Question a:

Mergers in business management are critical in generating enough resources for an organization to operate effectively while providing a platform for a harmonized management approach. In the banking sector, the option of merging is usually a major capital budgeting undertaking. It largely saves costs and improves economic gains. Besides, it improves the effectiveness of financial institutions and minimizes loss of revenue through aspects such as taxation and operating on a small scale.

Mergers in the banking sector provide offer firms with numerous cost advantages. The whole some of the reasons for most mergers include diversification, acquisition of more resources, and gaining market power, the main advantage of merging operations in the banking sector is saving costs. Most banks suffer from cost inefficiencies because of operating as single entities.

Question b:

Large banks usually enjoy huge advantages over smaller or relatively medium-sized banks. It is possible to measure the economic importance of large banks over small ones in terms of geographical location, scale, and scope of business. A $300 billion national bank provides unique benefits to customers by offering a large variety of products and services. This does not mean that smaller banks do not enjoy economic benefits. In terms of scope and scale of operations, larger banks reap long-term increasing returns contrary to smaller banks.

Question c:

The essence of forming any merger lies in the desire to infer stronger guidance and create focus in operations. Merging banks increases economies of scale among partners. A matrix structure assimilates and harmonizes regional and functional core commonalities amidst emerging competitors. Therefore, it is possible to predict the latter based on the economies of scope.