Strategic Management Fit: A Contrivance for Achieving Successful Business Merger

Abstract

Every business organization is concerned with growth. Growth does not only depend on availability of resources, but also on applying appropriate strategy to manage available resources. To succeed and grow, business needs to carefully and systematically choose strategy. The development of appropriate strategy is essential for survival in today’s business world. Business leaders must evaluate the opportunities in, and threats from the external environment in order to build appropriate strategies that take advantage of their industry’s strengths and shore up weakness. Successful organizations develop and implement strategies that are designed to ensure long-term success. This study looks at the impact of strategic fit on business merger, by analyzing the relationship between the two variables. This is to ascertain the strategic values firms attain from such cooperative arrangements. The study covered all the six (6) merged commercial banks between 1995 and 2005, operating in Owerri, the capital city of Imo State, Nigeria. For expedient purposes, only two of the merged banks (Equatorial Trust bank (ETB) and Stanbic-IBTC bank) were chosen for the study, and all the staff served as the population. Fifteen (15) senior staff each from the two banks was selected purposefully but randomly giving a sample frame of 30.The study adopted the survey design and the questionnaire served as the primary source for data collection. The questionnaire was structured and Likert’s 3 points scale- a summated rating (seemingly an interval) scale was used to measure the degree of agreement from respondents. The research instrument was validated and reliability test ascertained using Crombach’s Alpha Coefficient. Responses from the 30 respondents were collated and data analyzed. The two hypotheses were tested using Pearson product moment correlation and Z- statistical tools respectively. Result from test of hypotheses indicates that strategic fit has relationship with the success of merged organizations, and that the relationship is significant. Therefore, the proposal is that firms should seek well thought-out and excellent fit capabilities (complements) in targets when it comes to issues of cooperative arrangements such as merger.

Keywords: Merger, Strategic fit, Synergos, Capability, Cooperative arrangement, Contingency