ABSTRACT

The research is conducted to examine the impact of Mergers and Acquisitions on organizational performance considering Virgin Money and Northern Rock Plc as a case. The data and information is assembled from the five managers of Virgin Money UK. The collected data are analysed with the help of a qualitative analysis technique so that the data can be thoroughly examined and explained. Phenomenological research philosophy is applied to help the collection and analysis of the data through qualitative techniques. The results of the research are also compared with the earlier researches to ensure compatibility of the results. At the end of the research it is deduced that Mergers and Acquisitions have a positive impact on the organizational performance.

CHAPTER NUMBER ONE

INTRODUCTION

1.1.Introduction

This is the opening chapter of research. In this section all those aspects of the study are discussed slightly, which are used by researcher in the later parts of the study. Some of the significant features of the research are slightly touched in the section. The research’s background is given along with the company background. The aims and objectives of the study are discussed in this section as well.

1.2.Background of Research

With the opening up of business reforms in, developing nations,which are market oriented. Organizations always search new markets and the competition in the local market has been increased due to this reason. The trend has been observed that the investors started investing in the emerging market. The most favourable strategy which firms adopt to penetrate in the market with lower risks and costs is mergers and acquisitions. Firms adopt these strategies to fortify their positions in the market.

Mergers and Acquisitions is the fastest and the most effective way of expansion by firms.  (Schuler & Jackson, 2004).At times, the mergers and acquisitions fail as well this is due to a number of reasons, few of those reasons are mentioned below.

• The number of social costs
• Lost of family income
• Lost jobs
• Lost taxes

Mergers and acquisitions in the financial institutions and banks have witnessed failures, and the reason for that is considered as overlooking the human resources and activities in regards to mergers and acquisitions (Schuler & Jackson, 2001).

The reason for which  the mergers and acquisition have become a popular strategy of the firms isa resource based view along with innovations and organizational learning (Barney, 1991;  Conner and Prahalad, 1996). In this regard it has been elaborated that when the organization is exposed to diverse and new ideas after mergers and acquisition it has a greater chance of organisation learning. Post mergers and acquisition performance of the firm can be enhanced by acquiring the knowledge of the acquired firm (World Investment Report, 2000).

1.3 Company’s background:

Sir Richard Branson founded a company named as a Virgin Money plc. in March 1995, it is based in the United Kingdom and the Virgin Group held this company. It is actually a bank and financial services provider. It has expanded its business across the globe in a very effective manner. The Virgin money has tried to purchase the Northern Rock in the year 2007, and finally bought it in the year 2012 (http://www.virgin.com/company/virgin-money-uk).

Northern Rock is also United Kingdom, based bank it is located in Newcastle upon Tyne at the Regent Centre, it is presently owned by Virgin Money. Northern Rock is the first bank in one hundred and fifty years to suffer from Bank ruin. Firstly, it was public ownership and finally Virgin Money acquired it in the year 2012 (International directory of company histories 2000).

1.4 Problem statement

For the ongoing study, the problem statement designed is mentioned below:

“Impact of Mergers and Acquisitions on organizational performance-case of Virgin Money UK and Northern Rock Plc”

1.5 Aims

The aim of the ongoing research is as follows.

“Examining the Impact of Mergers and Acquisitions on organizational performance-case of Virgin Money UK and Northern Rock Plc.”

1.6 Objectives

The research is conducted with the following objectives

• To examine the degree of association between the mergers and acquisition and the organiza