The Relationship between organizational fit and financial performance of firms the case for Kassim – Lakha Samvir Abdulla, Pannel Kerr Forster certified public accountants

Abstract

This research was taken against the background that though mergers are intended to increase the shareholder’s value through increased efficiency, economies of scale, widened markets, greater purchasing power and profitability, the after merger performance of KLSA PKF is not satisfactory.

Mergers combine the divergent cultures, strategic orientations and practices into a new configuration creating intra firm variations. Friction between existing factions is prone to occur (Philips, 1994) which influences the organizational performance.

The study examined the relationship between organizational fit and financial performance of the merger. The independent variable, organization fit was measured by organizational culture and integration, job satisfaction and company size. The dependent variable was performance, was measured revenue, costs and profitability.

The results of the research indicate that job satisfaction, organizational culture and company size are associated with financial performance. The results further indicate that though mergers result in increased revenue, the associate costs are more in the early years of the merger.

The research report argues government, ICPAU to take assertive policies to ensure that mergers do not cause psychological stress on employees.