In a highly competitive business environment, firms look for ways and means of growth
through a variety of means. One such approach is through mergers and acquisitions
(M&As). M&As are often viewed with multiple objectives in mind. To some firms, it is a way to access new markets, while for some, it may be a beginning point for new innovation opportunities. Some look at synergies with new partners, while some look at business consolidation. Not all M&As lead to positive outcomes though. Studies indicate that the so-called synergies do not pan out the way they were planned. The objective of building economies of scale too turns out to be a distant mirage. In acquisitions, results have shown that the acquirer has in most cases lost out on the deal because of the very high price paid to the gains accrued. The acquired company benefits on most counts. The first paper in this issue, “Mergers and Acquisitions: An Empirical Study on the Post-Merger Performance of Selected Corporate Firms in India”, by Rosy Kalra, looks at the impact of M&As on firm’s performance. The financial implications of M&As of 47 listed firms in India are presented. The impact on liquidity, profitability, operating performance and leverage of sample merged/acquirer companies is analyzed using appropriate tests. The results showed a significant improvement in the liquidity, profitability, operating performance and financial leverage for very few merged/acquirer firms.
In a competitive environment, some firms have shown how to profitably reinvent themselves. Companies such as Apple have time and again exhibited the resilience to grow profitably based on specific capabilities such as R&D. Strategy researchers refer to these as ‘Dynamic Capabilities’ which are critical for a firm’s long-term success. For instance, Apple has never been a leader in technology but is a highly successful marketer and is always ahead in developing features that consumers value. IBM is a true technological innovator, both internally and in the markets in which it participates. IBM successfully transitioned from electromechanical tabulating machines to mainframe computers, and today has a very successful IT-based services, software and cloud computing business, all due to dynamic capabilities. In the second paper, “Dynamic Capabilities: Do They Lead to Innovation Performance and Profitability?”, by Niels Nolsøe Grünbaum and Marianne Stenger, the authors examine the relationship between dynamic capabilities, innovation performance and profitability of small and medium-sized manufacturing enterprises operating in volatile environments. A multi-case study design is adopted as research strategy. The findings reveal a positive relationship between dynamic capabilities and innovation performance in the identified case companies. The study could not, however, establish a positive relationship between dynamic capabilities and profitability.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
