Acquiring new technologies and capabilities

To improve competitiveness and retain sustainability, firms require new technologies and capabilities. In this age of rapid innovation and complexity, it is challenging for the firms to develop internally and remain competitive at the same time. Merger, acquisition and alliance are some of the ways to achieve this, but the primary driver is the desire to obtain valuable resources. Many acquisitions failed to achieve their objectives and resulted in poor performance because of improper implementation.

1. Improper documentation and changing implicit knowledge makes it difficult to share information during acquisition.

2. For acquired firm symbolic and cultural independence which is the base of technology and capabilities are more important than administrative independence.

3. Detailed knowledge exchange and integrations are difficult when the acquired firm is large and high performing.

4. Management of executives from acquired firm is critical in terms of promotions and pay incentives to utilize their talent and value their expertise.

5. Transfer of technologies and capabilities are most difficult task to manage because of complications of acquisition implementation. The risk of losing implicit knowledge is always associated with the fast pace acquisition.

Preservation of tacit knowledge, employees and literature are always delicate during and after acquisition. Strategic management of all these resources is a very important factor for a successful acquisition.

Increase in acquisitions in our global business environment has pushed us to evaluate the key stake holders of acquisition very carefully before implementation. It is imperative for the acquirer to understand this relationship and apply it to its advantage. Retention is only possible when resources are exchanged and managed without affecting their independence.