5.5 Additional influential factors
5.5.5 Organizational mindsets
Organizational mindset refers to company decisions that change the services and increase customer satisfaction. Employees’ mindset refers to employees’
decision to provide better quality services to customers based on received benefits and bonuses. For example, Bank B provided account statements in global branches. After it merged with Bank B1, Bank B decided to keep deposit books for their customers in a local branch to satisfy customer needs. Bank D retained Bank D1’s valuable business to satisfy customer needs during the merging process. Superiors at Bank D1 were responsible for this business and decreased customers’ complaints. Bank C only provided account statements, but no deposit books for customers after the merger with Bank C1. After the merger, many customers complained that Bank C did not consider customer needs. Bank C would not change their globalized operation process or spend resources to provide deposit books. Banks D and Bank E are state-operated banks. Employees did not worry about their benefits and did not want to provide better quality services to customers. After the merger, employees’ performance evaluation, benefits, and bonus did not change. On the other hand, Bank B and Bank C used a personal performances evaluation system, and thus their employees only cared about service quality since better service quality would affect their bonus and benefits. Bank A and Bank B similarly had performance evaluation systems. If employees provided low quality service to customers, then employees would receive a bad performance rating and lower benefits.
6. Conclusion
Previous research has focused on how human resources, culture, technology integration, and financial statements affect M&A performance. Although researchers have used survey methods to evaluate customer satisfaction before and after mergers, it was not deeply understood how companies manage resources before and after M&As. We applied a resource-based view to verify the kinds of intangible customer relationship resources that are needed to hold together after a merger and how companies manage combined resources.
This study posed two research questions: (1) Do enterprises retain the same quality of CRM after M&A?; and (2) How do organizations retain the quality of CRM after M&A? In order to answer the first question, we collected data from eight banks that experienced M&As in Taiwan over the past eight years to compare CRM performance in the credit card business. Moreover, based on the literature review, this study identified six critical factors including strategy for rebuilding the customer base and service portfolio, the service culture, process integration, technology integration, communications, and organizational inertia in managing CRM in M&As projects. To answer the second question, we conducted five in-depth case studies to understand the important factors about managing CRM after M&As. This study found critical factors (service culture, process integration, technology integration, communication with customers and employees) and influential factors (standard operating procedures of the business transition, customer care, strategic purpose, customer base, organizational mindsets) that affected managing CRM after M&As projects. These results could help organizations in developing effective plans for building synergy in CRM after M&As. Future studies may examine or compare the quality of CRM before and after M&As in other industries (Chen, Chu, and Huang, 2012; Chi, 2013).
Moreover, future works can apply other methodologies to understand how companies retain the quality of customer relationships after M&As (Lin and Chung, 2011; Shyu, 2014; Yang, Wang, and Ruan, 2013).
Appendix 1
Farmers Bank (46,266) Taiwan Cooperative Bank
May 2006 Taishin International
Bank (2,329,547)
Chinfon Bank (647,090) Taishin International Bank
March 2010 Citibank (1,617,971) Bank of Overseas
Chinese (781,427)
Citibank (Taiwan) December 2007 Taipei Fubon Bank
(2,376,638)
International Bank of Taipei (1,509)
Taipei Fubon Bank January 2005 HSBC (586,373) The Chinese Bank
(551,032)
HSBC March 2008
Bank of Taiwan (275,866) Central Trust of China (18,444)
Bank of Taiwan July 2007 Far Eastern International
Bank (1,043,276)
AIG Credit Card Co.
(225,715)
Far Eastern International Bank
September 2009
Note: The number means the effective cards before one month of the M&A.
Appendix 2
Descriptions of cases studied and data collection
Bank People
Interviewed Interviewees Total Interview
Time
Business managers
8 h, 30 min
Bank D 5 Specialist of Marcom Department
Business managers 8 h, 50 min
Bank E 6 Assistant Manager of Bank E branch
Business managers 7h, 40 min
Appendix 3
Credit cards issued after merger
Standard Chartered Bank merger with Hsinchu International Bank
Taiwan Cooperative Bank merger with Farmers Bank
Taishin International Bank merger with Chinfon Bank
Citibank merger with Bank of Overseas Chinese
Taipei Fubon Bank merger with International Bank of Taipei
HSBC merger with The Chinese Bank
Bank of Taiwan merger with Central Trust of China
Far Eastern International Bank merger with AIG Credit Card Co.
