Role of Human Resource Management in Cultural Integration Process among Selected Post-Merged Commercial Banks in Kenya

Abstract

Mergers and acquisition (M&A) is a critical vehicle in facilitating corporate growth and productivity. In Kenya, mergers and acquisitions are becoming a prominent feature particularly in the banking sector. Nevertheless, Kenya has witnessed a mix of dismal performance by some merged banking institutions and very positive performance by others. This study therefore examines the role of human resource management in the cultural integration process in post mergers and acquisition process. The study adopted a positivist philosophy on the mixed framework of research design comprising of descriptive, exploratory, and quantitative designs. The unit of analysis was the financial institutions that have undergone mergers and acquisitions in a defined time period. The unit of observation comprised of the employees of the acquired or merged organization sampled through simple random sampling of 361 employees out of 5998 which forms the target population. Both primary and secondary data was collected. A pretest was conducted where reliability and validity of the instruments were determined using the Cronbach’s alpha capped at 0.7. Requisite analyses were conducted to test the normal distribution of response data using Kolmogorov-smirnov and Normal QQ plot tests. Logistic Regression model was used to establish the relationship between the independent variables and the dependent variable and the strength upon which the independent variables affected the dependent variable. Results indicated that there was adequate awareness within the company’s management team that skilled newcomers are a culturally diverse and skilled labour pool, there was general acceptance and commitment from the management towards the practice of recruiting and hiring newcomers, and there was awareness of the value and transferability of international training, skills and credentials considered during recruitment. Results showed that companies have embraced training and development as one of strong factors of HRM practices that influence cultural integration. The study findings indicated that performance and reward was a key driver of cultural integration process. Descriptive results indicated that corporate leadership was emphasized in companies. The study findings indicated that leadership was a key determinant of cultural integration process. It was possible to conclude that the companies had put into place strict management policies and internal operating procedures approved by the senior management on recruitment and selection of employees. The study further concludes that recruitment and selection affect cultural integration; if the practices are well governed and executed they affect cultural integration positively. It was possible to conclude that employee empowerment was highly emphasized in post merged organizations. The study concludes that conclusion that all employees received induction training and all the learning was incorporated on the job training. It is recommended that employee empowerment be emphasized in the organizations as it has an effect on the overall achievement of company goals and objectives. Therefore the management is urged to encourage sharing of potentially sensitive information on costs, quality, and productivity on financial performance with other employees.