QM in Action

Topics: Central bank, Game theory, Mergers and acquisitions Pages: 2 (397 words) Published: March 17, 2013
Lorenz Anthony D. Cortezo11285885
QM in Action
Last year, Bank of the Philippine Islands (BPI) and Philippine National Bank (PNB) was in the talks for a merger of both companies. This merger will make the biggest bank in the country combining the assets of the two to a sum of 33 Billion USD. The deal didn’t transpire though because as of the December 15 deadline, no talks were settled. This made Banco de Oro (BDO) the biggest bank as of late. What interests me is what will happen if the merger will continue? There are 5,000 employees in PNB while BPI has 12,000 employees. If the merger will continue, there will be thousands of people that will be added in the mix and politics might rise up. We can say that PNB people want their jobs saved and even be promoted. We can also say that BPI employees wanted the same. In incorporating quantitative methods, I applied the BPI-PNB merger in the possible situations if either bank gets bigger power or shares. Below is the game theory analysis for this case. | PNB strategy 1PNB top management gets more shares| PNB strategy 2PNB top management gets less shares| BPI strategy 1BPI top management gets more shares| There will be a power struggle| BPI top management will gain more power| BPI strategy 2BPI top management gets less shares| PNB top management will gain more power| States that both parties are not interested in continuing the merger|

Ethical issues:
1. What will happen to the employees?
* The employees must be retained and not be obliged to have their compensation package compromised. The annual agreed salary must never change and the position or rank they currently have must not be demoted. * If there will be any justifications for layoff due to enormous employee headcount growth, the candidates for layoff must not belong from a single bank. There must be just reasons why they are being released and it must not be the bank where they originated from. 2. Ethical practices...
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