Appendix 4
Market share after merger
Standard Chartered Bank merger with Hsinchu International Bank
Taiwan Cooperative Bank merger with Farmers Bank
Taishin International Bank merger with Chinfon Bank
Citibank merger with Bank of Overseas Chinese
Taipei Fubon Bank merger with International Bank of Taipei
HSBC merger with The Chinese Bank
Bank of Taiwan merger with Central Trust of China
Far Eastern International Bank merger with AIG Credit Card Co.
References
Ahmadvand, A., Heidari, K., Hosseini, S. H., and Majdzadeh, R. (2012).
Challenges and success factors in university mergers and academic integrations. Archives of Iranian Medicine, 15(12), 736-740.
Anslinger, P. L. and Copeland, T. E. (1996). Growth through acquisitions: A fresh look. Harvard Business Review, 74(1), 126-135.
Ashkenas, R. N., DeMonaco, L. J., and Francis, S. C. (1998). Making the deal real: How GE capital integrates acquisitions. Harvard Business Review, 76(1), 165-178.
Alaranta, M. (2005). Evaluating success in post-merger IS integration: A case study. Electronic Journal of Information Systems Evaluation, 8(3), 143.
Al-Laham, A., Schweizer, L., and Amburgey, T. L. (2010). Dating before marriage? Analyzing the influence of pre-acquisition experience and target familiarity on acquisition success in the “M&A as R&D” type of acquisition.
Scandinavian Journal of Management, 26(1), 25-37.
Alsmadi, S. and Alnawas, I. (2011). Empirical investigation of the CRM concept in the Jordanian context: The case of banks and financial institutions.
International Journal of Business and Management, 6(2), 182-195.
Alvarez, R. March. (2008). Examining technology, structure and identity during an Enterprise System implementation. Information Systems Journal, 18(2), 203-224.
Amit, R. and Schoemaker, P. J. (1993). Strategic assets and organizational rent.
Strategic management journal, 14(1), 33-46.
Andrews, E. L. (2000, September 23). The new Rolls-Royce; an automotive classic coming to dealerships in 2003. The New York Times. Retrieved from http://www.nytimes.com/
Anthes, G. (1998). Mergers made easier. Computerworld, 32(24), 69-70.
Atkinson, W. (2004). Integrating procurement in acquisitions and mergers.
Purchasing, 133(18), 16-20.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management Information Systems, 17(1), 99-120.
Bauer, F. and Matzler, K. (2014). Antecedents of M&A success: The role of strategic complementarity, cultural fit, and degree and speed of integration.
Strategic Management Journal, 35(2), 269-291.
Beccalli, E. and Frantz, P. (2013). The determinants of mergers and acquisitions in banking. Journal of Financial Services Research, 43(3), 265-291.
Beitelspacher, L. S., Richey, R. G., and Reynolds, K. E. (2011). Exploring a new perspective on service efficiency: Service culture in retail organizations.
Journal of Services Marketing, 25(3), 215-228.
Bertoncelj, A. and Kovac, D. (2007). An integrated approach for a higher success rate in mergers and acquisitions. Zbornik Radova Ekonomskog Fakulteta U Rijeci-Proceedings of Rijeka Faculty of Economics, 25(1), 167-188.
Brakman, S., Garretsen, H., van Marrewijk, C., and van Witteloostuijn, A.
(2013). Cross-border merger & acquisition activity and revealed comparative advantage in manufacturing industries. Journal of Economics &
Management Strategy, 22(1), 28-57.
Bull, C. (2003). Strategic issues in customer relationship management (CRM) implementation. Business Process Management Journal, 9(5), 592.
