Cognition and knowledge sharing in post-acquisition integration: Insights from Indian IT acquiring firms

Abstract

Purpose - This paper examines the influence of cognition on knowledge sharing between members of the acquiring and acquired organisation in the post-acquisition integration process. It specifically analyses differentiation between in-groups and out-groups, the perception of organisational identity and interaction among members of the acquired and acquiring organisations and how these three factors affect knowledge sharing. Design/methodology/approach - The authors develop theoretical propositions and conduct an explorative pilot study on the basis of original interview data conducted with ten respondents in four Indian IT companies that have acquired firms abroad. Findings - The authors find evidence for supporting the negative effect of in- and out-group differentiation and the positive effect of inter-personal interaction on knowledge sharing among employees of the acquired and acquiring organisation. There was indicative, but less compelling evidence for the negative influence of inter-group competition and the positive influence of perceived shared organisational identity on knowledge sharing. Different from the established view, the authors find that when Indian firms acquire firms abroad, they initiate immediately knowledge flows from the targets rather than going through a long period of integration prior to acquiring knowledge from the targets. Research limitations/implications - The paper contributes to the scholarly conversation on cognition and knowledge sharing and argues that firms that are located in developing economies and that acquire firms aborad behave in a way someehat different from what the western literature postulates. This invites for further studies, both theporetical and emprical, to shed light on this phenomenon. The present paper is focused only on one country, India, and on a single industry - the IT industry. It is limited in its empirical part, mainly due to enormous difficulties in getting access to the field. Practical implications - The study demonstrates how central individuals are to the process of knowledge sharing and the accomplishment of organisational objectives in a psot-acquisition context. Managers should understand that the knowledge their employees possess is a strategic asset, and therefore how they use it is influential in attaining organisational goals in general and acquisition integration objectives in particular. The creation of task-and project-related communities or groups can help in establishing a shared organisational identity, especially after the turbulent event of one company acquiring another one. The creation of communities or groups where socialisation is encouraged can lead to employees interacting with one another, and developing a sense of belongingness with the community or group. Over time, this belongingness can translate into a shared organisational identity, which is beneficial for the organisation. The findings suggest that the creation of task-or project-oriented communities and groups are a powerful way to achieve that. Originality/value - The contribution of the paper is four-fold. First, while macro orientation dominates the literature on the growth of the Indian IT industry, this study is conducted at individual level of analysis, by focusing on managers in acquiring Indian IT firms. Second, whereas studies that have examined cognition and knowledge sharing have done so mainly through social capital lenses, this paper focuses on factors that are based on the inherent tendency of human beings to categorise themselves and other individuals. Third, the paper examines the links between cognition and knowledge sharing in an exciting context, namely post-acquisition integration. Finally, while research on both post-acquisition integration and on knowledge sharing is biased towards a Western context, this study investigates knowledge sharing and post-acquisition integration in the context of a major non-Western, emerging economy.