EFFECTS OF MERGERS AND ACQUISITIONS ON EMPLOYEE MORALE IN THE KENYAN INSURANCE SECTOR
Abstract
The purpose of the study is to assess the effects of mergers and acquisitions on employee morale in the insurance sector in Kenya. Morale is an essential ingredient of organizational success. It reflects the attitudes and sentiments of an individual and group towards the organizational objectives. High morale can help enhance job performance, job satisfaction and employment stability in any organization irrespective of its nature. On the other hand, low morale is manifested in; increase in costs, absenteeism from job, refusal of providing services, strike and murmur, lack of motivation and interest, decrease in creativity and innovation, lack of inter-organizational collaborations, preventing the satisfaction of organizational objectives and finally reducing efficiency. The study adopted a descriptive research design to collect data from the targeted insurance companies. Purposive sampling technique was used to select the insurance companies that have undergone merger or acquisition in the sector. A total of 12 companies was selected which translated to a sample size of 23%. Further simple random sampling was used to identify respondents from within the insurance companies. Self-developed semi structured questionnaires was used to collect data from the target respondents in the insurance companies. Data was analyzed using descriptive statistics by means of SPSS, a statistical software package to generate percentages and means. This study will add to the available literature on mergers and acquisitions and will provide evidence on the effects of mergers and acquisitions on employee morale in the insurance sector in Kenya. The study found out that mergers and acquisition had great impact on employee morale of insurance companies. Most of the firms studied showed improved work environment and job satisfaction after merger or acquisition. This could be due to reduced cost of operation brought about by economies of scale. The study also found out that mergers and acquisition was not the only contributor to job satisfaction; other factors did also contribute towards increased job satisfaction. In regard to work environment, there was a strong correlation between mergers and acquisition and work environment in markets. It was established that M&A helped companies acquire virtuous work environment at the same time enhance job satisfaction, which in turn translates to increased employee morale.
Key Words: Work Environment, Job Satisfaction, Mergers & Acquisition, Employee Morale
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DOI: http://dx.doi.org/10.61426/sjbcm.v4i1.407
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