Addressing Employee-Centric Risks in Post-Merger Integration: A Framework for Sustainable Growth in NBFCs

Abstract

In NBFCs, post-merger integration process is one of the most decisive factors for long-term success and sustainable growth of mergers and acquisitions. The function of human resource integration organizational culture and perceptions of employees play important roles in determining the fate of such transactions. This study is concerned with evaluating post-merger integration threats in NBFCs with a special consideration of the people-oriented problems that affect organizational stability, employee morale and staff retention during the integration process. Referring to the available literature, this study investigates the roles played by organizational culture, leadership communication, employees' stress levels and HR practices on the effective integration of acquired firms. A model of sustainable development in NBFCs is suggested, focusing on the alignment of HR plans with organizational objectives, creating cultural compatibility and resolving employee issues pre-emptively. The study also examines how theory, e.g., the Psychological Contract Theory and Cultural Fit Theory, is used to control employee expectations and minimize resistance to change. By focusing on the human dimension of integration, the research offers practical recommendations for NBFC leaders and policymakers to reduce employee discontent, turnover and morale risks of the merger to ultimately realize the expected financial and strategic synergies after the merger. The findings also extend current understanding of the complex relationship between employee integration and organizational performance in the NBFC industry, with important theoretical and practical implications for M&A management.