What They Know vs. What They Do: How Acquirers Leverage Technology Acquisitions

Strategic Management Journal, Forthcoming

53 Pages Posted: 23 Aug 2006  

Phanish Puranam

INSEAD

Kannan Srikanth

Singapore Management University - Management Department; University of Southern Denmark - Strategic Organization Design unit (SOD)

Abstract

Existing research suggests that in acquisitions of small technology based firms by large established firms, post merger integration both enables and hinders acquirer's efforts to leverage the technology of acquired firms. This apparent paradox can be resolved once we account for the qualitatively distinct ways in which acquirers leverage technology acquisitions. Integration helps acquirers use the acquired firm's existing knowledge as an input to their own innovation processes (leveraging what they know), but hinders their reliance on the acquired firm as an independent source of ongoing innovation (leveraging what they do). We also show that experienced acquirers are better able to mitigate the disruptive consequences of the loss of autonomy entailed by integration, though we find no evidence that they achieve greater coordination benefits from integration.

Keywords: Technology acquisitions, Post-merge Integration, Coordination

JEL Classification: L20, M10

Suggested Citation

Puranam, Phanish and Srikanth, Kannan, What They Know vs. What They Do: How Acquirers Leverage Technology Acquisitions. Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=925680

Phanish Puranam (Contact Author)

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore

HOME PAGE: http://www.insead.edu/facultyresearch/faculty/profiles/ppuranam/

Kannan Srikanth

Singapore Management University - Management Department ( email )

50 Stamford Rd
Singapore, 178899
Singapore

University of Southern Denmark - Strategic Organization Design unit (SOD) ( email )

Campusvej 55
Odense, DK-5230 M
Denmark

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