Business Wire. (1999). RTMS and Experian’s customer insight company to merge; combined company will be top-3 player in marketing automation market. [Press release]. Retrieved from https://www.thefreelibrary.com/
RTMS+and+Experian%27s+Customer+Insight+Company+To+Merge%3b+
Combined...-a057596321
Chattopadhyay, S. P. (2001). Relationship marketing in an enterprise resource planning environment. Marketing Intelligence & Planning, 19(2), 136-139.
Chen, C. Y., Chu, P. Y., and Huang, C. H. (2012). Open business model: An empirical study of IC industry. Chiao Da Management Review, 32(1), 1-28.
Chen, I. J. and Popovich, K. (2003). Understanding customer relationship management (CRM): People, process and technology. Business Process Management Journal, 9(5), 672-688.
Chen, R. H. and Chiu, K. K. S. (2010). Customer relationship management and innovation capability: An empirical study. Industrial Management & Data Systems, 110(1), 111-133.
Chen, F. and Wang, Y. (2014). Integration risk in cross-border M&A based on internal and external resource: empirical evidence from China. Quality &
Quantity, 48(1), 281-295.
Chi, L. C. (2013). Inter-Industry financial contagion and reorganization filings.
Chiao Da Management Review, 33(1), 37-63.
Childs, R. L. (2007). Successful acquisition strategies require due diligence.
Bank Accounting & Finance, 20(6), 21.
Conway, K. D. and Fitzpatrick, J. M. (1999). The customer relationship revolution - A methodology for creating golden customers. eLoyalty Corporation Publication. Retrieved from http://www.ctiforum.com/
technology/CRM/wp03/custrelrev.pdf
Couldwell, C. (1998). A data day battle. Computing, 64-66.
Coursework.info. (2006). The merger of BMW and Rover. Retrieved from http://www.coursework.info/University/Business_and_Administrative_studies/
Marketing/The_merger_of_BMW_and_Rover_L79485.html
Darkow, I. L., Kaup, C., and Schiereck, D. (2008). Determinants of merger &
acquisition success in global logistics. International Journal of Logistics-Research and Applications, 11(5), 333-345.
Davidson, C. (2011). Marriages of inconvenience. Risk, 24(8), 51-53.
Eisenhardt K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532-550.
Euromoney (1997). Most successful strategic merger: Chase Manhattan &
Chemical Bank. Retrieved from www.euromoney.com/Article/1118148/
Title.html
Epstein, M. J. (2004). The drivers of success in post-merger integration.
Organizational Dynamics, 33(2), 174-189.
Fabrikant, G. (1995, August 1). The media business: The merger; Walt Disney to acquire ABC in $19 billion deal to build a giant for entertainment. The New York Times. Retrieved from http://www.nytimes.com/
File, K. M. and Prince, R. A. (1992). Positive word-of-mouth: Customer satisfaction and buyer behaviour. International Journal of Bank Marketing, 10(1), 25-29.
Grant, R. M. (1991). The resource-based theory of competitive advantage:
Implications for strategy formulation. California Management Review, 33(3):
114-134.
Goff, W. (1999). Distribution mergers can unnerve agents. National Underwriter/ Life & Health Finanical Services, 103(29), 25-26.
Gotschall, M. (1998). The critical link. Electric Perspectives, 23(6), 14-21.
Gurău, C., Ranchhod, A., and Hackney, R. (2003). Customer-centric strategic planning: Integrating CRM in online business systems. Information Technology and Management, 4(2-3), 199.
Harrell, H. W. and Higgins, L. (2002). IS integration: Your most critical M&A challenge? Journal of Corporate Accounting and Finance, 13(2), 23-31.
Harper, P. (1998, August 3). Business "cultures" at war. Electronic News, pp. 50, 55.
Hiltzik, M. A. and Mulligan, T. S. (1996, January 6). The wells fargo-first interstate merger: strategies for a takeover: Anatomy of a deal: Wells went for shareholders. Los Angeles Times. Retrieved from http://www.latimes.com/
Hofstede, G. H. (1980). Culture's consequences: International differences in work-related values.London, UK: Sage Publications.
Hofstede, G. H. (2001). Culture’s consequences: Comparing values, behaviours, institutions, and organizations across nations. London, UK: Sage Publications.
