The phenomenon of trust and trust building has been widely researched with regard to different contexts and subjects. Nevertheless, the factors that influence trust building in mergers and acquisitions (M&As) and the way in which trust affects the post-M&A process remain unclear. This study explores trust development in the cross-cultural integration process following emerging country firms’ acquisitions in an advanced economy. A grounded theory model was developed to link the contextual characteristics of Chinese M&As in Germany that require the development of trust and the way in which managers understand sources of trust building. The perceived future uncertainty, different levels of technology and management, previous public discourses, and differences in institutional and cultural norms require the development of trust. The data reveal that a range of factors can foster trust development, including economic factors as well as emotional factors, such as mutual understanding, reliability, familiarity, and emotional bonding. A three-stage cross-cultural trust development theory is proposed, asserting that trust can be established based on economic factors, improved through mutual understanding and reliability, and further developed based on familiarity and emotional bonding. Trust development influences the acquiring firm’s behavior with regard to the transparency in information policies, the integration in decision-making, the exercise of control over the acquired firm, and the granting of autonomy in the cross-cultural integration processes.
Purpose – Banks and corporate customers have realized that bank-corporate relationship is important but little is known about why and how banks establish and exploit relationships. No comprehensive theory has explained relationship banking and in order to get a better understanding the purpose of this paper is to investigate why and how banks and companies communicate in order to create value. Design/methodology/approach – This study adopts a qualitative methodology and a grounded theory approach was adopted. In total, 34 in-depth interviews were conducted with banks and 15 with corporate managers. Grounded theory models are developed based on interview data. Findings – It was found that the nature of bank-corporate relationship is long term. The relationship is based on trust-based personal communications between banks and corporate customers. Macro conditions including the advances in technology, financial regulation and business globalization were considered when the case banks adopted relationship banking. Some intervening conditions including customer information and knowledge, customer needs and customer confidence also influence the development of relationship banking. The interviewees perceived that the case banks gained benefits including better customer retention economy, risk management efficiency and greater effectiveness in maintaining sustainable profitability. The corporate customers gained benefits including fund availability, product availability, service quality, help in-time and business platform. Originality/value – This study derives concepts and categories from primary data and identifies relationships among these theoretical elements. This investigation provides a comprehensive picture of relationship banking and supplies some theoretical and practical implications. Moreover, a value creation and allocation theory of the bank is developed.
This paper identifies strategic concepts and practical techniques in relationship-banking and explores how customer value was improved and how relationship-banking performance was measured and linked to relationship managers' compensation. Grounded theory was adopted to collect and analyse data. 25 interviews have been conducted with relationship managers and corporate banking directors in 11 case banks and case banks' quantitative data was used to support the propositions. It was found that customer relationship was seen as a valuable asset. Relationship Orientation and Customer Focus were evaluated by undertaking internal surveys and relationship management objectives were formulated and actions were proposed to improve Customer Value to the case banks. In the case banks Customer Information was collected through multiple customer touch points and integrated and analyzed. Customer Knowledge was accumulated and sustainable Competitive Advantages were built. Customer Perception and Customer Loyalty were measured externally. Customer Value and Risk Adjusted Return on Asset (RAROA) were employed to measure relationship banking performance and reward relationship managers accordingly. The interviewees perceived that relationship-banking performance could be improved in this dynamic learning process.
This paper identifies strategic concepts and practical techniques in relationship-banking and explores how customer value was improved and how relationship-banking performance was measured and linked to relationship managers' compensation. Grounded theory was adopted to collect and analyse data. 25 interviews have been conducted with relationship managers and corporate banking directors in 11 case banks and case banks' quantitative data was used to support the propositions. It was found that customer relationship was seen as a valuable asset. Relationship Orientation and Customer Focus were evaluated by undertaking internal surveys and relationship management objectives were formulated and actions were proposed to improve Customer Value to the case banks. In the case banks Customer Information was collected through multiple customer touch points and integrated and analyzed. Customer Knowledge was accumulated and sustainable Competitive Advantages were built. Customer Perception and Customer Loyalty were measured externally. Customer Value and Risk Adjusted Return on Asset (RAROA) were employed to measure relationship banking performance and reward relationship managers accordingly. The interviewees perceived that relationship-banking performance could be improved in this dynamic learning process.
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