Knowledge transfer: analysis of three Internet acquisitions

Antecedents of knowledge transfer in acquisitions

“…Third, asymmetric power relationships and lack of organizational "fit" between the acquiring and acquired firms may lead to dysfunctional tensions and conflicts, and, subsequently, make the knowledge transfer and acquisition complicated (Jemison and Sitkin, 1986;Inkpen et al, 2000;Schoenberg, 2001;Ranft and Lord, 2002;Castro and Neira, 2005;Bjorkman et al, 2007). Last but not the least, many acquisitions result in a reduction of relative standing of the acquired employees which may lead to their voluntary and involuntary departures (Hambrick and Cannella, 1993;Very et al, 1997).…”

“…In order to prevent this, it may be necessary for the acquirer to engage in post-acquisition process of gradual learning and grant a relatively high level of autonomy to the acquiree (Haspeslagh and Jemison, 1991;Ranft and Lord, 2002). However, empirical studies witness that granting more autonomy to the acquired firm promotes exploration at the expense of exploitation that may result in limited access and utilization of the partner's knowledge, prevent realization of synergies and generally inhibit the abilities of the two merging organizations to work together (Håkånson, 1995;Ranft and Lord, 2002;Castro and Neira, 2005;Puranam et al, 2006). Paradoxically, although granting more autonomy to the acquired firm may help to prevent the loss of most valuable knowledge and reduce feelings of uncertainty and job insecurity, it can also inhibit integration and recombination of different sets of knowledge in a newly merged firm (Kogut and Zander, 1992).…”

“…A study of 430 top executives in 97 acquired firms in the US indicates that acquisitions result in reduced relative standing of the acquired executives that increases their propensity to depart (Hambrick and Cannella, 1993). et alet alLoosing key employees in the acquired firm may lead to more departures and result in a decline of post-acquisition performance (Castro and Neira, 2005;Very et al, 1997). In order to prevent this, it may be necessary for the acquirer to engage in post-acquisition process of gradual learning and grant a relatively high level of autonomy to the acquiree (Haspeslagh and Jemison, 1991;Ranft and Lord, 2002).…”

“…Yet, knowledge integration and recombination is critical to the success of acquisition (Haspeslagh and Jemison, 1991;Håkånson, 1995;Bresman et al, 1999). Several studies of high-technology acquisitions in US and Spain witness that the most valuable organizational knowledge is embedded in technical skills of the acquired employees and complex interactions of functional teams which is the most difficult to evaluate, assimilate and apply to commercial ends by the acquirers (Ranft and Lord, 2001;Castro and Neira, 2005). Differences in cognitive and normative institutional environments of the two combining organizations increase knowledge ambiguity and result in perceptual differences between partners regarding the process of transfer.…”

Success and failure in M&As: Is there a place for a paradigm change? Evidence from the Israeli hi-tech industry

“…However, a high level of integration may cause disruption of existing resources and routines [Haspeslagh and Jemison 1991] and increase the tendency for acquired managers and employees to leave the firm [Hambrick and Cannella 1993]. The literature on human resources and organizational behaviour warns that integration, which involves reconfiguration and change in the acquired unit, may cause major upheaval amongst personnel, as well as cultural conflicts [Castro and Neira 2005]. -Retained autonomy.…”