Access to tacit knowledge by executive retention in cross-border acquisitions

Abstract

For companies that are internationalizing through foreign acquisitions, a major consideration is likely to be access to the technical and social knowledge of the local environment that executives of the acquired companies possess. Despite the importance of this consideration, the literature has not sufficiently addressed the issues it raises. Investigations of the factors that affect the departure of executives of acquired companies have until recently tended to overlook the question of the knowledge that leaves with them. The present paper discusses executive retention in cross-border acquisitions from a knowledge-based perspective. It analyzes three cases of such acquisitions in Brazil. The results show how knowledge can play a critical role in the acquirer's decision to retain or release owners and/or executives after the acquisition. In addition to conventional variables, the characteristics of the knowledge of the acquired companies' owners and/or executives emerge as essential to explain their retention. This paper argues that evaluating the knowledge the acquired company's owners and/or executives possess, especially regarding its degree of tacitness, is one basis for decisions on their retention.

Information, knowledge and collaboration management in the internationalisation of SMEs: A systematic literature review

“…Some studies show that knowledge assimilated by SMEs in internationalisation processes is both tacit and explicit in nature (Child et al, 2012;Fletcher & Prashantham, 2011;Sommer & Haug, 2011). Tacit knowledge is subjective and hard to formalise, being embedded in individuals and relationships, in the form of beliefs, perspectives and ideals (Nonaka, 1994).…”

Factors Influencing Knowledge Retention Process: Case of Lithuanian Armed Forces

“…According to Child et al (2012) the classification of knowledge retention factors should be linkable to the knowledge classification itself. These scientists suggest to classify the factors into personal and group, determining in this way who is the carrier of the knowledgeindividual or the group of the former.…”

“…The significance of the knowledge desired for preservation to the organization is no less important -strategic or tactical knowledge. Child et al (2012) suggests to evaluate the possibilities of the replacement of the possessed knowledge, after the knowledge carriers are identified there is a necessity to establish whether the knowledge can be replaced after the organization has lost certain employees or data bases (Child et al 2012).…”

“…In this way when leaving the organization the employees took the knowledge that they accumulated during the long years of service causing for the organisation to lose the strong market positions (Martensson 2000;Martins, Meyer 2011;Child et al 2012). Experienced employees usually are the carriers of the non-expressible knowledge and after they leave the organization, it usually loses a part of the organizational culture or certain properties, knowledge about the management specifics of the operational processes, strategy, products (services).…”

The non-economic dimension of changes prompted by cross-border acquisitions: a relational view

“…The enormous literature that follows the rise of M&A worldwide concentrates on analyzing a number of issues regarding the acquiring and the acquired firms (Calipha et al, 2010), such as performance (Das & Kapil, 2012), knowledge retention (Child et al, 2012) and changes in management practices (Duarte, 2001), such as human resource practices (Weber & Tarba, 2010). J.…”