Knowledge Matters, but Culture is King (In Technology Acquisitions)

40 Pages Posted: 19 Jun 2010 Last revised: 13 Jun 2014

See all articles by Abhishek Kathuria

Abhishek Kathuria

Indian School of Business (ISB), Hyderabad

Astrid Fontaine

Emory University - Goizueta Business School

Michael Prietula

Emory University - Goizueta Business School

Date Written: February 16, 2011

Abstract

Research consistently identifies knowledge and culture as critical antecedents to success in focused technology acquisitions. Because such studies are typically observational, these constructs have been considered independently and within limited parametric values. Incorporating an agent-based simulation expanding on the March (1991) exploration-exploitation model, we show that there are marginally decreasing returns on knowledge appropriation, but non-decreasing linear returns on cultural appropriation. Our findings also show that combinations of appropriation strategies yield equivalent performance benefits. Gains are improved by insulating retained employees from any exploitive cultural influences. We confirm prior evidence of the “dual-edged” sword effects of cultural appropriation of acquiring underperforming firms.

Keywords: Mergers, Acquisitions, Organizational Learning, Knowledge, Culture, Exploration, Exploitation, Simulations, Agent-Based Models

Suggested Citation

Kathuria, Abhishek and Fontaine, Astrid and Prietula, Michael, Knowledge Matters, but Culture is King (In Technology Acquisitions) (February 16, 2011). Emory Law and Economics Research Paper No. 10-67; Emory Public Law Research Paper No. 10-107. Available at SSRN: https://ssrn.com/abstract=1626330 or http://dx.doi.org/10.2139/ssrn.1626330

Abhishek Kathuria (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Astrid Fontaine

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Michael Prietula

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

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