First Abu Dhabi Bank (FAB) is the current the biggest bank in the United Arab Emirates (UAE) and the second largest in the Middle East and North Africa (MENA) region. FAB was founded after the merger between National Bank of Abu Dhabi and First Gulf Bank, which took place in 2017. The main purpose of the merger was to create a financial institution that can compete at the global level while at the same time capturing and dominating trade at the local banking and financial sectors. The two banks came together to add value to the country, the financial sector, and to all other stakeholders, including customers. The merger between two banks was successful and is expected to significantly change the financial sector in the UAE as well as MENA region. Fortunately, I am one of the main leaders of FAB who are charged with the responsibility of ensuring that the merger enjoys a long-term and sustainable success in the local and international markets. Currently, I am a Vice President (VP) and the head of global markets valuation control function, which is essential for the smooth operation of the bank across all its regions of operation. FAB is expected to dominate the Middle East financial sector with a long-term goal of becoming one of the most competitive banks in the whole world.
However, like any other merger, FAB is expected to experience a lot of post-merger problems, which may be a significant threat to its long-term success and its competitiveness in the market. Mergers always have substantial effect or impact on employees, customers and the entire banking and financial sectors. Any merger is characterized by high levels of uncertainty, which customers are always sensitive to and are concerned about. In many cases, customers are worried about the effect of the merger on their experience in terms of their relationship with the organization and the quality of services. As a result, it is highly possible for customers to shift to competitors in the market after the merger. As a result, it is highly likely for FAB to lose a significant number of customers after the merger. Customer defection is one of the primary reasons why many mergers fail to achieve their intended objectives.
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Apart from customers, mergers have a significant impact on employees. The fear of losing jobs is making many employees to resist any form of merger, and it can reduce productivity among employees in the workplace. The fear of losing jobs can result in unhealthy competition among employees in the workplace, which can equally lower their productivity. The top management of FAB, therefore, is worried about the effect of the merger on employees, and how it will affect the overall performance and productivity in the company. Besides, cultural conflict is common during and after the merger. The problem becomes worse when the merging companies use totally different organizational culture. It is obvious that the National Bank of Abu Dhabi and First Gulf Bank were using different organizational culture that can create cultural conflict in the operation of FAB, hindering its future success.
As a result, the main aspect of the company that could be viewed as problematic is the post-merger problem. Although the National Bank of Abu Dhabi and First Gulf Bank successfully merged after compressive discussion and consideration of various factors, post-merger problems are still threatening to its future success. As a result, it is important for the company to address the post-merger issues to enhance its chances of serving in the highly competitive financial sector that is dominated by many players. FAB will succeed in achieving its set goals and objectives when it addresses the post-mergers problems, especially concerning customers, employees and its shareholders.
Therefore, the first action plan is to retain all the National Bank of Abu Dhabi and First Gulf Bank customers after the merger to avoid client defection. The main step in the implementation of this plan will be to effectively and communicate with all customers. The communication will mainly be aimed at reducing the uncertainty that can make customers defect to the rivals in the market. At the same time, communication will be intended to inform customers on how the merger will affect, particularly concerning improving their experiences and enhanced customer service. Communication should be based on the problems and questions that are likely to be raised by customers regarding the merger . FAB should use the most effective and relevant means of communication. For instance, social media networks should be used to communicate with young and techno-savvy customers. On the other hand, conventional media such as TV should be used to target older customers who are not likely to rely on social media to get information. Effective and clear information is a strategy that FAB can be used to retrain its customers after the merger.
One of the main advantages of using communication to retain customers after the merger is that it can easily be implemented, especially due to the advanced communication technologies. FAB can use social media to reach a large number of customers without spending a substantial amount of financial resources. Hence, communication is cost-effective, particularly when modern communication is used. Communication is also advantageous because it can reduce uncertainty among customers after the merger. It makes customers to be informed of the possible changes and how they will be affected by the merger.
Consequently, customers can make an informed decision before deciding to defect to the rival companies in the market. Also, retaining customers is advantageous because FAB will not have to spend a lot of resources on its marketing activities because clients already know the brand and they would like to associate with the company. Furthermore, FAB will maintain and possibly increase its sales volume when it retains customers. As a result, the action plan for retaining customers, especially through communication, is highly beneficial to the company.
However, the main disadvantage of communication is that it sometimes cannot reach customers, primarily when ineffectively implemented. For instance, it is possible for social media only to reach a few customers, leading to mass defection to other firms in the financial sector. Therefore, FAB must ensure that the communication strategies and tools that are used are not only effective but also appropriate. Besides, there is the possibility of miscommunication, which may worsen the situation. Miscommunication can make customers to develop a negative perception against the merger and shift to the alternative financial companies in the sector. It is vital for FAB to be strategic in its communication aimed at retaining customers.