Holliday, K. K. (1995). Will bank mergers destroy customer loyalty? American Banker Magazine, 105(10), 30-37.
Hosseini, S. M. S., Maleki, A., and Gholamian, M. R. (2010). Cluster analysis using data mining approach to develop CRM methodology to assess the customer loyalty. Expert Systems with Applications, 37(7), 5259-5264.
Huang, E. Y. and Chia-Yu, L. (2005). Customer-oriented financial service personalization. Industrial Management & Data Systems, 105(1), 26-44.
Hultman, K. (1979). The path of least resistance: Preparing employees for change, Austin, TX: Learning Concepts.
Hultman, K. E. (1995). Scaling the wall of resistance. Training and Development, 49(10), 15-18.
Judson, A. S. (1991). Changing behavior in organizations: Minimizing resistance to change. Cambridge, MA: Basil Blackwell.
Karimi, J., Somers, T. M., and Gupta, Y. P. (2001). Impact of information technology management practices on customer service. Journal of Management Information Systems, 17(4), 125.
Koetter, M. (2008). An assessment of bank merger success in Germany. German Economic Review, 9(2), 232-264.
Kotler, P. (2006). Marketing management. 11th ed. Upper Saddle River, NJ:
Pearson Education.
Levesque, T. and McDougall, G. H. G. (1996). Determinants of customer satisfaction in retail banking. International Journal of Bank Marketing, 14(7), 12-20.
Lin, M. C. and Chung, D. T. (2011). The exit determinants and wealth effects in the Taiwan Mutual Fund Industry. Chiao Da Management Review, 31(2), 61-99.
Marakas, G. and Hornik, S. (1996). Passive resistance misuse: Over support and covert recalcitrance in IS implementation. European Journal of Information Systems, 5(3), 208-219.
Marks, M. (1997). Consulting in mergers and acquisitions interventions spawned by recent trends. Journal of Organizational Change Management, 10(3), 267-279.
Marks, M. L. and Mirvis, P. H. (2011). Merge ahead: A research agenda to increase merger and acquisition success. Journal of Business and Psychology, 26(2), 161-168.
Mayoff, B. and Cherba, J. (1998, November 30). Mergers, acquisitions affect it infrastructure. National Underwriter Life & Health-Financial Services Edition.
Retrieved from https://www.highbeam.com/doc/1G1-53366253.html
McKiernan, P. and Merali, Y. (1995). Integrating information systems after a merger. Long Range Planning, 28(4), 4-62.
Miles, M. B. and Huberman, A. M. (1994). Qualitative data analysis: An expanded sourcebook. Thousand Oaks, CA: Sage Publications.
Neary, J. P. (2007). Cross-border mergers as instruments of comparative advantage. Review of Economic Studies, 74(4), 1229-1257.
Odiorne, G. S. (1981). The Change Resisters. The Personnel Administrator, 26(1), 57.
Ojala, M. (2005). The art of the deal: Introducing mergers & acquisitions. Online, 29(6), 27-28.
Pai, J. C. and Tu, F. M. (2011). The acceptance and use of customer relationship management (CRM) systems: An empirical study of distribution service industry in Taiwan. Expert Systems with Applications, 38(1), 579-584.
Pautler, P. A. (2003). Evidence on mergers and acquisitions. Antitrust Bulletin, 48(1), 119-221.
Platt, G. (2004). Cross-border mergers show rising trend as global economy expands. Global Finance, 18(11), 49-51.
Raman, P., Wittmann, C. M., and Rauseo, N.A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.
Ramaswamy, K. (1997). The performance impact of strategic similarity in horizontal mergers: Evidence from the U.S. banking industry. Academy of Management Journal, 40(3), 697-715.
Rappaport, A. and Sirower, M. L. (1999). Stock or cash? Harvard Business Review, 77(6), 147-158.
Reichheld, F. F. and Sasser Jr., W. E. (1990). Zero defections: Quality comes to services. Harvard Business Review, 68(5), 105-111.
Riege, A. M. (2003). Validity and reliability tests in case study research: a literature review with “hands-on” applications for each research phase.
