Mergers & Acquisitions of Knowledge

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You should say mergers and acquisitions are an important way of developing an organization's strategic development of knowledge. However, mergers and acquisitions are not the key to organization's strategic development of knowledge. Nor does knowledge acquisition drive organizations to carry out these activities.
Mergers and acquisitions are a commonly applied strategic option for gaining new knowledge from the acquired company and then transferring that knowledge among other parts within the acquiring organization(1). However, the process of knowledge transfer is dynamic and complex and numerous challenges can arise along the way. Individuals in companies are important factors that constrain the transfer of knowledge in Mergers and acquisitions. In case of Mergers and acquisitions when knowledge acquisition takes place the challenge is to ensure how to pass on most of relevant knowledge from the previous two organizations to the new combined firm. Some of the challenges that emerge are from the differences in the two cultures of the organization. Further, there are two different systems of knowledge and insights that are integrated. To achieve the objective of strategic development of knowledge strategic management should enable the development and sharing of new knowledge and other resources. During Mergers and acquisitions the operations are high cost, complex operations where crucial decisions need to be made, yet this happens rarely. In reality tacit knowledge is lost. During mergers people caught in high pressure activity can easily forget the detail of how the decision was made and fail to pass the knowledge on to the future teams(2). Mergers and acquisitions knowledge transfer is so important that human memory alone cannot be relied on as a knowledge store, so there is strong need for documenting the learning for use in future.

From the perspective of strategic development of knowledge, there are areas where knowledge management efforts should be focused during mergers and acquisitions. These areas are identifying the valuable and redundant knowledge sources in the target organization. This is important because it involves understanding the target company's tacit and embedded knowledge locked in people, communities, processes, networks, and procedures(3). During the Mergers and acquisitions restructuring one of the main challenges is to combine the relevant knowledge with the organization's knowledge assets to achieve synergy. There is need for knowledge sharing, reuse, and creating of knowledge. However, there are barriers to combining relevant knowledge and achieving synergy. These include cultural differences, barriers in networks, and low incentives within a potential hostile environment.

The statement that mergers and acquisitions are the key to an organization's strategic development of knowledge is not valid. Strategic development of knowledge is achieved by collecting information, processing it, storing it, and using it to gain competitive advantages(4). Strategic development of knowledge refers to gaining critical knowledge relating to different areas. First, the company must have knowledge relating to customers. The company must have knowledge that the customers can gain to satisfy their needs for knowledge. The customer knowledge includes product, market, and supplier knowledge. Also, the company must develop knowledge about the customers. This knowledge helps the company understand customers, understand their motivations, and address them. The knowledge consists of customer requirements, expectations, and buying activities. Further, knowledge from the customer is about the products, suppliers, and markets. This knowledge helps improve products. How can a company enhance this knowledge? Knowledge management is achieved by getting feedback, collecting and processing marketing related information, and collecting suggestions(5). Moreover, the customer can be involved in development of a design. There is no need for Mergers and acquisitions to develop knowledge related to customers.

The contention that mergers and acquisitions are the key to an organization's strategic development of knowledge is not substantiated. Let us consider another area where the firm needs to develop competitive advantage(6). This is knowledge related to suppliers. Again there is need for knowledge for suppliers. The suppliers need to have knowledge about the production, forecasts, inventory, products, customers, and markets. In short the suppliers must have knowledge that helps ...