Weber Economics & Finance


August 2018, Vol. 6 (1), ISSN:2449-1662

© Author(s) 2018. This work is distributed under the Creative Commons Attribution 3.0 License.

Research Article

The Relationship between the Strategic Cultural Integration and Performance of Mergers and Acquisitions in the Financial Sector in Kenya

Jonathan Ekambi1, Margaret Oloko2 & Thomas Senaji3

1Daystar University.
2Jomo Kenyatta University of Agriculture and Technology.
3Kenya Methodist University.



 

Accepted 27th August, 2018; Available Online 29th August, 2018.


Abstract:

As a growth strategy, mergers and acquisitions are a common feature of modern business life that forms a major reason for organization growth. The purpose of this study is to look into the determinants of performance of mergers and acquisitions in the financial sector in Kenya, basically Banks and Insurance. The objective was to determine the relationship between cultural integration and performance of Mergers and Acquisition. The study used a descriptive and cross-sectional design, and a mixed methodology. Data collection instruments were questionnaire for obtaining the primary data and published data for secondary data. A total of 93 responses were obtained and the hypothesized relationships were tested using multiple regression analysis. Data analysis was conducted for the purpose of obtaining usable and useful information, with the aim of, describing and summarizing data, identifying relationships between variables, comparing variables, identifying the difference between variables and predicting outcomes of the research, coding, and developing themes. The study reveals that Culture integration contributes significantly to performance of M&A. The study offers practical insights to the; Policy makers, academician, scholars and researchers in strengthening organizational identification of the determinants of performance of M&A by considering the crucial role culture integration on the performance. On the basis of these findings, it is recommended that cultural integration help to maintain a unity and a certain balance, helping to keep the new firm together, sharing the same beliefs and values, therefore the firm will need to invest more in these areas. Using behavioural theory, the study suggests that there is a direct correlation between the culture integration and performance of M&A. with culture integration were highly negatively correlated and regression showed that there was a relationship between the culture integration and performance of mergers and acquisition in the financial sector in Kenya. On the basis of these findings, it is recommended that culture integration brings a greater impact leading to superior performance.

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