomberg.com/news/articles/2017-02-06/abu-dhabi-s-nbad-fgb-said-to-pick-managers-to-lead-merged-bank
Sharif, A., & Fattah, Z. (2019). Abu Dhabi commercial Bank to cut about 2,000 jobs after merger. Bloomberg.com. Retrieved from https://www.bloomberg.com/news/articles/2019-07-03/abu-dhabi-commercial-bank-to-cut-about-2-000-jobs-after-merger
Siegel, D. S., & Simons, K. L. (2010). Assessing the effects of mergers and acquisitions on firm performance, plant productivity, and workers: New evidence from matched employer-employee data. Strategic Management Journal, 31(8), 903–916.
Skipper, A., & Chaplin, V. (2019). Merger & acquisition in Africa and South Africa - corporate/commercial law - worldwide. Mondaq.com. Retrieved from http://www.mondaq.com/southafrica/x/823882/M+A+Private+equity/Merger+Acquisition+In+Africa+And+South+Africa
Slade, C. P., Ribando, S. J., & Fortner, C. K. (2016). Faculty research following merger: A job stress and social identity theory perspective. Scientometrics, 107(1), 71–89.
Smith, C. (2019). Mboweni approves Capitec acquisition of mercantile. Fin24. Retrieved from https://www.fin24.com/Companies/Financial-Services/mboweni-approves-capitec-acquisition-of-mercantile-20191009
Soundarya, M., Lavanya, S., & Hemalatha, S. (2018). Merger and acquisition of business organization and its impact on human resources. Journal of Business Strategy, Finance and Management, 01(1), 69–72. Retrieved from https://www.jbsfm.org/pdf/vol1no1/JBSFM_Vol1_No1_p_69-72.pdf
Souza, J., & Gartner, I. (2019). Market reaction to bank merger and acquisition events in Brazil: An analysis of the effects of market waves. Revista Contabilidade & Finanças, 30(80), 234–251. Retrieved from https://www.researchgate.net/publication/331176361_Market_reaction_to_bank_merger_and_acquisition_events_in_Brazil_an_analysis_of_the_effects_of_market_waves
The Straits Times. (2019). Singapore M&A rises 70.6% to $121.5b in first nine months. Retrieved from https://www.straitstimes.com/business/banking/spore-ma-rises-706-to-1215b-in-first-nine-months
Thomas, R., & Hardy, C. (2011). Reframing resistance to organizational change. Scandinavian Journal of Management, 27(3), 322–331.
Thomas, R., Sargent, L. D., & Hardy, C. (2011). Managing organizational change: Negotiating meaning and power-resistance relations. Organization Science, 22(1), 22–41.
Wahda. (2017). Mediating effect of knowledge management on organizational learning culture in the context of organizational performance. Journal of Management Development, 36(7), 846–858.
Wang, Y. (2018). An analysis of synergies under strategic mergers and acquisitions. Proceedings of the 2018 3rd International Conference on Education, Sports, Arts and Management Engineering (ICESAME 2018), 230, 5–7. Retrieved from https://www.atlantis-press.com/proceedings/icesame-18/25898419
Yang, Y., Lütge, C. and Yang, H. (2019). Organisational culture affecting post-merger integration. Review of International Business and Strategy, 29(2), 139–154. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/RIBS-12-2018-0104/full/html
Yousef, D. A. (2017). Organizational commitment, job satisfaction and attitudes toward organizational change: A study in the local government. International Journal of Public Administration, 40(1), 77–88.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 The Author(s)
About this chapter
Cite this chapter
Al Naeemy, T.M.Y. (2020). Consequences of Mergers and Acquisitions and Their Effect on Employees: A Case Study from the Banking Industry in the UAE. In: Pereira, V., Neal, M., Temouri, Y., Qureshi, W. (eds) Human Capital in the Middle East. Palgrave Studies in Global Human Capital Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-42211-0_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-42211-0_8
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-42210-3
Online ISBN: 978-3-030-42211-0
eBook Packages: Business and ManagementBusiness and Management (R0)