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Acquisitions That Make Your Company Smarter

It's challenging to successfully integrate any acquired company. It's even more complicated when you purchase a business for its knowledge. From Pfizer Inc.'s acquisition of Icagen Inc. to Walt Disney's acquisition of Pixar, knowledge-based acquisitions are focused on acquiring new knowledge — related to product features, customer needs, processes or technologies — and depend on assimilating the two companies' expertise.

Nima Amiryany of IBM Global Business Services and Jeanne W. Ross of MIT Sloan School's Center for Information Systems Research write that knowledge-based acquisitions are fundamentally different from traditional acquisitions. "On the one hand, the new bosses don't want to kill the goose that lays the golden eggs by disturbing the social structures and routines that made the company they bought attractive in the first place," they write. "On the other, the idea behind the acquisition was not simply to admire the goose: Generally, the acquiring company wants to learn how to lay golden eggs of its own."

Their research found that on-the-job learning was the only type of activity that appeared to enhance both the acquisition performance in general and post-acquisition knowledge transfer between companies. Wikis, data depositories and exchanges of company documents actually had a negative impact on the integration of companies. Included in this article: a sidebar on "Six Steps for Smoother Knowledge Transfer."

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