Managerial Characteristics And Post-Merger Organizational Performance Of Firms In The Insurance Industry In Kenya: Case Of Icea Lion Group Limited

ABSTRACT

Formation of mergers has over the years remained one of the most common and most pursued growth strategy by business organizations. Kenya as a country has neither been left behind by the waves of mergers that have been sweeping across different industries globally. Recent history of the business landscape in Kenya is marked with mergers within and across industries. The formations of mergers have been marked with mixed results and performances. On one hand there have been accounts of incredible and remarkable success and there have been cases of outright failures. The differences in performance of mergers all over the world prompted various researches to be conducted in order to establish and explain the difference in performances. Additionally, various theories and models such as the Efficiency Theory have also been developed to try and explain some of the factors that are critical to the performance of mergers. These researches have established different reasons for the varied results and performances. The reasons range from different organizational cultures to poor due diligence by companies intending to form a merger. Persistence in formation of mergers among corporate organizations despite the varied performances, as well as the knowledge gap created by absence of research focusing on managerial characteristics and post-merger organizational performance of merged firms in Kenya necessitated the author of this paper to conduct a study on post-merger organizational performance of firms in Kenya. Specifically, this research intended to establish; how management’s tenure, leadership, management’s communication and management’s level of education affect post-merger performance firms in Kenya. A combination of qualitative and quantitative approaches to research were used to conduct this study. Specifically, the researcher adopted cross-sectional descriptive research design to describe the relationship between the variables of the study. Additionally, correlational design was considered to further explore the relationship between the variables of the study. The target population of the research consisted of the top, middle, and lower management of ICEA Lion Group. Probability sampling, specifically stratified sampling, was be used in this study. Questionnaires were used to collect data from the field. Pearson Correlation, Chi-square, and ANOVA methods were used to analyse the data. Management’s tenure came out as a managerial characteristic that affects and has a great bearing on the post-merger performance of mergers in the insurance industry in Kenya. Good and effective leadership was also established to have effects on the post-merger organizational performance in the insurance industry in Kenya. Effective and timely communication from management were also established to affect post-merger organizational performance. Management’s level of education plays a key role in post-merger performance of organizations.