The second action plan is the training of employees, which is aimed at enhancing their productivity while at the same time motivating them to work hard towards the realization of the goals and objectives of FAB. All employees who were retained after the merger to be trained on various aspects such as new policies, procedures, and processes have resulted from the merger. Training is one of the best ways of preparing employees to embraces and adapt to the changes that have been brought by the merger. Training should ensure that employees are familiar with almost all aspects of the merger, including the technologies that will be used to achieve the objectives of the company. Moreover, training should help in boosting the morale of employees. Employees should feel that the new company values them, and they are not likely to be fired. Training should make employee comfortable in the new company. Training should be used as an opportunity to listen to the concerns and issues that employees are afraid of after the merger because it can provide a discussion platform. Besides, training should be used to enable employees to bond and form a strong network. Employee training is highly essential in overcoming post-merger problems, particularly those that affect workers.
The principal advantage of employee training is that it enhances productivity. In the case of a merger, the employees are trained and introduced to the new culture and new working experiences that are occasioned by staff reshuffling and in most cases, an inevitable introduction of new technologies. FAB employees will be able to learn new skills and gain new knowledge that will enable them to effectively and efficiently work towards achieving the set goals and objectives. Training will also enhance employee productivity by them to be creative and undertake challenging tasks. Hence, to maintain productivity, FAB should train its employees after the merger. The second advantage of training is low turnover, as employees will be willing to work in the company even after the merger. Training is beneficial after the merger because it improves employee satisfaction and motivation, leading to a reduced turnover. Consequently, due to reduced turnover, FAB will not spend a lot of money on recruiting new employees. FAB needs to train its employees to not only improve their productivity but also to improve employee satisfaction and retention rate.
Nevertheless, training is disadvantageous because it is expensive. To implement an employee training program, FAB will have to spend a lot of money on organizing training seminars and if need be, sponsoring for further studies for its selected employees. As a result, there will be a possibility of the increase in the cost of operations in the company. The second major disadvantage of training is that it is time-consuming, as employees will have to spend a lot of time in training, which may end up affecting their output at work and this has an eventual negative effect on quality of customer services. Thirdly, some employee can resist training. Employees are likely to resist training when they are presented as mandatory or when they do not have direct benefits to workers. Therefore, training has some disadvantages that should be considered during its implementation in the company.
The third action plan is the integration of the new culture in the company. In order to put in place the action plan, the company should first communicate and listen to employees of both companies that merged. Employees should adequately be informed on why the merger occurred so that they can understand, embrace and fully support the change. Senior managers in the company should be responsible for taking the lead by effectively communicating with other employees. Importantly, top managers should listen and give timely feedback to employees, especially about cultural issues. FAB executives should celebrate and embrace change together with employees. The second step in the implementation of the action plan is to define and implement the new culture. Creating a new culture is vital after the merger because it reduces conflicting values and philosophies that are linked to the merger. FAB, therefore, should create new behavioral norm and organizational culture that will help to drive the goals and objectives of the merger. Thirdly, all employees should be involved in the cultural competence and awareness training. Cultural competence and awareness can also be achieved through close interaction between employees in the company.
Addressing cultural issues in the company is highly beneficial because it enhances the relationship between employees at different levels of the organization’s structure in the company. Cultural conflict is likely to ruin the relationship between workers, resulting in poor performance and an overall derailment of the organization's goals. However, creating a new culture may be disadvantageous because employees may not readily embrace it. Employees can resist a new culture, which ends up disorienting the company. Hence, the three action plans have pros and cons that need to be considered during their implementation. Nonetheless, FAB must address all significant post-merger problems.
In conclusion, the post-merger problems are currently one of the significant aspects that are proving to be problematic and is threatening the success of FAB. The company was formed after a successful merger between National Bank of Abu Dhabi and First Gulf Bank, but that does not mean that the post-merger challenges have been overcome. FAB must ensure that its strategies are aimed at retaining customers, as this will help in gaining a competitive advantage in the United Arab Emirates banking sector and the broader Middle East region. At the same time, the company must make sure that its employees are highly productive and motivated to achieve the set long term and short term goals and objectives. Besides, cultural conflict should be addressed to create a favorable working environment for all the employees as well as the organizational climate that is favorable to all other stakeholders. FAB will continue to dominate the UAE and MENA financial market if it successfully addresses the post-merger problems that are inevitable in any merger.
