Applying the consistent fuzzy preference relations to select merger strategy for commercial banks in new financial environments

  • Authors:

  • Tien-Chin Wang;Ying-Ling Lin

  • Affiliations:

  • Department of Information Management, I-Shou University, 1, Section 1, Hsueh-Cheng Road, Ta-Hsu, Kaohsiung County 840, Taiwan;Department of Information Engineering, I-Shou University, 1, Section 1, Hsueh-Cheng Road, Ta-Hsu, Kaohsiung County 840, Taiwan

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2009

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Abstract

Generally, financial mergers can bring some advantages in terms of improving financial structures, and promoting the operating performance of financial organizations. Meanwhile, official reports demonstrate that the policy of bank mergers has fallen short of expectations, and the choice of managerial strategies remains a major issue for bank administrators. This investigation establishes an analytical hierarchy framework to help banks choose merger strategies based on six main criteria, including management performance, staff rights and interests, customer orientation, financial analysis, government policy and risk management. The consistent fuzzy preference relation is used to improve decision making consistency and effectiveness. The analytical results demonstrate that risk management and financial composition of banks are the major considerations for banks in strategy selection. Furthermore, analytical results demonstrate the best futuristic policy is ''merging with other financial organizations to become part of an existing bank.''