Qualitative Market Research: An International Journal, 6(2), 75-86.
Rigby, D. K., Reichheld, F. F., and Schefter, P. (2002). Avoid the four perils of CRM. Harvard Business Review, 80(2), 101-109.
Robbins, S. S. and Stylianou, A. C. (1999). Post-merger systems integration: The impact on IS capabilities. Information & Management, 36(4), 205-212.
Salami, M. P. (2008), ”Impact of customer relationship management (CRM) in the Iran banking sector. International Journal of Organizational Innovation, 1(2), 30-49.
Samet, K. (2010). Banking and value creation in emerging market. International Journal of Economics and Finance, 2(5), 66-78.
Shang, S. C. (2005). A comparative study on users' role in of ERP software and BPM software implementation. Journal of eBusiness, 7(4), 331-351.
Shrivastava, P. (1986). Postmerger integration. Journal of Business Strategy, 7(1), 65-76.
Shyu, S. H. P. (2014). Establishing a value-creation model on mergers and acquisitions: An integrated strategy approach. Chiao Da Management Review, 34(1), 117-139.
Siddiqi, K. O. (2011). Interrelations between service quality attributes, customer satisfaction and customer loyalty in the retail banking sector in Bangladesh.
International Journal of Business and Management, 6(3), 12-36.
Stuart R. (2011, September 6). Ensuring a successful credit union merger. Credit Union Times. Retrieved from http://www.cutimes.com/2011/09/06/ensuring- a-successful-credit-union-merger
Tan, A. (2009). The politics of financial reform in Taiwan: Actors, institutions, and the changing state. Asian Affairs, an American Review, 36(4), 201-212.
Bressler, T. G. and McDonnell, J. (2007). M&A in 90 days with CRM. Wall Street & Technology, 25(4), 49.
Tompkins, K. M. (2005). Why buy the whole company? Vital Speeches of the Day, 71(20), 639-640.
van de Vliet, A. (1997, June). When mergers misfire. Management Today.
Retrieved from https://www.questia.com/magazine/1G1-19909368/when- mergers-misfire
Vestring, T., Rouse, T., and Rovit, S. (2004). Integrate where it matters. MIT Sloan Management Review, 46(1), 15-18.
Weber, J. A. and Dholakia, U. M. (2000). Including marketing synergy in acquisition analysis: A step-wise approach. Industrial Marketing Management, 29(2), 157-177.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171-180.
Wiklund, J. and Shepherd, D. A. (2009). The effectiveness of alliances and acquisitions: The role of resource combination activities. Entrepreneurship Theory and Practice, 33(1), 193-212.
Wong, A. and Cheung, K. (2009). The effects of merger and acquisition announcements on the security prices of bidding firms and target firms in Asia. International Journal of Economics and Finance, 1(2), 274–283.
Worthington, A. C. (2004). Determinants of merger and acquisition activity in Australian cooperative deposit-taking institutions. Journal of Business Research, 57(1), 47-57.
Wu, Y. T. (2010). Applying the strategic approach to assess customer relationship management. International Journal of Organizational Innovation, 2(3), 186-205.
Xu, M. and Walton, J. (2005). Gaining customer knowledge through analytical CRM. Industrial Management & Data Systems. 105(7), 955-971.
Xu, Y., Yen, D. C., Lin, B., and Chou, D. C. (2002). Adopting customer relationship management technology. Industrial Management & Data Systems, 102(8), 442-452.
Yang, P. Y. S., Wang, J. H., and Ruan, W. Y. (2013). Service innovation strategies in financial service industry: The perspective of reverse product cycle and innovation type. Chiao Da Management Review, 33(2), 31-74.
Yin, R. K. (1994), Case study research design and methods. Newbury Park, CA:
Sage Publications.
Zeithaml, V. A., Parasuraman, A., and Berry, L. L. (1990), Delivering quality service: Balancing customer perceptions and expectations. New York, NY:
The Free Press.
Zeng, Y. E., Wen, H. J., and Yen, D. C. (2003). Customer relationship management (CRM) in business-to-business (B2B) e-commerce.
Information Management & Computer Security, 11(1), 39-44.