Discussion

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5.2 Discussion

This research is based on Tables 5-1 to 5-6, which verify six critical factors and finds other factors that affect the CRM in post-merger companies.

5.2.1 Strategy for Rebuilding Customer Base and Service Portfolio

Again, the “strategy” refers the company’s goals and direction for business integration.

These strategies concern refining and maintaining the customer base, and the products and services that firms need to scrutinize in order to make a smooth transition for customer service post-merger

Since the Bank E’s merger with the Bank D was a policy-driven merger, so they did not need to pay much attention onto their customer relationships, therefore they did not do customer base assessments. The managers of Bank A and Bank C assessed their customer bases in the merger process. These two banks also focused on more valuable customers for promotions and maintaining their customer relationships. For example, the representative of Bank A interviewed said, “we focused on potential customers of Bank A1 to promote the consumption campaign,” and the representative of Bank C said, “we found some rich or high-asset customers at first, then, according their regional place, we notified nearby branches to do communication or promotion in the hope that these customers would return to be customers of Bank C.”

5.2.2 Service Culture

Service culture refers to how the merged organization strives to develop service and performance competencies to exceed customer expectations and create superior value to attract and retain customers after the merger.

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Since the Bank E and Bank D were both official banks and their target company were also managed by the government, their service culture style were similar to each other, therefore they did not have culture clash. Bank B and Bank C each had distinctive service cultures. Because their organizational frameworks and services were different from the target companies, there would be culture clash after the merger. This would cause customers to get inconsistent service and have a mixed experience. For example, the representative interviewed from Bank B1 said “The employees of Bank B1 felt like “rootless orchids” after merger, because they were taken apart to difference departments, some employees could adapt to the new environment but some could not.

The business departments of Bank B still kept Bank B1 system, but Bank B required performance more than Bank B1, so if you could not adapt you have to leave.” For example, “The credit card department had to do all the businesses in terms of credit cards in Bank B1, but in Bank B they are doing by function.”

5.2.3 Process Integration

Process integration includes business policy discussions, dataflow synchronization, and procedure standardization which the merger firm must deal with to provide consistent service to customers in order to avoid customer attrition. They must give employees continuous training in order to provide the same service quality and attitude towards customers. The process of training helps employees quickly learn in order to decrease customer inconvenience and confusion.

In our selected cases, we found that all the process integration depend on the acquiring company rather than the target company, and all the merger companies held training for their target companies. The exception was Bank A, which only bought Bank A1’s credit card business, so employees do not move to Bank A. The other

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banks training strategy was to exchange their employees to target companies, thus facilitating employee’s skills with areas such as operation and process.

5.2.4 Technology Integration

Because each company had different IT infrastructure and systems, so technology integration can provide quality information to customer and lead customer satisfaction.

Since Bank E and Bank D their customer base of target companies were not too much larger, so they only took four months to switch and no big problems occurred in merger process. The customer base of Bank B almost as large as the customer base of Bank B1, therefore the data needed spend one year for conversion. In the system transfer process, since all the documents in the Bank C1 format needed to be changed to the Bank C type, a lot of customers of Bank C1 were not satisfied with the change and the customers would not accept only getting the statement of account from Bank C.

5.2.5 Communication

Communication with both employees and customers helps them understand the company’s future strategy, operation, and how they will benefit in order to ensure a smooth transition and reduce uncertainty during the period of change.

All the cases followed the standards of FSCEY in the merger process. So, they needed announcements or sent letter to customers. All the cases had communications with their customers and employees. Bank B not only took the initiative to help customers

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to change their credit cards, but also used a call center to connect to their customers to communicate and maintain their customer relationships.

5.2.6 Organizational Inertia

Leadership style along with changes to salary and benefits may cause employees to show resistance through such behavior as sabotage, vocal protests, or attitudes such as withdrawal and reduced commitment. Organizational inertia can cause delay in responding to customer requests, deficiencies in services, and decreased efforts to understand markets and customers and to improve products and services.

Since Bank B and Bank C are foreign companies, they had different leadership styles and cultures than the local companies, therefore the employees of their target companies had to learn these changes. The Bank E and Bank D are official banks, so their employees work right were protected by the government, and their cultures being similar to their target companies, therefore their employees showed less resistances.

Therefore, this research concluded that these six factors were very important for maintained customer values and customer loyalty. Companies who grasped these six critical factors were able to merge smoothly and maximize customer value and competitive position.